Originally Posted by
Timbo
Exactly. Even if we are successful in getting pay raises of 22-7-7, the actual 'winner' will be the IRS, as they take their 35% cut out of our pay.
If we are going to keep a DC plan, we need to start lobbying for a much higher tax free contribution level, so we can put more of that money into our retirement funding than into Uncle Sam's pockets.
A 'tax free' DC contribution of only $58K per year, for 10 years, is only $580K, plus or minus market gains/losses.
How long do you think you can live in retirement on $580K?
Yeah. Not long.
I'm sympathetic to what you're saying, but isn't it even worse - 415C @ $53k? Not sure what ten years is tied to. Whether you could divert $53k or $58k annually over a ten year period, you'd be in some pretty lousy investments to end up with only $530,000 or $580,000, respectively. Of course it's all at risk. But market history suggests principal plus returns should yield far more than the sum of your contributions.
Anyhow, the U.S. Government is not going to raise tax deferred contribution ceilings just for airline pilots, no matter how hard we lobby. Lump us in with the other "evil high wage earners" that Obama says should "pay just a little more" to fund all the slackers, and we are a very small portion of the U.S. wage earner base. And there is zero sympathy outside our elite demographic. I'd say we will be lucky if 415C limits are adjusted for cost of living.
We really need an innovative retirement enhancement. Something like an annuity or other non-wage compensation.