I'm curious about people who take extended time off (months, years).
Do you worry at all about how that will impact your ability to retire? The drain on your savings?
Do you worry at all about how that will impact your ability to retire? The drain on your savings?
I lived very cheaply, worked a few freelance jobs, burned through my savings, and ended up finding a job when I had about 6 months of expenses left in my savings account. Never had to dip into retirement or stocks though.
Best time of my life. Many people like the sound of this but have no interest in actually living that way. I lived in a tiny studio apartment, rode a bicycle everywhere, ate a cheap plant based diet, and bought almost nothing.
Personally, I liked having a routine and would make a little checklist at the start of every week that I had to do everyday. I remember stuff on it being like:
1. Say hello to someone I don’t already know.
2. Brush 2x and floss.
3. Walk for 1 hour after dinner.
I ended up doing some 500 sit-up program and within a year was doing like 5000 crunches a week. I also said yes to everything I was offered and wouldn’t worry about money too much. If a friend was going to a $5 concert, I could drop everything and go.
I have a lot of good memories from that time. It was amazing to just feel completely free.
This may be a difference in perspective but, I consider my savings and my official 401k to both be "retirement".
Partly this is because, I only have a 401k from a previous company. My current employer doesn't have one, so any savings I have are my "retirement".
While I realize this isn't an option for many people due to lack of opportunities, kids, lifestyle creep, etc., I have both planned for it and been very fortunate. So no, I'm not worried about it.
So you made well above that for 9 years AND lived somewhere with a lower cost of living?
Then I could understand saving so much that you don't worry about retirement. But if you're making "good" but average salary in the bay area, and even saving a lot, you're still eating into savings to take months and years off.
Maybe an easier way to ask this is... What would you consider to be enough saved in the bank, at say, 35 years old, to take a whole year off?
A senior dev in the Bay Area working at a respectable company will get 300k per year minimum.
300k+ for 9 years will put you solidly into the 7 figures of net worth - especially if you invest well in the last decade.
I figured that the average senior engineer in California makes somewhere between $130,000 and $170,000, depending on region.
I had simply no idea that an average senior engineer could be making north of $300,000. That is jaw dropping and of course I understand now how you're able to take time off.
I save over 50% of my income but I don't make anything close to $300,000 so yea, taking a whole year off would be a big chunk of my savings.
I guess I need to try and find a job where I'm making $300,000 lol. Do you have some niche specialty or is that literally just a standard rate?
There is something wrong with this piece of information. If you really save 50%, then taking a whole year off will only wipe out one year of savings, no matter what you make. So if it's a large part of your savings and you're really saving 50%, then the problem is you've only been saving for a couple of years. Having a higher income just makes it easier to have a higher savings rate, it doesn't change the math on how many years you have to save to afford the time off, given equal savings rates. You might want to re-read my other comment: https://news.ycombinator.com/item?id=27126783
> I guess I need to try and find a job where I'm making $300,000 lol. Do you have some niche specialty or is that literally just a standard rate?
It's a standard rate for someone who was a senior engineer then got promoted two more times, I guess. I don't have a niche specialty. And I expect to (and have planned for) making less at my next job, and potentially for the rest of my career.
I could be wrong but, I don't think that's standard pay for the vast majority of software jobs in the bay area, whether it be at smaller startups or more old school traditional software companies.
As I said in my original post, I've been very fortunate, and my situation doesn't apply to everyone even in tech. But yes, though I started out lower than that at the beginning, it just grew rapidly over time. This is the pay grade I've been at for the last several years: https://www.levels.fyi/company/PayPal/salaries/Software-Engi... (3rd party source, not implying anything about its accuracy)
> Then I could understand saving so much that you don't worry about retirement. But if you're making "good" but average salary in the bay area, and even saving a lot, you're still eating into savings to take months and years off.
I'm going to ignore compound interest and taxes for simplicity here. If I save 50% of my salary, and take one year off, I lose two years of savings -- one year of spending and one year of making up for what I spent. If I save 10% of my salary, and take one year off, I lose ten years of savings -- one year of spending and nine years making up for what I spent.
> Maybe an easier way to ask this is... What would you consider to be enough saved in the bank, at say, 35 years old, to take a whole year off?
This part of the answer is actually terrible advice because it's so over-simplified, this is just meant to make a point. The shorthand rule is at a 50% savings rate you can retire after a 20 year career. So you don't really need to have anything saved at 35 beyond what you'll spend to take time off, because when you come back you'll still have more than 20 years left to work.
Keeping my savings rate high is fundamentally what allows me to do this, more because I'll make up for the "lost time" quickly than because of what I've already saved.
I'm not going to be able to retire, and my savings are gone. The end of my life is likely to be quite miserable.
I know my choices have lead to that. They weren't good choices, and I wouldn't recommend them to anyone. But they are the choices I made and I am reaping the consequences.
If you can hack it, be all career oriented and make good choices that secure your future... more power to you if you can do that for yourself and your family.
My wife took a 6 month unpaid sabbatical about a year after we moved in together. She had been with the same company for 10 years at that point. She saved up about four months worth of rent and we just stopped eating out as much, and she paid for the rest with a ~4% personal loan through her local credit union. I think it was paid off within three months.
More recently, my wife took off 1 month unpaid maternity leave. During pregnancy we both saved about 10% of our disposable income, and this more than covered her portion of the living expenses during this month.
So, in the five years I've known my wife, she's taken 7 months unpaid leave. That's not a huge amount of time, but at the same time, definitely helped her avoid burnout. And we didn't have to chip in to long term savings for her to do it. I work in a different industry and job hop more often, so I just take 3 weeks unpaid in-between jobs, which is a mild strain on finances, but not significant. Other than the mortgage and boat payment we don't carry any long term debt and continue to save for retirement.
As for future plans, in about five years we're planning on taking an unpaid year off, just before our kids go to primary school, but plan on doing that in a low cost of living area. Most of that year will be paid for using savings set aside for that, with any run-over paid for with low interest loans. Will it impact the long tail of my retirement? Probably to some degree, but I'd rather spend my time, now, with my kids, rather than rot away in a retirement home wishing I hadn't worked so much.
Many professors are of course still motivated by internal drive, but there aren't strong external controls that can be exerted.
Being in the right mental place to do that is part of why now is the right time.
So after these 10 years you’re free to quit working for ever, work as little as you feel, and for any amount of money. In other words: you’re free to do whatever you want.
((((((((50*1.07+50)*1.07 + 50)*1.07 + 50)*1.07 + 50)*1.07 + 50)*1.07 + 50)*1.07 + 50)*1.07 + 50)*1.07 + 50)*1.07*0.04 = 30,000 per year income, after saving 50,000 per year and making 7% for 10 years at a 4% withdrawal rate, which is very aggressive for a retirement longer than the standard 30 years.
((((((((((((((((((50*1.06+50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06 + 50)*1.06*0.026 = 50,000 per year income, after saving 50,000 per year and making 6% for 20 years at a 2.6% withdrawal rate, which should be relatively safe even for a very long retirement.
50% of a McDonalds burger flipper salary while a large percentage of their salary, is still a very small amount of money.
Where does this logic of 50% for 20 years come from? Seems like a serious broad "rule of thumb" kind of thing that is only just barely realistic?
It doesn't matter your actual salary, if you can get by on 35% of it and save the other 65% then it's all that matters. After you've saved for 10-11 years, you'll get the 35% of your original salary you live on, in perpetuity, from what you saved earlier.
Now of course it's much easier to save 65% when you're paid more than if you're paid minimum wage, but still. And you'll probably want some slack because these numbers are really the bare minimum, but that's the idea. Saving 65% of your income as a SE is really not that hard for a lot of us, even less so when you realize this is the ticket to being free within 10-15 years.