Welcome to the third iteration in my ‘Reel Freedom’ FIRE-related film series. It’s been a while since my previous ones but I'm back with a corker! Previously I explored consumerism in Fight Club and money vs meaning in A Christmas Carol. This time round I'm looking at what is probably the most obvious of FIRE-related films... ' Office Space'. This is a 90s cult classic that strangely I acutally only got round to seeing a few years ago. If you've not seen the movie I've no doubt that will have at least seen a few memes based on the film. This film tackles a number of topics associated with the FIRE movement, most notably: what would you do if you didn’t have to work for money? Peter, the main protagonist, is the relatable everyman, wrestling with that age-old exchange of time for money, especially when the money comes from a job he hates! As before, disclaimer here is that this will probably contain spoilers. All set? Let’s have a look! "It's not...
Psst. D'ya wanna double your money? Ok, how about tripling it? Triple and a half?! Final offer!
Sounds too good to be true right? Well depending on your tax band and your employer contribution to your pension scheme this is effectively what is on offer.
Access the spreadsheet here:
https://docs.google.com/spreadsheets/d/1UXYHzVNM2wrynmsJzAIcr9rlQcHShAgWSLy7cS6I3wU/edit?usp=sharing
As with all my spreadsheets, you only need to fill out the cells in bright yellow. In the case of this one, there are only 3 cells to fill in.
Sounds too good to be true right? Well depending on your tax band and your employer contribution to your pension scheme this is effectively what is on offer.
Access the spreadsheet here:
https://docs.google.com/spreadsheets/d/1UXYHzVNM2wrynmsJzAIcr9rlQcHShAgWSLy7cS6I3wU/edit?usp=sharing
As with all my spreadsheets, you only need to fill out the cells in bright yellow. In the case of this one, there are only 3 cells to fill in.
Example 1:
- Take the UK median wage of roughly £25k (mean wage is much higher due to sky high wages skewing it!)
- Employer contribution of 5%
- Employee contribution of 6%
- If done via salary sacrifice, then the benefit to the employee is 224%
- If they have a student loan then this rises to 273%
Example 2:
- Income of £60k
- Employer and Employer contribution same as above (5% and 6% respectively)
- If done via salary sacrifice, then the benefit to the employee is 279%
- If they have a student loan then this skyrockets to 349%!!
- These figures apply to any income above the higher rate tax band starting point, currently 50k.
- Sticking with this example, this employee could sacrifice 10k into their pension and instantly get 349% return!
All of these returns are instant, and the performance of your pension after that point is a bonus. Remember the magical effect that 20/30 years of compounding will have on it as well!
Anyway, this post might not last that long depending on what the Conservatives do to the Pension Tax Relief in a few weeks, we shall see!
Comments
Post a Comment