Traditional retirement is so 1990s.
Work hard until you're 65-plus and then stop working cold turkey. Why? Where's the balance in that approach to your working years and your golden years? Why not ease into retirement beginning much sooner than 65? You'll get to enjoy more free time earlier in life while continuing to generate income.
At least that's my plan, which I call slow-motion retirement, or SMR. Here's how it works, followed by some tips to make it a reality for you.
- Calculator: Do you have enough money to live on?
Slow-motion retirement in actionSMR is simply the gradual reduction of working hours per week. I include time spent commuting when I calculate working hours. For me, that's about 1.5 hours round trip per day, or 7.5 hours per week. That's a lot of time, not to mention about $10 per day in transportation costs.
Reducing the time and expense of commuting by even one day a week would have a big impact on my life. Here are some ways to do just that:
- Work 40 hours in four days: I know a lot of people working for the federal government or as government contractors who follow this schedule. They work 10 hours a day Monday through Thursday and have Fridays off. For me, this would save 1.5 hours of commuting time and $10 of transportation costs per week. This is the first step toward a more flexible working schedule. You don't have to sacrifice pay or benefits, and you get to enjoy a three-day weekend, every weekend.
- Telecommute one or more days: If I could work from home even one day a week, my quality of life would see a big improvement. Just investing the commuting time into my family and my health would be a huge benefit. And combining one or two days of working from home with working 40 hours in four days would be a giant step toward SMR. You wouldn't work fewer hours, but you would have much more control over when and how you worked. And if your commute is anything like mine, you'd be getting back substantial time each week.
- Go part time (even four days a week): This is where SMR really kicks in. Rather than go from working 40 hours a week to zero at age 65, why not begin gradually reducing your working hours much earlier? Of course, with working part time comes making less money. Could you take a 20% pay cut? It actually may be less than you think once you factor in how much of that 20% you actually take home after taxes. I've written more about this concept, which you can read here.
Making slow-motion retirement a realitySMR may sound great, but how do you make it a reality? Depending on your situation, working less than a five-day, 40-hour-plus week may seem impossible for a variety of reasons. Here are some potential hurdles to your SMR plan and some ideas to help you clear them:
- Your current job requires your physical presence. There are some jobs you just can't do from home. Indianapolis Colts quarterback Peyton Manning has one. So do firefighters. This rules out telecommuting, but not working a full-time job in less than five days. In fact, that's what most firefighters do. They work three days straight, for example, and then have two or three days off. If telecommuting is your ultimate goal, however, you may need to consider changing jobs if your physical presence is required where you work.
- You can't afford to work less than full time. This is the biggest hurdle to working less than full time. Working less than full time may not cost you as much as you think. But if a lower salary is the hurdle, make this a longer-term goal. I'm 40-something today and work full time. Even if it takes me 10 years before I can start working part time, I'd rather have that option at 50-something than working full time until I'm 65 or older.
- Your boss doesn't believe in telecommuting or flexible schedules. This is a big one. Given computer technology and environmental issues, I'm still amazed that some companies and some bosses have yet to embrace flexible working arrangements. If that's your hurdle, my No. 1 tip is to make yourself indispensable at work. This has two benefits. First, it puts you in a position where your boss would rather allow you to work from home some of the time than lose you to another job. I'm not suggesting that you give your boss an ultimatum, but knowing how important this issue is to you will help your boss get the picture. And second, high-quality work will give your boss confidence that you can work effectively from home.
- Working from home is no picnic, either. If you do work from home, having your own space to work is important. I have a workshop that could double as an office. Maybe you have some corner of your home where you could comfortably work away from the family. If you don't, you need to create that space for yourself and make sure everybody in the family understands your need to focus on your work during the day. That's not to say there would be no interaction with your family during the day; that's one of the benefits of working from home. But work must be done, and your family needs to understand this.
The Dough Roller is a blogger who writes about striving for financial independence.
Published Dec. 3, 2007