Tuesday, January 12, 2016

Work Longer for Early Retirement or Work Part-Time Now?


I’m still working. I’m a little burned out. It gets to you after a while that you work all day only to spend hours driving in Houston traffic, the noise of the office, the office politics, etc.  Reading early retirement blogs became a way to relieve stress. It‘s so much fun reading how others have attained what I want and what their day to day lives look like.  I started dreaming about what it would be like not to have to deal with the negatives of working. How nice it would be to not be stressed anymore! I could see NaD Jr more.  I would have time to read again, to visit with friends and relatives, to do all the things I’ve been wanting to do.  So what would it take to reach this goal?

We would need 1.5 million dollars to fund $5000 a month in retirement. I would have to work another 12 to 13+ years depending on layoffs, stock market, and life in general. I just can’t do it. That’s too long. I’m done now.  I need a break right now.  I’m not going to work longer just so I can quit work forever.

The thought at the time was that if I became a SAHM, I’d one day have to go back to full time work in order to retire early. That’s not appealing either but $1.5 million seems impossible to reach on a single-income teacher’s salary.  So for a while now after we paid off the last of the debt that we’re going to pay off before I quit, I’ve been focusing on preparing to be a SAHM. I just put retirement out of my mind for a bit.

Then I read an article where the author mentioned how he was going to work only a few hours a month so that he could quit working full-time immediately. That got my attention.

I wish I could remember where I read it as I want to re-read it.  The author had multiple sources of income listed next to the amount of money he was expecting to make from each category.  I felt such a feeling of relief looking at his numbers. His listed numbers were so much easier to attain.  Of course you would not need as much money to live off of if you’re going to supplement your income with work, but I had never seriously considered that before. I had been bent on retiring completely and forever.

So I started working on my own plan based on his scenario. What would work for me? What wouldn’t?  I didn’t even ask my husband if he wanted to quit full-time work. Lol. (He’s always said he wants to work forever and never retire.) I just got busy and figured out how we could work a little and not make it feel like work.  Suddenly we didn’t have to generate $900k in retirement funds. Whoa.

                                 Mr. NaD take home from part-time work: $2000
                                 Ms. NaD take home from part-time work: $1000


                                              $3000 a month x 300 = $900,000
               ($900,000 x .04 withdrawal rate = $36,000 a year or $3000 a month)

Previously I wasn’t really thinking about rental properties. I had pictured retirement being funded by stocks alone. But if we had a rental or two, we could reduce the amount of time it takes to retire. Depending on where we move to, we wouldn’t necessarily need that much more equity in our primary residence to purchase a place that has a garage apartment and/or basement ready for rental. 

                                      Rental property: $1000 a month profit


This means we’d need $320k or so in stocks. We have $50k now, which leaves the need to earn another $270k. Huge difference between $1.5m and $270k. I felt such a sense of relief seeing that $270k figure. My heart literally beat faster knowing this was possible and not just possible, but possible right now! We can put this plan into place and begin immediately.

Happy Dance!

So another 12 to 13 years of working full time so I can retire completely at 60? Being miserable the entire time? Or 24 years of working part time being happy? I would like to work part-time, please.

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