Tag Archives: Golden Albatross

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 →

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 →

The Pension Series (Part 24): The Golden Albatross vs. Black Pensions

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Black Pensions Matter

On April 4, 1968, Martin Luther King Jr. was assassinated in Memphis, Tennessee, while supporting a Black sanitation workers strike (Hutchinson, 2019). Most Americans probably know those sad facts because they either lived through them or studied them at school. However, most Americans probably don’t know that the sanitation workers’ demands included a “10% wage increase, fair promotion policies, sick leave, pension programs, health insurance, and payroll deduction of union dues” (Estes, 2000, p. 158). Civil Rights advocates, like Dr. King, saw pensions and the organization of Black labor as one of many ways to improve the lives of Black workers and a method to level the economic playing field (Schmitt, 2008). So, believe it or not, Black pensions matter, and have for a long time.

Jobs and civil rights. The issues haven’t changed (Library of Congress, 28th August 1963).

I don’t wade into the subject of race and pensions lightly. But, up to this point, my work on the Golden Albatross worth vs. worth it decision framework has focused solely on the issues a generic pensionable worker would need to consider. And, since I’m a White-guy, it’s reasonable to assume that my vision of that generic worker was White … and a guy.

My lack of consideration for how the Golden Albatross decision framework might need to adapt based on either sex or race seems myopic. It looks incredibly myopic when considering the global re-emergence of the Black Lives Matter movement in 2020, as well as the unequal devastation caused by the COVID-19 along racial and socioeconomic lines. As a result, this article marks my first effort to correct my mistake. Continue reading →

The Pension Series (Part 23): Organizational Culture and Pension Signals

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The Long Road to Pension Signals

I struggled with categorizing this post. It’s ultimately about the importance of pension signals that companies and organizations broadcast to their workers. For that reason, I made it a part of the Pension Series. However, I meander through several (somewhat funny) stories, and explain the importance of organizational culture, prior to arriving at pension signals. As a result, I could have placed it in my Life and Money section. In any case, if you don’t have the time to read my well crafted narrative, no worries, just skip to the last two sections. You’ll miss a lot of the context, but capture the main points. On the other hand, if you have time to take the long road to pension signals, please read onwards … which is actually downwards. Continue reading →

The Pension Series (Part 22): Analyzing Public Pension Plan Safety

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How Safe Is My Pension?

Pension plan safety is one of the most popular and relevant topics among the potential pensioners who read my blog. It’s popular because much like Social Security, chronic underfunding of certain types of pensions receives a lot of bad press in the U.S. As a result, many people think that all pension plans are circling the drain. While that isn’t true, as with most things in life, determining the truth about your pension plan’s safety is a somewhat subjective and complicated journey. However, that doesn’t mean you shouldn’t strive to answer the question, especially if the Golden Albatross has trapped you in its maw.

Pension plan safety

Instead of a circling the drain, how about a black hole sun?

There’s a reason why I started the Pension Series with the topic of pension safety. I said it then, and restated it more recently in my book; no issue cuts straight to the chase quicker than pension plan safety. That’s especially true when trying to determine if staying for a pension is worth it. If you are facing the gut-wrenching stay or leave decision at your pensionable job, and you decide there’s a high probability the pension won’t be there at retirement, then you may not require any further analysis. In other words, the realization that the pension won’t be there as promised effectively ends the internal debate. Continue reading →

Making Bold Adjustments

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Hey folks! I hope everyone is staying safe and sane out there during the COVID-19 pandemic. Grumpus Familias is safely ensconced at our new home in Nelson, New Zealand. We love the place despite the nationwide COVID-19 lockdown. I attached a picture of the snow-capped mountains of Mordor that we can see from the hill we live on as proof.

Bold Adjustments

However, more on life in NZ in future posts, because I have another great guest post to share from Chris Pascale. Today’s topic is Making Bold Adjustments which fits perfectly as a subject for this blog. I hope you agree.

In case you’re a new reader, or just don’t remember, Chris is a Marine Corps veteran, a friend of the blog, and also an author. In addition to that, he helped me BIG time by editing my forthcoming book, The Golden Albatross, which I’m happy to announce that ChooseFI Media will publish in June! Stay tuned for more announcements soon.

Bold Adjustments

Concept art from the book! It’s so close to release, I can smell that new book smell.

Back to saying great thing about Chris, though! He is interested in many of the same things I am like personal finance, pension hacking, and family time. Yet, he looks at things differently than me, which means he always has a fresh angle or new topic in mind for the blog. You can check out his other guest posts by going to the Article Index. One more thing, as with all other guest posts on the blog, I supplied the pictures, captions, and what hopefully passes as comic relief.

OK, Chris, take it away …. 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 Pension Series (Part 11) : Pension Lump Sum Case Study — Updated

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Substantive Revision

This is a substantive revision to the original Pension Series Part 11 article I published on 18 JAN 2018. I updated this article because I have a new method for calculating the Total Dollar Value (TDV) of pensions that do not possess a Cost of Living Adjustment (COLA). The new method is far more accurate than the old method, so I am updating all articles in which I used the old method. That said, the new formula didn’t change the results of this case study because the estimated value of the pension annuities on offer increased vice decreased. As a result, the new method only strengthened the recommendation I made for the ChooseFI listener to concentrate on comparing the difference in value between her $75,740 lump sum offer and the lifetime annuity starting at age 60. 

Any additions I made to the text are in blue. Sentences from the old version of this article that discuss my old TDV method are struck through. I only used the feature a few times in the text, mostly to replace the old TDV steps with the new. As a result, the article itself remains fairly coherent.  Continue reading →

Golden Albatrosses Killed Your Golden Goose

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No Birds Were Hurt In The Making of This Post

Wondering where I’ve been lately? Well, I’ve taken advantage of some post-operative convalescent leave to concentrate on finishing my book. As a result, I haven’t spent any time writing new content for the blog. Fortunately, though, Chris Pascale saved the day and offered to write a guest post for this month. Chris is a published author, father, husband, accountant, teacher, and former U.S. Marine (although I’ve been informed there’s no such thing as a former Marine). He’s also a big fan and friend of the blog.

Chris reached out to me last year (2018) after he heard my interview on the ChooseFI podcast. He believed we had a lot in common including military service, money issues, and PTS. To prove it, he sent me a copy of his most recent book of published poetry called War Poems: A Marine’s Tour 2003-2008. Continue reading →

Choices and Thankfulness

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Choices

I’ll have you know that I do most the cooking on Thanksgiving in our house.

Happy Thanksgiving

“What are you thankful for this year?” is a commonly asked Thanksgiving question. It’s usually asked around dinner tables, which is where we Americans typically celebrate this holiday designed to bring us together and reflect on the bounty in our lives. In fact, Mrs. Grumpus and I asked our children the same question tonight as we ate.

Grumpus Minimus #1 (the older one) dutifully answered that he was thankful for his mom, dad, family, and friends. He then proceeded to list every single one of his friends. Grumpus Minimus #2 (the younger one) said he was thankful for Hickam Air Force Base, where he likes to go and watch Hawaiian airline’s planes land (Hickam AFB shares a flight line with the Honolulu airport). I bet no Air Force Base has ever been loved as much as GM#2 loves Hickam.

Continue reading →