The 4-day Work Week

[mdgv2]

Sheer, dumb, luck.

My employer contributes 12% of my salary, cost free to me, and matches up 3%. And I contribute 5% getting a weeny tax break off the back of it.

It started in 2012, and currently stands at £92k or so, with a projection of a retirement in 2050 of £647,500, and a monthly yield post tax of £2.6k. Now, whilst I’ll be taxed 20% (less allowance) I won’t be paying NI. Add in State Pension and I really won’t be far off what I’m earning month to month now.

Whilst it’s a grim thought, by then Dad will be gone, and I’ll have inherited enough to buy somewhere lock stock and barrel, and so not be paying mortgage or rent. Hence, somehow, inexplicably to my simple mind, better than Final Salary. Provided the projection bears out.

Yes I’m a lucky, lucky bastard.

[herzlos]

Ah, I haven't even considered the state pension, because I'm sure by the time I get to 67 it'll have moved or become useless. I also wasn't factoring in the not paying rent thing; I'm working on the same plan that by then my outgoings will drop so a lower pension will likely mean more disposable income especially if we can downsize.
Pension wise I'm in the same ball park but probably not going to grow as fast as my total contributions are 13% - I pay 6% and they pay 7%. It's weird because a year or 2 ago it was predicting I'd get a pension of about £7k and now it's apparently about £15-20k. I was aiming to at least get to the income tax threshold but that may not be enough.

[mdgv2]

One thing I will say is that because of how compound interest works, even starting such a pension in your early 30’s as I did? It soon ramps up.

Hence the golden handcuffs. Which I really don’t mind as I not only enjoy my career, but also genuinely enjoy it, even when I’m dealing with a bunch of arseholes.

[Haighus]

I'm on an NHS pension so fortunate enough to get 20ish% employer contribution. The downside is it comes with a 9ish% employee contribution, which will be great when I eventually retire* but takes a fair chunk out of my paycheck.

*The retirement age will probably be bloody 90 by the time I get there...

[mdgv2]

I’ve set my retirement age as 70.

Depending on when Dad goes (grim thought again) that could come forward. But I certainly don’t fancy working beyond that.

[herzlos]

Jul 9, 2024 15:12:25 GMT -5 mdgv2 said:

One thing I will say is that because of how compound interest works, even starting such a pension in your early 30’s as I did? It soon ramps up.

Hence the golden handcuffs. Which I really don’t mind as I not only enjoy my career, but also genuinely enjoy it, even when I’m dealing with a bunch of arseholes.

I'm sure I've seen claims that if you pay into a pension from 18-30 and stop, you'll have a bigger pot than if you pay from 30-65, due to compound interest. I was a bit late to the game, started work at 22 and didn't pay into a pension for a while because the company offering was crap and I was skint.

I guess it's part compound interest and part investments. Compound interest because any gains are rolled into the balance to generate more gains, and investments because if managed well enough they'll grow over time anyway. It can be pretty risky in the short term (so my plan reduces the stock/cash ratio in the 10 years before retiring to reduce risk), but it's pretty safe over a longer 40-50 year working life term.

Your pension seems pretty generous so definitely a bit of the golden handcuffs. With mine the pension is meh, but I've got them too. Partially for the flexibilty, but we also get an enhanced redundancy package of 2 weeks pay for year of employment, and I've been here 20 years so the job insurance package is now sitting at 40 weeks pay. I'd be too scared about jumping ship and then getting let go with nothing.

I do actually like my job, but I'd reduce my hours or retire on the spot if I could afford to.

[Haighus]

Jul 9, 2024 16:09:52 GMT -5 mdgv2 said:

I’ve set my retirement age as 70.

Depending on when Dad goes (grim thought again) that could come forward. But I certainly don’t fancy working beyond that.

I think my pension is in some way tied to the pension age, so I don't get that much choice in the matter. Can't remember the details off the top of my head though.

[herzlos]

I know for mine the prediction is based on paying in until retirement age with an assumed salary growth of 5% every year which is unrealistic.

I thought for the final pension ones you got something like 1/26th of whatever ratio of your final salary for every year you worked. I don't know if that means you stop contributing after 26 years or you could potentially get more in pension than salary.

[pacific]

Jul 9, 2024 9:16:56 GMT -5 herzlos said:

Jul 9, 2024 5:08:57 GMT -5 pacific said:

Do they have the same work culture as Japan, where you can't speak up about anything and falling asleep at your desk is a commendable sign of how hard you are working? That seems an absolutely awful way to live.

Yes very similar. I remember trying to contribute when we were being given instructions once and the manager just started laughing and talked straight over the top of me. You just take orders, be seen to be doing the work. 

Incidentally, I work in the Nuclear industry and a large part of the investigative work and suggestions by INPO (the international nuclear safety body) related around trying to introduce processes for staff challenging manager decisions and routes for whistle-blowing. Get away from the worker just saying "hai", bowing, leaving the room and keeping their concerns to themselves. It was identified as a route cause in Fukushima, and very similar things happened in Chernobyl as well. 

[pacific]

Jul 9, 2024 16:09:52 GMT -5 mdgv2 said:

I’ve set my retirement age as 70.

Depending on when Dad goes (grim thought again) that could come forward. But I certainly don’t fancy working beyond that.

The problem with 70, we've had our three score years and ten and can't guarantee much beyond that (or what standard of living, health problems etc. we will have). Just seem to hear so many stories of people lining up all of these activities for post-retirement, then they get diagnosed with something awful just as they reach it. 

I am aiming for retirement at 60, or at least to be in a position where I am work a few days a week. All comes down to finishing the utterly horrendous mortgage payments (and unfortunately, like you say, when mum and dad leave you something). 

I do have friends who, thanks to good ole parents, were kicked out from home at 18 to earn their own way (as the parents did, in a vastly different economic world) and have forever been stuck in a rental loop. Mine at least recognised the costs and allowed me to stay at home for a while and save for that initial payment, so am very fortunate in that regard. 

[herzlos]

I suspect most of us are in jobs we can comfortably do into old age too. I'm at a desk most of the time so whilst I don't want to and have no intention of it, I could work into my 70's.
I'm hoping I'll be semi-retired sometime in my 50's, but then I started off well with an inheritance being enough to get a house deposit. When the mortgage is paid off at 65 my outgoings will drop pretty drastically (like I could drop my days for 5-4 and still be better off).

Someone doing manual labour is unlikely to comfortably make it far into their 60's without struggling/slowing down.

Jul 11, 2024 4:48:33 GMT -5 pacific said:

Jul 9, 2024 9:16:56 GMT -5 herzlos said:

Do they have the same work culture as Japan, where you can't speak up about anything and falling asleep at your desk is a commendable sign of how hard you are working? That seems an absolutely awful way to live.

Yes very similar. I remember trying to contribute when we were being given instructions once and the manager just started laughing and talked straight over the top of me. You just take orders, be seen to be doing the work. 

Incidentally, I work in the Nuclear industry and a large part of the investigative work and suggestions by INPO (the international nuclear safety body) related around trying to introduce processes for staff challenging manager decisions and routes for whistle-blowing. Get away from the worker just saying "hai", bowing, leaving the room and keeping their concerns to themselves. It was identified as a route cause in Fukushima, and very similar things happened in Chernobyl as well. 

I always liked that the Japanese deliberately hire someone to be "The American". Someone whose role is to be obnoxious and talk back.

We had lots of problems with breaking communication chains with India and China as well, though that's slightly better because feedback travels eventually. You'd talk to someone and they'd tell you all was good, then they'd go back and talk to your manager who'd talk to their manager until it got back to you after being misinterpreted many times and the simplest question took a week to get an answer if all of the chain was available. I don't think we made much progress there at any scale, so I can't imagine somewhere like Japan would be any easier. Encouraging people to speak up? Heresy!

[mdgv2]

Well, now I feel a right cunt.

Here’s me in this thread discussing retirement and how inheritance will affect that?

And this morning, Dad went from a heart attack. Sorry. Still processing and the void was right there.

[herzlos]

Jul 11, 2024 6:25:01 GMT -5 mdgv2 said:

Well, now I feel a right cunt.

Here’s me in this thread discussing retirement and how inheritance will affect that?

And this morning, Dad went from a heart attack. Sorry. Still processing and the void was right there.

I'm sorry to hear that. If you need to vent to someone I'll send you some contact details.

There's also nothing you did here that could have caused it, as much as you'll feel guilty about it.

[Haighus]

Jul 11, 2024 6:25:01 GMT -5 mdgv2 said:

Well, now I feel a right cunt.

Here’s me in this thread discussing retirement and how inheritance will affect that?

And this morning, Dad went from a heart attack. Sorry. Still processing and the void was right there.

Really sorry to hear that MDG. Sounds exceptionally sudden. Hope you have support around you

[mdgv2]

I’ve let my friends know. Now off to process. Which does NOT involve beer.