“older workers who are planning to retire in the next six months, or at some point in 2020, have more to think about. If you're one of them, your best move may be to postpone retirement until the market does a better job of settling down and portfolio values recover.”

For those that keep thinking the older guys are just out for money. Just sayin

 

Nobody is taking an early out now. Especially if they were substantially (40% or more) in the equity market. Most retirees need that amount to sustain their nest egg.

 

I hope "nobody" with such large exposure to equities in their final years was actually positioned to sustain significant losses. They should have been built in to one's financial plan that close to retirement. I know everyone didn't plan smartly, but many did. And many with the massive losses of late also gained much in the last 10 years with the same exposure.

 

^^^^^^^^^^^Yes! This^^^^^^^^^

The company has much, much less leverage over us without the DB. They can claim the sky is falling and we will liquidate if we don’t totally acquiesce to their demands but we know it’s total BS. DAL is not going anywhere.

DAL was profiting 5B+ a year prior to this. No one knows how long it will take to get back there but we absolutely will. Potential creditors know that Delta was and will be again a money making machine that they will be happy to loan money to if Delta needs it.

As we all do, I want DAL to succeed and think the recent LOA was a win-win for DALPA and Delta, but if the company starts threatening us with “Take this or else” I would say fine it’s “or else.” Many of us have been through this rodeo before and the fact that we don’t have a DB actually empowers us in times like these.

Scoop

 

Anybody want to defend the “min balance” plan now?

 

Taking a lump sum early retirement could be the greatest financial move available. Imagine investing a huge lump sum at current market prices and catching the next decade of recovery.

I won't castigate anyone who planned an early retirement, but is now holding on til 65. That said, if you are within a year or two of retirement, your portfolio should have already contained a proper balance of equity and income holdings. Being 100% equity until retirement date, then making the shift is irresponsible at best. The last few years in the workplace should be building cash for retirement and transitioning to an income production vs growth. If your portfolio just tanked and you want to work til 65 instead of 63, go for it. Stock away a few grand while stocks are on sale. If you start lobbying for 67 because the market just tanked, get out of my seat old man.

 

I am not a min balance plan person. A plan however can’t be canceled unless two things have occurred. The corporation must file for reorganization in bankruptcy and the plan must be severely underfunded causing it to meet the but for test. That test means that a successful reorganization could not occur unless the plan were terminated. A small supplemental retirement plan is not likely to meet that test. That is why in many chapter 11 filings there is not a concern over termination. With the changes in retirement rules and a plan structured to avoid a run on the bank there would not be much to worry about. Delta currently has huge retirement funding obligations. I don’t hear anyone discussing those plans getting terminated.

 

I think you are making his point even stronger. If Delta didn't have a min balance obligation, more money is available for the remaining seniority list. Those who benefit with the hypothetical min balance "plus up" would be flying out of here with money that could be used to maintain the contract for current employees. Remember the impact of lump sum departures on the pension...

 

Even in retirement there is an appropriate place for equities. It really comes down to your balance and draw down plan. How conservative or risk tolerant you choose as an individual will determine the reliability of the retirement. If you are going to live for 25 years after retirement you need income and growth unless you have other sources of income. Inflation over that amount of time requires it.

By delaying retirement by 2 years you turn those years into earning years and don’t start drawing from the lower value. Postponing likely aids the recovery of retirement funds and adds more. It also reduces the number of years you need to use those funds. If you’re able to work or, why wouldn’t you? I hope they retire all the same, but putting myself in that situation, I’d work until I could no longer hold a 1st class medical.

 

Vanguard's 2020 target plan, retire now is about 50/50 equities and bonds. 2025, 60/40. So being near retirement with 40% equities is not haphazard.

That being said, senior guys are down 300 to 500k in a week