Pulling trigger on going part time

[Millenial Doc]

I understand that some fields are just not as amenable to part time as others (i.e. Surgery). For those who are in a part-time friendly field, I'm trying to weigh the benefits of going part time sooner vs later. Sooner for me would look like having all debt paid off (school loans and mortgage), relatively low fixed expenses as a result (about 80 to 90k per year, 529s for all my young kids adequately funded, and about 500k in mostly retirement accounts. This could be in 1 to 2 years. Later means waiting to reach FI, which would be funding investments until my spendable accounts were 2 to 3 million. I would guess this could be in 5 to 7 years.

Part of me says grind it out a few extra years, while the other part of me says go part time ASAP since you only live once. Part time income would easily pay the bills and allow a bit to save.

[Lithium]

I say do ASAP, if your debt is manageable.  Life is a marathon, not a sprint.  Financially it makes sense too.  You get a lower federal tax rate, and you can put a higher percentage of your savings into retirement accounts.

[RosieQ]

Also agree it would be reasonable to do sooner rather than later. I'm waiting until I have all major purchases (mainly a house) completed with a long term expectations of fixed expenses. Then you can cut back and be in a lower tax bracket and keep more of your income overall as a percentage. Also very helpful with the new tax law as you could likely qualify for the 20% extra deduction if self employed or partner making it an even more valuable move assuming you were above the phase out limit before. Part time would extend working career time overall but this could be beneficial if you could stay working for longer and delay time drawing from savings. If I could retire at 40 vs work part time until 55 for example I would much prefer to work part time rather than being burnt out. I can take a lot of 2 and 3 week vacations that would make me very happy, plus still qualify for 2 month or 1 year sabbatical time with my job every 5 years for longer experiences. Plus you have a lot of experiences that would be best to take advantage of while younger like very active trips, spending more time with young children.

At a bare minimum I am waiting for enough savings to be able to retire at the age of 65 assuming no further contributions and growth at 5% real before I would go part time. This sounds like a reasonable backup and would likely be very accelerated by continued investments just at a slightly lower rate (say 30% savings rate instead of 50%).

Finally I would also consider the role of hedonic adaptation. You get used to more time etc and it's just not as sweet as it was when you first made the change. Instead of going fully part time I'll likely drop a shift a month every few years. I'm in EM work 16/mo now, working my way towards 12 by the time I'm 40 then maybe stay there for a while and then do 8-10 until I'm ready to fully retire with some admin thrown in as well.

[The White Coat Investor]

Millenial Doc wrote:

I understand that some fields are just not as amenable to part time as others (i.e. Surgery). For those who are in a part-time friendly field, I’m trying to weigh the benefits of going part time sooner vs later. Sooner for me would look like having all debt paid off (school loans and mortgage), relatively low fixed expenses as a result (about 80 to 90k per year, 529s for all my young kids adequately funded, and about 500k in mostly retirement accounts. This could be in 1 to 2 years. Later means waiting to reach FI, which would be funding investments until my spendable accounts were 2 to 3 million. I would guess this could be in 5 to 7 years.

Part of me says grind it out a few extra years, while the other part of me says go part time ASAP since you only live once. Part time income would easily pay the bills and allow a bit to save.

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Not sure I'd do it with only $500K, but that's up to you. I am a big fan of part-time work. It is also very nice to go slowly if you can to try it out. Cut back 10%, then 25%, then 50% etc. If you get to the point where you'd rather have the money than the time, you can stop or reverse the process more easily.

[Dr.V. Investor]

The White Coat Investor wrote:

Millenial Doc wrote:

I understand that some fields are just not as amenable to part time as others (i.e. Surgery). For those who are in a part-time friendly field, I’m trying to weigh the benefits of going part time sooner vs later. Sooner for me would look like having all debt paid off (school loans and mortgage), relatively low fixed expenses as a result (about 80 to 90k per year, 529s for all my young kids adequately funded, and about 500k in mostly retirement accounts. This could be in 1 to 2 years. Later means waiting to reach FI, which would be funding investments until my spendable accounts were 2 to 3 million. I would guess this could be in 5 to 7 years.

Part of me says grind it out a few extra years, while the other part of me says go part time ASAP since you only live once. Part time income would easily pay the bills and allow a bit to save.

Click to expand…

Not sure I’d do it with only $500K, but that’s up to you. I am a big fan of part-time work. It is also very nice to go slowly if you can to try it out. Cut back 10%, then 25%, then 50% etc. If you get to the point where you’d rather have the money than the time, you can stop or reverse the process more easily.

Click to expand...

would you do it if you had 1.5M, 40 yo (almost), no school loan, just mortgage, not in a high paying field?  I have not pulled the trigger yet but I keep saying it to our manager.  I also believe that cost of healthcare is so inflated so might as well benefit from this "higher income" rather than work later when medicare goes bust.  At the same time, I have young kids that I need to spend time with.  I am giving myself another year but most likely cut down to 0.8.  For now, only cut I get is removing my lunch break to get home earlier.

[wideopenspaces]

Honestly, I think it comes down to personal values and comfort levels. Financially it sounds like you could swing part time work now.
I went part time straight out of residency 3.5 years ago and cut back further after having my son 15 months ago. I'm just now slowly scaling back to my pre baby work hours. I did this because I was burned out after residency and I wanted to do normal"mom" things- drop off and pick up from school, attend daytime kid things, and hang out with my kids after school. I also enjoy doing all the domestic things, cooking, keeping the house running, etc. My husband works from home a day or two each week and it allowed us more time together as well. So it just made sense for us and I think makes all of us happy. I also know that while it will be cool to have the freedom to do what we want once the kids are out of the house and we retire, this time while the kids are at home is probably going to be the most valued by me, so this is where I want the extra time, not when the kids are off doing their own things. So I'm ok with the trade off of working longer, at least until they graduate ( and perhaps longer, I actually like my work). Financially we make this work because I had minimal student loans ( med school in TX is cheap) and we mostly paid them off in residency. And we bought a house we'd be able to afford on my husband's salary alone so everything I make goes to retirement and savings. So in our case, having a spouse that also works ( but not in medicine) also makes it doable.
Everyone's situation is different so I don't know what will make you happiest. The good news is that you can always change your mind! It sounds like you've put yourself in a good financial situation so you've got options available to you. Good luck sorting it out!

[Donnie]

Make hay while the sun shines. $500k is not much. If you could have $3M in 5-7 years, that seems worth it to me. It may be harder to go back and make that money if you go part time now. Many things could change.

I don’t follow the comment about making financial sense to go part time because your savings percentage will go up. You will save more dollars (i.e. the thing we actually care about) if you make more money.

[RosieQ]

Donnie wrote:

I don’t follow the comment about making financial sense to go part time because your savings percentage will go up. You will save more dollars (i.e. the thing we actually care about) if you make more money.

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I think the comment was that you would pay less in taxes so have relatively more money available for spending and savings as a percentage of paycheck, so not getting as much of a paycut as one might expect by dropping hours. However it makes sense not to let the tax savings dictate earning less after tax money overall. It's more about lifestyle choices instead.

[jfoxcpacfp]

Apologies in advance for the appearance of being self-serving, but this is an example of a situation in which a financial planner could provide an extremely valuable service. There are many vetted advisors on the Recommended Financial Advisors page. Why don't you interview a few? You might get the answers you need with just a financial checkup and then you will have clarity about your options and confidence in the decisions (and possible changes) you need to make.

[ticker]

If you were going to work the same number of hours either way, it is almost always better financially to work longer rather than harder.  Your total tax burden is lower, social security benefits are usually greater, you likely get more total matching 401k funds (if you're employed and making more than $275k per year), you get the benefits of employer-subsidized healthcare longer, etc.

A few considerations:

- There are more options than just "full time" or "half time".  If you are in clinic, you could drop 1/2 day a week or every other Friday, then a year or two later drop every Friday, etc.  If you're a hospitalist/ED/shiftworker, you can drop 1 or 2 shifts a month.  Many on this forum will testify that a 10% reduction in work has equated to much more than a 10% increase in happiness, job satisfaction, etc.

- You may be able to relocate to a job where "full time" is defined differently than where you are now.  I work about 75% of the average hours for my specialty, yet I'm considered "full time" by my employer, am paid more than average for my specialty, etc.  Rather than sacrificing pay in exchange for time, I sacrificed geography (and we actually love it here).

- Tomorrow's salary isn't guaranteed.  Like Donnie said, if the sun is shining right now, it may make sense to make hay at least a little while longer.  There are infinite possible glide paths between the two options mentioned in your initial post.

[VagabondMD]

This is a great topic for a blog, or even panel discussion at a future WCI conference .

I went part time after 21.5 years of practice. My gut feeling is that it is too early for you. Your future expenses and returns are very unpredictable and your reserves too low. It depends though, on the nature of your work and whether or not it would be easy to return to full time.

[Kamban]

Millenial Doc wrote:

Sooner for me would look like having all debt paid off (school loans and mortgage), relatively low fixed expenses as a result (about 80 to 90k per year, 529s for all my young kids adequately funded, and about 500k in mostly retirement accounts. This could be in 1 to 2 years. Later means waiting to reach FI, which would be funding investments until my spendable accounts were 2 to 3 million. I would guess this could be in 5 to 7 years.

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You need to ask yourself

1. Are you getting burnt out. If so go a bit part time - like 0.8FTE.

2. Do you want to spend more time with your kids now and does going part time make that happen?

3. Will you be able to go back FTE later or be able to work as long as you plan to do. Also, will the earning be as good later as now.

You have a mortgage, school debt, 529 and only 500K in savings. If you have dual income it might make sense to go part time. If not, hang in there for 5 years and stabilize the ship a bit more.

[The White Coat Investor]

Dr.V. Investor wrote:

The White Coat Investor wrote:

Millenial Doc wrote:

I understand that some fields are just not as amenable to part time as others (i.e. Surgery). For those who are in a part-time friendly field, I’m trying to weigh the benefits of going part time sooner vs later. Sooner for me would look like having all debt paid off (school loans and mortgage), relatively low fixed expenses as a result (about 80 to 90k per year, 529s for all my young kids adequately funded, and about 500k in mostly retirement accounts. This could be in 1 to 2 years. Later means waiting to reach FI, which would be funding investments until my spendable accounts were 2 to 3 million. I would guess this could be in 5 to 7 years.

Part of me says grind it out a few extra years, while the other part of me says go part time ASAP since you only live once. Part time income would easily pay the bills and allow a bit to save.

Click to expand…

Not sure I’d do it with only $500K, but that’s up to you. I am a big fan of part-time work. It is also very nice to go slowly if you can to try it out. Cut back 10%, then 25%, then 50% etc. If you get to the point where you’d rather have the money than the time, you can stop or reverse the process more easily.

Click to expand…

would you do it if you had 1.5M, 40 yo (almost), no school loan, just mortgage, not in a high paying field?  I have not pulled the trigger yet but I keep saying it to our manager.  I also believe that cost of healthcare is so inflated so might as well benefit from this “higher income” rather than work later when medicare goes bust.  At the same time, I have young kids that I need to spend time with.  I am giving myself another year but most likely cut down to 0.8.  For now, only cut I get is removing my lunch break to get home earlier.

Click to expand...

First, cut back to full-time. Most doctors talking about cutting back to part-time are actually working like 60 hours a week. So, first try to get down to 40 hours. That's full time. That's what I'm trying to do. Sure, I'll be half-time clinically by summer, but I've got this other thing going right now. I figure I'm at about 1.5X right now and I'd like to get down to 1X. It sounds so relaxing....

Then, cut back little by little and see how it goes. Think you might like 0.8? Go try it. See how it goes. I bet you like it. And at 1.5M in your 30s? I mean, you're pretty much done saving for retirement now if you don't retire for a decade or two.

[Millenial Doc]

I appreciate the responses. It is something to contemplate and I'm not sure yet when I will pull the trigger.

My feeling is that if I were the sole earner for my family, I would definitely grind it out a little longer. However, wife is also a doc who could earn a similar part time income as I can. The dual income, to me, adds enough stability to consider part time earlier with less reserves.

My main hesitation is Vagabonds point--how much full time experience is optimal prior to part time? I will have some but I wonder if 5-7 years is enough. My gut tells me it's probably fine, and I think I can still maintain competence with 3 days per week, but my main reason to go part time is to preserve longevity in my field, and I also fear at the same time about it prematurely harming my career

[dayman]

Donnie wrote:

Make hay while the sun shines. $500k is not much. If you could have $3M in 5-7 years, that seems worth it to me. It may be harder to go back and make that money if you go part time now. Many things could change.

I don’t follow the comment about making financial sense to go part time because your savings percentage will go up. You will save more dollars (i.e. the thing we actually care about) if you make more money.

Click to expand...

I respectfully disagree. Imagine he was a CRNA working 45 hrs a week making $175K per year (an uneducated guess). He's debt free, his family spends $80K per year, and he's got a decent start on retirement. Would anyone be telling him to get a second job in his spare time because $175K isn't enough? If $175K is enough for the CRNA, pharmacist, software engineer or whoever else spending $80K per year, why wouldn't it be enough for him?

Our concept of "full time" is completely arbitrary. Just look at the range in average hours worked and vacation time between different countries and cultures. You only get one ride, do what makes you happy.