Tag Archives: Geoarbitrage

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 →

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 →

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 Golden Albatross vs. Kiwi Arbitrage

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Long Time Comin’

For more than nine months I’ve promised several readers an article covering the geoarbitrage potential behind Grumpus Familias’ pending move to New Zealand — which I’m calling “Kiwi Arbitrage” in honor of the beloved flightless bird native to New Zealand. Yet, for one reason or another, I kept putting-off that particular task. In other words, I procrastinated. That’s something of an Olympic sport in certain parts of my life.

That said, I had several good reasons for procrastinating this time around. The most legitimate was the lack of approved entry visas. I didn’t want to waste time writing an article on New Zealand only for some reason to appear that would prevent us from moving. If you don’t think that was a realistic possibility, then you obviously haven’t read about my lifetime of Charlie Brown-like luck.

Alas, I can procrastinate no longer. Grumpus Familias’ visas arrived several weeks ago and no major obstacles sprang out of the military retirement process. As a result, flights and movers are booked and Mrs. Grumpus and I are busy selling off or donating a large fraction of our worldly possessions that we can’t or don’t want to take with us. While we haven’t “burnt the boats” just yet, we are close — which means this move is on like the proverbial simian made famous by ColecoVision! Continue reading →

The Military Retirement Process: Lessons Learned (Part 1)

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For the Military Members in the Audience

When I first announced that I was officially retiring in 2019 via the blog and my Facebook group, the response was overwhelmingly positive. Amidst all those positive responses, Timika Downes, a fellow Financial Independence (FI) blogger, reservist, and FB group member asked me to share lessons I learned throughout the military retirement process. I was non-committal at the time because I had no idea if there would be anything worth sharing. However, now that I’m through the first phase of that process, I realize I have a few nuggets of information worth sharing — especially for military Financially Independent Retire Early (FIRE) seekers like me.

Admittedly some of my lessons are more or less relevant, based on what you want to do after the military. However, any military member contemplating either retirement or transition from Active Duty can take something away from what I’m about to share. Top among those takeaways is this: The Department of Defense (DOD); the Veteran’s Administration (VA); and many state, local, and benevolent organizations have put a lot of effort into ensuring that current active duty military members transition successfully to civilian life.

As a student of history, I’m well aware that the above takeaway was not always true. The VA, and the taxpayers who fund it, have failed to take care of U.S. vets on numerous occasions. As evidence, consider the string of VA scandals outlined by CNN in 2014. Continue reading →

GI(bill)arbitrage

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Did You Catch What I Did There?

I’ve invented a new term. Or maybe it’s a word. What do you call a word with parens in the middle of it? Do the grammar police allow such nonsense? Probably not. When I run this article through Grammarly, I bet it will have a field day with this new word-term-thing I’ve created. In any case, the term is GI(bill)arbitrage.

As a play on words, it’s quite clever … if I do say so myself. You can’t see me, but right now I’m patting myself on the back. It gets more clever still, but the meaning becomes less obvious if you drop the (bill) part and just go with GIarbitrage. Sounds a lot like the now infamous term Geoarbitrage used so heavily within the Financial Independence (FI) community, doesn’t it? It should because it’s a direct riff on the meaning of that word. However, because I didn’t want people to confuse GIarbitrage with Gastro-Intestinal arbitrage (whatever that might be?), I stuck the (bill) part in the middle.

There I am patting myself. Do you like my yoga pants?

What’s the Point, Grumpus?

Did you know the GI Bill can be used to study overseas? Neither did I until a few weeks ago. More accurately put, I never thought to examine the idea until Mrs. Grumpus and I decided we might like to emigrate to New Zealand after I retire from the military. By that point (and I mean all of about six weeks ago), I had already decided to retire from the military without transferring my GI Bill to my kids. I had also decided I was going back to school to use the GI Bill myself. Continue reading →

Work, Mental Health, Disability, and Retirement Planning

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Time For a Rethink

I recently started ramping down my anti-depression and anxiety medication that I take for my PTS linked issues. I didn’t make this mental health decision lightly. You see, based on my doctor’s recommendation, I tried to ramp down before. I wasn’t successful. My mood swings were too erratic and unpredictable. After the failed attempt, I decided to stay on the medication until I ended my Active Duty military career. I figured the natural stress relief created by retirement would greatly assist efforts to balance my moods more naturally.

However, a few recent experiences persuaded me to reconsider that decision. The first is a continuing deterioration of my physical health. The cascading effects that issue has created, and my attempts to manage the pain, built a desire to end all but the most benign medications. My psychotropic medication is anything but benign. While it definitely evens my temperament and smooths my erratic behavior, the side effects are numerous. This includes interruptions of my sleep cycle, weight gain, and a heightened tendency to sweat and dehydrate. Continue reading →

The Pension Series (Part 16): VA Disability

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Friendship Is Rare

Does anyone have a friend that dates back to first grade? I don’t mean an acquaintance either. I mean someone that’s been there almost your entire life through thick and thin. Someone who is more like a brother or a sister than a friend. I’m happy to report that I got one. I’m also happy to report that he decided to write an article for my blog!

Now, I believe it’s good etiquette that people who host blogs introduce anyone who writes a guest post. In fact, that’s what Darrow Kirkpatrick did for me when I wrote Part 8 of the Pension Series for his blog. However, in this case, my friend interwove his story into the blog post. So instead of a long-winded introduction, I’ll simply say:

Here’s a great post on the tax benefits of VA disability from a best friend of mine that I’ve known since 1982!

Continue reading →

The Pension Series (Part 10): Geoarbitrage and Pensions

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Where in the World …

geoarbitrage

… 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 →