So Long, Full Time Employment!

Hello, part time position.

 


Feeling fairly fraudulent as a financially independent full timer, I wrote a post about a fictional Dr. Findley last summer. In that post, I came up with a somewhat convincing argument for the good doctor to consider working part time.

Trust me. The doctor considered it. His family discussed it. They evaluated the numbers and decided they weren’t quite ready. The math at the time showed them they would reach their financial goals in 2.9 to 4.5 years working full time at 2% to 8% real returns, or 4.3 to 9.4 years working half time.

 

 

A Casual Conversation Becomes Serious

 

A couple months ago, I was working the concessions stand at the curling club with one of my teammates. He also happens to be one of my partners in a small anesthesia group. Precisely 40% of our city’s anesthesiologists were busy slinging beers to thirsty curlers on a frigid Tuesday evening, and no, neither of us was on call.

Not wanting to blindside my four partners someday, I’ve been dropping hints about my desire for part time or no-time work for a couple years now. On this particular evening, I mentioned that I would be ready to go part-time anytime another partner was willing to share a job with me, not thinking that was likely anytime soon.

To my surprise, my colleague had thought this through more thoroughly than I had. He knew that at least a couple of the docs in our group, including him, would be willing to pick up some shifts if I wanted to drop some. In fact, he figured two could each pick up 20% of my shifts, allowing me to drop 40% of my current workload.

I liked the sound of that. I ran the numbers. I talked to my wife. I talked more with my group. We came up with a plan. The plan was presented to our employer, and they have now signed off. Woo Hoo!

Starting October 1st, I’ll be working a 0.6 full time equivalent (FTE) job, while each of my partners will be working 10% more, or a 1.1 FTE position.

I see it as a win-win, and I believe my partners do, too. Several of them still have student loans and other large ongoing expenses. I’ve got enough to consider myself financially independent and am closing in on financial freedom. What I’m lacking more than anything is time.

 

The New Schedule

 


My current schedule, which I’ll be working for another five-plus months, is actually rather favorable compared to many physician jobs. I worked a much more demanding schedule in my first full time position, when I took call every third night and weekend, and very rarely had a post-call day off.

A month’s work at full time now consists of an average of 16 or 17 units, with a unit being roughly equivalent to a 12-hour shift. A surgery center shift is one unit; a 24-hour hospital shift / call is two units. My new schedule, which starts in October, will average 10 units a month.

In one very busy stretch, I can get a month’s worth of work done in seven days — four days at the surgery center followed by a three-day weekend at the hospital. That works out to about a 110-hour workweek, with a portion of it being home call. It sounds brutal, but it’s not much different from some weeks in residency, and I prefer to bunch my work together rather than spread it out. I may not be able to get that schedule every month, but I hope to have stretches of three to four weeks off at a time on a regular basis.

 

The New Numbers

 

Naturally, my 40% cut in hours will come with a concomitant 40% cut in pay. Perhaps I shouldn’t use the term “naturally.” Many physicians would see their income drop by a higher proportion. Those in private practice with significant overhead might have a negative income if they dropped 40% of their clinical workload. Fortunately, that’s not the case for an employed anesthesiologist.

What about benefits? Will they be cut 40%? Nope, full benefits. I’ll get the same 401(k) match, health insurance, HSA contributions, etc… that I get right now. My locker will be the same size; I won’t be downgraded to one of those waist-high, half-height lockers. Thank goodness.

The 40% I’m giving up? That’s the 40% of my salary that gets taxed the heaviest at both the state and federal level. On an after-tax basis, those are the hours for which I am reimbursed the least.

Based on a $400,000 salary, which is not my exact salary but will suffice for today’s exercise, my salary drops by $160,000, but my take-home pay drops by $92,000. I’m dropping the portion of my pay that is taxed at approximately 42.5%.

 

Increased Work = Diminishing Returns

 

The $240,000 salary results in $56,000 in income taxes after all deductions and exemptions, for a new effective tax rate of 23.3%. This was calculated using Taxcaster for a one-income family of four, married filing jointly, in a high-tax state with $43,000 in tax-deferred investments in a 401(k), 457(b), and HSA.

Working full time, post-tax compensation (after-tax income + match / profit sharing is $298,000 per year, or $24,833 per month. Working an average of 16.5 units per month, I am compensated an average of $1,505 per unit ( ~ 12 hour shift) after taxes are paid.

Working part time, post-tax compensation is $204,000, or $17,000 per month, which works out to $1,700 per unit. In other words, I’ll be keeping an extra $200 per surgery center shift, or $400 per 24-hour hospital shift by working part time.

When extrapolated over the course of a year, the 6.5 additional units worked per month as a full time employee result in an extra $7,833 in after-tax compensation, or $1,205 per unit. Compared to  the first ten units worked in a month, the final 6.5 units are compensated at nearly $500 less after tax. That’s $500 lower after-tax compensation per surgery center shift, or $1,000 less per hospital shift for those shifts that bridge the gap from 0.6 FTE to 1.0 FTE.

Of course, the tax system is more gradually progressive, but I’m simply comparing two salaries. The math for the year would work out the same for someone working only the first 60% or last 60% of the year, or taking 4.8 months off in the middle.

I have been well aware of the progressive nature of our tax code, but running the numbers and applying them to this decision-making process has made the right choice clear. Going part-time allows me to drop the shifts that are effectively compensated at a 34% lower rate.

Why wouldn’t I want to do that? Can you say “disincentive to work more“? I can.

 

What Has Changed

 

Last summer, we rejected the part time plan. Now, we’ve embraced it with a bear hug. Why the change of heart?

We have more money now. According to Personal Capital, our portfolio has returned 7.77% since I published the half time post. I’ve also had 9 months of accumulation, and we are financially independent with a 3.33% withdrawal rate, spending $80,000 per year. We are also within one year of reaching the financial freedom goal of $2,500,000, even with the part-time schedule (which doesn’t start for 5+ months).

We moved the goal posts. I assigned a goal of 40x expenses or $3,200,000 for Dr. Findley. Nine months of reading, writing, and contemplation have convinced me that an excessive goal is, well… excessive. We’re good to go right now with a 3.33% withdrawal rate, and a 3% withdrawal rate is within reach in a year or two.

 

 

We have new “passive” income. I’m referring to the money that the blog earns or is capable of earning. It would be disingenuous to completely ignore it for a couple reasons. For one, it is anything but passive, and doing it well takes a lot of time. Also, while I will be donating half my profits, I will be keeping the other half, and that could make living without my physician income easier, even if it is money I shouldn’t need based on any retirement calculator.

Our friends at Our Next Life pointed out the “elephant in the room” for those of us who write about FIRE while monetizing a blog. It seems appropriate to acknowledge it rather than the 800 pound gorilla doesn’t exist. Or was it an elephant? Does it matter?

A bear market could set us back (elephants, gorillaz, and bears, oh my!). An immediate drop of more than 20% would set us back to a non-FI status at the $80,000 a year allowance (although we only spent $62,000 last year). That wouldn’t be disastrous. I’ll still be working, investing at discounted valuations compared to today, and I could continue to work beyond 2019 if our financial situation calls for it.

 

Walking the Walk

 

In the Dr. Findley post, I described Dr. F as talking the FI talk, but failing to walk the walk. In other words, he was touting the benefits of financial independence, but not taking advantage of them himself.

It’s taken me awhile, but I’m about to start walking the walk. I’m going to start working less and living more.

Technically, I’m not going to be living more. If anything, I’ll be sleeping a little bit more, awake a little bit less, and continuing to live precisely 168 hours a week. But I will do more interesting things with my time.

A couple weeks ago, my wife and I sat down with our boys’ elementary school principal to nail down just how much school the boys could miss while remaining enrolled in good standing. To our surprise, there was not necessarily a number of days that would make them truants. As long as we remain connected and engaged with the school, and getting some schoolwork done while away, he saw no problem with them missing a few weeks each trimester.

Let the family slow travel begin!

 


What, you’re still not using Personal Capital? Track all your accounts in one place like I do.


 

Part-timers, how do you take advantage of your free time? Full-timers, would you consider a part time job if it were an option for you? Any suggestions for our initial slow travel adventures? Are you as excited as I am?

 

 

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124 comments

  • Finally! Freedom for Dr. F! Well, maybe not freedom but perhaps we call him Dr. Lean from now on since he’ll be cutting back his hours and only working the essential.

    Glad to hear that you’re taking the next step and incredibly jealous that your profession (position?) even allows such an option.

    I found the calculation of the disincentive to work quite interesting. You get a lot more bang for your buck working the first part of the schedule, so why wouldn’t you do that. Makes sense to me.

    Cheers,
    Josh

    • Thanks, Josh!

      The progressive nature of our tax system is something I’m very familiar with, but it was still enlightening to know that I keep so much less of that 40% of the salary I’m giving up.

      It’s true that not every specialty or position would be able to offer a part time gig like this, but in many cases, there are ways to make it work.

      Cheers!
      -PoF

  • Wow, it seems everything is dropping into place. How much control do you have on your schedule to get things more concentrated?

    • Indeed, it is!

      My curling buddy who suggested the new arrangement makes the schedule, so I think it will work out. It will depend on time off requests from others. I’m willing to be flexible to make things work for the group.

      Best,
      -PoF

  • Congratulations on your new job schedule, PoF. It has been years in the making and I’m so happy you’ve finally taken the plunge.

    Are your anesthesia partners still in the dark about the blog?

    • Thanks, WaSP!

      If any of my partners or anyone on our medical staff is reading the site, they haven’t told me. I haven’t told them about it, either. It’s a matter of time, I’m sure, but I’d rather learn that someone found it on their own rather than have me tell them. It’s one measure of the site’s reach.

      Cheers!
      -PoF

  • VagabondMD

    Congrats on taking the part time plunge. I am also going part time in the fall (10/1/17), which will entail working 26 weeks per year, roughly every other week.

    My compensation works out to 59.1% of full time (numbers similar but not identical to your illustration). Partners in my group work 44 weeks per year, and 26/44 is .591.

    This is a beautiful number because my wife’s company will drop the (post-tax) spousal surcharge on family health insurance if the spouse (i.e. Me) works part time or less, defined as less 60% of a full time position. I will just squeak under that number.

    I am looking forward to working more on my radiology consulting side gigs, doing more writing and research, supporting my wife and daughter on the home front, learning to brew beer 🍻, and taking up spinning. And that’s just the last quarter of 2017!

    • Our new part time schedules start at the same time — funny how it ended up that way. I guess I’ll be working 1% more than you 🙂

      Cheers to free time! If you have questions about brewing, I know a guy. I dove into the deep end. All grain, kegging… the whole nine yards.

      Cheers!
      -PoF

  • This is fantastic news! The fact that you also keep full benefits and the big locker is amazing. Wow. October is just another the corner. I imagine you and your family are stoked – do people still use that word? 😉 – to be another step closer to freedom. Congrats! You deserve this!

  • So awesome!! Congrats on moving forward with your plan. I know it was hard to make that decision to cut back but it won’t be long before that becomes the new norm. I am thinking of doing the same – my flight schedule is killing me lately…I’m not 23 anymore! You guys are well on your way to FIRE so crank out the next few months and enjoy the new schedule come October. I can’t wait to see what the future brings!!

  • Jacq

    If I just had fewer days to commute it would increase my happiness. 🙂 Plus last week with people out for their kids spring break I got more done with fewer interruptions and less nattering gossip. Unfortunately my company is still very paper based, and is likely to stay that way. These are some of the best managers I’ve worked for, so I’m sticking around for now. 🙂
    Hoorayfor Dr. F!

  • Wahoo! Sounds awesome. I’m glad you have such a good group of coworkers who want to take up the work. I suspect many people would drop down in hours worked if they could. Sadly, many are only full-time, with just a handful allowing them to do any sort of part-work. I would love to stay on it a part-time capacity but that’s simply not possible. All or nothing for me, baby!

    • I hear you, Gwen.

      Five years ago, I would have gladly picked up extra shifts for the money. In fact, I did. If I hadn’t discovered this whole FIRE concept, I don’t think I would have considered cutting back. Happy to be on board.

      Cheers!
      -PoF

  • I really enjoyed this post. Congratulations on achieving your goal and walking the walk. I’m sure your more liberalized schedule will return many great blog posts in the future. Good for you and your family.

  • Well played PoF.

    I think the part time/seasonal approach to working is the sweet spot between FI and being fully FIREd. Particularly for folks who have skills that date quickly (e.g. technology, or anyone in a profession requiring continued professional development).

    I hope you have a smooth transition, and enjoy the run up to full retirement at some point in the future.

  • Congrats PoF! That’s an awesome schedule to have for you and the family.

    Being able to switch to part time work while keeping your salary and all the benefits/match is a huge win. It makes a lot more sense to me than taking on a lower paying job sometime down the road in retirement.

    Enjoy and looking forward to hearing about the travel!

    • Thanks, AE!

      You’re absolutely right; working a bit more now (as an anesthesiologist) and padding the retirement accounts makes waaaayyyy more sense than working a low wage job years down the road.

      Unless said job is at a brewery. I could see that happening.

      Cheers!
      -PoF

  • Hatton1

    Congrats on the new status. I have been working 3 days a week for 3 years now. As you age a 12 hour shift is a looooong time😀. I think you and Vagabondmd have the best of both worlds because you have health insurance.

    • Thanks, hatton1. If only I could find a way to cut OB from my practice like you have.

      I feel honored to be a part of the birth experience, but when my part comes sometime around midnight three nights in a row, like it did Easter weekend, the magic fades.

      Cheers!
      -PoF

  • AWESOME!!!!! So happy for you!!!

    If you really could work a week a month and then be free, how cool would that be? 😉

  • Congratulations on engineering that scenario and making it happen! “Wicked awesome”, as they say in Boston.

    Do I read from this that you will work part-time through 2019 and not pull the cord completely in 2018?

    Our plan is still to go to full-time retirement (zero-time work) in July, 2018 – aiming for a 2.5% SWR based on assumptions from the higher end of our spending projections. If the market pulls back between now and then, our SWR will move to a slightly higher percentage.

    Anyway, mucho high fives to you and your family. It’s a huge family win, no doubt!

    • “Wicked awesome”

      Was that with a Southie accent?

      At this point, our end date has little to do with money, and more to do with what’s best for our family and my colleagues. Working 7 days a month, I don’t think I’ll be in a huge hurry to escape.

      I’ll be in Boston for the ASA annual meeting in October. See you then?

      Cheers!
      -PoF

      • Doc,

        Would love to meet you while you are in Boston in the fall. If you are considering spending an extra night in the area, happy to host you at our home in the western suburbs of the city. Bring a 6-pack and you have free accommodation!! Seriously, send us a private Twitter message and we can work something out to meet up.

        All the best,

        Dr. and Mrs. PIE

  • Kudos! I know this took many years of hard work, planning, strategic lifestyle, and a little luck to pull off.

    I agree about the overhead…if I dropped down to 0.6 FTE, I’d probably earn half of Dr. F with even some down months of greater losses. It does take an ideal structure of expenses and coworkers who might be interested in working a little bit more.

    Looking forward to seeing what your adventures bring! Perhaps I’ll make your success and inspiration for my future plans!

  • Eric

    Great news! So happy for you. Do you worry about spending creep in your first few years of part time/no time work? I think 30x is very safe. 40x seems silly, but to each his own! You’ve inspired me!

    • Thank you, Eric!

      I pretty much expect spending creep these next couple years. I could be retired, but instead I’ll be making $240,000, so I won’t feel bad buying round trip tickets for the 4 of us a few times a year.

      Knowing that we won’t have to get back home every few weeks when we’re fully retired, I expect those expenses to decrease. Or maybe we’ll learn that we need more money than we thought. Either way, this schedule will be a welcome change of pace and a learning experience for the whole family.

      Cheers!
      -PoF

  • Congratulations PoF! 5 short months to partial retirement (pre retirement?). You need to set up a command center type thing at home – large table strewn with maps, pins, a tiny camper and miniature people – to seriously attack your slow travel plans.

  • Congrats on being able to drop down to part-time! I’ve thought about doing that in the future at my company, but I’m not sure they’d even allow that. Most people work 12 hour shifts where I work, but I’m lucky and only work 8 in the department I’m in.

    Where are you all planning on doing the slow travel?

    • Thanks, Linda!

      I’ve got more ideas than we’ve got time for when it comes to traveling. We did make a list of a dozen or so ideas… some will happen with the part time schedule and others will wait for when we’re fully retired.

      Cheers!
      -PoF

  • Congrats on your new part time status! First Mr. 1500 retires, now PoF goes to part time, the dominoes are falling. Who will be next?

    Sounds like you worked out a pretty sweet gig, well done!

  • So excited for you to downshift into part-time work! The calculations say it all – and with your end goals already determined, it certainly sounds like it made for an easy (and smart) decision! Dropping the shifts that are compensated lower rates would keep me really motivated during the other shifts too! My options are limited for part-time work (and any real level of pay) – but I’m putting my resume out there too for interim administrative/consulting positions. I can always say no if it cuts into our travel plans. The Finger Lakes region in NY is a fine place to visit too!

  • The point about tax efficiency per hour is important when you are at your goals and making enough and to spare. The progressive tax as a disincentive to work more is right in the crux of the work-life balance. I’m looking at you WCI. 🙂

    • Scroll down to see your neighbor’s thoughts. Or just walk next door. 😉

      But, yes, the good doctor is thinking about reducing his workload a bit more. When you only keep about half the money, it’s not so enticing to work those shifts.

      Cheers!
      -PoF

  • Awesome! Congrats PoF. How long do you think you’ll do the part-time, before officially pulling the plug? Part-time arrangements in my line of work are very rare, but this gets me thinking, where there is a will, there is a way.

    • Great point, FF. Many people will say “I could never do that.” But quite often, when there’s a will, there’s a way. It can take some creativity, and thinking outside the box.

      To answer your question, it probably depends as much or more on when my employer lines up a replacement for me. We are contemplating possibilities as we speak. If I’m not ready to say goodbye at that point, if I can convince one of my partners to share 1 FTE with me, there might be potential to continue on. Time will tell.

      Cheers!
      -PoF

  • Well, you know how I feel about part time work PoF.

    🙂

    I think you will enjoy it. Perhaps we should exchange notes over a cold IPA sometime. It’s interesting that all of your partners wanted to work more shifts considering the tax consequences. I love win-win scenarios though. When everyone is happier the plan has a much higher chance of succeeding long term.

    • I’m always down for that! I’m not sure my partners have considered the tax consequences. I’m not sure I want them to. 😉

      Cheers to a fellow part timer!
      -PoF

    • We aren’t just flyover country, we are drive through country. 🙂

      I’m in a city with maybe the best beer heritages in the country with big and micro breee (I’ve been told. I don’t drink alcohol as you know). It’s also a perfect place to visit with kids your age — one of the most family friendly places in the US. Worth a stopover!

  • That’s amazing! If your family road trips take you through Missouri, give me a holler.

  • That’s awesome, PoF! Such great news. And it’s soooo great you will keep your benefits. Sounds like the perfect arrangement, in my opinion.

    I also LOVE that your kids’ school is flexible on taking them out for extended periods of time. We used to be able to do the same, but once high school hit, it became more difficult. Take advantage while you can! Oh – and I don’t know if you’re looking at domestic or international travel, but we took a 3 week (tent camping) trip out west a few years ago, and made the rounds to all the amazing National Parks. GREAT trip!

    • Great insight, Amanda!

      We’re thinking we may be uprooting the boys around middle school age — not a bad time to miss school based on what I recall about those years. When they’re ready for high school, I imagine we’ll settle down again. The best part is we can choose to do that anywhere in the US. A solid education will be top priority.

      Cheers!
      -PoF

  • That is great! I think you won’t ever regret getting that extra travel time with your kids. It sounds like it will be a great arrangement for everyone! And the extra sleep sounds good too! I was so burned out when I first quite my job, I took a full month to hike everyday and clean out my cabinets. Weird maybe, but I felt like I had fallen so far behind on stuff like that. =)

  • Congratulations on coming to this decision! You had me at “diminishing returns”. Looking forward to seeing what new opportunities await you and how you feel about this life shift.

  • Congratulations on your newly found freedom. Part time is a very wise choice, especially at your hourly compensation level. As you so astutely pointed out, the drop in gross income, due to progressive (punishment) taxation means your dollar for dollar drop in pay, does not match a dollar for dollar drop in take home pay.

    Thus, your math is easier. Hopefully you’ll be able to reclaim some of the Pease phase outs of itemized deductions as well: https://taxfoundation.org/pease-limitation-itemized-deductions-really-surtax/

    I am in the process of engineering my layoff where I work, which will bring me effectively down to zero hours per week. That will definitely be a paradigm shift, and something I’ll likely write a blog article about. Stay tuned.

    • Exciting times for you as well, FP!

      As an engineer, are you better able to “engineer” your own layoff? I’d like to be able to “doctor” my exit strategy to somehow include a severance, but of course, there’s really no possibility of that.

      Cheers!
      -PoF

  • Super interesting, PoF! Well done 🙂

    I am on my way to FI, but still have some years to go and not a nest egg the size of yours. I have already spoken to my employer about working less than full-time. I managed to a get a deal where I (in a few years’ time) will go 20% down in time and 10% down in salary while losing my chance of getting a bonus. For me, I’ll try gradually to go down in time until I am financially independent and can throw out my alarm clock.

    I may have missed it in a previous post, but how come you are aiming for 2.5% when most people say 4% is more than sufficient as SWR?

    Looking forward to hearing how part-time works out for you!

    Onwards,
    Carl

    • Thank you, Carl!

      I think you’re smart to ease into FIRE. I’m no longer aiming for a 2.5% withdrawal rate — I came up with that number base more on where I expected to be at 45, assuming I’d work until then.

      A year of reading, writing, and contemplating our future led me to realize I’d probably be happier working less and having less.

      Based on Big ERN’s SWR series, I think I’d be happy with a 3.33% withdrawal rate, or having 30x anticipated expenses, which is what I have right now. Future earnings are just an added safety margin, and can allow for lifestyle inflation.

      Cheers!
      -PoF

  • Congrats! I’m so glad you’re about to join the PT club.
    I suspect you’ll not have a single regret.

  • Consider this as taking an inexpensive advance on your freedom. I am hoping to pull off something similar later this year. Seeing others pull the trigger certainly boosts my confidence l, so thanks for sharing!

  • That’s awesome! Congratulations! This sounds like a fantastic opportunity to test the waters of freedom without giving up too much in the meantime… except for some pay, of course.

    I love that you get to keep your benefits. Sounds like it’s going to be a great situation to be in.

    Good luck – can’t wait to read how it works out for you! 🙂

    — Jim

    • Thank you, Jim!

      I’ll be sure to post updates on how things are going once we have a couple months of the New Schedule under our belts.

      I’ve already got some plans for October, including the ASA annual meeting in Boston and FinCon in Dallas.

      Cheers!
      -PoF

  • Congrats! I had the feeling something was up when you wrote the Dr. F post. A smooth transition into RE seems the most appealing. After all, “Natura non facit saltus!”
    It’s amazing to see the marginal impact of going from 0.6 to 1.0 (or reverse) on the tax landscape. Those last $160k are really a hamster wheel with high marginal taxes. And in addition also offer a high marginal value of leisure, so it’s a no-brainer to go part-time! If I can I will surely try to keep a half-time gig just for the health insurance!
    Best of luck, Dr. PoF!!!

    • I appreciate the sentiment, Big ERN, even if you did make me look up that Latin phrase. Makes sense.

      The fact that I”ll still be working 60% of a full time job seems like a lot, but when I look at my new schedule or think of it in terms of a typical 9-5 job, it’s like going from 5 days on / 2 days off to 3 days on / 4 days off. Those two schedules are light years apart.

      Interestingly, my father worked a schedule equivalent to about a 0.6 FTE position for about the last decade of his dental career. It worked for him.

      Cheers!
      -PoF

  • Congratulations! I will see how it goes for you. I may be next!

  • Congrats PoF! Fortunate that we have positions that allow us to cut back, still partake in medicine, but have time for other things we enjoy in life.

    This post is full of such great information as I’m considering the same move. Thanks for being the bold one and showing me the way!

    • Well, we’ve got a lot in common, so I’m not surprised you would consider a similar move. We’ve both got young families, business pursuits outside of medicine, and high tax states that make those marginal dollars earned worth a lot less.

      Good luck to you!
      -PoF

  • WONDERFUL! You hit it spot on and reducing your top marginal income that gets taxed the most, and getting down to a more reasonable taxation level. $200,000 – $250,000 is the SWEAT SPOT for maximum happiness.

    Enjoy taking one step towards early retirement!

    Sam

    • THANKS, SAM!

      I think you’re right about the sweet spot. My biggest concern now (and it’s a good one to have) is that I might not want to cut back any further once I get comfortable with the new schedule.

      CHEERS!
      -PoF

  • Congrats doc!! (note the “non-caPitalized” title, just seemed right). Great move, and fascinating to look at the after-tax impact.

    Great decision, and truly excited for you. Now, take advantage of the 6 months to plan your perfect “new” life. Sounds like the perfect situation for you, and look forward to watching your journey through your words!

    • and thank you, fritz!

      I think we’ve been planning this New Life for a few years as we’ve contemplated how we’d like to spend our time in early retirement. We’ll just be taking it in smaller chunks at first, 3 to 4 weeks at a time.

      Cheers!
      -PoF

  • Too many docs fail to consider or figure out a way to work part-time. Heck, half my group works part-time. Medicine is so much more fun. It’s pretty tough to get burned out when you’re only working 20-25 hours a week. I think a lot of docs that think they want early retirement would change their mind if they could work half-time. I mean, unless you want to go on month long trips or go live in an RV for a while, there is very little you can’t do while working part-time.

    I dropped the overnight shift almost a year ago. It’s been pretty awesome. I’ve been at 3/4 time now for about 9 months. Mostly I’ve just filled that time with WCI stuff, but it does make trip scheduling easier. My wife is pushing me to drop from my 12 shifts a month to 8, but given the time lag, that is at least 15 months away. I think I’ve convinced myself I can stay competent at 8 shifts a month.

  • Aw

    Two things:

    1) big fat congrats on pulling the trigger.
    2) curling? Really? Haha

  • complete_newbie

    A more pertinent question: Are the gophers any good at football this year? I can’t wait for Big 10 football! Go Blue!

    • Good question, CN.

      There are some questionmarks, particularly at quarterback position, and the depth on the Offensive Line and Defensive backfield is concerning.

      But — after an impressive showing with a victory over WSU in the Holiday Bowl, and the hiring of an enthusiastic new coach, there is reason to be cautiously optimistic of the Golden Gophers chances to become Elite.

      What happened to Blue’s “little brother” last year, by the way. Wow.

      Cheers!
      -PoF

  • Great job PoF.

    I worked 3 years part time before finally pulling the trigger to no more medical work on February 20, 2017. I started off at 2.5 weeks a month for two years, then 2 weeks a month for 7 months, then only one week a month for 7 months and then it ended. During that time I was able to use my new found free time to write 3 books. Two of then have been released, “The Doctors Guide to Starting Your Practice Right,” and “The Doctors Guide to Eliminating Debt.” The third book comes out in June, “The Doctors Guide to Smart Career Alternatives and Retirement.”

    I found it very helpful to have something productive to do as my medical practice wound down. As my life as an author ramped up it became an easy transition for me. Had I quit medicine cold turkey and had no other mission, I don’t think it would have turned out well. I believe I needed a purpose. It is good that you have another mission to work on as you back out of the clinical practice of medicine. You will love the transition.

    Best of luck to you. You will change many lives.

    • What a great transition, Dr. Fawcett.

      I’ve read the first two books — they’re great! I learned that we have a lot in common, and I plan on writing up formal book reports when I find the time. As you know, time is my most limited resource at the moment, but I’ve found a way to buy back some of it starting in about five months.

      Cheers!
      -PoF

  • Tyler

    Have you addressed concerns of spending more $$ as a result of having more time to spend it? My expenses are so low when living like a resident because I only have time to waste money on Amazon haha.

  • Sully Augustine

    “A bear market could set us back (elephants, gorillaz, and bears, oh my!). An immediate drop of more than 20% would set us back to a non-FI status at the $80,000 a year allowance (although we only spent $62,000 last year). That wouldn’t be disastrous. I’ll still be working, investing at discounted valuations compared to today, and I could continue to work beyond 2019 if our financial situation calls for it.”

    After the 20% drop it would be logical to expect a somewhat higher return from stock index funds, since stocks would then be selling at lower P/E ratios; so the sustainable withdrawal rate one could expect on that new lower asset base would be higher. See Wade Pfau’s article of 4/10/17 exhibit 2 which lays out the demonstrated sustainable withdrawal rate (over a 30 year retirement period) for each year from 1925 to 1987. The other day I saw another excellent article by a different author (can’t recall name right now) which pointed out that the safe withdrawal rate for a longer retirement period is significantly lower than the 4% rate which is often cited for a 30 year retirement, but I don’t believe it was low enough to concern someone as conservative as you seem to be based on the withdrawal rates you cite.

    • Great point, Sully. We can expect the market to bounce back, as it always has before.

      I’m a fan of Early Retirement Now’s SWR series (linked above in comments). That may be what you read.

      I like Pfau’s work, too, but it’s important to look at his assumptions, such as much higher investment fees than I will have as a DIY investor. I believe some of his papers suggest 1% in fees, whereas mine are under 0.1%.

      Cheers!
      -PoF

  • Wohooo!! You’re going to start living the good life now PoF!

    Congratulations on the upcoming ‘part-time’ status, it’ll be a huge change in your life, and the perfect opportunity to dip your toe in the FIRE-water (pun intended).

    I hope you enjoy it as much as I do!

  • Dave

    Life and plans change. Sounds like a good change for you and your family. Just wonder what the thoughts will be if stock market drops 20%….30%…. by October 1.

    • Good question, Dave.

      I know a bear market is coming; I just don’t know when. The tentative plan is to work a year or two at the reduced pace. If the markets have dropped and not recovered, I could consider working longer or finding a different part time position if I’m unable to continue in the current one.

      My initial “retirement” will be treated initially as a sabbatical, but one I may never return from. I’ll have my licenses and certifications extended for at least a year or two to keep my options open.

      Cheers!
      -PoF

      • Dave

        Good to have an alternative plan. I had many colleagues who retired in 2000 and 2007 who found themselves back at work 9-12 months later.

        I know there will be a few more bear markets in my lifetime, it is just a matter of when. That and health insurance are the main reasons I still check in every morning.

      • Happy1

        I have recently started reading your blog. Congrats on achieving financial independence. Now that you don’t have to worry about money, why slow down now? You have made money from your job and now are able to reduce your working hours by 40%. I would call you rich. You have an active cash flow which is your job. Do you have a passive cash flow which is equal to 100% or even 40% of your salary? A passive cash flow can be defined as having enough money or money generating assets that you do not have to work at all. I call that wealthy. Are you still working for money or is money working for you. Using an inflation calculator, if you have $3 million at 4% inflation you will need close to $8 million in 30 years to have the same value. The book “Rich Dad Poor Dad” by Robert Kiyosaki describes this concept in detail. Become an entrepreneur and develop a business.
        Take a rest break and then jump back on the saddle. Become wealthy. I am trying to practice what I am preaching.

        • Thank you, Happy1! Glad you found me, and I hope your journey to wealth is going as planned.

          I don’t have passive income to match my salary, but in most years, it will exceed my family’s annual spending, so we’re in pretty good shape. Most of the income simply comes from total return on passive index funds. I am starting to see some income from this website, but it is anything but passive and pales in comparison to my physician income at present.

          I like to use the Rule of 72 as my inflation calculator. With 2% inflation, today’s money will go half as far in 36 years. At 3%, I’ll need twice as much in 24 years. At 4%, 18 years.

          Cheers!
          -PoF

  • Congratulations!! That is so exciting – slow travel sounds fantastic. I try to do some form of it when we travel. We can’t always do the 2-3 week version but thanks to my more flexible work we can do it a little more often now.

    As to part time work, I was about to say “I don’t know, it’s not an option for me” but that’s only true on the money part. It has been offered as a possibility for me in the past, though I’m not positive I would truly only be working part time due to the nature of the work / boss, and I turned it down because I need my full salary for a while yet. It’s an interim stage to aim for later on the way to real retirement, though. It’ll be a good way to adjust to the end goal of true retirement.

    • Thank you, Revanche. I hope those part time doors remain available for you as you approach your FIRE goals. I wasn’t sure if I would want to go this route, but now that we’ve made this decision, it makes perfect sense.

      Cheers!
      -PoF

  • Very inspiring! I’m 10 years into practice and have started to give more thought to working part time. Look forward to hearing about your journey.

    • Maybe a decade is the tipping point. That’s when I first started to consider the idea. I’ll be 11 years and 3 months into my post-residency career when the part time position begins.

      Dr. Dahle, The White Coat Investor, dropped a quarter of his shifts after a decade as an attending.

      Cheers!
      -PoF

  • Congratulations! I think this is a great move. You’ll be able to spend more time with the family and still make really good income. It really is a win win for you, your family, and your partners too. Nice going.
    Interesting about the school. Our school district is very strict. If you miss more than 10 consecutive days, they will take the kid off the roll.

    • Thank you, Joe!

      Our school may be able to offer more flexibility based on the fact that our boys are in the district’s gifted and talented classrooms. They learn the basics at an accelerated pace, and do more “outside the box” learning with the extra time.

      The principal was excited for us and told us world travel would be a great way to supplement their education.

      Best,
      -PoF

  • Comment number 72…I guess that is what happens when I am practicing early retirement with a day off with friends.

    Kudos PoF. 60% FTE is my goal, though I may not hit it until my mid 40s. This is great and I am psyched you made it. Now you will have time to invest in the brewery!

    Nice number crunching too. Great to see the hit won’t be as bad as we think since it affects the highest income bracket.

    • I’m sure you had a good time practicing. That’s what I’m doing this week, although responding to comments is proving to be a time-consuming task with this particular post!

      I think the new salary does fall into that sweet spot where taxes don’t eat away too much at the earnings.

      Cheers!
      -PoF

  • Well done, POF! I am very happy for you. I can only imagine what more great stuff POF will produce here with all that extra time. Also, very smart move going part-time because you are only giving up the heavily-taxed marginal dollars first, so good ROI for you! But then, I expect nothing less from Dr. POF. Here’s wishing you the very best as you transition to a ‘more life, less work’ lifestyle.

    • To be honest, I don’t know that I’ll do much new or different here. I’m hoping to use the newfound free time to spend more time traveling with my family, being home for dinner, geocaching with the kids, etc…

      Cheers!
      -PoF

  • Congrats on your semi-retirement Mr POF!

    Having more flexibility is totally worth the reduced income in my opinion ( plus, you are financially independent, so more money won’t make you any happier either)

    Dividend Growth Investor

  • Congratulations! That’s great too that the boys’ school is flexible enough to allow for your travels. Pretty excited for you but probably nowhere near how excited you are 😉

    I would most definitely go to part-time if that was an option for my position. Perhaps someday!

  • Beautiful deal you arranged, congratulations! I’m hoping to take much the same leap at my law firm in about 5-7 years, following 3-4 more years of incredibly hard work, billing near the top of my firm, and then 2-3 years of full-time-but-slacking-compared-to-old-me work.

  • This is great! So happy to hear you announce it to the world. That makes it real after all.

    And I’ve always wanted to try curling. Really.

  • And so it begins… Congrats on getting more free time, and still maintaining some killer income! I think you’ll find the free time addictive 🙂

  • Longtime reader, first-time commenter. Congratulations, PoF. It’s nice to see the theory actually translate to reality for you. Best of luck to you!

  • Congratulations. It has been so fun to watch this site grew and you grew into a well deserved part-time work schedule/full-time life.

    Love it!!!
    cd :O)

    • Thank you, Chris! We’re pretty excited.

      Just went and looked at RVs this morning and sat around a fake campfire in the showroom enjoying some complimentary hot dogs and Cheetos, dreaming of a real fire (and real food).

      Cheers!
      -PoF

      • We “outgrew” our first trailer. But, by the time we upsized our family dynamics had changed and now we have too much. I guess it now leaves room for future grand children, although we really aren’t in a hurry for that either.

  • Congrats on finding a much better arrangement for your lifestyle and tax situation. My goal is similar even though my projected income is on a different tier. I’d like to get my business running to the point where I can work 4 days of six hours each most of the time. I want to sleep in and show up during my most productive hours. I want to enjoy my days off without work over my head.

  • Ramblin MD

    Thanks for your post! I’ve loved finding your website!!!

    I’m a year from finishing fellowship in a competitive subspecialty with good reimbursement (for now…?). I’m looking at different offers and trying to give myself permission to take less salary for a 4 day work week and better call. In the job I really want, I’d start at high 200s and automatically be mid 300s in 2 years vs about double that in private practice working much less favorable hours. It’s really scary to think of my 200k in student loans, but I think we can make it disappear in 2-3 years even at the job I want. And as a pretty new mom it’s hard to justify working way harder for that extra few hundred k when thinking about what I’d want to buy with all that it’s mostly my time and how brutally that extra income would be taxed – your post really brings that last part home.

    • Thank you for the kind words, Ramblin MD.

      It’s really tough to balance work and parenting. If you can earn that kind of salary working a 4-day workweek with light call duty, that does sound appealing. Of course, earning double that has appeal for different reasons, but you’ll meet your goals either way and your kids won’t stay young for long. The increased taxation on the difference between the two incomes can help you make the decision. It did for me.

      Cheers!
      -PoF

  • Congratulations on taking the plunge! Now you’ve got time for those extended travel trips! Sounds like a win-win for your entire family! 🙂

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