Originally Posted by
Gunfighter
There are so many reasons this is wrong. Thank You for once again proving pilots should not be financial advisers. Please don't take my suggestions below as advice, rather use my commentary as a basis for forming your own conclusion. Furthermore it may be a basis for a rational discussion with a real financial advisor.
Again, the math doesn't lie. Assuming I used the correct calculations. Feel free to check my numbers. I've shared them for the internet to bash.
Also, I would never take financial claims from the internet as advice. Instead, I would take the advice of my father, a "real financial advisor" (CFP), whom I have been learning from for the last 3 decades. I am in no way up to his level of knowledge, but I
am generally good at math, I know how to read IRS documents, and I
believe I have a better understanding of this stuff than the general population.
Originally Posted by
Gunfighter
At the end of the MBCBP you gave it a 6% annuity and only 4% distributions on the self directed plan. WTF? Both avenues have an option to purchase a similar annuity in the market place, the MBCBP isnt a prerequisite for an annuity. Talk about apples and oranges. What if you did a 4% withdrawal rate from the MBCBP and purchased a 6% annuity with the self directed funds? Talk about misleading.
I did that because most people generally consider the
default for retirement investments to be the 4% withdrawal rule. And the union has stated that the
default (but not the only option) for the MBCBP upon retirement is to buy an annuity with it. As best I can find, immediate payment fixed lifetime annuities generally pay about 5-7% of the purchase price per year, hence 6%. If you have better knowledge, by all means, show me some data that allows us all to make a better estimate.
Originally Posted by
Gunfighter
You have not shown any math behind the assumed final value of the two plans. In the ignorant cries to "Avoid TAXES", you are leading the uneducated masses into a plan that will handicap them with Income Taxes on retirement money. Wealthy individuals pay LT Capital Gains Taxes, not Income Taxes.
I sure have. Here you go:
MBCBP comparison tool
Originally Posted by
Gunfighter
There is a better option to pay income taxes now and then pay LT Capital Gains taxes on the growth via a simple ETF.
Sure it is....assuming you have the time for it to grow (or get really lucky with individual companies) and don't get caught being forced into retiring during a down cycle.
Again, I am not arguing for or against the MBCBP. I just don't buy the "it's my money or else" crock that you're trying to sell. I want to see the actual numbers. And, as it turns out, if you take the DPSP Cash money and invest it after tax and get 8% from it, it takes about 18 years to break even compared to the MBCBP and the tax savings you get right away.