The Pension Series (Part 28): The Golden Albatross Vs. Age, Tenure, and Gender

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To justify studying Golden Albatross (i.e., stay-or-go) pensionable job decisions for my master’s program, I made an argument. I’m not talking about a Facebook or Twitter argument where everyone types in CAPITAL LETTERS and no one changes their mind. I’m talking about an academic argument. That’s right, I moved beyond my typical ranting via the interwebs and masqueraded as a social scientist for a few months. Let me tell ya, white lab coats for hairy knuckle draggers are hard to come by!

age tenure gender

I’ll let you guess which one is me.

My thesis argued that human resources (HR) managers needed to know which pension design elements made their pensionable workers most likely to stay. Reasons they might need to know this included if pension plan re-design was required after a fiscal crisis — like the dot-com crash in the early 2000s. Since the main reason for offering a pension is to create worker retention, I reasoned that pensionable employers would want to avoid cutting design elements that most attracted workers towards staying.

Of course, the argument was hypothetical. I have neither the ear of HR managers anywhere nor the nerve to advocate cutting design elements from pensions. I simply made the argument to convince my advisor and those (un)lucky enough to grade my thesis. However, after collecting and analyzing the results from my pension survey, I was ready to declare ‘Don’t mess with healthcare!’ to any HR manager that would listen.

If you’ve read Pension Series Part 27, then you know why. Survey participants ranked ‘pension subsidized healthcare’ as the design element that made them consider staying at their job the most during their Golden Albatross decision. In fact, the final weighted score for healthcare was ten percentage points higher than the second-place design element, ‘immediate annuity.’ Therefore, the results appeared to support a ‘keep your money grubbing hands off of healthcare’ declaration.

That said, I’m glad I didn’t declare this straight away. As you’re about to find out, age, tenure, and gender are far more powerful elements during a Golden Albatross decision than any singular pension design element — even one as popular as healthcare. Continue reading →

The Pension Couch: Early Retirement Penalties

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I run a Facebook group for pensioners, pensionable workers, and/or their significant others called Golden Albatross/Golden Handcuffs. The group relies on the wisdom of the crowd to answer members’ pension-related questions and/or discuss pension-related topics. From time to time, the group serves up good topics to write about. For instance, I recently exchanged comments about the early retirement penalties built into their pension with a group member. It didn’t appear that the group member understood the reason for these penalties. As a result, I provided a short explanation as to why they did.

Fortunately, the Facebook exchange reminded me of a more in-depth email exchange I had with a reader a few months ago on the topic of early retirement penalties. Since the email conversation was far better organized (and researched) than my Facebook exchange, it seemed like a good candidate for a Pension Couch post. For those that don’t remember, Pension Couch articles are posts created from lightly edited and sanitized email exchanges in which I answer readers’ pension questions. In this instance, I answer McGruff’s (the crime dog from Public Service Announcements in my childhood) questions about the early retirement penalties built into his/her law enforcement pension plan.

Do early retirement penalties spell death for pensioners’ early retirement hopes?

Continue reading →

The Pension Couch: 8 More Years

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Believe it or not, I get fan emails from time to time. They come in many different forms. Some of it is precisely what it sounds like, meaning people take the time to drop me a nice note and say how much they liked the blog, the book (or both), or how much something I wrote resonated with them. I’d be lying if I didn’t say that my ego likes those emails. I’d also be lying if I said I have great tracking system for responding to all them. So, if I owe you a response, please accept my apology in advance as I try to work through the backlog. More importantly, please keep sending those types of emails because I find them extremely motivating. They help me write, even on days when I’m not feeling particularly creative.

Advice requests are another form of fan emails I receive. Those motivate me too because I get to help people directly. Most of the time, the advice being sought is pension-related. For instance, sometimes, people want me to analyze their pension as a whole. In contrast, others ask about a specific pension design element. Anyone who’d like to see or listen to me provide an overall analysis of a pension can check out the ChooseFI episode where I counseled a young married couple about the wife’s pension.

Less often, advice requests center on career/life issues associated with pensionable jobs. These issues sometimes include a mental health angle. Since I blog about my mental health issues connected to my previous pensionable job, it’s no surprise that readers reach out with similar problems or questions. That’s the gist of the latest email, which I discuss below. Continue reading →

18 Months of Kiwiarbitrage

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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

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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

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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

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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

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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

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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?

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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 →