In our fast-paced world, the desire for a better work/life balance is a common goal. It affects everyone from young professionals working long hours to get ahead, dual income households juggling inflexible jobs and children, and older workers wanting more time to help care for grandchildren or ease into retirement.
While some people want to increase their working hours, the more common reason for pursuing work/life balance is to reduce working hours. Let’s face it, who hasn’t wished for more hours in the day to pursue interests or hobbies, spend more time with the kids, care for elderly parents or to volunteer?
Traditionally it has been professional women leading the push for part-time work as a way to balance the competing demands of a career and parenting.
Now, greater numbers of men are considering flexible working arrangements that allow them to balance paid jobs with time taken out for parenting duties, sports careers, to improve their health or to do volunteer work.i
Need for time out
Recent statistics show that 29 per cent of men under the age of 35 have given serious thought to quitting an organisation that does not extend workplace flexibility.ii
Currently, 16 per cent of Australian men work part-time compared to 44 per cent of Australian women. Economists have calculated that a woman taking time out to care for children will, over a lifetime, suffer an average 17 per cent fall in her income.iii
If you are considering cutting back your working hours, you need to consider the impact on your take-home pay and weekly expenses. While some expenses, such as childcare, may decrease, others still need to be covered. Thought should be given to maintaining contributions to superannuation, income protection insurance and investments for future spending needs.
In addition to a drop in income, there is evidence that part-time work is less secure and predictable than full-time work. This underscores the need to plan carefully for the financial consequences of opting for greater job flexibility.iv
Plan your finances
Among the factors that need to be calculated when making a switch to part-time work are the impact on your taxation status, credit and other debt, especially large borrowings such as a home mortgage, plus your eligibility for government benefits.
Your adviser can guide you through the implications of transitioning to a part-time job and help build a financial plan that will avoid disadvantages that can flow from reducing your hours at work.
For instance, if you are over the age of 55 and you decide to work fewer days, you may be eligible to withdraw income from your super to top up your pay.v This is called a superannuation transition to retirement strategy.
Such a strategy could be useful if you want to care for grandchildren on some days, while not retiring entirely. This helps your adult children to remain in work and reduce childcare costs.
Consider your options
If you have considered going part-time to help restore some work/life balance but do not really want to leave your full-time position, there are other options.
For instance, instead of cutting back on work hours you could outsource some of your household’s unpaid but time-consuming duties, such as cleaning, gardening and even cooking. Not only will this buy you more time for leisure at the end of a hard day’s work, it can improve the wellbeing of the whole family.
A structured plan to restore your work/life balance is possible without compromising your finances or your career. We can help you with financial strategies to achieve your personal and financial goals.
i http://museumvictoria.com.au/about/work-opportunities/volunteering/
ii April 27, 2015, AFR, Fiona Smith: Why these men have decided to stop being workaholics. http://www.afr.com/leadership/careers/why-these-men-have-decided-to-stop-being-workaholics-20150427-1mu6uw
iii Adda, J., Dustmann, C., and Stevens, K. (2010). The career cost of children. Paper presented at the 10th World Congress of the Econometric Society 2010. Retrieved from http://www.eswc2010.com/
iv Page 4, WGEA perspective paper, Parenting, Work and the Gender Pay Gap. https://www.wgea.gov.au/sites/default/files/2014-03-04_PP_Pay_Gap_and_Parenting.pdf
v https://www.ato.gov.au/Individuals/Seniors-and-retirees/Transition-to-retirement/
