Cutting Back?

[gasjames]

So I have the opportunity to cut back at work and want to see what people think about the option.  I am currently a W2 attending 5 years out in private practice making around 400k with 8 weeks of vacation.  The option is to reduce my time to 75% which would basically increase my time off to almost 18 weeks a year.

My financial situation:

Mortgage 580k left (valued at 900k) @3.7%; planning on paying it off in 12 more years.

Student loans 48k @1.25% so no rush paying them off

No other debt.

600k in tax protected accounts and 200k in taxable.

If I continued on at 100% I think I could FIRE in 12 years when the house is paid off.

Taking this position would obviously delay that, but I think my day to day happiness would be significantly increased.

Anyone else decided to cut back at a relatively young age?

 

 

[Craigy]

My cousin is only a few years into her career and she's already cut back.  She seems pretty happy.   

 

[PhysicianOnFIRE]

You are in great shape being only five years out.

If you can earn $300,000 with full benefits at 3/4 time with 18 weeks off, and you don't mind the paycut, it could be a great idea.

I would have some plans as to how you plan on spending the additional time off. After accounting for taxes, you're looking at a reduction in pay of roughly $60,000 a year. Will the additional free time be worth $1,000 a day to you? Are you feeling burned out with your current schedule?

 

 

 

[pulmdoc]

Assuming your income goes in line with your time, $300k/yr is still plenty to live on and achieve your financial goals. The real question is what you will do with your extra time and whether that is worth the income tradeoff. The other consideration is whether cutting back so early in your career will make it difficult to go back to 100% production if your financial situation changes.

[DarrVao777]

gasjames wrote:

So I have the opportunity to cut back at work and want to see what people think about the option.  I am currently a W2 attending 5 years out in private practice making around 400k with 8 weeks of vacation.  The option is to reduce my time to 75% which would basically increase my time off to almost 18 weeks a year.

My financial situation:

Mortgage 580k left (valued at 900k) @3.7%; planning on paying it off in 12 more years.

Student loans 48k @1.25% so no rush paying them off

No other debt.

600k in tax protected accounts and 200k in taxable.

If I continued on at 100% I think I could FIRE in 12 years when the house is paid off.

Taking this position would obviously delay that, but I think my day to day happiness would be significantly increased.

Anyone else decided to cut back at a relatively young age?

 

 

Click to expand...

I was actually forced to cut back by administration in the past few months. Dropped to 90% with another cut to 80% come March 2017.

At first, it felt odd since I'm only 2 years out of training and want to hustle and make some hay while the sun is shining.

I couldn't imagine going back to 100% at this point

I don't have anything special to do. It's nice just to have an extra half day or even a full day off to run errands and spend some more time with my family.

[gasjames]

Thanks for the replies thus far.

I do feel like I would be healthier and happier cutting back (more time for exercise, family, slow vacations etc..)  And though I wouldn't consider myself burned out I do see the change as a step to keep it from happening.

I still will be able to hit all of my saving goals, but like POF points out it basically equates to 60-70k less real take home pay. In my mind it is a good compromise of work and financial freedom (if not independence just yet)

[Lithium]

I'm very envious.  Look at it this way - if you were working for your employer for 300k and had 18 weeks off a year with full benefits, would you volunteer to work additional weeks at your marginal tax rate when you got no additional benefits in return?

If you're still hungry at that point, I think it makes a lot more sense to look for 1099 income, open up a solo 401k, and take a slew of Schedule A deductions while broadening your network.  Though personally, I would prefer to just enjoy my free time.

 

[VagabondMD]

The pre-2010 (age 45) me would have said something like, "Don't do it! Grind, grind, grind."

Today, at age 51, I say that it sounds like a great plan. Anything that makes your life easier and your career more sustainable is good for you in the long run. Life is a marathon, not a sprint.

[Kamban]

Is the 18 weeks in a block of time or is it an extra day a week and added on.

Some physicians who have gone part time or cut back hours for an extra half day end up working longer and do not really get that half day free time but lose the pay for that time. And sometimes an extra free day might mean doing charts from home but not getting reimbursed for it. With new CMS rules this is only going to get worse. So make sure that you are not giving away money for a dream time off, that never materializes.

[Josh0731]

I wish I had your problems.  I recently suggested "why don't we take ED call in 1-2 day blocks instead of 3-4 day blocks so I don't have to feel like a zombie at work" and everyone acted like I was being weak and lazy.

[BurnedoutDoc]

I cut back to 2/3 time 5 years out and now am 1/2 time 10 years out.  Now, I essentially make the same as when I started full-time because of salary increases.  If you can keep your cost of living fairly fixed (sounds like you are able to do that) and live a little like a retired person during some of your 18 weeks off (enjoy low cost activities) I would definitely do it.  I don't know how old your children are, but when they become teenagers they will have little time to hang out with you.  Enjoy them while you can!

[RadDoc6876]

Sounds like a good offer and I would likely take it--a couple thoughts I had other than already brought up--1) depends on your specialty but have you considered the impact to your job skills from taking 18 weeks off per year?  Personally I would be worried about losing skills/credentials beyond about 12 weeks a year.  2) Unrelated to lifestyle but have you looked at refinancing that mortgage--on $580K at 3.7% it might be worth it.  Mine is almost exactly the same as your except I am paying 3.00% which is why it caught my attention.

[wideopenspaces]

I cut back straight out of residency and wouldn't change a thing :-) I'm 2.5 years out and work 0.75 FTE. I'm going down to 0.5 FTE once my parental leave ends in 2 months. We have less debt than you but less savings. However we are still on track to be financially independent in about 13 years as well. I make less than you, but we live well (in my book) and quite happily on what we make. So what you are proposing is definitely do-able. My guess is that if you go for it, you won't regret it. You'll realize that your time is WAY more precious to you than the money you could be making. At least that is how I feel. Would love to hear what you end up deciding!

[gasjames]

All the input is much appreciated everyone.  I have decided to jump on the opportunity. I agree with BurnedoutDoc in that I don't want to miss any more of my kids growing up than I have to.  We live (relatively) modestly and will continue to meet all of our savings goals, but still want for nothing.  I am ok with not having the vacation home or porsche.

[Zaphod]

I cut back immediately after fellowship as well, but am starting to feel ancy to do something else with my spare time (not more of what I am doing). We dont have ftes but I work about 3.5 days a week. I am very thankful to be spending so much time with the family and having the toddler not always be so shockingly bigger than the last time I looked like residency felt.