Happy 2019 everyone! I read somewhere recently that we should make goals and not resolutions at New Year’s, which brings me to the inevitable question:
What are your goals for 2019?
Wait a minute, does one of those goals say “kill Grumpus Maximus”?
Since we’ve officially entered the last calendar year that I’ll be a part of the U.S. military, my goal for 2019 should come as no surprise. In October 2019, I’ll begin terminal leave, and on 01 January 2020, I’ll be officially retired … if all goes according to plan. I’m excited but also nervous. I got a lot of work to do in order to retire on the best terms possible from the military and to make sure my family and I are financially prepared. Continue reading →
I am ready to meet my Maker. Whether my Maker is prepared for the great ordeal of meeting me is another matter. — Winston Churchill
Death and Binders
I did something different this week for work. I deployed to a foreign country for a military exercise. I’m writing this post from that country as a matter of fact. It’s the first time since my Afghanistan tour in 2013 that I’ve deployed abroad with all my gear. It’s also the first time since my financial awakening that I’ve deployed. Granted, I traveled multiple times on official orders since Afghanistan and was also stationed overseas for multiple years. However, except for our Permanent Change of Station (PCS) move from Europe to Hawaii, I consider my travel comparable to business trips. There’s something different about packing up all your combat gear that sharpens the mind. As a result, while not a tour to a combat zone, I used this military exercise as an excuse to build my “Death Binder”.
Just for the record, Mrs. Grumpus hates the term, Death Binder. In fact, she won’t let me call it the Death Binder in the house. Instead, we call it the “Financial Binder” or “Financial Folder”. However, I call it the Death Binder when she’s not around. I do that partly because of my love of heavy metal. There’s something about the term Death Binder that makes me want to throw the devil sign up in the air and bang my head while shouting “DEATH BINDER” in my loudest metal voice.
A reader, whom I’ll call Lady J, recently asked me if I could value her future insurance annuity scenarios vs. her current cash-out value. She wanted an annuity valuation done in the same manner as the Pension Lump Sum Case Study I wrote for the Pension Series. The question intrigued me. My initial reaction was, yes, I could. Since a Defined Benefit Pension (DBP) is just another phrase for an annuity; I didn’t think it would prove too hard if she could provide the appropriate details. I told Lady J as much, and she promptly supplied me with details I needed.
Surprisingly, the annuity valuation proved both easier and harder than I initially thought. Easier in the sense that based on the numbers provided by Lady J, my Master Pension Value Calculator spit out an answer to her question in no time. Harder in the sense that once I reviewed the terms of her annuity policy, and the facts surrounding her initial investment, it forced me to ponder numerous “what if’s”. Thus, consider this article in two parts. First, I walk through the facts surrounding Lady J’s situation and the process of annuity valuation. Second, I address a few different issues, both good and bad, I noticed with this annuity. Continue reading →
This article is a follow-up on the lump sum case study I conducted for the ChooseFI listener, Tess, in Part 11 of the Pension Series. If you missed it, that case study also aired as Episode 58R on the ChooseFI Podcast. I mentally debated if I should make this Part 11a considering the links between the two articles. However, given this article’s length, and the alternate pension lump sum analysis method it outlines, I decided it warrants its own part in the series.
I’ll warn you now, this article is another deep dive into the world of pension lump sum offers. It won’t be my last either. Pension lump sum analysis is a rabbit hole. As I pointed out in my previous article, there’s no one correct method. A lot depends on what the pensioner values and the questions they are trying to answer. Proper analysis is also based on the strings attached to either the lump sum or the annuities.
Hello? Can anyone up there hear me? I got stuck down here analyzing my pension lump sum!
Fortunately, as a result of my appearance on ChooseFI 58R, several people reached out to discuss methods of calculating pension value and conducting lump sum analysis. We are currently in the process of compiling a spreadsheet with many of those methods baked in. It’s not quite ready though. So, for now, you have to put up with another wordy pension lump sum analysis from yours truly. Forewarned is forearmed. Continue reading →
Like what I did there with the title? I created what’s called click bait. Most of the time my titles are boring, other times they are obscure. This time though I created an “action” title to capture readers’ interest in the Gap Number Method, because it gained some recent publicity. That’s about as creative as I get, adding the word “action” in all caps to a title.
How’s that for action? Mrs. Grumpus hiking in Kauai
Yes, I know. You’re wondering how, with only two readers who aren’t related to me, did I gain any publicity? Well, it turns out I have a face built for radio — or podcasting as the case may be. Not so sure about the voice though.
In any case, on a recent (and so far my only) podcast interview on ChooseFI, the hosts asked me to explain my concept of the Gap Number. For those of you who need a refresher on the Gap Number, you can find the post where I coined the term here. In general, the Gap Number is the difference between your fixed income in retirement and your expenses. Expressed mathematically it looks like: Continue reading →
This past week was a big one in the short history of the Grumpus Maximus blog. My first guest post on a much bigger website drove a record amount of traffic to mine. The guest post was a result of collaboration between myself and Darrow Kirkpatrick of www.caniretireyet.com. I am happy to consider Darrow one of my two main mentors in this blogging adventure. My introduction to Darrow was facilitated by my other mentor, Doug “Nords” Nordman, who founded the Military Guide blog. Darrow and Nords are both great guys, not only generous with their time but knowledge as well. Together they make up my team in the blogging sphere. Whether or not they know it, their willingness to help me succeed translates into a special kind of teamwork for which I am immeasurably grateful.
Da Komrades, we built this victory monument to commemorate your week.
I blogged recently that when I retire from the military, what I will miss most is working with the great men and women I’ve had the honor of serving with and leading. For some reason, I’m the type of person who draws great satisfaction from working successfully together as a team to accomplish goals. The military life, despite its many drawbacks, definitely offers plenty of opportunities for teamwork. While not the only career that offers this opportunity, if teamwork is one of your main motivations in life, I could think of no better occupation to enter.
The Post-Retirement Teamwork Challenge
It remains to be seen if I can successfully translate the satisfaction I derive from teamwork opportunities in my full-time career to retired life. For someone like me who needs the sense of accomplishment which comes with teamwork, it begs the question as to what outlet I will turn to when retired. Certainly, blogging might provide more and bigger opportunities to collaborate, and I look forward to the possibility. Yet, as I stated elsewhere on this blog, I started blogging as a means of therapy and to help a friend plot a path through a Golden Albatross moment towards Financial Independence (FI). I’m not ready to give those reasons up and place all my hope for fulfillment in retirement on blogging. Continue reading →
Great news! You don’t have to read me waffling on about analyzing your pension lump sum offer this week at GrumpusMaximus.com. I published Part 8 of the Pension Series as a guest post for Darrow Kirkpatrick’s blog, CanIRetireYet.com, so you can read my waffling there instead. Check it out at the following link.
Darrow’s site is a long time favorite of mine. It is the one sight, more than any other, that inspired me to make the calculations and determine if early retirement was possible for myself and my family. Avid readers of my blog may already be familiar with his work as I reference it quit a bit. Luckily a mutual friend put Darrow and I in touch, and I now get to consider him a mentor and a friend. Many thanks to Darrow for providing me the opportunity to write for his site, and gain exposure for the Golden Albatross message and GrumpusMaximus.com. Darrow does not allow comments on his website, but feel free to post them to this article and let me know what you think.
Americans abhor failure, or so we’ve been led to believe. I joined the U.S. military in the late 1990s and can remember the Zero Defect Mentality the post-Cold War peace dividend bred into our military leaders. While I would like to think the longest-running armed conflict in U.S. history (Afghanistan), and the most controversial since Viet Nam (Iraq), bled our military leadership dry of the Zero Defect Mentality, I’ve watched it slowly creep back into prominence since 2010.
My current Commanding Officer (CO) is an exception to that trend. He uses a term to describe his willingness to accept failure: Recoverable Training Failure. It essentially means he allows people to learn from their mistakes, as long as those failures are recoverable (i.e. no one died or was seriously injured). He’d rather people fail in a training environment, take the hard lessons learned, apply them, and succeed operationally when it matters most. It’s a combat veteran’s mentality and is a good leadership philosophy in my opinion.
Sister, I killed Colonel Grumpus in the Drawing Room with a lead pipe.
Grumpus The Confessor
I have a confession to make. I put off writing this post for a while. When I first started my blog, I had always intended to demonstrate how to test your retirement plan. I wanted to do this by using a high powered retirement calculator. Doing so would complement what I consider the biggest strength of my website: the series of practical “How To” retirement plan articles in the Planning section. However, I needed to tackle some other topics first. I wanted to walk financially novice readers up to a point where they could understand the subject matter of this article. Yet, I essentially hit that point weeks ago, and still, I delayed.
Part of that delay was due to the complexity of what I intended to describe. It’s hard to write effectively about the steps needed to test your retirement plan. A technically savvy blogger would simply post a video of how to do this, but that is beyond my capability at the moment. As a point of reference, I was happy enough when I figured out how to embed a spreadsheet into this post. Maybe someday I will circle back and create a video once I obtain the skills, and find the time. Continue reading →
The two avid readers of this blog site (my parents — Grumpus Maternus and Grumpus Paternus) might recall a mention in a previous post of my three-legged stool of financial independence (FI) knowledge. They might also recall that I built that stable platform of knowledge through blogs, books, and podcasts. In the first leg, I discussed financial independence blogs. In this post, I review financial independence books.
Form, function, and finances
I specifically review three books, two booklets, and one chapter that when taken together would allow a person to plot a course to FI. The beauty with this list is that it includes a book for each stage in that journey. From those simply needing the motivation to start, to those ready to write retirement plans, create spreadsheets, and make investment moves; there is a little bit of something in here for everyone. Continue reading →
