Recently I have been struggling with what I call the “Time Now or Time Later” paradox. I find that the Time Now or Time Later paradox is applicable to most people who are using a W2 job to pursue Financial Independence. This especially holds true for those that work in Manufacturing like I do. However, I have also heard similar experiences from friends in Sales, Healthcare and Finance roles as well.
The Time Now portion of the paradox is based on the fact that higher paying/higher level jobs typically require more work hours per week. This is true both as you put in extra effort in the beginning to excel and gain promotions, and when you reach the higher level jobs with more responsibilities. This has happened to me and I have seen it happen to other individuals in the companies that I have worked for. When I started my career in Manufacturing I was an individual contributor that worked 40-45 hours per week. Now 10 years later I manage a site of 40 employees and work 60+ hours per week.
The Time Later portion of the paradox is based on the fact that if the additional money from the higher paying job is saved, then earlier retirement can be achieved. Over the last decade I have been able to double my salary by working hard to get promoted into higher level jobs. Even in the simple low cost index fund investing approach this extra savings can cut many years off of a career.
MY CURRENT PATH
I was recently running through my personal numbers and discovered that if I keep saving at the 50% savings rate I am now (assuming 7% annual return on investment), that I can retire in 14 years at age 45. At first I was shocked and admittedly a little proud of this fact. I know retiring at 45 is somewhat late within the FI community, but this would be decades earlier than anyone in family.
After a few weeks my positive feelings turned into concern and 2nd thoughts. One day on my long heavy traffic commute home I wondered if I could do 60+ hours a week for 14 more years. This was longer than my entire career so far and I am already showing preliminary signs of burnout related to the workload and never ending responsibilities of my current job. There are many other jobs out there that I could pursue. However, most Management jobs in Manufacturing have similar attributes requiring similar workloads.
I found myself being nostalgic about the days of being an individual contributor with less responsibility. Mostly I missed the 8 hour days with more time to pursue family time and hobbies. Even at my current lifestyle cost I could survive on the salary of my 1st job, but I would have minimal room for savings. This brought up several questions:
- What if I stopped saving for retirement?
- What would only covering my current costs do to my retirement timeline?
- Could my existing savings ever grow enough to retire on them alone?
WHAT IF NO SAVINGS?
I reran my personal numbers with a 0% savings rate assuming only a 7% annual return on investment for my current savings. I found that I could still retire, but it would push my retirement date back 14 year to at age 59. This effectively doubles how long I will have to work.
The struggle I am currently having is what is better: working more for a shorter period, or working less for a longer period. Up until the last couple of years I was firmly in the suck it up and get it over with mindset. I have always run head first into a project and pushed to get it completed before moving on to the next thing. I have never been a big fan multitasking where possible. However, since my children have been born I am starting to rethink this approach.
I don’t want to look back and feel like I was too busy during their childhood.
I don’t want to look back and feel like I was too busy during their childhood. In the Time Later approach, my children will be 17 and 14 by the time I retire at age 45. It would be great for me to have complete freedom, but by that age my children will be busy with friends, activities and soon off to college. It’s much easier to spend time with them now in their formative years when parenting is especially important.
TRANSITION TO RETIREMENT
The other thought I had was that maybe it’s a positive to have work to consume some of my time after my wife and I become empty nesters. The absence of our children is certain to create a large void in our time which may be hard to fill after years of running between practices, performances and other events. Having a low stress job might be a good way to constructively fill some of my time as I make that transition. I may ultimately decide I want to retire completely, but I could make that decision at whatever speed I’m comfortable with.
All in all this is a huge mindset change for me. After years of running full speed ahead in my career, this change in perspective has caused me to pause unexpectedly. I plan to review my options for a while before I make a decision on how to proceed as downshifting would be a major life change and likely have long lasting implications. Hopefully my internal struggle is relatable and causes others to consider their options as well.