Originally Posted by
oldmako
The most important aspect of the RHA is that you are using pre-tax dollars upfront to fund it and they become ZERO tax dollars later on when you use the money.
Unless one already has a ton of money set aside, it's a no brainer. I think that ALPA's suggestion is for pilots to shoot for a $200K RHA at retirement, per couple. And when you factor in maxing out your 401 contributions early in the calendar year and then adding post-tax dollars to your retirement lump. It's tough, but it should pay off downrange.
Triple tax advantage. Pretax in, tax free growth (7.8% YTD), untaxed out. R&I said about 200 pilots put 100% of paycheck into PRAP to start the year and around 3/16 the 16% spills into RHA for remainder of the year. Side benefit, after pretax 401k limit is reached, do the rest post tax and convert it to Roth for no taxable 70 1/2 RMD requirement.