Originally Posted by
First Break
I think any qualified financial advisor would probably tell you exactly the opposite. The tax arbitrage available through one of these plans is amplified by time. The power of compounding interest comes from time, and the youngest pilots will benefit from these plans the most.
Again, don’t take anyone on this web board’s word on this, including mine. Seek input from a qualified advisor that you trust and make the best decision for your situation.
Stop referencing financial advisors. This is basic math. There is ZERO difference between the compounding of the two. One is tax deferred, and other isn't. The only real difference is your tax bracket when paying the taxes. Most that go tax deferred are betting they will have a lower tax bracket on withdrawal in retirement. Easier decision to make with 5 years or less to go.
Your comment on compounding interest and tax arbitrage for younger pilots is misplaced. I don't think you fully understand how low of a return 5% is and huge opportunity cost wasted by not paying taxes now, controlling your own money and investing it as you see fit. Any pilot can get a much better return on real estate or value stocks. Moreover, I believe you're flat out confused on the tax advantages. The MBCBP is not a HSA and therefore not triple taxed advantaged.
By all means, do what's best for you, but coming on here and telling pilots who are opting out that we don't know finances is quite the contrary. For me to opt into the MBCBP I'd need at least a 10% hurdle rate, preferably 15%