August 04, 2020

Know Your Pension | Grumpus Maximus

46 minutes

Today’s episode features Grumpus Maximus, author of The Golden Albatross and creator of the Grumpus Maximus website.

Grumpus was three years away from a pension when he had a breakdown.

This pushed him to gather all the information he could on his pension to choose on staying or going.

Ultimately, he stayed and from then on became focused on teaching others how to understand and utilize their own pension plans.

Listen, learn, and let us know what you think about this awesome episode!

Episode Summary

Grumpus’ Beginnings

In the spring of 2016, he suffered a mental breakdown

This was while serving in the military

He was only 3 yrs from a pension

This made him do a lot of investigating into his pension

He gives people advice on how to balance mental health and personal finance decisions

We also talk about how to decide when to stop chasing the pension

This is important because there’s often such a long time to earn the pension

Varieties of Pensions

Grumpus highlights the vast differences in pensions

These differences make them more or less valuable

Differences include healthcare and inflation adjustment

One thing to look out for is how well funded the pension is

If it is only 50% funded, then it could be a riskier and less attractive pension

What is a Pension?

Generally, it’s some percentage of money based on your salary that you receive forever

You might have to work X number of years and at that point, you’re fully vested

Some allow you to ramp up your pensions vs all or nothing

Think partial vs cliff vesting

The main reason for a pension is for retention

If you’re ready to leave, they may offer you a lump sum

It’s important to consider tax implications and how much value you’re giving up

Grumpus also highlights that all plans must offer survivor benefits

This is where your spouse or dependent would get a part of your pension after your death

Rely Only on Your Pension?

Simply put, you shouldn’t only rely on your pension

The closer you get to vesting, the more you can assume you’ll have it

You also need to study how likely your pension is to actually exist

This is on top of understanding how likely you’ll be able to handle a single job for 20-30 years

Grumpus Moves Abroad

He moved to New Zealand and enjoying the conversion rate

We then discuss how the pension is taxed based on state/country you live in

Grumpus is a big fan of the range of activities available in New Zealand

Cody couldn’t agree more!

Key Takeaways

Know Your Pension: The pension system isn’t as simple as we thought, so study your specifics

The future is uncertain: At times we don’t take action because we’re pessimistic but then, unfortunately, we make future assumptions based on overly optimistic projections

Call to Action

Study your pension! Even if you don’t have a pension, chances are that you or your spouse has some type of benefits. Really dig in to make sure you fully understand and maximize those benefits.

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Grumpus’ Information

Website: Grumpus Maximus

Book: The Golden Albatross

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By Cody Berman and Justin Taylor

4.8

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