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Is Delaying Financial Independence Ever Worth It?

Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Disclosures.

Achieving financial independence (FI) is a big deal. Once you reach FI, you no longer have to work for money and can do whatever you like, at least in theory. However, many of the people that focus on achieving financial independence do so by adopting a mindset of reaching FI as fast as possible. They want to try to escape the rat race and finally live life. But is that the right way to achieve FI?

The answer will depend on your particular situation, but I strongly believe there are good arguments as to why you may want to delay FI.

A few weeks ago, someone posted in the Choose FI Facebook group asking if it would be worth it to drop their hours at work from 30 hours a week to 20 hours per week to spend more time at home with their kids. The person had two young kids and they felt like they were missing out on this portion of their lives. The person’s 10+ hour shifts meant missing bedtimes and other activities on a regular basis.

Unfortunately, most people achieve FI after their kids are older or even fully grown. Few people have the luxury of being FI when their kids are young. So, if you’re trying to achieve FI as fast as possible, there is a good chance you’d miss out on many of life’s events with your young children as you put earning income as the top priority.

While the answer will be different for everyone, I believe this is one example of when it might make sense to delay FI in order to live life in the present. In fact, my wife and I recently made a somewhat similar decision.

Our Similar Situation And How We Handled It

My wife is a registered nurse and used to work three 12 hour night shifts per week. During her workdays, she only got to spend about an hour or two per day with our family after working, commuting and getting ready for work. She felt she was missing out on a big chunk of our son’s early years. Thankfully, her work offers an option to work on an extremely part-time basis. If we could make our finances work, she could in theory work as few as three 12 hour shifts per six-week period.

I work from home as a blogger and freelance writer, so I can only reliably get work done while my wife is home or my son is sleeping. If my wife is home more, I could theoretically earn more money. We ran the numbers and felt comfortable that we could cover our expenses if my wife switched to the extremely part-time status, but we wouldn’t be able to save as much as we had been saving for retirement.

Ultimately, we decided to sacrifice saving for retirement for a few years was worth the extra time my wife would get to spend with our son during this portion of his life. When she switched to working fewer days, something unexpected happened. I earned more money than we had projected due to the additional time I now have to work on my business. While we still aren’t saving quite as much as we did before my wife cut her hours back, the decrease in our savings wasn’t nearly as large as we predicted.

Of course, not everyone can afford to make the decision my wife and I have made. Sometimes you must continue working even if you don’t want to because the negative effects would be too large.

Here’s how you can take an objective look at your situation to see if delaying FI might be worth it to you.

Run The Numbers

The first thing you should do if you’re considering delaying FI, whether it be from taking time off from work or for any other reason, is run the numbers. Since you’re working toward FI already, you probably have a couple spreadsheets that calculate when you’ll reach FI. If you don’t, there are plenty of spreadsheets or calculators you can use to do this.

Rather than continue toward FI based on your current scenario, see what would happen if you changed your calculations to achieve your goal. In our worst case scenario, we cut my wife’s income down for four years and reduced our savings rate to zero but we would still earn enough to cover our monthly expenses. Even in this scenario, we’d only delay our FI date by two to four years thanks to our current savings. To us, that wasn’t a big deal to get some extra time with our son now.

Related: How To Calculate Your Savings Rate

Consider Future Scenarios

While you have an ideal scenario in mind, things won’t always turn out how you expect. You may not be able to return to the workforce full time when you imagine. Alternatively, you may have to take a pay cut or your advancement within your field will have slowed down.

Make sure you account for all of these potential options and run the numbers to see how much speed bumps like these could affect your decision. My wife works in a very high demand field and her part-time work will keep her skills up to date so we don’t foresee any major issues with our plan that could delay our FI date further.

Is The Delay Worth The Benefit?

Once you’ve run the numbers for your ideal and less than ideal scenarios, you have to decide if the delay to your FI date is worth what you get now. We were willing to make the sacrifice to our FI date to spend more time watching our son grow up. In the few months since we’ve made the decision, it’s become clear it was the right choice. It also helps that my business is making even more money which has allowed us to still save for FI at a decent rate. This means our FI date won’t be as delayed as we thought it would.

Related: Scary Money: Overcoming Your FI Fears

Final Thoughts

In the end, you’ll have to decide whether delaying financial independence is worth the benefit you gain. For some, spending more time with your kids when you’re young or traveling around the world before you have kids might be worth delaying FI by a couple of years.

For others, the extreme desire to escape the rat race may be worth forgoing additional time in the present. There is no wrong answer. It’s your life. Just make sure you aren’t blindly following the path to FI as fast as possible without considering the alternatives, first.

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Is Delaying Financial Independence Ever Worth It?

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Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Disclosures.
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