OOfff

that poster won’t upgrade until they’re 35% seniority, iirc. So take the claim of “stuck” with a grain of salt.

Trip7

Theyre still good. I’m 40% and haven’t been here nearly 15 years

Gone Flying

… In ATL

ten characters

m3113n1a1

This is what the MBCBP is:

Hey, how about we lock your 401k excess cash in a vehicle that underperforms the s&p for the next 30 years so you can defer your taxes until retirement? Sound like a good deal to you?

​​​​​Oh, you wanted to invest the excess into your Roth IRA, real estate, businesses, or your personal brokerage account? Nope! Not allowed.

Bottlen0se

Yes, this.

I’m not a one issue voter, but if the MBCBP is not optional I’m not for it. I’d still rather pay the income tax on the excess and do what I wish. I can back door it for now into Roth IRAs for spouse and myself. Put it in my kids 529 plans. Or buy high dividend paying investments in a normal brokerage. Or even buy real estate, pay off debt, etc. The point is, why lock ourselves into something that in the end is very mediocre.

notEnuf

It's for overages, when we get 20%DC the company fully funds the 401k. All you need to do is nothing and there's no spill to manage. Take your post tax money and do what you want with it. Nobody is locking up anything unless you choose to. Next year that's $66,000 for everyone making $330,000. If you contribute to an IRA and roll to a roth that's another $6500. If your 50+ add $1000 to the IRA and $7500 to the 401k. The current setup shelters up to $81000. If you go over just reallocate. Move your bonds into stocks and the MBCBP become you conservative low risk portion of the total portfolio. The MBCBP is already negotiated the only thing holding it up is optionality. With our current set up there's tons of ways to avoid overages and a minimal amount will probably make your conservative investment portion of your diversified portfolio perform better. Don't fear the boogey/straw man of jailed funds, they are guaranteed returns.

m3113n1a1

If it's optional then I have no problem. I don't currently buy bonds and don't plan to for at least 20 years, if ever. And there's no such thing as guaranteed returns.

I have a feeling the only reason we're getting this vehicle is because they needed somewhere to put their mythical "minimum balance.'

TED74

MBCBPs may not be off interest to you, and that’s fine. They are extremely popular with other high-earners like doctors, lawyers, small business owners, etc., or folks who have interest in deferring more income taxes than they might without such plans. Optionality is the key that everyone, including DALPA, has acknowledged is essential.

TED74

Probably wise for folks with a long time horizon until and through retirement. The calculus would shift a bit, though, if you could buy bonds with pre-tax money and reduce your taxable income.

bugman61

They are not “guaranteed returns” they are “guaranteed* returns”

and if the plan went away from a conservative 3-5% targeted rate of return to a target date fund set up, that asterisk just got a whole lot bigger.