Bridging the Divide

For a while now I’ve been rolling around the idea of semi-retirement in my head, but I’ve also had an issue with planning something like that.  You see I’m a little unsure on how to pick the minimum to earn each year during those years and then how do you transit then to full retirement.  It’s always been a divide I have yet to come up with a good way to bridge since I’m aware that any income I could generate from writing would be erratic at best.

So yesterday while discussing that issue, out of the blue, my lovely wife asks me a question “Would you be willing to go back to school for a bit?”  I have no idea what she is talking about, but I reply “Depending on what, yes.”  Then she lays out her idea: I could work in her daycare.  Pardon!?!  Then she reminds me of a interesting fact that if she had a second employee she can take on some extra kids.  The profit margin at that point would likely be close enough to cover are entire budget once the house is paid off.  Therefore allowing the investments to grow at their full rate, but you could always fall back to the investments if you have a low period of income.

I stare at my wife in nearly shock.  In a two minutes she has manage to propose an simple, realistic solution to bridging the divide when I had yet to come up with a plan after rolling the idea around in my head for the last few months.  If I haven’t mention it lately, I really do love my wife.

While I’m not sold on the idea entirely yet, it does provide a potential base for me to actually run a full-blown analysis on semi-retirement.  This partly rolls out of the fact the way I wife picks her clients.  She takes great care to ensure her clients will fit in well with the other kids in care and the parents will work out as well.  So the result of that is her income stream is very stable and she has very low turn over of clients.

So you might be wondering, why I would bother looking at semi-retirement when I am already on track to retire at 45? The reason is actually rather simple.  I like the idea of transitioning out of work more slowly.  I think a full stop on work at 45 could be a little too much at once.  So that is why I’ve been rolling the idea around in my head.

If you were semi-retiring, what would you be willing to do to bridge the divide between full work and full retirement?

10 thoughts on “Bridging the Divide”

  1. It’s so nice to have a clever wife, for sure. What I wonder about is whether working in a daycare at all is you bag. Even a part-time job would seem like a full-time grind if you couldn’t find some real enjoyment (other wise it is only a part-time job, but NOT really semi-retirement, IMO.

  2. I’ve looked at that question of considering semiretirement (lower employment) a few times and kept coming back to staying fully employed.

    The reason, for me, is that no part time job consistently pays the hourly wage that I currently get. So to get, say, one quarter of my annual salary, I’d have to work at least half-time, so it’s not likely to move me closer to my full retirement goal.

    To make it work, I’d effectively have to be within 10% of the full retirement goal. And if I’m within 10% of the goal, pushing through for a year of full-time work is preferable to spending 3-5 years at part-time work.

    It’s possible that I could convince my current employer to keep me on part-time at my full-time hourly wage, but that could adversely affect the pension calculation.

  3. I am contemplating the same thing and coming to the same conclusion as George above. Need to brainstorm some more to see if any other options can be found.

  4. I worked part-time (semi-retired) for 7 years before I fully retired in 2008. In those 7 years, I had no desire to work at something else.

    My reduced income still covered my expenses with room to spare so I was still able to invest my surplus with my existing investments. My company match for the 401(k) dropped because it was based on a percentage of my income, so I boosted my own share to retain the same total contributions. I did receive a few less shares of company stock because it was based on total compensation, but simply working there made my existing shares grow as the stock price rose dramatically from 2001-2008.

    A few months after I switched to PT work in 2001, my company froze our pensions (for those not old enough to get grandfathered) so working less did not cost me anything there.

    Being childfree, I would never consider doing childcare work although I did take on some volunteer work with kids when I began working PT, hardly comparable to daycare.

  5. I had 2 separate consulting contracts this last year – both of them allowed for working part time and both paid about what my regularly hourly wage was before. I meant to only work about 400 hours in the year but ended up with more (about 600). Some weeks were as low as a few hours, none as high as 40, some months were completely off – and that’s when I traveled.

    I can see George’s point though and it depends on your area of work. I would have thought there’d be lots of project work in your field Tim?

    I think it also depends on your kids etc. too. I just extended a work contract for another month because my youngest kid is still in school. I might as well be going off to work if I can’t travel. Plus there’s that whole “make hay while the sun shines” thing. If one month of working pays for 4-6 months off, it’s hard to say no (hello golden handcuffs). Especially when you like the work.

    The best change that I’ve seen has definitely been those weeks where I’m putting in around 20-25 hours a week. Transitioning to that was good though. I hadn’t realized I was so locked into “come home at 5:30 p.m.” routine. So in coming home at 3 p.m., I was looking at the clock at 7 p.m. wondering if it was bedtime yet. 🙂

    Oops, sorry for the blogpost style comment. 😛

  6. I didn’t know that your wife had a daycare. Must’ve missed those posts!

    I would be very interested in talking with you about how to start a daycare and what the profitability is. I am simply amazed that daycare workers get such a low hourly wage yet the supply of spaces is so limited. There must be a market reason for it. High insurance? High value in the toys and renovations?

  7. I have been reading your site for a long time. Congrats on the book, I have talked to the local library, and will get a copy for them. I have often wondered why, it seems everybody, gets excited/concerned/worried, about the 5W’s after they don’t have a J.O.B.(just over broke). At the age of 33 I sold my business, bought a new set of golf clubs and enjoyed myself. Everything was paid off,(ZERO debt of anykind)and a large investment pool. My DW was still full time, so I had to stay close to home. After 4 years I was getting bored without something to do, so I started another business. This time, I was smarter, I said I would only work when it was nice and we could go away for the winter. It took several years for DW to stop working at her job.(and beliving all that education/job title B.S was really worth it) Now she helps me with our seasonal business and, although it’s not her dream job,truth is its not mine either,(similar to you working at your wife’s daycare?) She would never go back to a J.O.B.
    Work, even at your own business, does not need to define who we really are.

  8. I am a nurse practitioner and I am planning to retire at the age of 54 this summer. It is so easy for nurses to work part-time that it’s a no-brainer for me. Here’s my deal — right now I work in a clinic where I have my own caseload just like a doctor does. I take also take call. I’ve always loved my job but after 30 years I’m ready to downzise. In June I am going to per-diem status which means I will fill in when my clinic needs help and it will be my option to yes or no when they call. And I won’t have to take call (yeah – I really, really don’t like call).

    If plan this doesn’t work as well as I anticipate, I intend to look into part-time work for our local Hospice. It seems like working with the dying and their families would be very meaningful and it would be nice to only take a few clients at a time.

    Nursing is a great profession in many ways and job flexibility is just one of them.

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