How was your week? Productive I hope. I spent most of my spare time drafting my pièce de résistance for the Pension Series as a guest post for one of my favorite blogs and bloggers. I’m excited, so stay tuned for the announcement as to when and where you can find it. Unfortunately, it means I’m short an article because I (stupidly) don’t keep any posts in the bank.
However, I am about to let you in on a little blogging secret. Facebook provides an endless amount of material to write about. As proof of this point, about 10 days ago George, one of my awesome Golden Albatross Facebook Group members, asked the following sizzler of a question related to pensions and inflation-adjusted Cost of Living Allowance (COLA):
I have another confession to make to my dear readers (that makes two for those keeping track). When I covered how to calculate the Total Dollar Value (TDV) of your pension in Part Four of this series, I purposely restricted the calculations to retirement income owed to a retiree through a pension fund. I didn’t include Other Post-Retirement Benefits (OPRBs), alternately known as Other Earned Benefits (OEBs). For those of you unfamiliar with OPRBs, Investopedia defines them as:
Benefits, other than pension distributions, paid to employees during their retirement years. Most post-retirement benefits include life insurance and medical plans.
Some other examples of OPRBs include tuition assistance, legal advice, and support for funeral arrangements. I excluded OPRBs from my TDV calculations primarily because they are hard to value, and do not necessarily come with price tags attached. In the U.S. at least, no better example of this exists than pension-linked or subsidized healthcare. Continue reading The Pension Series (Part 6): Valuing Pension Subsidized Healthcare
“Exactly What Do You Think Is Happening Here Captain?”
Raise your hands if it’s hard to determine where I come down on some of the issues I address in this blog. You’re not alone. I do it on purpose. The way I see it, for some topics, all I can do is describe the problem and provide some options to solve it. The choice is yours as to how to use the information I provide. I was reminded of that this past week as I interacted with several of my Golden Albatross Facebook group members about topics I should include in a money manifesto if I chose to write one for the blog. Continue reading Golden Albatross Pension and FI Decision Trees (1st Draft)
My original intent for Part Four of this series was to write about good pension calculators found on the web that could help you place a Total Dollar Value (TDV) on your pension. In fact, I was building up to it from Part One onward. I felt my topics had a nice and natural progression beginning with pension safety, moving on to whether or not your pension is worth it, and then analyzing the three most important factors in determining the your pension’s worth: the Initial Dollar Value (IDV) formula, inflation’s effect, and the Immediacy Effect.
However, it turns out that most generic pension calculators on the web stink, if you can find one at all. It also turns out, that most pension plans have their own calculators. In hindsight, that makes sense because as we discussed in Part Three, each pension plan has its own formula to calculate IDV. My oversight aside, it doesn’t decrease the importance of determining the TDV of your pension. In fact, there are several good reasons for doing so, even if the process might prove different than I first imagined. Continue reading The Pension Series (Part 4): Total Dollar Value (TDV) of Your Pension