Will Changing Careers Destroy My Dreams of FIRE?

My interview last week went really well. There’s a very good chance I’ll be getting an offer from the company, I think, based on the conversations I had with the hiring manager. This role is a good opportunity to get my foot in the door in an industry I’ve been wanting to transition to for a while. And the company itself, while it’s early days yet and I’m sure in time I’ll find it doesn’t hit all my criteria, seems to be a pretty good one with low turnover and good growth. At the very least my commute would be significantly easier, and for that alone the transition might be worth it.

The biggest hesitation I’ve had making this leap has been, obviously about the money. As part of this career change, I’ll be taking a big pay cut. Probably 20% of my pay if I’m lucky. Also, as a smaller company, they are missing a lot of benefits I’ve gotten very accustomed to in the corporate world like retirement plans with matching and maternity leave, etc.

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Using rough estimates of what the company will offer based on my discussions with the hiring manager, the average pay for this role in the market, and the maximum I’m willing to take in terms of a pay cut, I expect our household savings rate will drop significantly from 64% to 55%. If I manage to negotiate up the cash compensation to just a “mere” 20% pay cut, our savings rate will only drop to 60%.

Luckily fiancé recently started working again after a six month period of unemployment, so in a sense it won’t feel like our financial progress will be changing that much at all since I never really got “used to” a 64% savings rate. However, the new set up requires that both of us be working in order to maintain a >50% savings rate. Once we have kids, for instance, if we do day care or if fiancé becomes a stay at home father, we’ll be hovering 30-40% savings rate territory. Not terrible by any means, but a huge difference if our goal is FIRE. Like, a ten year difference.

So long and short of it: Am I giving up FIRE to pursue this career change? Yes and no. For just a little while, I want to prioritize the now-me versus the future-me. If I angle this thing right, I should be back on a good career and income trajectory in 1-2 years. Sure, I may not hit all the dates on my FIRE plan. But really this stuff is all about flexibility and optimizing happiness along the way. Hopefully, I’ll be doing just that.

Is it worth it to take a pay cut in order to change careers? Any tips on how to negotiate maximum possible pay while still resigning to a pay cut in this sort of scenario?

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6 thoughts on “Will Changing Careers Destroy My Dreams of FIRE?

  1. Your doing the right thing. Years of unhappiness for some theoretical fi point is not the way to go. You might not even live to that point so you need to maximize through the entire spectrum. I’ve done a career change or two in my life, though not with a pay decrease. Money wasn’t the motivator though, being happier is the key.

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  2. Yes, a pay cut is (probably) worth it. I don’t think FI is a good destination if the journey isn’t something you enjoy along the way.

    Our savings rate without me working would be in the 30 – 40% range assuming T could get summer pay (typical but not promised, especially if projecting out years). Considerably lower without summer pay. (I just did a back-of the-envelope calculation and am surprised it is even that high, given that the sheer magnitude of dollars saved per year diminishes a bunch. But our tax burden drops a lot too!)

    Since we are coast-FI with no firm plans or dates for RE, savings is mostly just gravy at this point. I want to maximize our options, but not focusing on RE gives us lots of flexibility in our life choices. I do probably want to RE, but not sure exactly how early or when.

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    1. Yeah, I was surprised how much we’d still be able to save without fiance’s income. Taxes make a huge difference (side note: crunching the numbers, I found retirement vehicles are way more beneficial to FI plans than nearly anything else).

      Coast FI is a sweet place to be! Not quite in that range yet, but I’m trying to look at this as one of my intended glide paths based on my savings so far.

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  3. Best of luck with the ongoing job search! Alas, the pay cut versus savings/possible FI debate isn’t something that I have much insight on. (Lawyers with a less happy stint in biglaw are primed to be thrilled about accepting potentially a very large pay cut for the right job.) I have no regrets about my post-clerkship pay cut, relative to what I’d have been making if I went back to my first firm. I haven’t really run calculations on how it impacts even my loan repayment though, haha, so I can’t really say that I necessarily fully know what I’m giving up.

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    1. I don’t think I would have it in me to take a clerkship level pay cut even if it was just for a year before FI. I keep telling myself I’ll be the oldest grad student in my future PhD program but I don’t care. Did you at least get a pay boost post-clerkship relative to what you had been earning? (even if you would have made more at your former company?)

      On the one hand I feel really spoiled about it. Like, I don’t work nearly as hard as BigLaw folks do, so it’s not really about having that much less stress and I feel like why can’t I just tough it out here until FIRE. But then company drama happens and I am so, so glad I’m outta there.

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