Tag Archives: Defined Benefit Pensions

Pensionable Careers: Fed vs. Military Benefits (Part 1)

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A Word from the Publisher

This post is the first of a two-parter from longtime friend of the blog Chris Pascale. Chris was a US Marine who served in Iraq in the mid-2000s but is now a US federal employee. If you want to know more about him, you can read his short bio at the end of the blog post.

Chris is also a published poet!

Chris writes here in a private capacity, which is good because he has several strong but fact-based opinions on which pathway (federal or military) provides the better retirement benefits value proposition from a “worth vs. worth it“ perspective. I emphasize the term pathway because judging the worthiness of a pensionable career should be more than just an examination of the retirement benefits provided. It should also consider the pros and cons one will experience while working towards those benefits during their career, which is what Chris does.

In that light, Chris clearly believes the federal path is the better one. That’s a critical view to represent since I spend so much time on this blog talking about the advantages of my military retirement benefits. That isn’t to say that Chris doesn’t support those making a career in the military; he simply believes the career and retirement benefits should be more equitable. The remainder of this article and the next explain why. Take it away, Chris! Continue reading →

Why I’m Offering Paid Pension Analysis Services

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Pension Analysis Services

I made some subtle changes to The Golden Albatross webpage the other day. First, on the home (aka splash) page, I added three paragraphs under a subsection called “Services” that briefly describe the paid pension analysis services I now offer. Those paragraphs also quickly explain why I’m charging for services. Second, I created a permanent page called Pension Analysis Services, where I provide an in-depth explanation of the range of services on offer. I also explain the technicalities of how hiring my services works.

In case you don’t want to click away, here it is.

Since “what I offer” got a web page, I wanted to circle back with an article about “why.” By doing so, I will have a permanent explanation for anyone who asks, nested under the “what I offer” page. More importantly, I want to explain “why” because paying me pension analysis is a marked departure from the original intent for The Golden Albatross website. In all, I provide five solid reasons, which I list below.  Continue reading →

Put Your (Pension) Money Where Your (House) Mouth Is

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Permanence and Pension Money

Greetings, long-lost readers! It’s been over a year since I published my last post about my return to work to qualify for a New Zealand residence visa. A lot happened over that time, so much so that a separate update is warranted. However, for this article, the easiest thing to say is that my return-to-work plan … worked! My family and I obtained NZ residence based on my employment in April 2023, I transitioned to part-time work in August 2023, and we bought and moved into a house in December 2023. It was a hectic but ultimately successful year, with few setbacks and much growth. As a result, my family and I feel truly blessed when we wake up to the stunning views each morning at our New Zealand home and are comforted by the permanence it provides. Couple that with the financial stability afforded through our monthly defined benefit (DB) pension money, and we are sitting well indeed.

Pension Money

The view from our new back yard.

The remainder of this post is about some of the concepts I put into action to purchase our house and achieve that permanence. As you may have deduced from the play-on-words in my title, the money from my DB pension played, and will continue to play, a key role in making that happen. As such, there are potential lessons to be learned for anyone with a DB pension playing a central role in their retirement who might also wish to purchase a house.

Continue reading →

FIRE in New Zealand: One Thing a Pension Cannot Buy

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Here’s an imaginary conversation that’s been playing in my head recently:

      • Almost non-existent long-term reader: “Hey Grumpus, I noticed you haven’t posted any new articles in a while. Is everything OK?”
      • Grumpus: “Thanks for asking, but unfortunately, no, everything is not OK. I’ve been mourning a personal loss.”
      • Almost non-existent long-term reader: “Oh…I’m sorry for your loss. Who are you mourning?”
      • Grumpus:“Not who but what.”
      • Almost non-existent long-term reader: “OK … That’s strange … What are you mourning?”
      • Grumpus:“I’m mourning the death of my defined benefit pension-enabled Financial Independence Retire Early (FIRE) in New Zealand lifestyle. It died in October 2022, when I returned to full-time work.”
      • Almost non-existent long-term reader: “Oh, I’m sorry to hear that! However, I’m afraid I must report you to the Internet Retirement Police (IRP) that Mr. Money Mustache talks about.”
      • Grumpus: “I understand. I’m now a FIRE imposter. Tell the IRP that I’ll go willingly.”

(Moments later, as the IRP is dragging a defeated Grumpus into the police van)

      • Grumpus: “My first attempt at a FIRE in New Zealand lifestyle is dead. LONG LIVE MY SECOND FIRE IN NEW ZEALAND LIFESTYLE!”
The End of a Short Era

You read that imaginary conversation correctly. My defined benefit pension-enabled FIRE in New Zealand lifestyle only lasted 1 year, 4 months, & 23 days. By FIRE in New Zealand lifestyle, I mean the time I spent in retirement with no GI Bill-sponsored or other full-time work-related income. During that time, my family and I lived in New Zealand, relying solely on the income from my Department of Defense and Veteran’s Administration (VA) pensions. I must admit, with a small amount of pride, we did an excellent job of staying under those spending limits.

Why, then, did I return to full-time work? I did it because a defined benefit (DB) pension cannot buy a New Zealand residence-class visa. And without a resident visa, an immigrant family like mine cannot FIRE in New Zealand. That’s not to say that money can’t buy residence in New Zealand because it most certainly can through an investor visa. However, in the post-pandemic New Zealand immigration system, that potential visa pathway was moved beyond my family’s ability to achieve. As a result, even though I’m guaranteed to earn the same inflation-protected amount of money each month until the day that I die, it wasn’t enough. I found myself at the uncomfortable crossroads of a return-to-work decision around September 2022. Continue reading →

This Is Your Pension On Inflation

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What do you think will be the Word of the Year for 2022?

My heart says it should be “Ukraine,” but my head says it will be “inflation.”

If I was a betting man, I’d bet with my head.

To be fair, one of the driving factors of 2022’s inflation is Russia’s illegal and immoral war in Ukraine. Specifically, it is the grain and gas shortages caused by the war and the international sanctions against Russia. However, that’s not the only cause of 2022’s inflation problem. It turns out that inflation’s rise in 2022 is a complicated story, one with many villains and few heroes, which also means it may be sticking around for some time. As a result, it’s an excellent time to analyze the vulnerabilities of a pension without an inflation-fighting mechanism. Continue reading →

The Pension Couch: Replacing Pension Income

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Back in Action

I’m back with another edition of the Pension Couch. I produce Pension Couch articles from edited and sanitized exchanges with readers who ask me defined benefit (DB) pension questions. It’s a way for me to create posts with useful pension-related information without the additional work required to write one from scratch. In this edition, I answer a reader’s “what if” question about replacing lost pension income by taking a higher-paying non-pensionable job. As a question, it fits well with this blog’s stay-or-go Golden Albatross theme. Therefore, I believe it’s worth your time.

This article’s request came from a reader who I called Kai. He specifically asked how much he’d need to save and invest at a new non-pensionable job to replace lost annual pension income from his current pensionable job… if he decided to leave six years earlier than planned. On the face of it, that’s a straightforward question. The answer, however, required modeling his retirement savings and investment options and then determining if they could replace the potential lost pension income.

Readers ask me some form of the “replacing pension income” question a lot, which tells me two things. First, many readers have contemplated leaving their often lower-salaried pensionable jobs for higher salaried non-pensionable jobs. Second, many readers also understand these scenarios involve trade-offs connected to their pension’s ultimate value in retirement. But, as just mentioned, mathematically modeling these “what if” questions can be complicated. Fortunately, in this article, I demonstrate how to determine if replacing pension income is feasible without resorting to complex math formulas. Instead, I use a free website and free retirement planning software, which you can easily replicate, should you need to answer the same question. Continue reading →

The Pension Series (Part 31): Grumpus Maximization

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Pension Maximization Part Deux

This post is a direct continuation of Pension Series Part 30. In that article, I introduced my general framework for maximizing your defined benefit (DB) pension, which I call Grumpus Maximization. I also walked through the first two steps of Grumpus Maximization, which were (1) setting expectations and (2) orienting on yourself and your pension. These two steps are about understanding your retirement needs and your pension. In fact, step 2 required answering nine questions along those lines, not all of which were easy.

This article covers steps 3 through 5 of the Grumpus Maximization framework. As a preview, step 3 involves determining your Gap Number, which I discuss in detail below. Step 4 identifies tax minimization and investment maximization strategies that complement your pension’s steady earned income. Finally, step 5 discusses identifying other pension maximization opportunities. Continue reading →

The Pension Series (Part 30): Pension Maximization

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Pension Maximization

Helping pensionable workers determine the value of their defined benefit (DB) pension to make well-informed Golden Albatross decisions is the raison d’être for this website. Thus, I write most of my articles for pensionable workers trying to determine whether staying for their DB pension is worth it. However, those aren’t the only articles I write. Although much smaller in number, I also publish articles for pensionable workers who decide to stay. If a unifying theme to those articles exists, it’s pension maximization.

What’s pension maximization? In practical terms, pension maximization ensures your pension’s positive impact in retirement is as significant as possible. You maximize your pension by taking active steps during your pensionable career. My Gap Number, Roth vs. Traditional, buying back years, and pension geoarbitrage articles provide examples of actionable steps pensioners can take. That said, unlike my Golden Albatross-themed articles, I never laid out a framework for pension maximization. In other words, after a worker decides to stay, I never answered the simple “now what?” question.

The remainder of this article, and its follow-on, layout my framework for answering “now what?” I call this framework Grumpus Maximization.

Yes, it’s a somewhat cheesy metaphor. But, Grumpus Maximization is a catchphrase designed to stick, much like the Golden Albatross. Who knows? It might even aid future marketing attempts like printing t-shirts with “Got Pension?” on the front and “Get Maximized @ grumpusmaximus.com” on the back …

That’s not helping, is it? Fine, I’ll sidebar the marketing discussion for now. Continue reading →

The Pension Series (Part 6): Valuing Pension Subsidized Healthcare (Updated)

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A Much-Needed Overhaul

Not every blog post I publish stands the test of time. While I always aim to produce “evergreen” articles, meaning they stand on their merits regardless of age, I don’t always succeed. My original pension subsidized healthcare post was a great example of this shortcoming.

When I published the article, the US’s Affordable Care Act (ACA), also known as Obamacare, appeared on its way to the scrap heap due to domestic US politics. This made estimating the value of healthcare attached to a US-defined benefit (DB) pension even tougher. It also led me to rant about how overly complex and unfair the system was for those going through their Golden Albatross decision. As a result, I concluded that it was an invaluable benefit for those lucky enough to have healthcare attached to their pension, especially if they intended to retire before Medicare eligibility at age 65. Therefore, it should weigh heavily in their Golden Albatross decision.

That was it. I didn’t develop any complex formulas or provide helpful suggestions on accomplishing the seemingly impossible. Nor did I provide many links to others who had tried. So much for value-added, huh?

Absolutely none of that!

Continue reading →

The Pension Series (Part 29): The Golden Albatross vs. Women’s Pensions

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Recent History

In Part 28 of the Pension Series, I stated that age, tenure, and (in some cases) gender mattered more than any singular pension design element during a pensionable worker’s Golden Albatross pension decision. I based that statement on the evidence from my master’s thesis research. For my thesis, I ran a survey for pensioners and pensionable workers which I called the Golden Albatross survey. To complete the thesis I statistically analyzed the results of the survey, which I discussed in Pension Series Part 28. This post expands on the gender portion of those findings by focusing on the impact of defined benefit pensions for women in retirement.

Much like Pension Series Part 24 (Black Pensions), for this article I examine if and how the Golden Albatross decision-making framework should be modified for a specific sub-set of pensionable workers. In this case, that sub-set is women. In doing so, I specifically focus on the disparities in retirement savings between men and women and the impact of defined benefit (DB) pensions on women’s retirement outcomes. I conclude that the Golden Albatross calculation is different for female versus male pensionable workers. Continue reading →