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Originally Posted by PilotWombat
(Post 2964022)
Ok, so I've been going through the numbers. Of course I have to make a lot of assumptions:
With those assumptions and more, it will take 28 years for your own investments to provide more income than the MBCBP. At a 9% return, 22 years. Those numbers stretch are 31 and 24 years respectively with a 5% state income tax. So I guess if your retirement horizon is more than 30 years out, then it's in your best interest to not have the MBCBP. If it's sooner than that, the MBCCBP is the better option. I guess I shouldn't say "adequate". Fully tax advantaged, maybe. Sent from my SM-G975U1 using Tapatalk |
Originally Posted by Trip7
(Post 2964016)
Please show your Math on how you think pilots will not be able to outpace the after tax returns of the MBCBP
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Originally Posted by PilotWombat
(Post 2964022)
Ok, so I've been going through the numbers. Of course I have to make a lot of assumptions:
So I guess if your retirement horizon is more than 30 years out, then it's in your best interest to not have the MBCBP. If it's sooner than that, the MBCCBP is the better option. I guess I shouldn't say "adequate". Fully tax advantaged, maybe. I'm not sure I've heard anyone with two decades left in this industry advocate for the MBCBP. If I had 3-5 years left, I'd be singing the praises for sure! |
Originally Posted by Tailhookah
(Post 2964014)
I would recommend you talk to your reps. We need more than just a higher DC percentage. It’s because we make a lot. So the MBCBP allows us high earners to have a secondary tax haven to protect our money. There are rules and the MBCBP is that vehicle. It’s naive to read where some of you say you want the money and you’ll do what you want. That’s fiscally irresponsible and ignorant. You’ll not be able to outpace the taxes and return that the MBCBP will provide.
And the way this this country is going, I expect our 401k max contributions will someday soon be lowered to something around 40k from the current 58k due to our esteemed Reps in the DC swamp thinking we make too much and they enact a tax on the rich. That’s us. That hidden tax will lower our tax savings under current 401k rules. Most of America won’t care because they don’t get close to their limits. When that hat happens our MBCBP will absorb our money above the new lower limit and protect us from our own swamp rats that are trying to hose us in DC. The MBCBP is a great vehicle for those who are smart and get it. I’ve talked to my reps. And any question beyond what is covered in the bullet points they put out gets a “you should ask the R&I guys that question.” So your theory is that the socialists will take over, and mess up the 401k plan that is used by nearly everyone who has money to save for retirement but leave the MBCBP alone that is only used by the ultra rich? I have said before and still believe that the MBCBP is a god option, and it might be the best option for some of us. But it’s not for everyone. If we actually believed that it truly will be optional in a TA you wouldn’t see all the pushback. Sent from my iPad using Tapatalk |
Originally Posted by Tailhookah
(Post 2964031)
Tax sheltered money. That’s upfront a savings of roughly 15-25%. Plus 4-8% return. Later when your income is much less you’d be in a lower tax bracket. If you can beat that long term please call the Oracle of Omaha. He will give you the keys to the castle.
Sent from my SM-G975U1 using Tapatalk |
Originally Posted by Tailhookah
(Post 2964014)
I would recommend you talk to your reps. We need more than just a higher DC percentage. It’s because we make a lot. So the MBCBP allows us high earners to have a secondary tax haven to protect our money. There are rules and the MBCBP is that vehicle. It’s naive to read where some of you say you want the money and you’ll do what you want. That’s fiscally irresponsible and ignorant. You’ll not be able to outpace the taxes and return that the MBCBP will provide.
And the way this this country is going, I expect our 401k max contributions will someday soon be lowered to something around 40k from the current 58k due to our esteemed Reps in the DC swamp thinking we make too much and they enact a tax on the rich. That’s us. That hidden tax will lower our tax savings under current 401k rules. Most of America won’t care because they don’t get close to their limits. When that hat happens our MBCBP will absorb our money above the new lower limit and protect us from our own swamp rats that are trying to hose us in DC. The MBCBP is a great vehicle for those who are smart and get it. |
Originally Posted by Tailhookah
(Post 2964031)
Tax sheltered money. That’s upfront a savings of roughly 15-25%. Plus 4-8% return. Later when your income is much less you’d be in a lower tax bracket. If you can beat that long term please call the Oracle of Omaha. He will give you the keys to the castle.
In addition to what Trip7 said, if you don’t shelter the money now, you will only pay long term capital gains rates on withdrawals above your basis when you retire. And that almost certainly is far lower than your marginal income tax rate in retirement. Sent from my iPad using Tapatalk |
Originally Posted by Trip7
(Post 2964027)
I see more assumptions than numbers here. Especially the 6% annuity purchased with MBCBP
Originally Posted by TED74
(Post 2964041)
I'm not sure I've heard anyone with two decades left in this industry advocate for the MBCBP. If I had 3-5 years left, I'd be singing the praises for sure!
I also am not one who generally uses the phrase "What's in it for me????". My retirement isn't mutually exclusive of someone else's security. Even if nothing changes and we operate under the current contract for the remainder of my career, I'll be able to comfortably retire in my early 50's. Anything on top of that, whether MBCBP or just an increase in rate, is gravy. I won't vote for any reduction, but I'll gladly give a couple percentage points improvement (say, 22% instead of 24%) if it means 7000 guys who gave up their pensions get to be secure in their retirement. |
Originally Posted by Tailhookah
(Post 2964014)
I would recommend you talk to your reps. We need more than just a higher DC percentage. It’s because we make a lot. So the MBCBP allows us high earners to have a secondary tax haven to protect our money. There are rules and the MBCBP is that vehicle. It’s naive to read where some of you say you want the money and you’ll do what you want. That’s fiscally irresponsible and ignorant. You’ll not be able to outpace the taxes and return that the MBCBP will provide.
And the way this this country is going, I expect our 401k max contributions will someday soon be lowered to something around 40k from the current 58k due to our esteemed Reps in the DC swamp thinking we make too much and they enact a tax on the rich. That’s us. That hidden tax will lower our tax savings under current 401k rules. Most of America won’t care because they don’t get close to their limits. When that hat happens our MBCBP will absorb our money above the new lower limit and protect us from our own swamp rats that are trying to hose us in DC. The MBCBP is a great vehicle for those who are smart and get it. |
Originally Posted by PilotWombat
(Post 2964022)
Ok, so I've been going through the numbers. Of course I have to make a lot of assumptions:
With those assumptions and more, it will take 28 years for your own investments to provide more income than the MBCBP. At a 9% return, 22 years. Those numbers stretch are 31 and 24 years respectively with a 5% state income tax. So I guess if your retirement horizon is more than 30 years out, then it's in your best interest to not have the MBCBP. If it's sooner than that, the MBCCBP is the better option. I guess I shouldn't say "adequate". Fully tax advantaged, maybe. Can you share your numbers? With your tax bracket and growth assumptions I don’t see how the break even point is so far away. Sent from my iPad using Tapatalk |
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