Should I Coast to Early Retirement or Run Hard To The Finish Line?
As I noted in our latest Quarterly Financial Scorecard, we’re getting close to making financial independence a reality.
We’re now two years away from my target early retirement date. And barring a major downturn in the stock market, we should hit our net worth goal early next year.
But even in a best case scenario, that means we still have another 24 months of long commutes, late nights, countless meetings, office politics, and stressful deadlines ahead.
As fate would have it, my job may change before the end of the year, and the two most likely options are very different. Which means I have the potential to follow two very different paths over the final years of my career.
One would be returning to a role similar to the one I have worked in for most of my career. I know I can be successful in this position, but I’d no longer be working in management. This position would definitely be coasting towards early retirement.
The second option would be taking on a bigger role in the organization and leading a larger team than I do today. This team would be structured differently than the way any of our competitors are, and needs to be built from the ground up. It would be an interesting opportunity, but success is by no means assured. This position would entail running very hard for the last few years of my career.
The benefits of coasting towards retirement include:
- Fewer hours in the office and a better work-life balance while my children are still relatively young.
- Less stress, since I already know most of what I will need to do to be successful.
- None of the potential headaches associated with managing people.
The primary downside of moving to a role similar to the one I have spent most of my career in is likely a modest cut to my current base salary and potential annual bonus.
The benefits of running through the tape include:
- The same base compensation as today, with the potential for a larger bonus and higher salary if the team is successful.
- Finishing up with the “biggest position” of my career, rather than a less prominent role.
- Potentially learning some new skills that could be useful if I ever wanted or needed to go back to work someday.
But the potential cons associated with the bigger role are significant:
- More hours in the office, more stress, and less time for family, friends, exercise, and relaxation.
- Managing a larger team in a new way that may not be successful (if it was obvious this was going to work, one of our competitors would probably have already tried it!).
- Potentially more pressure from my boss and others at the company to not retire early if the new role is going well or there is still heavy lifting needed to fully implement the new structure.
At this point in our journey to financial independence and early retirement, we’ve done most of the heavy lifting. Living well within our means, investing the balance, and letting compounding work its magic over more than a quarter of a century has put our family in a sound financial position.
Although I’d prefer not to take a pay cut, I’m pretty confident we’ll reach our target net worth next year, regardless of whether I stay in my current job or move into one of the other potential roles. That said, we’d likely retire with at least 5% more money if I were to successfully run hard for the last two years of my career rather than coasting to the finish line.
I haven’t made a decision yet. Before I do so, I’m looking for feedback:
Given the two options and the pros and cons I’ve outlined, which path to FIRE would you choose, and why?
JessicaJuly 19, 2019
Hey! Thanks for sharing this. If it were me, I’d definitely choose to coast. I think there are huge benefits to having more time outside of work, and it might give you an opportunity to put your excess mental energy into things you are excited about outside of work, which could make the transition to retirement easier. In our society, I think we sometimes place too high of value on success in a work environment while our lives pass us by. There’s a movement of people choosing to slow down and live better lives. That being said, only you can know what you want. If the opportunity feels like a “hell yes” to you, and you’d regret not doing it, then go for it.
RobbarinoJuly 19, 2019
Just Coast! Say NO to stress while your kids are young! 😃
Mr. 39 MonthsJuly 28, 2019
One of the concerns I have with FI is what will I do once I get there? I’ve been actively working on hobbies and other things to keep me occupied once I am financially free.
If you chose Option 2, you are going to drive hard for 24 months, and then suddenly hit FI, without a plan for what you’ll be doing once you retire. You will have not spent time with family and the question ends up being “what did I do all this for?” You will end up having to spend another 12-24 months at work slowly winding down, while concentrating on your “post FI” life.
My suggestion would be to “coast” into FI, while exploring what you’ll be doing once you hit it (that is what I’ve been doing).