6 - 15 is quite a margin for error. I have 1 - 9 kids. True statement. Why are you flying for Delta? We are talking about the PWA not your hobby. Our retirement funds provided by Delta which are intended to be tax free (or prepaid with growth not taxed) are losing earnings potential due to taxation. I want another vehicle to shelter those funds because the current one has become inadequate. If you are the next Elon Musk or Steven Wynn great, but those of us (the majority by far) that aren't want more efficiency in building our nest egg. Take all of your earnings and invest in anything you like but the retirement funds from the PWA are for retirement investing within the retirement plan(s) provided by the PWA. We have no argument for additional DC contributions without a place to put it. If you don't want to be a typical pilot, fine. Those of us that are want efficient and reliable savings growth that aren't taxed until we choose. Perhaps you need to write a letter to your representatives to start polling on a venture capital allocation as part of our PWA. I can see it now section 275.203 of the PWA. Just set up a self directed IRA and let us have our 30% savings and additional capital growth. Are you overfunding just to get the roth benefit? If so how much of your income are you trying to roth?

 

Minor math correction.
Assuming $10,000 annually is contributed by 401k excess in equal monthly increments (it will actually be back loaded reducing accumulation), it takes 220 months (18+ years) at 5% projected rate of return to reach $300,000.

 

Trip, myself and others have laid out multiple options to shelter funds while outperforming the 5% return. The only argument against MBCBP is the potential mandatory aspect of the plan.

Owning LP interests in cash flowing businesses, rental real estate and dividend stocks will pave the way to financial security. The biggest financial risk you face in retirement is loss of purchasing power due to inflation. Earning a fixed rate of return that barely outpaces inflation over the long term is a recipe for disaster. Trip is not bragging about what he has, he is showing you the path to financial security. Retreating to the "safety" of a tax deferred 5% return won't make a significant difference. In less time that we spend on CQ each year, pilots can learn how to properly manage finances and own assets that produce cash flow. Retiring with a stream of cash flow is much safer than retiring with a pile of cash and guessing when it will run out.

 

We get it. You want the mbcbp. I want you to have it too. I haven’t seen anyone on this site, or FB, or talked to anyone in person who doesn’t want that to be an option for you. The concern is that if the IRS doesn’t allow it to be optional, everyone could be forced into the plan. Is that what you want? Do you support the plan for yourself at the expense of everyone else who might want a different option? Clearly nobody here will convince you of the shortcomings of the MBCBP, can you at least admit that there is validity to some pilots wanting to do something else with their 401k excess?

 

Why are you opposed to it then? It's overages of a few thousand per year right?

Your hobby has nothing to do with my retirement.

You can preach all you want. I was in real-estate and got out (except for a few REITs) because I didn't want the exposure and my time was more valuable to me. I hope everyone takes your and trips advice, just do it with your own earnings. You are costing us all capital appreciation and tax efficiency. I'm not interested in your situation. I'm interested in the PWA and the tax efficiency that every pilot who doesn't choose to take your advice deserves.

 

I have yet to get an authorative answer on where my money goes if I die before getting paid, etc.

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I get it, you don't want anymore DC.

This is completely false. You already have optionality by the amount of funding you choose. The company can contribute up to 20% of $330,000 without any excess. If you choose to cause excess that's on you. I'm all for optionality but the reality is going to come out soon that the IRS is not on board with it. Then what? Is a "mandatory" deposit of overages you can determine really a bad thing. Most of us will find ways. I can save $81,000 in sheltered vehicles next year. And an unlimited amount if it goes into 529s. Some of that will be in conservative diversified income yielding assets. Does it matter if that small portion is in a MBCBP or another account? If you make $400K we are taking about $11,200 or 16% of 70,000 over the earnings cap. At 20% there no need to contribute anything and it's fully funded. If you're making $330,000+ then you are probably closers to retirement anyway and need to taper risk. Or you have already built your empire and a few thousand dollars a year isn't moving the needle.

 

We are opposed to it if it’s not optional. We really don’t need to debate further as it will not pass the pilot group if it’s not optional.

 

You're not understanding that most pilots hired in the last 15 years have no interest in "guaranteed returns," pensions, deferring taxes, or some third party entity managing our money. We have never seen this type of thing work out well.

Most of us expect (hope) to be in roughly the same tax bracket in retirement as we are now. We also are fairly certain tax rates will actually be higher by the time we retire. That's why we want to pay taxes now.

 

I made more than 330k this year and would like to manage my own overage as I do now. Is a mandatory plan that captures that overage a bad thing?

yes. You do with your excess anything you want. Don’t commandeer mine.