Personal Finance

I'm 42 and the recent surge in the stock market has pushed my portfolio to $3 million - is it a silly idea to move to part-time work?

Rich Duprey

Published: December 5, 2024 9:20 am

The world of high finance can be a stressful workplace. A 40-hour workweek can easily become 60 hours or more, making it easy to get burnt out.

Particularly after growing your net worth into the millions, the temptation to pull back and coast grows stronger. Switching to a part-time position seems attractive, especially when you would still be making a six-figure income.

That’s the position a Redditor on the r/ChubbyFIRE subreddit finds himself in. At 42 years old with a net worth of $3.1 million, not including the equity built up in his $700,000 home, he is thinking of adopting a slower pace. The bull market of the past few years fortified his retirement accounts and the bulk of the Redditor’s net worth is in his 401(k), IRA, and Healthcare Savings Account. He has another good chunk in a brokerage account.

The Redditor is currently on a five-month sabbatical and loving every minute. It is what gave him the idea of going back to on a part-time basis where he could earn 60% of his current $300,000 a year salary. It seems a generous offer and makes a reduced workload all the more attractive. Still, there are important things to consider before making the leap.

24/7 Wall St. Key Points:

• Transitioning from full-time to part-time work when you have hit your retirement goals early is a wonderful option to face, especially when the new job comes with a six-figure salary.
• Yet it is more than just about money and there are several important, key considerations that must be accounted for before making the decision.
• Proper life-work balance is always something that is difficult to keep in check and it could actually get worse on a part-time basis.
• Also: Take this quiz to see if you’re on track to retire (Sponsored)

Expenses don’t end after hitting your mark

Part-time employment can allow you to balance work and family obligations better. The Redditor has two children, ages nine and five, so he still has to consider their expenses growing up and going to college. While he doesn’t plan on fully funding their tuition, instead just giving each $60,000 and letting them finance the rest, children don’t get cheaper as they get older.

Even with childcare costs behind him, there are clothes, food, cars, insurance, and more that can be costly. As those expenses are still in his future, they need to be factored into his calculations.

Maintaining a proper distance between work and home life

There is a work-life balance as well. Far too often people going part-time find they still work 40 hours a week as they commit more time to completing projects. It’s also not helpful if your off time is spent still thinking about the job.

The Redditor admits he has trouble delegating. Even though he is in management, he likes to be in the mix with his subordinates. He could have difficulty letting go of the reins even as he has been enjoying his sabbatical.

People transitioning away from their jobs also find it hard to come up with activities to do. Whether it is new hobbies, volunteering, or some other activity, ensuring you’re not bored when away from work is critical to making part-time work a success.

When your net worth is tied to the stock market

Arguably the biggest factor in this decision is how much of his net worth is tied up in the stock market. The probability of a market crash in the next few years is high, and his net worth is a result of the bull market. 

We have enjoyed two straight years of better than 20% gains, which is a rarity. It is often followed by a significant decline afterward. The Redditor may quickly find he is not as well off as he thought if there is a market crash.

Fortunately, bear markets tend to be measured in months whereas bull markets go on for years. If he can avoid panicking and hold on through a severe downturn, he should emerge on the other side just fine.

But that also brings into question the security of his position. A recession or depression may cause his job to eliminate part-time posts, leaving the Redditor with more time on his hands than he bargained for.

Key takeaway

Being able to go part-time and pull back from the rat race is an excellent option to have, especially when it comes with a six-figure salary. Yet there are still a lot of considerations to account for that make it a bigger decision than it might otherwise seem.