I now have a meeting lined up with my boss and discussed the whole thing with a colleague who took a similar package in 2020. He said that there weren't anything to know really that isn't on the website and the main thing are the psychological issues involved in retirement in general but also the sudden and fast pace of retiring under a scheme like this. I have been debugging and improving my simulation. Now there is no financial difference between taking the package and working half time from the middle of this year till the end of 2027. After that, each additional year of half-time work adds 1% to net worth!
The university has an existing "transition to retirement scheme" as well. Under this you commit to retire at a date not more than 3 years out and then step down your hours while the university pays your superannuation contributions at the full time rate. That wouldn't be much different to taking the package. Maybe 0.5% extra net worth and a lot of work....
The website mentions that there might also be an early retirement scheme but that the ATO needs to approve of it still. So, I sent an email to HR asking what that would be like.
2 comments:
You could also take the VSS package and do something in 'retirement' that adds to NW. Either a hobby business, consulting, or maybe even 'home school' the kids? Since school fees are not tax deductible, the pre-tax earnings being consumed by paying private school fees is likely considerable. So saving on school fees by home-schooling (since MM is not keen on the public school system) could be a way to make VSS even more financially beneficial. Then again, you might just want to do some short-term contract consulting work or something else when 'retired'?
Yes, we have mentioned moving somewhere else cheaper and "home-schooling". My wife already does quite a bit of home schooling being Chinese, this seems to be the thing. I don't think I have a lot of consulting potential and getting clients would be tough for me. But we are moving away from doing the VSS as my next post will say.
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