Tag Archives: Pension

8.7% Social Security COLA, Peripheral Effects, Pension COLA Reminder, SSA Neat Fact Sheet …

Last year we penned the following … in this post

HUGE Social Security COLA … 5.9% to Be Exact, Wow…. COLA Pension Recipients Check Your Benchmark

Looks like that was just the dress rehearsal… here is this years release…

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With much talk of Inflation costs this year, the SSA (Social Security Administration) release this week of an 8.7% COLA (Cost of Living Adjustment) was not a huge surprise..

Important Items Associated with this Adjustment

Pensions – Folks with Pensions that have COLA adjustments should also watch for a similar increase – Your benchmark and adjustment will likely differ from SSA as they use the CPI-W three month average as noted here in our pre-post last year

Pre-Retirees – Those nearing Social Security, according to this neat fact sheet,

Maximum Social Security Benefit: Worker Retiring at Full Retirement Age goes from $3,345/mo. to $3,627/mo.

New Social Security Tax Base – Those still working, understand this COLA also filters into the SSA base income tax rate, again as mentioned in the press release

“Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $160,200 from $147,000.”

Have a Great “COLA Reminder” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



Attention all Pension Lump Sum Buyout Offerees

Over the last three years we have experienced a multitude of pension buyout offers both from in-force pension payments and lump sum offers for pensions not yet started.

Recently we have just experienced another, and knowing these frequently come in waves, wanted to put this note out to anyone who may be in a position to receive a pension buyout offer.

Trust but Absolutely Verify

In every situation that we have experienced over the last three years, the processing of the lump sum pension is quite different.

Also, the paperwork originally sent with the offer tends to vary slightly to dramatically from the actual offer.

We of course do a detailed breakeven analysis in order to find out if the offer is good, but in order to calculate the offer correctly, the appropriate information is needed.

If you are in a situation of receiving a lump sum buyout offer for a pension or even a lump sum buyout offer for an in-force pension, please trust but absolutely verify all of the details. What we are finding that frequently the original offer may have inaccurate information making for an impossible correct decision of acceptance or decline.

This is another subject that we ask you may share with other individuals that we may not know that might greatly appreciate or need this knowledge. So please share at your leisure.

Have a great “Trust but Absolutely Verify that Pension” day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



Overzealous Spam Filter on New System … HUGE Social Security COLA … 5.9% to Be Exact, Wow…. COLA Pension Recipients Check Your Benchmark… Birthday Week – Jen and Donald Same Day Yesterday, Happy Birthday Guys … Friday Before Busy Virtual Conference Week

Our summer project this year was to replace our server, update our office Wifi with greater speed and security as well as move our email system to a new more secure platform…

All this wonderful security and speed has led to an occasional overzealous spam filter…. we are validating all emails as safe, but the super sonic spam filter still grabs them every once in a while… please re-email us is you do not hear from us in short order… apologies for the accidental Ghosting, we thought we had this all fixed, but two instances in the last two weeks led to this announcement….

Big COLA Increases

Back in late July of this year, we warned here of possible GREAT news for Social Security and COLA Pension Recipients….

On Wednesday (10-13-21) the BLS (Bureau Of Labor Statistics) released the final month of the third quarter CPI-W which gave the average for the third quarter and is used to calculate the COLA (cost of living adjustment) for next year’s (2022) Social Security Benefits….

From this Release :

Social Security National Press Office Baltimore, MD
Cost-of-Living Adjustment (COLA):
Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2020 through the third quarter of 2021, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 5.9 percent COLA for 2022.

Pension recipients, check that benchmark … you may have a nice surprise awaiting next year … YAY!


Always try to do something unique for the office Birthday’s … but some how we ended up with two on the exact same day…. Wow… tough creativity all at once…

Happy Birthday Jen and DC the Brain… You guys are great!

Friday Before Full Week of Seminars and Welcome Learning

Today is a Friday and next week we have a full week of Virtual Seminars and Fantastic learning… Looking forward to it for sure… Will bring you any important details in short order…

Have a Great Weekend, Enjoy your Friday and Weekend!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



Social Secuirty COLA – Cost of Living Adjustment – Look Out Above – 5-6% COLA ?? Maybe … WOW … Pension Recipients You May Receive a Similar Increase …

With a few of our industry rags shouting look out above for the Social Security COLA (Cost of Living Adjustment) we took a deep dive into the SSA (Social Security Administration) methodology for the adjustment.

Pension Recipients with COLA adjustments you likely will be in the same boat of increases, depending on the index the COLA adjustment is marked against….ok digressing a bit, but wanted to get that thought out !

Social Security COLA Methodology

Basically the SSSA looks at the CPI – W in the third quarter of the year and compares it to the prior year and marks the new COLA Accordingly….

The fuss or cheer, is due to the dramatic increase in the CPI – W …that most recent print is 6.1% WOW!

The CPI – W

“The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is based on the expenditures of households included in the CPI-U definition that meet two requirements: more than one-half of the household’s income must come from clerical or wage occupations, and at least one of the household’s earners must have been employed for at least 37 weeks during the previous 12 months. The CPI-W population represents about 29 percent of the total U.S. population and is a subset of the CPI-U population!”

From the latest BLS (Bureau of Labor Statistics) Here

SSA Methodology

Here is the SSA Methodology from their calculation pamphlet last year here https://www.ssa.gov/pubs/EN-05-10526.pdf

To determine the COLA, the average CPI-W for the third calendar quarter of the most recent year a COLA was determined is compared to the average CPI-W for the third calendar quarter of the current year. The resulting percentage increase, if any, represents the percentage that will be used to increase Social Security benefits beginning for December of the current year. SSI benefits increase by the same percentage the following month (January). If the increase in the CPI-W is at least one-tenth of one percent (0.1 percent), there will be a COLA. However, if the CPI-W increases by less than 0.05 percent, or if the CPI-W decreases, there won’t be a COLA.

Have a Great “COLA Adjustment Heads Up” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



January 2019 Podcast Video, Financial Planning and Capital Market Update – By John Kvale

Hello and Welcome to our January 2019 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast format as well as Video!

Newbies – We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

January – 2019 Video

Financial Planning Tip (s) –

Get and Earlier than normal start on those Taxestaxes control-1027103_1280

Here in this post, we remind everyone that due to the new tax laws, it will be a good idea to get your tax information to your professional as soon as possible.

If your using tax software, be sure to do the recommended updates as we feel certain there will be necessary updates to the tables along the way.

Corrected 1099’s are the usual, with only a few last year, we will give everyone the green light once we get our first round of corrected tax forms – but again go ahead and get started with your taxes!

Stunning Findings about your old employer 401kabonded dawn-3358468__480

We had long suspected as much, but in this post we review a Cerulli study that interviewed over 800 401k providers, only to find out that less than 30% really want your funds once you leave.

We have experienced less than stellar service over the years with former employees 401k plans – leading to our long suspicion of these findings.

Make Pension Changes/Decisions Carefullythumbs-up-2056022__480

While our favorite commencement benefit for pensions (100% jt survivor) is fairly straight forward, the simplicity ends there.

In this post, we review recent trends in buy outs and what to watch for, as well as the many scenarios we have experienced that are not always in our best interest.

Capital Market Comments –

Good News – Recovery without a Re-test – So far

What a different a month makes – WOW! We literally have gone from the sky is falling to sunshine!

In our summary post in December, we mentioned that fast moving slumps, such as the one we had, frequently do not last long….

Here, earlier in the month we also mentioned that we fully expected some type of retest of those lows before we gained our footing.

We still do expect some type of re-test, but as of this date we have had the following positives that have added to the markets better mood:

  1. Federal Reserve (FOMC) have turned very cautious about raising rates further (We are happily surprised at their yielding, and even more surprised at market participants joy)
  2. Tariff talks are making progress – Interestingly, China has seen a slow down in their economy making for slightly more urgent talks – with a little compromise and statesmanship a resolve looks more likely – again a positive for capital markets.
  3. Earnings are still cranking along – For the prior 4-6 quarters, earnings were red hot and hitting on all cylinders, so hot, they were not sustainable. Companies are still reporting good earnings, just not the Red Hot, overheated earnings from prior quarters – this is good news as it avails the FOMC to not have to raise rates to slow the economy –

All in all a Win- Win!

Have a Great Day – Talk to you at the end of February!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.

Why you should Be Careful before taking that Lump Sum offer of your Pension, especially if your are receiving a monthly benefit already – Careful analysis is needed with ANY Pension decision

We have seen pensions that actually give you less money on a monthly basis if you wait longer! Not Kidding…

We have seen pensions dramatically lose money on their present value lump sum benefit over time (very short time in a few cases) monitoring is needed.

We have seen pensions that never break even, if you take them early versus waiting (similar to first point mentioned.)

We have seen offers to buy out monthly pension benefits in the form of a lump sum that are horrible.

We have seen lump sum offers that are too good to pass up (fewer times, but it happens)

We have run into pensions that if the participant passed away before the pension commenced, the spouse received NOTHING, but once the pension commenced the spouse was a full 100% beneficiary.

We have seen random offers from outside companies to buy pensions off – out of no where- usually not a good deal.

Be Careful with Pension DecisionsTrade - handshake-2056023_960_720

Most pension decisions are irrevocable, due to the actuary calculations that are put into place once a decision (contractually binding the company) is made.

While our favorite pension benefit decision (Jt survivor- as mentioned here) in great detail) is fairly straight forward, little else about pension decisions are easily understandable, compound that with the irrevocable nature of the decision, caution and analysis is warranted.

Recently we have run across a few buy out offers from different sources, reminding us of the complexity of pensions and bringing our thoughts to you in this post.

By reverse engineering these offers, a very complex situation can be turned into black and white.

Use caution when deciding on pension decisions as they are mostly irrevocable and frequently offers and changes, may not always be in the participants’ favor.

Have a Great “Clear Pension Benefit” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.

No Social Security/Pension Cost of Living Adjustment Increase for 2016

On October 15, 2015 the Social Security administration formally announced that there will be no Cost of Living Adjustment for 2016.

No Cost of Living Adjustment

The Cost of Living Adjustment (COLA) for Social Security and most other pension plans is based on the Consumer Price Index (CPI). Recall this is part of what Janet Yellen and her friends at the latest Federal Open Market Committee (FOMC) said was too low for their comfort and was used as one reason they did not increase rates.


CPI 1 year trailing 9-2015


Here is a good graph of the components of CPI, by Bonddad


CPI Components CO bonddad 2012


Believe it or not, the long term average of CPI is 2.75% – We are no where near that today !

Have a Great Day!

John A. Kvale CFA, CFP

8222 Douglas Ave # 590
Dallas, TX 75225


Something never seen in 28 years – Now happened twice in a month – Pension Offer

After almost three decades in the financial industry, it has up to this point, been safe to say:

Once you begin that pension, you will never have a chance to change it.!”

Not anymore !

In force Pension Plans – offered buy outs

Frequently pension plans that are not paying (beneficiary has not started monthly benefits) are offered buyouts. We have never seen in force (benefits are paying currently) pension plans being offered a buyout, until now, and go figure, we have run into two in the last month.

Items to know –Lump Sum

Don’t automatically just take the cash – it is likely a big sum of money compared to what you may be receiving on a monthly basis, BUT frequently the offer is skewed towards a greater benefit for the company.

Carefully review EVERY detail and how it relates to your situation – longevity, continuity, heirs, beneficiaries, age, financial need are just a few items to consider – call us before you make ANY moves.

Be very skeptical of any company that is not directly associated with your pension plan– The more hands between you and your money, the less you may ultimately receive.

Lot’s of scams and abuse – Along the line of the prior point, there have been many scams as well as abuse in this part of the financial world, laws have begun to prohibit many from taking these type of benefits – be careful and check the facts.

Call us –While there are very distinct times when one should or should not accept an offer such as this, most fall in the gray area. We have the ability to reverse engineer the offer to see how it stacks up as well as dissecting all the fine points of the offer!

Have a Great Day!

John A. Kvale CFA, CFP

8222 Douglas Ave # 590
Dallas, TX 75225


FORMER EDS/HPQ Employees, You May have a new Pension Decision if You have not Started Your Monthly Pension Benefits

Recently Fidelity has begun notifying CERTAIN individuals that they may request their old pension be distributed.

Your deadline is March 6, 2015!

New EDS/HPQ Pension Distribution Option

I have been unable to determine the exact method for determining who is being offered this option. Fidelity said it was size related, but I have found inconsistencies.

As a former EDS/HPQ employee, if you have NOT commenced on one or all of your pensions, in order to determine if you are available to distribute your pension, go to the link below and see if you are able to register and log in.


This is what the splash page looks like.

HP Pension Splash

You must register as this is a unique offer and none of your prior credentials will work.  If you are unable to log in, unfortunately it means you are not part of this offer.

If we find further details we will let you know. Feel free to share this with others you may know.

John A Kvale CFA, CFP

8222 Douglas Ave # 590
Dallas, TX 75225

Q 2 2013 J.K. Financial, Inc. Newsletter Topics with Video Summary…….The Masters

It is finally here…..Our newsletter has been posted on our company website here and paper copies should be in your mailbox soon if not already. This Quarterly newsletter was light on heavy technical topics and heavy on longer term planning issues. We hope you enjoy.

Q 2 2013 J.K. Financial, Inc. Newsletter Key Topics

  • Currency as an Asset Class
  • Paper Certificates go the way of the Buggy Whip
  • Why you should be on the email list for this site (http://www.street-cents.com)
  • CFA Forecast Dinner Review (17 points for our electronic Diary)
  • If you have a Pension you have a decision and it’s irrevocable

A few personal points by John Kvale

Lastly, those who follow us, know we love The Masters…it starts the spring season and is great viewing (might even take over the normal tennis that is on every night at my house)….Hope you enjoy as much as us…it starts tom0rrow !!

Have a great day!

John Kvale

8222 Douglas Ave # 590
Dallas, TX 75225