While most discussions fixate on using the 4% rule to completely retire, the concept is equally useful for those looking to reduce their work schedules. In the diagram above, we can see how many days* we could safely eliminate from our work schedule. To get back a 2 month summer break, you would need a net worth of approximately $125,000, if you kept an annual spending rate of $30,000. Not only does this sound reasonable, but it would also make most work situations bearable, some might even become enjoyable.
As the 4% rule assumes that you are only drawing down from your accumulated net worth, a partial reduction is much safer:
- If your reduced income is any higher than the remaining spending, you will have excess available to further secure your finances.
- If you wished to reduce work days on a weekly basis, from the full 5, then you could likely leave your assets to grow, while spending from your active income.
- Taking larger breaks would increase the risk of drawing from your assets, but would also mean longer marathons of accumulation.
- If your situation allowed, you could flex days depending on the performance of your assets.
- Working more to buy assets while they are cheap.
- Working less to sell or keep assets while they are expensive.
- Many groups and individuals have increased productivity with reduced work periods, so you may sacrifice less income than expected.
- The extra free time allows you to significantly cut expenses, so you may overestimate your spending needs.
- Cooking more.
- DIY builds, repairs, and renovations.
*This is calculated out of 365 days, so a work week off would take 7 days.