Originally Posted by
Chuck D
I just hit PRAP Cash spill this year. Good problem to have but an annoying one when the CBP could let that sit tax free on the way in then more investable after 59.5. I agree the proposed CBP isn't to everyone's liking and may get punted but I think by the end of this CBA and for however long it takes until the next one there will be a growing number of pilots who are annoyed by how much cash we get from the company's 18% that will take the full tax hit.
And I think you'll be surprised with how much you have in your PRAP at the end of your career. I'm at the point of paying taxes now to do pure ROTH contributions because my PRAP has grown to the point where I'll be in the same tax bracket in retirement that I'm in now. More tax deferred money is actually a PITA. My financial advisor has me minimizing my funding and taking as much cash as possible to limit my tax bill by using a brokerage to pay capital gains at this point because it's less than I'll pay on withdrawals from the PRAP when I retire. Yes first world problems but don't assume tax deferred is some financial panacea. Taxes will always get paid. What the rate is matters. Also does anyone believe taxes won't go up at some point with our astronomical national debt?