Using the 4% Rule to Gradually Reduce Your Workdays

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:

  1. 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.
  2. 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.
  3. Many groups and individuals have increased productivity with reduced work periods, so you may sacrifice less income than expected.
  4. 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.

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