Originally Posted by
Gunfighter
You are correct about the tax play portion. There is however a return play component where MBCBP funnels money into "market assets" as opposed to non-market assets. Many of the complaints about return are from pilots participating in investments outside of Wall Street or at least outside of what Fidelity Brokeragelink offers. In that case it becomes more difficult to achieve the desired portfolio balance when 16-18% of earnings above the IRS threshold are kept in the market. Pilots on property have the chance to opt out and preserve that flexibility. It isn't just investing in gold, real estate, bitcoin and businesses. Some pilots are investing in their children by funding education and a down payment on their first house.
It could be argued that the second bolded comment applies to the most favorable conditions. We have pilots who started a week ago with no retirement savings who could receive 401k excess for 20+ years. They will be heavily overindexed on bonds. It's an entirely different kind of money problem to have when you are at the IRS 415C limit before your 30th birthday. It's not ideal, but I'm sure they will survive.
Houses, kids, boats, and Miatas are apples to oranges comparisons and not what the common arguments surrounding the MBCBP have been about. If pilots want to *spend* their money instead of saving, that's awesome too.
As for bonds, "overindexed" is in the eye of the beholder but I did the math and even with your stated assumptions the max "forced" bond allocation is 10-20%.
The interesting thing that no one is talking about is the possibility that super-young captains may hit the IRS DB limit in the MBCBP. That would be a good problem to have.