18 Months of Kiwiarbitrage

Posted on by
Reply

In my original Kiwiarbitrage article, I explained how I determined that my family and I could afford to “retire” to New Zealand (NZ). I also stated that I would write many more articles on New Zealand and geoarbitrage. Since then, I’ve written precisely none … until now!

This article starts with general lessons that any expatriate (EXPAT) pensioner should know before moving, some of which I didn’t. Secondly, since several readers contacted me over the past few months and asked what the cost of living in New Zealand is like, I discuss that below. The article is organized so people can read the sections they’re interested in and skip the rest. I also try not to concentrate too much on COVID-19 pandemic-specific lessons but rather lessons that apply to all environments.

Finally, this article is anything but definitive. There will be others. For instance, I want to write one for EXPAT US military retirees and veterans. However, I limited this article to just the general lessons I’ve learned from retiring overseas and cost of living insights for the sake of time. Continue reading →

The Pension Series (Part 27): The Golden Albatross Pension Survey

Posted on by
8
Would You Like To Take A Pension Survey?

I loved the Animaniacs cartoon when I was a teenager, especially one episode called “Survey Ladies.” In it, two ladies run around a shopping mall hounding the Animaniacs screaming, “would you like to take a survey?” and asking crazy questions like, “would you eat beans with George Wendt?” For those of you who don’t know, George Wendt was Norm in the sitcom Cheers.

That’s how I felt in March 2021 as I administered a pension survey to US-based pensionable workers and retirees from several personal finance Facebook groups and my blog’s email distribution list. I ran around (virtually) trying to convince pensionable workers and retirees to take my survey and answer many seemingly crazy pension-related questions. Sadly, I couldn’t figure out a way to work George Wendt or beans into it. Continue reading →

The Pension Series (Part 26): Continuance Commitment

Posted on by
3

An Albatross By Another Name

Guess what? I may not have needed to coin the Golden Albatross metaphor! It’s sad but true. I cried (on the inside) when I discovered that business management academics had an entire theory that captured employees’ stay-or-go psychological condition long before I arrived on the scene with the Golden Albatross. It’s called ‘continuance commitment.’

While neither as catchy as the Golden Albatross nor limited to just pensionable workers, continuance commitment fits the Golden Albatross metaphor perfectly. The only difference is that the Golden Albatross describes the situation for pensionable workers. On the other hand, continuance commitment captures the stay or go feeling that any worker might face while working any type of job.

continuance commitment

Is this albatross masquerading as a management theory?

This post is all about continuance commitment and why I think it’s vital that pensionable workers know about it. The article starts small, with a definition of continuance commitment, and then moves on to the general theory. I then explain how continuance commitment fits into the study of voluntary employee turnover. I also link continuance commitment, voluntary turnover, and defined benefit pensions (DBPs) together. Afterward, I take a quick look at how continuance commitment ties into pension plan design, which I discussed in Pension Series Part 25. I do this to set up the discussion for Part 27 of the Pension Series. Finally, I end on a cautionary note about the types of employees continuance commitment produces. Continue reading →

The Pension Series (Part 25): Pension Design

Posted on by
6

Defined benefit pensions are not created equal.

I wish they were, mainly because it would make my job of explaining pensions easier, but that simply isn’t the case. Most pensions are designed differently than each other. In some cases, pension design varies significantly, in others only slightly. However, in almost all cases, these variations in pension design produce unique plans.

This fundamental truth is key to understanding the potentially decisive role of a defined benefit pension (DBP) in a pensioner’s retirement outcome. This truth is also vital for understanding a DBP’s influence during an employee’s decision to depart a pensionable job before reaching retirement eligibility. Academics and economists call this departure decision a voluntary turnover decision. However, I call it a Golden Albatross moment for those in a pensionable job. Future pensioners and current pensionable employees must understand their pension design in both the retirement and Golden Albatross scenarios. They can do this by examining their pension’s design elements. Continue reading →

6 Lessons From 18 Months as a Pensioner

Posted on by
4
Back in Time

Wow! Where did the time go? I blinked, and my first year-and-a-half as a pensioner flew by. Before you start laughing about my use of the term “pensioner,” I’m aware that in many parts of the world, “old age” comes in front of the word “pensioner.” However, since I’m only in my mid-40s, I’m not ready for the Old Man Grumpus moniker just yet. Let’s just agree that pensioner describes someone who receives defined benefit pension payments, like me, for the past 18 months.

I’m not the first personal finance or Financial Independence Retire Early (FIRE) blogger to write about the lessons from their first X number of months in retirement. In fact, it’s a popular topic. That said, none of the articles specifically address pension-related lessons learned. This article fills that void. So, I’ll put aside my usually verbose introduction and reveal six pension-related lessons that I’ve learned during my first 18 months as a pensioner.

Continue reading →

Guest Post: How to Optimally Ruin All Your Plans

Posted on by
5
A Message From Your Sponsor

This post is the latest in a series from friend of the blog, Chris Pascale. While his previous posts were mostly about the often strange intersection between life and money, this one is about fiscal planning.  Specifically, it’s about how your plans need to change to remain relevant when confronted with new circumstances. It’s a theme that fits in particularly well with this blog for several reasons: Continue reading →

A Guest “Worth vs. Worth It” Post: Is It Worth Your Life?

Posted on by
20
Is Your Crap Really Worth It? By “It” I Mean Your Life

I was at an estate sale. Among the hundreds of cups and glasses, I bought a dozen for $3.

Inside the house, passing a glass-encased wall display of ceramic dolls, I went to the basement. It was wall to wall hardcover popular novels – read once and then occupying shelves beyond the owner’s death. I wouldn’t buy them for a quarter, and the library wouldn’t take them for free. At $20 retail, there was at least $10,000 worth of purchases.

Leaving the basement and seeing more commemorative glass sets for sports teams and other themes, I saw that this was a theme – whatever they had, they had a lot of.

All of it cost money, and each purchase was a trade-off that initially appeared to be cash for a Stephen King book, a New York Mets beer stein, and a fourth coffee maker. Continue reading →

The Pension Series (Part 24): The Golden Albatross vs. Black Pensions

Posted on by
12
Black Pensions Matter

On April 4, 1968, Martin Luther King Jr. was assassinated in Memphis, Tennessee, while supporting a Black sanitation workers strike (Hutchinson, 2019). Most Americans probably know those sad facts because they either lived through them or studied them at school. However, most Americans probably don’t know that the sanitation workers’ demands included a “10% wage increase, fair promotion policies, sick leave, pension programs, health insurance, and payroll deduction of union dues” (Estes, 2000, p. 158). Civil Rights advocates, like Dr. King, saw pensions and the organization of Black labor as one of many ways to improve the lives of Black workers and a method to level the economic playing field (Schmitt, 2008). So, believe it or not, Black pensions matter, and have for a long time.

Jobs and civil rights. The issues haven’t changed (Library of Congress, 28th August 1963).

I don’t wade into the subject of race and pensions lightly. But, up to this point, my work on the Golden Albatross worth vs. worth it decision framework has focused solely on the issues a generic pensionable worker would need to consider. And, since I’m a White-guy, it’s reasonable to assume that my vision of that generic worker was White … and a guy.

My lack of consideration for how the Golden Albatross decision framework might need to adapt based on either sex or race seems myopic. It looks incredibly myopic when considering the global re-emergence of the Black Lives Matter movement in 2020, as well as the unequal devastation caused by the COVID-19 along racial and socioeconomic lines. As a result, this article marks my first effort to correct my mistake. Continue reading →

The Pension Series (Part 23): Organizational Culture and Pension Signals

Posted on by
3

The Long Road to Pension Signals

I struggled with categorizing this post. It’s ultimately about the importance of pension signals that companies and organizations broadcast to their workers. For that reason, I made it a part of the Pension Series. However, I meander through several (somewhat funny) stories, and explain the importance of organizational culture, prior to arriving at pension signals. As a result, I could have placed it in my Life and Money section. In any case, if you don’t have the time to read my well crafted narrative, no worries, just skip to the last two sections. You’ll miss a lot of the context, but capture the main points. On the other hand, if you have time to take the long road to pension signals, please read onwards … which is actually downwards. Continue reading →

The Pension Series (Part 22): Analyzing Public Pension Plan Safety

Posted on by
Reply
How Safe Is My Pension?

Pension plan safety is one of the most popular and relevant topics among the potential pensioners who read my blog. It’s popular because much like Social Security, chronic underfunding of certain types of pensions receives a lot of bad press in the U.S. As a result, many people think that all pension plans are circling the drain. While that isn’t true, as with most things in life, determining the truth about your pension plan’s safety is a somewhat subjective and complicated journey. However, that doesn’t mean you shouldn’t strive to answer the question, especially if the Golden Albatross has trapped you in its maw.

Pension plan safety

Instead of a circling the drain, how about a black hole sun?

There’s a reason why I started the Pension Series with the topic of pension safety. I said it then, and restated it more recently in my book; no issue cuts straight to the chase quicker than pension plan safety. That’s especially true when trying to determine if staying for a pension is worth it. If you are facing the gut-wrenching stay or leave decision at your pensionable job, and you decide there’s a high probability the pension won’t be there at retirement, then you may not require any further analysis. In other words, the realization that the pension won’t be there as promised effectively ends the internal debate. Continue reading →