Originally Posted by
NotMrNiceGuy
We had two retirement options with the failed TA. Option 1 improved upon the pension by 30% and left the DC of 9% capped unchanged. For anyone retiring in the next ten years, this is a no brainer. Best in class among all airlines.
Option 2, when viewed through the lens of history as well as contrasting with other existing retirement schemes, is not as cut and dry. Option 2 was a split between MBCBP and DC into the 401(k), 11% and 9%, respectively. Both of these contributions are capped at IRS Compensation Limits ($345,000 in 2024). In addition, the fiduciary would be FedEx with a target rate of 6.5%.
To bring all this minutiae to a close, I would say that the market average right now is:
DC: 20% Cash Over Cap (when you include pensionable profit sharing)
MBCBP: Spillover cash
Profit Sharing: Yes
SWA added a nice nice automatic 2% into the MBCBP. Something to consider.
To accept anything less is to fall behind our peers and undervalue the sunsetting of our Traditional A-Plan.
Long time stalker... first time poster:
Very good analysis of what the current contracts can offer... but I encourage everyone to work backwards from an end date, assuming we are all lucky enough to reach that without an illness.
disclaimer: I'm in year 24.... I was a no vote as I do not want to see the pension sunsetted w/o an option.
The calculations above look great but it is all predicated on a healthy career with max earnings and significant hour accumulation... where a pension is based on a high five and yos
I estimate I will retire with around 2.5MM in my 401k(maxing it most yrs) with slightly above conservative returns/under s&p avgs. I believe I will be able to take 10k per month out plus a full pension of 10.4k(hopefully more in TA 2.0) for a total of 20.4k pretax w/o social security.... or about 245k/yr income w/o decreasing my 401k balance. I bought a term life policy to cover my wife if I die early or I may also take a survivor benefit w/ less income generation tbd.
I ran some finance calc estimations ... having zero and having the company and yourself add a total of 7k per month for 25yrs at a conservative but reasonable 8% ... you will have 6.14MM in your account. To generate an income, if you withdraw 4% per year, you will have 246k per yr income pretax. Very similar income... except, yes it's your money if you die... but, you have to work(fly) and have a healthy career. You also can't spend large chunks because you need the balance for income generation.
Some different perspective as I get closer to the endgame. Be nice, first time poster here 🤣