Unpaid Leave Vs 4 Day Week

In a few years time I'll have my mortgage paid off at the age of 50, which will boost my disposable income by around €250 a week.

According to my calculations, a 20% drop in my gross income at that stage would still leave me over €100 a week better off in terms of my disposable income (and around €200 a week better off than I am now).

I'm lucky enough that in my job I should be able to get either a 4 day week or another 8 weeks unpaid leave a year (I already take 4 weeks unpaid a year), either of which would give me the 20% reduction in my gross. In either case I'd lose about a week of my annual leave.

What do people think is the best option? Never work Friday again, or take the whole summer off every year?

Explosive_Cornflake

how does a drop in gross increase your net?

bennyineire

https://www.boards.ie/discussion/2058351892/unpaid-leave-vs-4-day-week

Studies have shown that taking the Monday rather than the Friday is much better.

For me I would 100% be taking the Monday and would love to have that option and be able to afford it.

"Mondays off improved return-to-work anxiety on Sunday, making it “10x better”. Others said Friday was a waste to take off because it was often “the most relaxed day” at work, while taking Monday gave you a full day out of the most hectic part of the week."

AnnieinDundrum

I’d take the summer off and travel.

but that’s me

leanbh

What happens the bank holidays if you take Monday off? Isn't there 10 in Ireland?

Kaisr Sose

https://www.boards.ie/discussion/comment/122144809#Comment_122144809

It won't , though they will pay less tax on the gross. It's about the additional after tax (disposable) income having paid off the mortgage. Read post again to get the basis of the OP financials.

AnnieinDundrum

if you are on leave on a bank holiday you get the appropriate proportion off in lieu

so 4/5ths of a day is added to your annual leave.

https://www.boards.ie/discussion/comment/122144809#Comment_122144809

Disposable, not net: paying off my mortgage will greatly increase my disposable income.

Explosive_Cornflake

https://www.boards.ie/discussion/comment/122144874#Comment_122144874

Got it. I had just skimmed the post.

I'd do a 3/4 day week. If I took a few months off I wouldn't go back.

Mrs OBumble

https://www.boards.ie/discussion/comment/122144835#Comment_122144835

Depends on company policy: Some give you another day, some add 4/5 ths of a day to your AL, some pay you 1/5th of a week extra wages.

FishOnABike

or another option might be to keep (mostly) to a five day week with occasional extra unpaid days off days here and there and put the extra disposable income into your pension and look forward to retiring early.

SodiumCooled

https://www.boards.ie/discussion/comment/122144827#Comment_122144827

I have seen the Monday vs Friday as a day off mentioned before and while it’s does make sense in that you ease the Sunday blues and take a much busier day off this is also the reason why to me anyway if I was to go to a 4 day week the Friday is the only feasible day to take off.

We don’t officially finish early on a Friday but the reality is that many of us do (especially with WFH), people take it easier, meetings are avoided if possible etc. In other words talking Monday off would mean working a 3.5day week if even productivity wise and keeping deadlines etc would be challenging to say the least.

I would imagine it’s similar in many other places too based on previous jobs I’ve been in and talking to friends/family.

To answer the question asked by the first poster - I’d do the 4 day week I think rather than the big block of time off - evening financially the loss of income is more spread out.

gipi

Would 12 weeks unpaid (4 + the additional 8) not being you closer to a 25% reduction in gross, as 12 weeks is almost ¼ of the year?

Personally, I'd take the 4 day week - I did it for years, found it hard to go back full time when I transferred jobs.

https://www.boards.ie/discussion/comment/122146029#Comment_122146029

You're right, but I'm looking at it from where I am now not from where I'd be if I took zero unpaid leave. I've taken 4 weeks unpaid for a good few years, so my working year is 48 weeks not 52; August is for other people as far as I'm concerned.

Reducing this to 40 weeks would reduce my current effective gross by about 17%, going to a 4 day week would reduce it by 20%.

I'm leaning towards the 4 day week, but not fully there yet. I have a few years left anyway!

C3PO

https://www.boards.ie/discussion/comment/122146011#Comment_122146011

I agree OP - I could take Fridays off with not too much impact on work productivity but takings Mondays off would start every week off on the back foot and would definitely increase my stress levels!

Ezeoul

I assume you are civil service?

Check what impact a reduction from a 100% work pattern to an 80% one will have on your pension when you retire.

There is a pension modeller on NSSO.

https://www.boards.ie/discussion/comment/122146887#Comment_122146887

Yes.

I'm a member of the single scheme, so my work pension is going to be crap whether I'm on 50%, 100%, or 200% work pattern. The difference between my pension if I spent my entire career at CO level and if I spent it all at PO level just isn't enough to get excited about, never mind the impact of reducing to an 80% work pattern. Also the modeller for the single scheme is anyway worthless .

This is why I'm dumping cash into AVCs from several years ago until I retire. I pay myself first; if I didn't I could easily afford to drop down to a 4 day week and take 12 weeks unpaid leave per year now. But that would be a decision I'd bitterly regret down the line.

Buddy Bubs

If in the higher tax bracket for significant part of your income, reducing your hours/days and also taxable income can be quite a decent idea.

A lady in work here works 4 days because a 5th day would be heavily taxed, at the moment she is just under her threshold for the higher rate

Jim2007

https://www.boards.ie/discussion/2058351892/unpaid-leave-vs-4-day-week

You need to develop a proper financial plan for the future including retirement to know if you can even afford to take any time off!

• For instance when you take unpaid leave how does it impact to state and private pension entitlements
• What level of expenses are you like to have in retirement
• Will your current savings, private pension and state pension covery your living expense
• And so on

I can tell you experience advising people, that they always under estimate their living expenses, because they rarely go down very much especially in the early years, others discover they need to do building renovations as they get older because they designed their living space for young people and so on.

Thread very carefully because this is one financial decision you can't reverse later if you get it wrong at your age.

https://www.boards.ie/discussion/comment/122148786#Comment_122148786

You're obviously right that I need to think about the rest of my life, not just today.

As stated above and in another thread, I'm aiming (through a combination of COAP, work pension, and AVCs) to have more disposable income in retirement than I currently do. I fully expect to have more expenses in retirement, as Ryanair aren't going to bring me places for free! I've done most of what I'll need for my home for if/when I'm (for example) not able to get up the stairs anymore. I definitely won't need to do anything massive with it.

I've also done the maths on the effect on COAP and my work pension of maxing out my unpaid leave. It might add up to €25 a week in total, and frankly if €25 more or less per week makes a difference to me in retirement I'll already be totally screwed financially.

My two biggest outgoings are my mortgage and my AVCs, followed by the investment fund I've set up to cover my little person's college days (in case we're not able to). Takeaway the mortgage overpayment and the other two and I've a ton more disposable income, but I'd be storing myself up a lot of trouble for later.

I'd love to turn off the part of my brain which tells me about the stuff I'll need to deal with 10, 20, 30 years down the line but I can't! I think your advice is good mostly because it's the same advice I've given to myself and am already acting on!

Having done my sums & made my long term plans, I reckon I can afford to drop my gross income by 20% once the mortgage is paid off and still have more disposable income with which to enjoy life than I do now, and this is what I intend to do.

Where I'm undecided is which of more unpaid leave or a 4 day week I'd enjoy when I get to that stage.