Budget changes: did I miss an announcement?

AnotherJoe

chucknorris wrote: »

But you are only looking at employment income and not considering other income! My investment income is about £90k PA, so all of my employment income is taxed MARGINALLY very high.

It doesn't seem extreme to me, especially as I /we are unlikely to to live long enough to actually spend the money that I earn (because we also have substantial capital to draw down from). There isn't any point in being the richest man in the grave yard, life should be about living, not attaining a certain capital value.

Why then are you working now, irrespective of any tax changes? You seem to have gone far past the point of needing to work for money, since you self admittedly don't need the additional money anyway so your position is self contradictory as you do currently seem to be working to be the richest man in the graveyard.

chucknorris

RickyB2000 wrote: »

I think where I am struggling is on the one hand you say you have so much money it is likely you won't be able to spend any extra in your lifetime and that you don't want to be the richest man in the graveyard. On the other you say you are only going to work if you get to keep more than 30% of the cash.

If you have plenty of capital and income for the rest of your life, and don't want to be the richest man in the graveyard, surely you can't be working for the money. So any change in tax status doesn't matter. So the only reason to work is because you enjoy it or you want to be the richest man in the graveyard.

There are 4 things that make working on an extremely marginal decision, so it wouldn't take much to tip the balance:

1. I am not working for the money that is for sure, but if my net pay fell to around 30% I feel that is really taking the p*ss to the extent that I wouldn't accept it.

2. Although I do like my job, I do have plenty interests to keep me fully occupied and happy. But I retired early once before when I was 42 (I'm 58 now) and I regretted it, although I now know that was because I had not planned my retirement properly, I just did it because my wealth reached a certain number. This time around I have already been slowly planning my retirement for a few years, in terms of what would I do with my time. My largest difficulty now with retiring, is that since I started lecturing, rather than working as a quantity surveyor, I have realised that it is the best job that I have ever had, I get much more satisfaction from it.

3. My mother in law died last week, she was only 72, that highlights (once again) the fragility of life and that you don't know how long you have. She was in reasonably good health, but caught pneumonia and died in a very short space of time.

4. Due to my wife's mother dying my wife is talking about retiring this December, this opens up the possibility of spending the winters in Spain and/or the Algarve if I retired too.

So it definitely isn't just about the money, but having to pay what I consider to be a ridiculous percentage of my salary as tax (plus employment expenses) could well prove to tip the balance. On the other hand other reasons might also do that, 3 and 4 above only occurred very recently, which has brought up the retirement agenda once again.

chucknorris

AnotherJoe wrote: »

Why then are you working now, irrespective of any tax changes? You seem to have gone far past the point of needing to work for money, since you self admittedly don't need the additional money anyway so your position is self contradictory as you do currently seem to be working to be the richest man in the graveyard.

Because I like my job, I came out of early retirement to start a new career as a (part time, 80% fractional) university lecturer 5.5 years ago, I didn't need the money then, I just wanted to do it. But if you read my post above this one, you will see that it is an extremely marginal decision for me whether to retire or continue working, there are non financial considerations too. But the financial one isn't anything to do with 'do I have enough money', it is simply that if my net earnings fell to about only 30% net of my gross pay, then that doesn't represent value. Even though I like my job, there has to be some financial value in doing it, because I also have plenty interests that I enjoy doing too.

EDIT: The financial argument might have just evaporated, looks like there may be no change to pension tax relief:

http://www.bbc.co.uk/news/uk-35732604

AnotherJoe

chucknorris wrote: »

Because I like my job, I came out of early retirement to start a new career as a (part time, 80% fractional) university lecturer 5.5 years ago, I didn't need the money then, I just wanted to do it. But if you read my post above this one, you will see that it is an extremely marginal decision for me whether to retire or continue working, there are non financial considerations too. But the financial one isn't anything to do with 'do I have enough money', it is simply that if my net earnings fell to about only 30% net of my gross pay, then that doesn't represent value. Even though I like my job, there has to be some financial value in doing it, because I also have plenty interests that I enjoy doing too.

EDIT: The financial argument might have just evaporated, looks like there may be no change to pension tax relief:

http://www.bbc.co.uk/news/uk-35732604

I don't understand the "there has to be some financial value" argument. If you've got more money than you can spend, there's no value to you, to any financial value.

Either you are working because you like it, or because you need the money, (or both). If you don't need the money, which it seems to be the case, you are letting your emotional feeling about being paid a small amount override your enjoyment of the job and actually you are doing it for the money, whatever you tell yourself.

chucknorris

AnotherJoe wrote: »

I don't understand the "there has to be some financial value" argument. If you've got more money than you can spend, there's no value to you, to any financial value.

Either you are working because you like it, or because you need the money, (or both). If you don't need the money, which it seems to be the case, you are letting your emotional feeling about being paid a small amount override your enjoyment of the job and actually you are doing it for the money, whatever you tell yourself.

Part of it, is of course that nobody can possibly know for sure how much they 'need', because nobody knows how long they are going to live. But that said, I don't feel that I 'need' the money'. Needing and getting value are two different things. Value is important, I like my job, but I'm not going to do it for free, there has to be a taxation point where it wouldn't represent value to me, only taking home 30% of my gross salary is below that point. If you don't understand that, it doesn't mean that it isn't a valid point, perceived value is of course very subjective, perhaps to you it isn't a valid point, but it is to me.

RickyB2000

chucknorris wrote: »

Part of it, is of course that nobody can possibly know for sure how much they 'need', because nobody knows how long they are going to live. But that said, I don't feel that I 'need' the money'. Needing and getting value are two different things. Value is important, I like my job, but I'm not going to do it for free, there has to be a taxation point where it wouldn't represent value to me, only taking home 30% of my gross salary is below that point. If you don't understand that, it doesn't mean that it isn't a valid point, perhaps to you it isn't a valid point, but it is to me.

For me, it was the point about being the richest man in the graveyard. If you had said you have plenty of money but you are earning more money to buy more luxuries, leave a large inheritance etc and that a 30% tax would make doing those things so much harder that it wasn't worth working, I wouldn't see the problem. But saying you don't want to be the richest man in the graveyard but that a change in tax laws means you would throw in your job just seems like opposing arguments

chucknorris

RickyB2000 wrote: »

For me, it was the point about being the richest man in the graveyard. If you had said you have plenty of money but you are earning more money to buy more luxuries, leave a large inheritance etc and that a 30% tax would make doing those things so much harder that it wasn't worth working, I wouldn't see the problem. But saying you don't want to be the richest man in the graveyard but that a change in tax laws means you would throw in your job just seems like opposing arguments

It is more about value, but avoiding being the richest man in the graveyard is indeed the counter argument.

On the one hand I want to obtain value (I'm not going to work for peanuts, even though I like the job, there are other more enjoyable things in my life). But on the other hand I don't want to be the richest man in the graveyard, which makes working on more of a marginal decision than it otherwise would have been. Given that it is marginal, it doesn't take much to tip the balance.

I only made the comment about being the richest man in the graveyard in response to you saying:

RickyB2000 wrote: »

Feels a bit extreme to throw in a job you like for a few percent extra tax overall.

To demonstrate that it isn't an extreme thing for me to do, it is actually very marginal whether I carry on working or not anyway.

Bootsox

chucknorris wrote: »

...Value is important, I like my job, but I'm not going to do it for free, there has to be a taxation point where it wouldn't represent value to me, only taking home 30% of my gross salary is below that point. If you don't understand that, it doesn't mean that it isn't a valid point, perceived value is of course very subjective, perhaps to you it isn't a valid point, but it is to me.

I understand your point because I believe that there has to be a sense of "fair play" in society (this applies to both ends of the socio-economic spectrum).

RickyB2000

chucknorris wrote: »

It is more about value, but avoiding being the richest man in the graveyard is indeed the counter argument.

On the one hand I want to obtain value (I'm not going to work for peanuts, even though I like the job, there are other more enjoyable things in my life). But on the other hand I don't want to be the richest man in the graveyard, which makes working on more of a marginal decision than it otherwise would have been. Given that it is marginal, it doesn't take much to tip the balance.

I only made the comment about being the richest man in the graveyard in response to you saying:


To demonstrate that it isn't an extreme thing for me to do, it is actually very marginal whether I carry on working or not anyway.

I Still don't get it though. You say there are other more enjoyable things, so why keep working if you don't have to? Or is this ultimately down to a fear of not having enough? You keep working because you are worried you have miscalculated or some unforeseen event hits you? Thus if you don't earn much after taxes, then the job is no longer helping to mitigate this fear and so you would stop? Is that the finacial argument?

xylophone

You enjoy work.

You enjoy other activities more.

The work gives enjoyment plus a salary - even after tax there is a net benefit. That benefit is the bonus.

The other activities give enjoyment which is greater than that given by working. The benefit /bonus here is the extra enjoyment.

The question is which benefit/bonus do you value more?