Guest Post by Chris Pascale
“Is My Pension Worth Staying in a Job I Hate?”
The Golden Albatross blog at GrumpusMaximus.com is the personal finance and Financial Independence (FI) site that answers the above question. Its proprietor, Grumpus Maximus, is fast becoming the man that pensionable and FI-minded people go to when contemplating quitting their jobs.
He has a Facebook following of nearly 1,000 members, and his book titled The Golden Albatross (Choose FI Media) is a compilation of articles from his popular website.
The central tenets of Grumpus Maximus' work are:
- Quitting or staying at a pensionable job should be a value and values-based decision
- That decision should be supported by math and self-examination
- Proper planning will help you bear the weight of that decision
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Wait! Who Are We Talking About?
Before I say, ‘Grumpus Maximus says…' it will be useful to first answer the question: who is this guy?
Grumpus is a recently retired military officer. In 2016, 17-years into his military career, he suffered a mental breakdown, was diagnosed with Post-Traumatic Stress (PTS) and wanted to leave military service. The cause of his PTS stemmed from a decision he made in late 2012 to honor a commitment and deploy to Afghanistan…a week after he and his wife lost their second pregnancy. His PTS was further complicated by the effects from a 2009 mission to interdict Afghani heroin and hash, during which he and a teammate were almost killed.
When the breakdown happened, Grumpus was only three years away from his 20-year cliff-vested military pension. Once he ran the numbers and calculated his pension's potential worth, he faced a stomach-churning dilemma: stay, at the risk of further mental injury, or leave and forgo a lifetime of pension payments and medical benefits for him and his family.
He felt trapped, bewildered, and alone — especially since there were no personal finance or FI-related websites that dealt with these issues. In the end, he decided to stay. However, he vowed to help others through similar situations if ever provided the opportunity.
That opportunity came at the urging of a friend in 2017, who convinced Grumpus to start a blog that addressed the intersection between retirement planning, FI, pensions, career-caused health problems, and job dissatisfaction. In doing so, he named that intersection “The Golden Albatross” from which his website and book both get their name.
Deciding to Quit or Stay: A Values and Value-based Decision
Lifetime pensions should be stacked, not discarded. However, the National Institute for Health (NIH) says that a bad job = lousy health.
The key is to develop the kind of financial security that comes from multiple sources, like outside income or appreciating assets. This doesn’t have to be fancy; in fact, the simpler, the better.
Grumpus says that the reason it's so hard to leave a pensionable job is that the pension hangs around your neck like the fabled dead albatross. But, instead of being a stinky bird-corpse, it's golden because it represents potentially millions of dollars in future retirement income. Add in the fact that by the time workers realize all of this, their prize is not a career away, but often 10 years or less.
As a result, the fiscal pain of leaving a pension makes one hesitate.
Quitting for a large sum of cash makes sense, but departing at the expense of a large sum of cash means that there are serious problems. It could be an issue of integrity, especially if one works for an unethical organization. Or, it could be a matter of losing a promotion to someone less capable.
No matter what, once you've drawn that line you need to determine if you can afford to give up the pension.
Backing up the Decision with Math and Self-Examination
Grumpus says you must calculate the actual value of your pension before deciding to quit.
He calls this the Worth vs. Worth It comparison. Is it worth it to give up a pension worth $x,xxx,xxx for more happiness? Or a higher paying job? Or a better work-life balance? No matter what has caused you to question your pensionable career's value, you need to determine the pension's value.
For instance, I knew that it was worth it to leave the Marine Corps after 5 years since I still had 15 years to go before vesting in my pension. If I had stayed longer, the calculus would have changed, especially if I went from enlisted to officer where the pay difference is substantial.
When I first joined the civilian federal workforce in 2011, I knew it was worth it to leave after being furloughed multiple times. However, now that I have 10 years of federal service (including my military time), it's worth it for me to do at least 20 and qualify for a pension that starts paying-out at age 60. Now, I may not actually leave federal service at age 48. But, the marginal value of each additional year may not be worth accumulating if I can double or triple my income with a move into the private sector. Nor would it be better than focusing on my health and family if my finances are completely in order.
Bearing the Weight of Your Decision
This step is crucial because sometimes people who leave a pensionable career also leave their identity behind. The author of the linked article – my uncle – was a research psychologist, but is he now? Not according to his bio, and certainly not according to his day-to-day life.
Grumpus is currently bearing the decision. For 20 years he was able to say I am a military officer, but now he's not, so he can no longer say he is. Instead, he's a student, a personal finance guy, and the author of a book about personal finance.
If your pensionable job is a significant part of your identity, leaving it is not so simple.
For example, if you haven't worked through a process similar to the ones I outlined here on OLD, made adjustments where needed, and maybe even developed another career (e.g. teaching); then how are you going to just stop what you're doing?
Disclosures: My Association with Grumpus Maximus
The book was out on July 1, but I have already read it three times, and here's why: After listening to Grumpus being interviewed on a podcast, I reached out and we became friends. When he told me he'd written a book, he asked if I could take a look, and, as I try to do when I can, I said yes.
Also, seeing that I had published some work on OLD, Grumpus asked if I could connect them. The result was the following OFD (Optimal Finance Daily) podcast episodes:
- 887: Financial Planning
- 936: Can You Teach an Old Dog New Tricks? (Part 1)
- 937: Can You Teach an Old Dog New Tricks? (Part 2)
Find out More Right Now
If you are in a pensionable job, I can honestly say the book is worth reading. In fact, the earlier in your career, the better. While I hope you love your job and will continue to do so, the time may come when you need this information. If you don't want to buy it, then have your library order it.
If you’d prefer the blog format, check out www.GrumpusMaximus.com