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View Full Version : Retirement Question


Jrossi
01-28-2019, 11:45 AM
I seem to remember getting some information prior to the switch to Fidelity that said we could have a 3rd party manage our retirement account instead of Fidelity. Has anyone done this or have any information on it.


Fdxlag2
01-28-2019, 12:54 PM
I seem to remember getting some information prior to the switch to Fidelity that said we could have a 3rd party manage our retirement account instead of Fidelity. Has anyone done this or have any information on it.

Fidelity is the third party.

flextodaline
01-28-2019, 11:16 PM
If you wish to take money out of your 401k and give it to a 3rd (4th) party to manage, you CAN take money from the portion of your 401 listed as SBA (Sick Bank Account) and move it to another company under a self-directed IRA. This has to be done "hands-off" by you to avoid any penalties or taxes. By doing this, you can have a portion of your 401k managed by another company other than Fidelity.

"Before investing, consider the investment objectives, risks, charges and expenses of the fund or annuity and its investment options. Contact Fidelity for a free prospectus and, if available, summary prospectus containing this information. Read it carefully.":D:D


Dakota
03-06-2019, 11:18 AM
Are Fidelity's fees the norm?

kronan
03-06-2019, 12:35 PM
I seem to remember getting some information prior to the switch to Fidelity that said we could have a 3rd party manage our retirement account instead of Fidelity. Has anyone done this or have any information on it.

Previously it wasn't quite kosher to hand off your login credentials to allow various folks to make changes in your Retirement funds.

Now it is, and there are a couple of vendors happy to sign up and manage your funds for you.

Via Fidelity, either the standard options or in the Universe of Investing via the Brokerage link

renman95
03-11-2019, 08:18 PM
Are Fidelity's fees the norm?

IIRC, Vanguard charged $7 for stock trade (brokerage account), Fidelity is $3.75.

MOGuy
03-27-2019, 12:42 PM
Could someone explain the retirement contribution at FedEx? What is posted on the profile page doesn't quite make sense to me. I'm guessing the 500/yr match is a typo? Do they do match up to IRS limits? Do they contribute a % to 401k regardless if the pilot puts any in? Is this reirment better than or equal to what Delta offers? Some clarification would be appreciated, thanks!

401K:
up to $500/yr
401K Matching: Yes
A/B Fund:
2.00%/8%

FrankTheTank
03-27-2019, 01:04 PM
Could someone explain the retirement contribution at FedEx? What is posted on the profile page doesn't quite make sense to me. I'm guessing the 500/yr match is a typo? Do they do match up to IRS limits? Do they contribute a % to 401k regardless if the pilot puts any in? Is this reirment better than or equal to what Delta offers? Some clarification would be appreciated, thanks!

401K:
up to $500/yr
401K Matching: Yes
A/B Fund:
2.00%/8%
Not a typo.. They contribute 500 bucks and you contribute the rest of your 401k.

Flying Boxes
03-27-2019, 02:51 PM
Could someone explain the retirement contribution at FedEx? What is posted on the profile page doesn't quite make sense to me. I'm guessing the 500/yr match is a typo? Do they do match up to IRS limits? Do they contribute a % to 401k regardless if the pilot puts any in? Is this reirment better than or equal to what Delta offers? Some clarification would be appreciated, thanks!

401K:
up to $500/yr
401K Matching: Yes
A/B Fund:
2.00%/8%

1). If a pilot contributes $1,000 to a 401K for the year, company gives a $500 match. Yes, that is it for employer match for 401K.

2). FedEx also contributes 8% of income up to IRS limit ($280,000 this year I think) into a B Fund. $280,000 * 8% = $22,400. (goes to 9% in Oct of this year or next, not sure which year)

3). Regular sick account (RSA) of 72 hours a year go into a Disability Sick Account (DSA) if not used. If DSA goes above 686 hours at the end of the year (about year 10 of not being sick...ever :rolleyes:), FedEx will deposit extra sick hours into retirement account at pilots hourly rate. 72 hours * $XXX.XX/hour = $XX,XXX. IF DSA payout exceeds the IRS annual limit ($56,000 under age 50 or $62,000 if 50 or older), it paid out as taxable pay.

4). Pilot can contribute $19,000 into 401K. And if IRS annual limit has not been exceeded, FedEx allows after tax contributions upto the annual IRS limit.

5). A Fund is 2% for each year of service up to max of 25 years * high 5 year average (limited to $260,000 by pilot contract). Max pay out is $130,000. Not part of IRS annual limit mentioned above.

Comparing to Delta, they contribute 16% of eligible earnings...upto the IRS limit of $280,000. (I don’t think they have cash over cap, which would put extra money into regular pay.) Delta has profit sharing as well. I think they are somewhat similar with our A Fund & b Fund if you are not “young” because FedEx allows pilot to max the IRS limit, but it is out of their pay. Time value of money may make Delta better if young enough to grow the retirement account.

FedEx Alpa is trying to sell the crew force on freezing the A Fund for a Variable Benifit retirement vehicle. Not worth discussing since it is currently being negotiated so NO ONE KNOWS what it really is yet.

kronan
03-27-2019, 03:29 PM
Flying Boxes,
our B plan goes to 9% January 1st.

Delta DOES have Cash over Cap. And profit sharing is pensionable. One of our transitioned Delta Pilots pointed out that a Delta Pilot can use their Profit Sharing tool to have 100% of their profit sharing deposited into their DC as permitted under a 401(a) plan.
Asking a Delta Bud about the whole process and his confusion over the issue leads me to think not a whole lot of Delta folks make use of it that way. Some of whom have commented on the Delta forum here that doing so just makes the Cash over Cap start early. Others totally miss the deadline.

So, what else is new regarding pilots and $$.

The equivalent value of our current A plan. In general, if you wanted to generate 130k in cash flow without fear of outliving your savings, you would need to accumulate roughly $3.2M. Over a 25 year period, at a 6.5% return, that means saving $4,273 each and every month or $51,276 each year. If you don't do that well, or want to be a bit conservative and still hit the goal. Then at 5.5% returns you'd need to save $4,984 each month or $59,808 every year.

crwfshkid
03-27-2019, 06:34 PM
At the risk of asking pilots for financial advice, what’s the best way to maximize FedEx’s retirement? Obviously hit high-5, but what about maximizing 401k without leaving company money on the table? I heard if you contribute too much to the 401k, the company stops matching early...

CAVOK84
03-28-2019, 02:06 AM
3). Regular sick account (RSA) of 72 hours a year go into a Disability Sick Account (DSA) if not used. If DSA goes above 686 hours at the end of the year (about year 10 of not being sick...ever ), FedEx will deposit extra sick hours into retirement account at pilots hourly rate. 72 hours * $XXX.XX/hour = $XX,XXX. IF DSA payout exceeds the IRS annual limit ($56,000 under age 50 or $62,000 if 50 or older), it paid out as taxable pay.

At the risk of asking pilots for financial advice, what’s the best way to maximize FedEx’s retirement? Obviously hit high-5, but what about maximizing 401k without leaving company money on the table? I heard if you contribute too much to the 401k, the company stops matching early...

I may be missing something. Assuming a pilot contributes the max allowed to the 401K, a $500 match and an 8% contribution to the limit of $280,000-- how are we likely to reach the IRS annual limit of $56,000?

Is extra sick pay contribution the only means by which this might occur? If this is in fact the issue, how would receiving a sick pay contribution at end of year elicit lost contribution?

Tokyo
03-28-2019, 02:32 AM
I may be missing something. Assuming a pilot contributes the max allowed to the 401K, a $500 match and an 8% contribution to the limit of $280,000-- how are we likely to reach the IRS annual limit of $56,000?

Is extra sick pay contribution the only means by which this might occur? If this is in fact the issue, how would receiving a sick pay contribution at end of year elicit lost contribution?

You can and should use your After-Tax sub-account to reach $56,000. Up to 20% of each check can be socked away here, where it can start generating tax-free earnings for your retirement. The great thing Fidelity offers now that Vanguard did not is the auto-sweep from after-tax into your Roth 401k each paycheck. This minimizes taxes on gains and eliminates calling in to speak to a representative.

MOGuy
03-28-2019, 03:12 AM
1). If a pilot contributes $1,000 to a 401K for the year, company gives a $500 match. Yes, that is it for employer match for 401K.

2). FedEx also contributes 8% of income up to IRS limit ($280,000 this year I think) into a B Fund. $280,000 * 8% = $22,400. (goes to 9% in Oct of this year or next, not sure which year)

3). Regular sick account (RSA) of 72 hours a year go into a Disability Sick Account (DSA) if not used. If DSA goes above 686 hours at the end of the year (about year 10 of not being sick...ever :rolleyes:), FedEx will deposit extra sick hours into retirement account at pilots hourly rate. 72 hours * $XXX.XX/hour = $XX,XXX. IF DSA payout exceeds the IRS annual limit ($56,000 under age 50 or $62,000 if 50 or older), it paid out as taxable pay.

4). Pilot can contribute $19,000 into 401K. And if IRS annual limit has not been exceeded, FedEx allows after tax contributions upto the annual IRS limit.

5). A Fund is 2% for each year of service up to max of 25 years * high 5 year average (limited to $260,000 by pilot contract). Max pay out is $130,000. Not part of IRS annual limit mentioned above.

Comparing to Delta, they contribute 16% of eligible earnings...upto the IRS limit of $280,000. (I don’t think they have cash over cap, which would put extra money into regular pay.) Delta has profit sharing as well. I think they are somewhat similar with our A Fund & b Fund if you are not “young” because FedEx allows pilot to max the IRS limit, but it is out of their pay. Time value of money may make Delta better if young enough to grow the retirement account.

FedEx Alpa is trying to sell the crew force on freezing the A Fund for a Variable Benifit retirement vehicle. Not worth discussing since it is currently being negotiated so NO ONE KNOWS what it really is yet.

Thank you for the explanation.

So the A fund and B funds. Are these pension type plans or are do they go into a safe harbor vested retirement vehicle that is not subject to the financial health of the company?

BoilerUP
03-28-2019, 04:06 AM
A fund = Defined Contribution (traditional) pension

B fund = Defined Benefit plan, ie. company contribution into a brokerage account in your name (what DAL/UAL/SWA/etc. now have).

MOGuy
03-28-2019, 05:00 AM
A fund = Defined Contribution (traditional) pension

B fund = Defined Benefit plan, ie. company contribution into a brokerage account in your name (what DAL/UAL/SWA/etc. now have).

Okay great thank you for the response and clarification.

TOMM
03-28-2019, 05:08 AM
This tool will let you put in all your data and tell you how much percentage you can be pulling out of each paycheck, 401K and after tax dollars, to hit the IRS limit at the end of the year without loosing out on any of the FedEx 8%.

https://fedexcontributionmaximizer.com/

Flying Boxes
03-28-2019, 05:18 AM
More money saved younger is important, but I think the retirement is close enough to not be a factor for targeting a company. It is also significantly better retirement money than regionals or military! Just my opinion.

An example of a FedEx wide body FO at top FO pay.

Company Contributes 401K Match: $500
Company Contributes B Fund: $22,400 (senior FO can make 280K, had a friend make ~240K on 2nd year pay on B777) YMMV
Pilot 401K (ROTH or Traditional): $19,000
TOTAL SO FAR $41,900

Pilot OPTIONAL contribution out of paycheck of after tax 401K (should be ROTH 401K/Roth IRA) money: $14,100

OR

(assuming max DSA payout :rolleyes:) DSA Pay out on 31 Dec would be 72 * 222.08 = $15,989.76

Pilot's 31 Jan of the next year pay check, company adds $1,889.76 to pilot's pay since pilot exceeded the IRS Limit.

Delta profit share currently doing well and probable benefits junior pilots ability to save max retirement earlier and easier, I wish FedEx had this.
Delta 16% Retirement contribution is excellent, but retirement money wise is still constrained to IRS Limit. Cash over cap becomes regular pay as I understand it (and not very well!)

FedEx still has A Fund, it's very valuable guarantee retirement but does not ever get cost of living adjustments so value decreases over time.
Out of pocket retirement savings is doable at FedEx on 2nd year pay if you are wise with money and not in serious debt. Much easier every year as seniority and pay increases. Many start 2nd year pay at $178.14/hour and according to the EOY salary thread here pilots can make around 200k.

BTW, the IRS limits are YOUR limit. IF you have a working spouse, their retirement savings are separate from yours and have same 56K limit, but that is in addition to yours. ;):D

Flying Boxes
03-28-2019, 05:23 AM
Forgot to add, I hope you end up where you want!!!! :D

navigatro
03-28-2019, 05:23 AM
A fund = Defined Contribution (traditional) pension

B fund = Defined Benefit plan, ie. company contribution into a brokerage account in your name (what DAL/UAL/SWA/etc. now have).

I think you got the labels backwards.

A fund = traditional pension = defined benefit

B fund = 401K (or company paid % ) = defined contribution

MOGuy
03-28-2019, 06:44 AM
Forgot to add, I hope you end up where you want!!!! :D

Thanks! I would love to be at FedEx but I'm not gonna pigeon hole myself into one option 😊

BoilerUP
03-28-2019, 06:56 AM
I think you got the labels backwards.

A fund = traditional pension = defined benefit

B fund = 401K (or company paid % ) = defined contribution



Drat, that’s what I get for typing on a cell phone after waking up at 1am....thanks for that correction!

KODI3
03-28-2019, 03:11 PM
Flying Boxes,

Can you pls clarify:

Pilot OPTIONAL contribution out of paycheck of after tax 401K (should be ROTH 401K/Roth IRA) money: $14,100


What is OPTIONAL? 405 or some other plan?
Thought 401K was limited annually and already included in your total calculations?

THANX

Fdxlag2
03-28-2019, 03:31 PM
Flying Boxes,

Can you pls clarify:

Pilot OPTIONAL contribution out of paycheck of after tax 401K (should be ROTH 401K/Roth IRA) money: $14,100


What is OPTIONAL? 405 or some other plan?
Thought 401K was limited annually and already included in your total calculations?

THANX
MEC R&I Page: https://fdx.alpa.org/LinkClick.aspx?fileticket=xnlhZwRnETE%3d&tabid=8032&mid=27595#page16

CAVOK84
03-29-2019, 11:14 PM
You can and should use your After-Tax sub-account to reach $56,000. Up to 20% of each check can be socked away here, where it can start generating tax-free earnings for your retirement. The great thing Fidelity offers now that Vanguard did not is the auto-sweep from after-tax into your Roth 401k each paycheck. This minimizes taxes on gains and eliminates calling in to speak to a representative.

Whoops... Thanks for the info. For some reason I had thought the Roth 401k and the traditional 401k shared the limit contribution by the pilot of 19k. Got some catching up to do I guess! Just to clarify, the after tax contributions are distinct from Roth 401k contributions right? Fidelity offers the option to 'auto-sweep' after-tax contributions to our Roth correct?

busdriver12
03-30-2019, 12:52 AM
You don't want to confuse the after tax contributions ($14.1K) that can be converted within the plan to your Roth, with the 401K contributions (limited to 19K) that can be put in your 401K with before tax funds, or into your Roth 401K after tax. The 14.1K is what is referred to as a Mega Back door Roth, and not too many people do it (but should). Fidelity will not limit your contributions to that, but if you get too much deducted out of your paycheck, the company will limit their contributions to your B fund...:eek: so be careful and make sure you understand it.

Don't forget the catch-up contribution of 6K to 401K's for people over 50.

FlyBoyd
03-30-2019, 10:01 AM
Don't forget the catch-up contribution of 6K to 401K's for people over 50.

Just a slight clarification in case someone doesn’t know.....over 50 by the end of the tax year. As an extreme example, if you turn 50 on 12/31/19, you are allowed to contribute the catch-up contribution in 2019.