I have been thinking about this for the past few weeks, maybe a couple of months now. I currently work a full-time schedule and on occasion pick up extra shifts. My salary comes out to around $110 per hour of gross income or take-home. For urgent care in a very well run large medical group, this is a great pay with even better benefits.
My Actual Income Working Full-Time
In another post I talked about calculating your actual hourly rate. I did this using my gross income of $257k, with a net income of around $150k. Adding in the benefits from work (my 21% employer contributions) I pocket another $70k taking my total take-home pay up to $220k/yr, or $18k/mo, not bad.
At this rate I’m able to pay down my student loans by $8,000 per month (update: now fully paid off). That leaves me with around $2,000 a month of living expenses. On top of this, I get to set aside $5,500 of pre-tax money every month. With only $23,000 of student loans left as of now (9/2015) I will soon be able to contribute that $8,000 to my investment accounts.
What if I decided to not work full-time any longer?
- Switch to part-time at current job (50-75% of a full-time schedule) and maintain all my benefits
- Become a per diem physician for my group, gain a lot of flexibility but lose my benefits
- Move to a lower cost state and work for a different medical group as a per diem
- Travel around and work per diem/locums for various medical groups
It’s great having options but I figure I would transition from one to the other rather than go from a full-time staff doc to a travelling per diem doc. I could drop down to as little as 50% of a full-time schedule and still get full medical and dental benefits plus disability, life insurance, as well as malpractice.
My Income Working Part-Time
At 50% of full-time I would work a Fri/Sat/Sun approximately 10 hours each day every other week. That would be 3 days on and 11 days off. I would actually get paid for 4 days since I get 10 hours of admin time every 2 weeks. The admin time is for the leadership role I took a few months back.
My gross paycheck would be $19,368 a month, so 50% would be $9,684. Of this I figure I would get to keep $5,617 after taxes. I can set aside separately from this income $1,500 towards my 401(k), I would get $193 matched towards my 401(k). Another $871 would be put into my 401(a) account monthly along with $968 contributed towards my Cash Balance Plan (similar to a pension plan).
That’s a grand total take-home of $9,100 which is an annual income of $109,000 working part-time, at 50% of a full-time salary. Many well-earning professionals don’t have this kind of take-home pay. I think what makes this number quite appealing is that my expenses won’t be very high once I pay off my student loans.
I figure after daily living expenses I would be left with $79,000/yr which I would add to my savings/investments. With my current $400,000 portfolio I could expect to have around $770,000 in my portfolio assuming a 4% rate of return, after-tax and inflation adjustments, approximately 44 months from now.
Or, I Could Just Keep Working Full-Time
And I know I shouldn’t do this because it’s not good to be greedy. But if I continued working a full-time schedule for the next 44 months I would have $1.2 million dollars.
Option 1 (part-time) would allow me to have a passive income of somewhere around $1,900/month by retirement age.
Option 2 (continue full-time) would come out to a passive income of $3,500/month. This would provide me with more money than I need. However, option 1 leaves no room for error. Then again, historically option 1 works and if supplemented by some part-time income it’s likely quite feasible.
Perhaps what I should be doing instead of looking at ‘how much more money I could have if…’ would be to count the number of hours I would have to work in each scenario. Option 1 would come out to working 60 hours a month. Option 2 would be 140 hours of work per month.
In Summary
Highly certain future financial stability vs much more free time in the very near future – that’s what it comes down to. My instinct says go for the lesser hours, you can always switch back to full-time easily. My more cautious side, of course, disagrees but I am not very fond of my cautious side.
Have you switched down to part-time in your career?
What is holding you back from switching to a part-time schedule?