I was chatting the other day with someone about my plan to retire early and they noted that if things go wrong that “You may never earn this much ever again.”
To which I frowned and then replied, “But that doesn’t matter. I’ve NEVER spent my entire salary, so who cares if I fail and go back and earn less? I don’t.”
You see that is perhaps why I’m a LOT more relaxed about my plan to retire early than most people. I’m not obsessing about the fact I’m currently at my peak earning potential in my life. That I believe is the logical flaw that sucks in a LOT of people who fall into the one more year syndrome. They erroneously assume you have to keep working since you can potentially never earn this much income again. They confusing having to work again in the future with having to have the same income and/or career.
The issue comes down to this, even if things go horribly wrong and I have to go back to work for a while I am under no obligation to go back to my current career or pay range. Honestly, I earn currently north of six figures and only spend a bit over $30K a year. So in reality if I have to go back to work to save some more money my actually target is to earn more than $30K a year to allow some savings while paying the bills. So any job that pays $31K or more will work. It’s just a matter of how much do I want to save and when I quit again.
Of course this ignore the reality that we already have substantial assets and I would likely notice things going wrong sooner than later. Thus in fact I won’t even need to earn more than $30K to pay the bills, the fact of the matter is earning ANYTHING would result in me saving some money. So even some mindless minimum wage job at half time would be enough to help build up my savings again. It would just be at a slower rate than I’m doing right now.
So yes, I’m currently riding my peak earnings towards my early retirement date and if that is the case, so be it. I can give up the really high saving rate and roll the dice on my current plan. Yes, I may lose and have to go back to work at some point doing something, but if I win I will have an additional 25 years of time to do things that interest me. I know what I’m choosing.
So what about you? Would you spend an extra year or two working at my current job to buffer against ever working again or take the risk of having to do some work in the future? Would you care if you worked again in the same field or not?
Recently I had a frank discussion with my boss about the fact I’m around two years out from leaving the company. I didn’t provide an exact date, but we did discussion his question “How do I get you to stay around longer?” I bluntly answered at the time “Working less. Like a lot less.” So we started an investigation into options on how to get that done.
Unfortunately I came to realize just how hostile my workplace policies are towards part time work. While I give my workplace full credit for being open to discussing the idea of part time work in actual practice the policies aren’t much good beyond getting perhaps 80% to 90% time rather than the full 100% of full time work. I ran multiple potential scenarios on to see if 60% was doable, but most of the time the overall costs to the company made the option of doing this hard to justify as the polices are stuck in thinking of bodies not dollars.
In the end, I just went with the path of least resistance. I’ll keep my current 90% time and then use our existing flexible benefit, which is equal to 3% of my pay, to fund a bit extra time to further reduce my working hours starting in 2016. The flexible account doesn’t require any additional approvals…I can just pick the option and be done with it. Three percent sounds like a tiny bit, but when you start to add up all the time I already don’t work I started to realize something important…I don’t work that much.
The math goes something like this. A standard 52 week year has about 260 potential working days (52 x 5 working days). Yet I also get 12 days of stat holidays a year, so that real total is now 248 working days. I currently get the following time off 4 weeks of vacation (20 days), 13 Banked Days off, and if I use the flexible benefit another 7.8 days or 40.8 days off when you add it up. Yet because I work 90% time, those totals get scaled down by 10% to 36.7 days off, but in exchange I get another 26 days off. Oh, I get another 3 family days a year that don’t scale on top of that. So grand total that works out to 36.7+26+3 or 65.7 days off. So out of the total working days of 248 in a year I’m not working about 26.5% of the time starting in 2016 or inverting the result I will only work 182.3 days next year. So out of total year of 365 days that means I only work about half the time (yes I love my workplace for time off…it was one of the major reasons I came to the company).
So bluntly, I came to realize I really don’t need to reduce hours any further since I already don’t really work that much. Instead I’ll keep up this nice coasting pace for the next year or two and just leave when I hit my savings target. Isn’t it funny how when you go looking for something, you come to realize how valuable what you already have is.
Much to my shock and utter amazement after delaying the decision for four months the senior management at my employer decided to grant us bonuses for last year. This is of course after they gave us our usual raise and then took it away earlier this year. Yup, I know this doesn’t make any sense to me either.
In the end, they decided we just qualified to get them and through some fairly complex calculations I got roughly a bonus roughly equal to 5% of my annual salary. To say this was unexpected doesn’t begin to cover it. As I pointed out to a co-worker of mine I gave the odds of me getting a bonus as a snowflake spontaneously forming in hell. Not impossible, just very unlikely.
While I’m being generally being a good boy with the extra money and the vast majority of it will be moved into RRSP accounts. So between this bonus and my tax refund I’ve had an insane month for income. I’ll give you all the details later this weekend as I finally get caught up on my net worth posts.
Then I decided to spend a small portion on the windfall on something that I would enjoy: I bought a new laptop. You see I had previously bought a little netbook computer to do my writing on since I wanted something portable and lightweight…which did work fine for a number of years. Then I changed to a different writing program that was designed to support larger writing projects (aka books) late last year. Yet there was a problem…the new program was a bitch to use on my netbook since the display was fairly small. While I could have just put up with it I thought I would be purely selfish and just buy what I want.
So this is my first post on the shiny new machine and my dear god it is a HELL of a lot faster than my old one. It’s sort of nice not to upgrade for a few years so when you finally do it becomes a bit of shock to get eight times the RAM, double the processor speed and nearly five times the hard drive of your previous machine. Yes I’m having a geek moment and I’m enjoying it. 😉