A 20% salary reduction can seem like a lot, when thinking of reducing to 80%. Your free time, on the other hand, increases by 50%, which is huge and not always taken into account. IMHO opinion it’s totally worth it (if you can afford it).
I currently work 100%, although did 80% in my previous job and reducing again is the first priority in my “job progression”.
However, if you already work overtime or have a job environment that is not very respectful of your free time, it might be a loss. I know someone who obtained a deal to work 90% over 4 days to partly compensate for that, although that might be tougher to negotiate.
Of course time is the most valuable asset and would be great to free up but there are tons of other factors to consider for such a decision. It is highly personal and imo it wouldn’t be correct to say just go for it without really knowing what your financial, personal and work situation is.
Mathematically speaking if you reduce, you will have a lower saving rate, therewith lower future gains, lower pension contributions and longer time to financial security. So for someone without big savings and/or saving rate, it can be tricky.
Another aspect is what you will do with your free time. If you learn new skills, study or start some side gigs, it can be financially beneficial. But if you start an expensive hobby or eat/drink out more, it may ruin all of your plans.
If we oversimplify things, reducing the amount equivalent to your passive income would be a good start to see how things go.
I know my numbers and I can actually afford working 80%. It’s more a “philosophical” question that I ask here: Essentially its FIRE vs FIR-“a bit now and then fully later.” My thinking is the same as @MUFC_OK: We all don’t have unlimited time and I am younger now.
I want to change employer anyway. I don’t like it where I am right now.
A friend of mine works 90% and leaves at noon every Friday. I’m not sure if that actually works…
How so? Let’s say that I have 7*24 hours per week at my disposal, i.e. 168 hours.
Subtract 5*8 hours for a full-time job or 4*8 hours. That’s not 50%.
My response to a similar question a while back.
Still all applies today.
And also my “calculation” to the topic of free-days when working 80% compared to working 100% - the number of quality free days actually “double” (+100%) since one free day per week is usually filled with chores.
Hi @Neville, I like your line of thinking and find the points others raised in the discussion also very valid, let me share my experience for comparison:
I started to work 100% and after a few years had a pay adjustment of about 25%, which prompted the same line of thought. After inquiring, it seemed possible to move to 80% (4-days workweek), both HR and management were OK with that as long as there was business justification.
Unfortunately, the company culture where a workweek is regularly 60 hours and managers are often on the abusive side, was not really suited for this (and my boundary setting sucks), so I ended up working exactly the same as before, but now my workdays were longer to compensate for the “lost” time, not to mention being publicly called out as an outlier every single time something was due on the “day off” which led many times to work during those days too, and in general less energy to use them productively.
Lo and behold, few months later I got absolutely fed up and got back to 100%, failed experiment, should have known better, end of story.
Some takeaways from my experience and this discussion are (others may add to, or disagree):
The company needs to support this not only from a HR / contract perspective but also from a factual perspective, in the discussion with the manager both sides should be clear which tasks are shaven by the 20% reduced effort and where do they ultimately end up. Meetings should be rescheduled or done without your participation. Internal and external deadlines should be met even if you are absent, in my case if it fell on the day off I basically had to work for free, will it be the same? This may be feasible or not depending on your seniority level, team size, industry, customers, etc.
There is a cultural aspect involved, part-time is more common in Swiss companies and/or with Swiss employees, but can be stigmatized by others. Make sure the team / clients / partners / supervisors / subordinates are onboard with this (perhaps by sending out some feelers in advance?). Before coming to Switzerland (unfortunately) the only part-time I’ve ever witnessed was for mothers with small children, or serious situations like tending to very sick family members.
Like @dom.swiss says, it works best if you present it to the company as their own benefit too (e.g. technical certifications, advanced studies, MBA, exploring new tech, whatnot). I don’t think they will ask you for proof, after a few months things become business-as-usual.
Be clear on your value of time, which is very subjective ofc. Is time spent now a better value than time gained later, e.g. by FIRE-ing earlier thanks to that 20% opportunity cost? Is there a better time to fulfill this experiment, e.g. with a newborn or when a concrete project/side-hustle pops-up?
Perhaps do a simulation of the FU-date with and without part-time, and see how many years that would set you back.
I agree with the above strategy, also should you have already defined project(s) in mind for the time at home, be consistent and disciplined, use whichever system works for you e.g. time-blocking, this will help enormously also in setting clear boundaries with those overreaching colleagues who believe you are just dilly-dallying in your time off.
But most importantly I would praise this advice, the decision is reversible
Since you are going to look for new opportunities, I think it will be easier to find a place that lets you start directly on 80%, see how it goes and perhaps agree with them that a 100% capacity is doable in the future (so they can plan it budget-wise).
Good luck with your search, let us know how it goes!
Wouldn’t you have at least accrued some “overtime credit”, that you would be able to balance afterwards?
Unless of course it’s a managerial position (where time ain’t clockin’ )
OT, but no, overtime is not paid, and thus not recorded. Including mandatory work during weekend, holidays, sick leaves, etc. Again, shitty Indian company that deliberately suppresses the local labour laws, but I can only blame myself as my boundary setting sucks (I learned later I wasn’t the only one, small consolation)
Going back to the original topic, if you find yourself in an environment that on paper allows for part-time, but the reality of the job and people around does not, then don’t assume things will change just because you do.
Although in the OP situation, if he starts a new job with 80% then it’s a much better proposition.
Just to elaborate on my earlier comment. Ask any parent: working full time without children you have more time for yourself than working part time with children.
I think it really depends also on where you picture yourself in 5, 10, 15 years from now.
As first approssimation: if you don’t expect big changes in 5-10 years from now (examples: stay in CH, do a job similar to what you do today), then go for 80%. Your long-term “health” will benefit for it.
If you instead think that in few years your life is anyway going to change (example: kids, going abroad) then better to “squeeze” your enery, stay 100% and “relax” later.
[well… not really relaxing if you plan to have kids…]
Agree, FIRE doesn’t have to be about all or nothing.
Partial FIRE is the point at which you have enough financial freedom in your life that you can reduce your current workload and pursue part time work. As previous posts have mentioned: part time work requires a part time workload, not same workload for less salary at some abusive company.
(Partial FIRE: The Solution to Your Problems? - The Physician Philosopher)
Coast FIRE = means you don’t touch your portfolio but you dial your employment back to cover your expenses only. Once the portfolio grows to cover your full expenses, you are FI.
Barista FIRE = means you are withdrawing money from your portfolio, but supplementing it with income.
Lean FIRE is being able to retire before the conventional age of 60+ with a very lean and simple lifestyle.
Expat FIRE is basically geo-arbitrage: FIRE in a cheap country
Can recommend it, did it and never looked back once. Can’t imagine a life without it actually, time is the most valuable and finite good and the ultimate luxury
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