About Retirement Saving and the Florida Retirement System, Part 1

For my doctoral dissertation at University of Central Florida (UCF), to be completed in Fall 2019 and entitled A Survey of Investing and Retirement Knowledge and Preferences of Florida Preservice Teachers, I will administer a questionnaire to undergraduate students at UCF who are studying to become teachers. The questionnaire (commonly referred to as a “survey”) asks about their financial knowledge and personal preferences related to personal finance, retirement accounts, and the Florida Retirement System (FRS), as well as financial challenges they anticipate in retirement and in funding their retirement.

Although the background information explained in my dissertation’s introduction and literature review chapters is extensive, I am writing here to explain this information along with important but ancillary points regarding teacher retirement preparedness, the FRS, pensions for public workers, and financial literacy.

Pension plans, which pay a monthly benefit in retirement, are uncommon nowadays in the private sector. Since the 1980s, they have been almost completely replaced by 401(k) or similar accounts that employees fund on their own, manage investments, and draw upon. Although employers may add “free” money to an employee’s 401(k) account (e.g., employer matching contribution), employers do not have to worry about paying an employee for the rest of their life in retirement, or other things such as survivor’s benefits for a spouse or children.

However, pension plans remain common in the public sector, and teachers are the most numerous class of public workers. These plans are managed by state governments or school districts, and over the past decade since the Great Recession of 2007–2009, many states have watered down benefits for existing and new employees, with many even replacing pension benefits with 401(k)-like accounts or adding an option for such an account. The FRS added such an option earlier than most, in 2001. Florida offers both a pension plan and a 401(k)-like plan (“investment plan”). Teachers and other public workers get to choose the plan they want when they start working for the State of Florida. Then, in 2011, the Florida legislature watered down benefits for both types of plans, which continues to this day despite a booming economy and stock market.

The idea of a retirement plan is set aside money to avoid poverty in the third phase of life, after one stops working. This phase (“retirement”) is getting longer as lifespans increase; although life expectancy is 79 in the United States now, about half of people will live beyond this, sometimes for a decade or longer, and women also have longer lifespans than men. Teachers and other public workers face a special challenge; about 40% of teachers won’t receive Social Security benefits (unless they worked another job), because 15 states including California do not participate in Social Security. Such teachers are even more dependent on their employer retirement plan. Florida does participate in Social Security, which means 12.4% of employee wages are sent to the Social Security Administration and Florida teachers will receive benefits in retirement, on top of any FRS benefits. Although private employers must participate in Social Security, opting out is a special option given only to public employers.

Retirement plans receive special tax treatment under U.S. law, which is why it is beneficial to put money in a retirement plan rather than receiving pay as normal taxable wages and putting the money in an account that is taxed for interest, dividends, and capital gains. Retirement is something that must occur after a certain age with respect to many plans; there are penalties for drawing on a 401(k) or individual retirement arrangement (IRA) before Age 59 and six months, full retirement age for Social Security is 67, and employees hired on or after July 1, 2011 in the FRS must work 33 years or become Age 65 before receiving their benefits. Retiring before these ages is also ill-advised for many Americans because they wouldn’t be able to afford it and they would lose their employer-sponsored health insurance before Medicare eligibility at Age 65, although the Patient Protection and Affordable Care Act has enabled early retirement for many financially privileged Americans since 2014, thanks to government insurance subsidies provided to Americans which are means-tested based on income, not wealth, which means that even millionaires can be on the dole if they have manipulated their present annual income to be low by ceasing work.

In a similar way, retirement plans allow Americans to manipulate their annual income, by the blessing of Congress as specified in the U.S. tax code, to reduce, defer, or eliminate payment of tax. For states that assess state and/or municipal income taxes, this may also have benefits (to workers) at these levels of government. There are also tax benefits bestowed on employers if providing nonwage benefits and deferred compensation, such as 401(k) plans, health insurance, stock options, et cetera. Data and research shows that workers, not just in the United States but also across the world, tend to spend money as they earn it, not investing for retirement or setting aside money for financial emergencies. Therefore, retirement plans also benefit workers by circumventing such inclinations, although voluntary plans or plans that allow withdrawals without much penalty or effort (such as IRAs) are less effective toward this end.

Putting money in a low-risk investment such as a certificate of deposit (CD) or U.S. government debt (Treasury bonds) is not an effective way to prepare for retirement because the money won’t grow much over time. One would typically talk about “saving” in respect to a savings account, CD, or government debt, so “retirement saving” is a bit of a misnomer. The term “retirement investing” is more appropriate, particularly for young people, who should have a large proportion of funds in the equities markets, as shares of companies’ stock which represents fractional ownership of corporations. Although events such as the Great Depression of the 1930s, the dot-com crash of 2000–2002, and the Great Recession of 2007–2009 decimated such investments, over several decades the probability of such events being counteracted by investment gains approaches 100%. That is to say, investing is the opposite of gambling; as you do it more and longer, your probability of an increase approaches 100%, whereas with gambling it approaches 0%. When it comes to pension plans such as the FRS pension plan, the government assumes investing risk and pays benefits based on a formula calculated from your employee class, salary, and years worked, regardless of how the stock market performs. When it comes to defined-contribution plans such as 401(k) plans and the FRS investment plan, you assume investing risk and may run out of money if you have bad luck or poor planning.

I will continue this in a follow-up post soon to come.

Digitally-Mediated Team Learning Workshop Photos (Blog Post)

Digitally-Mediated Team Learning workshop at the University of Central Florida
Sponsored by the National Science Foundation
March 31 – April 2, 2019

Click below for photos of the conference by Richard Thripp (Twitter announcement):

Day 1: Sunday, March 31, 2019: 158 Photos and 1 Video (00:01:00)
Day 1 Photos on Google Drive
Day 1 Photos on Facebook

Day 2: Monday, April 1, 2019: 589 Photos and 5 Videos (Total: 00:13:25)
Day 2 Photos on Google Drive
Day 2 Photos on Facebook

Day 3: Monday, April 2, 2019: 160 Photos and 2 Videos (Total: 00:04:50)
Day 3 Photos on Google Drive
Day 3 Photos on Facebook

Deletion requests can be emailed to thripp@ucf.edu. Please include filename(s).

Response to commentator on Amazon’s theft of $2,200 gift card balance purchased with cash at Walgreens

I received the following comment on my website from a commentator who purportedly suffered a theft by Amazon of their $2,200 gift card balance purchased with cash at Walgreens:

omg please tell me you can help me. here is quick version of what happened

I buy $2,200 in gift cards with cash at Wal greens to make a purchase on amazon with. I load the giftcardds to my amazon account and then I have AMAZON ask me to verify my account, I verify it then AMAZON asks for the bank to fax them proof of my name address and account. My bank is a prepaid Green Dot card and there terms are not to fax my info to anyone, even amazon.

6 weeks later of me faxing the info to amazon and them playing games saying they need the bank to do it. I call amazon up and tell them the bank doesn’t send out my personal info. and we do this whole circle for 8 weeks or so.

Amazon closes my account now for no reason and stole the gift card balance in my account.
I have receipt where I bought all the giftcards with CASH. and they still tell me I wont get it back

I responded as follows:

Amazon has been unprofitable for many years and only recently has become profitable, so they steal gift card balances as a way of improving profitability. It’s illegal, but no government officials care or do anything about it and even the general public assumes people deserved to have their gift card balance stolen.

With Green Dot as your bank, they probably provide you with statements online or by mail, so I would have faxed them a statement myself (although they asked for the fax to come from the bank rather than you, they might not have noticed the difference). I see that you did this and they claimed they needed it direct from the bank… but the low-level Amazon employees that handle this probably don’t know Green Dot’s fax number.

I have had a couple times where a corporation asked me to have a bank fax them a personalized letter indicating some information about me which banks will usually not do… I used to use NetSpend savings accounts to earn 5% interest and they ended up (after several years) freezing my accounts and demanding a fax from Chase Bank attesting to my legitimacy, which a veteran employee at Chase said they could not provide and she had never heard of a bank asking for this. I ended up getting my money back after explaining to the NetSpend corporate employee that this was ridiculous and I would file complaints and sue in small claims court if necessary, and that I had fought Amazon before and won.

Keep your Walgreens receipt and scan + photocopy it just to be safe. File complaints against Amazon with your state attorney general, the Washington state attorney general, and even the Internet Crime Complaint Center. Of course, if you try to go to a consumer advocate like Elliott.org they are going to say something like “he’s obviously a drug dealer—why would anyone buy $2,200 of Amazon gift cards with cash.” Caveat emptor.

A Ratio for the Relative Climate Change Impact of an Economic Activity

I wrote a three-page paper and submitted it to the Social Science Research Network (SSRN) on a ratio for climate change impact using gasoline as as an example.

A Ratio for the Relative Climate Change Impact of an Economic Activity
Richard Thripp
University of Central Florida

Abstract
I propose a ratio for assessing the climate change impact of an economic activity as a function of global greenhouse gas emissions and annual gross world product. To construct a simple example, I consider only CO2 emissions and use the purchase and combustion of gasoline. I show that it has a ratio of 8.82:1 in the United States as of March 6, 2019 at a national average price of $2.44 per gallon. This means that in consideration of the direct impacts of gasoline’s combustion alone, gasoline would have to cost $21.50 per gallon in order to achieve a 1:1 ratio. Other applications of the ratio and its impact are discussed.

Keywords: climate change, co2, greenhouse gas emissions, economics, fossil fuels, relative harm, carbon taxes

You can download the paper on SSRN (free account required) or by clicking here.

Distance education and telecommuting can slow climate change

Although the recent IGI Global academic anthology that I am a co-editor of, Handbook of Research on Emerging Practices and Methods for K–12 Online and Blended Learning, does not mention climate change at all, in fact virtual schools can help slow down climate change. Teaching and learning from home, also known as distance education, like working from home, which is referred to as telecommuting, reduces carbon emissions by reducing travel.

As I have written previously, the United States emits over five billion tonnes of CO2 per year, almost a third of which are from transportation. Preventing transportation from occurring, therefore, is an important way to slow down climate change. Although an enormous amount of CO2 is nonetheless being emitted and has already been emitted, this does not mean we should succumb to the “all or nothing” fallacy and concede that it is pointless to do anything offering amelioration.

Research has shown that distance education produces similar academic achievement to in-person education. Florida has pioneered and continues to lead in K–12 distance education with Florida Virtual School, through which students of all grade levels can take some or all of their classes from home. Distance education is not an all-or-nothing proposition; it is perfectly sensible for online learning to involve occasional face-to-face meetings and for a mix of online, face-to-face, and blended courses to be offered.

Although broadband Internet connectivity and computers are widespread, and many workers are now “knowledge” workers rather than doing location-dependent work, the majority of workers and students continue to show up in-person, and are often obliged to. Online work is perennially criticized for stifling valuable in-person interactions, but it is perfectly reasonable for many schools and firms to meet once a week or even biweekly rather than five days a week.

As a student and instructor at University of Central Florida, I have taken and taught the majority of my courses in fully online or blended modalities. Although I did elect to take mixed-mode courses several times, particularly in my Master’s program, even when fully online courses were available, the weekly or occasional meetings allowed me to make friends, ask questions in person, and participate in many educational projects. Commuting from almost 60 miles away in the Daytona Beach area, I was always aware that each round-trip emitted almost 100 lbs. of carbon dioxide, however (2,205 lbs. is a tonne).

Especially in the current strong economy, construction is booming. New housing, commercial buildings, and road expansion projects are happening everywhere. None of this is sustainable and much of it is ill-advised. Cement, concrete’s key ingredient, produces about three tonnes, or 8%, of annual global CO2 emissions. Steel production produces another 5% of CO2 emissions. Buildings, bridges, and roads are often made out of concrete and steel. Distance education and telecommuting can reduce the demand for cement, steel, cars, and fossil fuels.

Particularly in the United States, but throughout the world, most of the costs of driving a car are not assessed to the motorist. Of course, the carbon footprint and damage to the earth is not priced in, but also, the costs of roads and infrastructure are borne collectively by taxpayers but not charged incrementally. If these costs were all priced in, people would be traveling far less and clamoring for distance education and telecommuting. Any competent transportation planner knows of the phenomenon of induced demand, where widening a road results in more motorists miraculously turning out, making trips they wouldn’t have before due to congestion. Although Tesla drivers are helping reduce carbon emissions and increase production of lithium-ion battery cells, driving still requires roads made out of asphalt and concrete, and more driving prompts more expansion and repair of roads. Reducing travel is important.


Picture this: Children going to school one day a week instead of five, while the rest of their learning is done at home. Schools are much smaller in size, because each student has a certain day of the week when they go to school in-person and only about 20% of the student body shows up on any particular day. Children learn 21st-century skills while continuing to get valuable in-person interactions with other students and teachers, which are rendered special and precious due to only occurring once a week. Although parents previously relied on schools for childcare, now many of them are working from home too and only going to the office one day a week or even less. People are getting out for walks, talking with their neighbors, and organizing neighborhood events instead of driving out-of-town for work and socialization.

Going to the cubicle or classroom five days a week was a downer anyway, so people are now feeling happier and more well-adjusted while also emitting far less CO2. In Orlando, a massive freeway expansion project called I-4 Ultimate was just completed, but the 12-lane highway is never used to capacity and the congestion-priced toll lanes are producing little to no revenue. Attorneys for the 40-year public–private partnership to pay for the $2.5 billion project via toll revenues are currently working from home, drafting papers for a bankruptcy filing.


The recent, catastrophic destruction by Hurricane Michael in Mexico Beach, Florida was a call to action on several levels. One of these was to improve the building codes. Although building codes have already gotten far more rigorous in south Florida to withstand higher categories of hurricanes, Central Florida and the panhandle have lagged behind due to strong hurricanes rarely if ever striking. Due to climate change, this has changed. Ironically, building stronger structures emits more carbon dioxide, which turns into a vicious circle. Wood structures are replaced by masonry, and concrete blocks become solid and reinforced with steel. More trees are cleared and structures must be rebuilt from scratch after each disaster, emitting even more CO2, while the oceans reach their CO2 saturation point and polar ice melts releasing fantastic quantities of CO2 and methane. It’s pure madness.

The CO2 situation is dire, and the idea of “slowing” climate change is not unlike saying we cut the U.S. national debt by merely slowing its rate of increase. But, we are not even cutting the rate of increase; in fact, 2018 CO2 emissions increased 3.4% in the United States in 2018. The levels have already been outrageous for decades and continue to go up.

When we are at school or work, our house or apartment, in whole or part, is going unused. When roads are expanded, peak demand is being accommodated at the busiest times of the day, while the roads remain almost unused at night and below capacity during mid-day. When a new concrete mega-church is planted to go unused and locked most of the week, with a massive asphalt parking lot to boot, it is a travesty. There are eight parking spaces for every car in America—a CO2 nightmare—but of course, none of them are ever in the right place at the right time. The time for distance education and telecommuting is now.

I know that schools in Florida are also used as hurricane shelters, but even if we were to stop building and replacing schools due to distance education, churches can pick up some of the slack.


Like many Bay Area workers, my mother lives near Fremont, California and commutes on BART to San Francisco, 4–5 days a week. She works for the San Francisco government in a job that is completely computer-oriented, but only gets to work from home occasionally. Although she fully relies on walking and BART to get to and from work, there are plenty of days when she would prefer not to get up before 7 a.m. and be gone 12 hours due to over two hours of commuting. No one can actually afford to live in San Francisco, so technology workers, teachers, and countless others commute from cheaper areas each day, to do work that could be done from anywhere. Why?

Automattic, Matt Mullenweg’s company that is behind WordPress and many other interesting and useful projects, has about 700 employees, the vast majority of which work remotely. (You are currently reading a WordPress-powered blog by a 27 year old who developed a popular WordPress plugin as a teenager, with over a quarter-million downloads, but then got bored with it and abandoned the project.) Although Automattic’s employees do fly to 1–3 meetups per year, which is horrible for the earth (there are no electric airplanes), in principal this fits with my idea of having occasional face-to-face meetings with most work being by telecommute. If you get lonely, you can always go to the nearest Starbucks, which probably isn’t much of a commute because they are almost everywhere.


I hope you have enjoyed reading my ideas here, many of which were regurgitated from other sources, although I have not seen many suggest distance education and telecommuting as a multi-pronged approach toward reducing CO2 emissions. As further reading, I suggest Losing Earth at the Pulitzer Center’s website.

Writing on finance, education, et cetera