The Gap Number Method in … ACTION!

Click Bait

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 →

The Pension Series (Part 10): Geoarbitrage and Pensions

Posted on 18-December-17 by Grumpus

Where in the World …

… is Grumpus Maximus?

In Part 9 of the Pension Series a reader’s question prompted me to research the interplay between the U.S. Federal tax code and pensions. My reader, Mr. Yankee, wanted to know what options existed to minimize Federal taxes when pension payments started for him and his wife, Mrs. Doodle. I found a few specific instances to defray some Federal tax, but nothing major. Turns out Mr. Yankee already knew the most powerful tax options available to him. What did Mr. Yankee know? He knew that in the U.S., geography mattered when it came to taxes — specifically at the State level.

For my one non-related international reader, it may seem strange, but in the U.S. we tax income more than once. We typically tax it at the Federal and the State level, and sometimes even at the local level. Furthermore, pension payments typically count as income no matter the source. As I chronicled in Part 9 of the Pension Series, everyone who receives a pension is (typically) subjected to Federal tax. However, not every State in the Union taxes income. Nor does every State tax pension payments as income. Continue reading →

The Pension Series (Part 9): Pensions and U.S. Federal Taxes

Posted on 15-December-17 by Grumpus

***This is an updated article. See Post Script at the bottom***

Today’s topic comes from one of my Facebook group followers. I recently solicited my Golden Albatross group on subjects to research and write about, and Mr. Yankee responded with the following question:

Has there been discussion of how to shelter your pension benefits from federal tax? When I retire I expect to receive about $60,000 a year from my pension I’d hate to give a large portion of it back to the government.

I told Mr. Yankee I would look into it since I’d yet to conduct an in-depth analysis of pensions and taxes. It’s a bit premature considering the fact that U.S. tax law is undergoing its first major overhaul since the 1980s. Currently, the House and the Senate are working on reconciling their two different bills into one in order to approve and send to the President for signature. However, my research only shows one proposal in the House bill with the potential to impact this conversation in any meaningful way, and I believe I can address it appropriately. If something radical happens in the reconciliation process, I will simply update this article when the dust settles. Continue reading →

Work and Mental Health: Slaying the Dragon

Posted on 03-December-17 by Grumpus

Am I only one I know, waging my wars behind my face and above my throat?

— Twenty-One Pilots, Migraine

How Was Your Week?

Last Friday wasn’t the best day for me mentally. I don’t know if the stress of a few hectic work weeks which included a lot of travel finally caught up, or if I missed my meds the night before. Maybe it was both. Maybe it was something else entirely. Either way, I didn’t feel the most stable. I think it was fairly apparent to several of my co-workers as I lost my cool (just a wee bit) during a meeting. For a moment, it felt like the bureaucracy was going to grind my bones to grist before I could escape. As a result, several hours after the meeting the weight of the Golden Albatross still felt insurmountable. Never a good feeling.

It got me this week.

As one of my Facebook readers once wrote, “Some days you slay the dragon, some days the dragon slays you.” Friday the dragon slew me, and it caught me off guard. It’s been a while since I’ve experienced a day like it. In fact, it might be the first day in over a year that I’ve lost my cool in a work environment. Home is a different matter, and the typical battlefield where I struggle to keep these sort of emotions in check (which of course is worse, and a different story altogether). Losing it at work, on the other hand, is an anomaly. As a result, I wasn’t ready to handle it. Continue reading →

Thankfulness and Bounty

Posted on 23-November-17 by Grumpus

The Meaning of a Grumpus Thanksgiving

I am sitting at home on Thanksgiving 2017 with a turkey breast on the smoker and some time on my hands to reflect. I find the Grumpus Minimi (pronounced min-EE-my) thankfully entranced with Charlie Brown specials, and Mrs. Grumpus busy making the pumpkin pie. Yes, for this five minutes my life feels like a Norman Rockwell painting (ignoring the Hawaii climate). I have much to be thankful for with respect to my life, this year more than any other. I hope as you’re reading this you feel the same way. If so then I believe our thoughts are aligned with the original intent of this holiday.

We’ve moved on to Paw Patrol apparently.

I’ve always loved Thanksgiving. A day set aside by one of the richest nations to ever exist in human history in order for its citizens to reflect with friends and family on the bounty that life found fit to bestow upon them, always appealed to me. Declared a national holiday in 1863 at the height of the U.S. Civil War, I would also suggest that part of the original intent included a belief by then President Lincoln that we should be thankful despite the hardships life has set in our path. As any student of U.S. history can tell you, my nation has thankfully never again seen such hardship as the Civil War. Continue reading →

The Pension Series (Part 7): How to Create Your Own COLA

Posted on 29-October-17 by Grumpus

St. George’s Thesis

“Cry — God for Harry! England and Saint George!”

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):

Basically, if my pension is say $50k [a year] with no COLA provided by my employer, what do I have to have saved in an IRA to be able to grow my pension with cost of living for the next 30 years? (50k+4%)+4%)+4%)etc. For 30 years…)
Continue reading →

Golden Albatross Pension and FI Decision Trees (1st Draft)

Posted on 15-October-17 by Grumpus

“Exactly What Do You Think Is Happening Here Captain?”

“Fists in the air in the land of hypocrisy.”

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 →

An Unintentional Meander Up Grumpy Avenue (Part 3)

Posted on 23-September-17 by Grumpus

It’s OK to Fail

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.

Continue reading →