Thanks dude! You are correct! And right back atchya!:) Happy New Year!

Denny

The one thing about that I haven’t been able to reconcile yet is why the new hybrid DB still requires a premium to be paid to the PBGC. If it’s fully funded at all times and can’t be taken away, then why is there a requirement to pay premiums to the PBGC as essentially insurance for if it gets terminated?

Maximizing Roth for some is not necessarily all about the tax piece. If you project a large balance in your retirement accounts at the end of your career, more Roth and less Traditional can be very impactful in managing RMDs.

Does it? I don’t know the answer to that question. Maybe it has to do with ERISA law in that ANY form of DB requires PBGC “insurance.” Maybe it’s to cover people in case the company that has control of investing the plan (In our cas probably would be PWC) went belly up ala Lehman Bros.

Denny

How is it not all about the taxes? If you are projecting a large retirement account, you want to protect from more taxes in retirement so you pay them now. I get that. My point is how many guys/gals do you think are going to be in the situation of making more money in retirement than while working? There will be some but I’m guessing not many.

Denny

Probably more then you'd expect. Combination of decades of maxing out 401k, theoretical returns, and the inevitable increase in taxes over the long run. Yes they are *occasionally * reduced, but like a correction to the market, it's usually just temporary... you know they will always take more as time goes on . Just like predicting the market though no one truly can say, so we all just do the best with the information we are given.

I bought property in Boulder, Colorado with my "windfall." Immune from downturns, historically. My concert promoter was under water. That's not the point. We got hosed by a company now buying $12 billion high and the stock is at $50. They can afford a little something for the effort.

Totally BS
 

Originally Posted by Trip7
“DB was indeed terminated but there was compensation. Not full compensation but a significant amount of it with the Note. According to the ADC Dispatch notes compensation was aimed for provide pilots 49% FAE after conservative investment gains.

Saying your Retirement went to zero is an exaggeration. Statements like that is why some are saying the call for a DB by some pilots is an attempted money grab after poor investment decisions. “

What a crock! At the time of termination I was a widebody Captain. Had a few green slips that year to boot. My claim plus note plus PBGC. In the market indexed to the S&P, had huge gains in the market, put several hundred thousand of my own money on top of that. I’m over 60 now. If I withdraw at 4 1/2% I have an FAE of less than 20%. I’m one of the lucky ones. Who the hell is expecting FAE 49%?

It’s this kind of crap that drives me nuts. I know there’s not so many old guys left and I can’t expect the young guys to care. Just give me my strike ballot please. Nothing left to lose at this point.

Just to clarify, you are saying your note, claim and all the 401k DC you've accumulated over the years so far has you at 20% FAE?

In case you thought the 49% FAE was based just off PBGC and Note it was not. How much time you had left to accrue DC funds into the 401k was also factored into the 49%. And those calculations were made at lower DC % at the time.



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Isn't this deceptive logic? It seems that you are trying to imply an "FAE" solely from interest (and nothing but) on your holdings. That is not necessarily the same thing as "xxx% FAE" paid from the corporate treasury. I think most of us are assuming that whatever stream of retirement income we end up getting will be a combination of interest and distributions of the principal from our retirement accounts.

Or are you saying that in this example you are withdrawing 4.5% of your assets as distributions (versus an interest rate of 4.5%...perhaps I misunderstood the example).

Another question is (and I don't know the answer): under the old DB plan, what happened to your retirement when you passed away? Did it go to your spouse? If so, what happened when both of you were gone? I assume the answer is--it no longer existed, nothing for your heirs, charities, etc.

While you may not be able to get a tidy monthly income stream solely from the interest on your holdings, if and when you and your spouse are gone...ALL your remaining holdings are still the property of your estate, to be passed on as you and your estate plan saw fit. Under the DB plan once you and spouse were gone, you had...nothing...to pass on (from the "official" retirement resources).

Please correct me if I am wrong, but that is a pretty important distinction I think.