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Airline Pilot Central Forums (https://www.airlinepilotforums.com/)
-   Delta (https://www.airlinepilotforums.com/delta/)
-   -   MBCBP implementation announced… (https://www.airlinepilotforums.com/delta/143005-mbcbp-implementation-announcedo.html)

Jughead135 05-26-2023 08:37 AM
Originally Posted by notEnuf (Post 3641949)
We are only talking about overages also. Personally my overages have been in the less than $2K per year range as I manage my contributions. Anyone making $330K+ (a lot of us with "retro") this year will have some but below that should be fairly manageable.
Careful. Retro [i.e., the "Pilot Retro Pay" for 2023] counts toward the $330K. The OTP [i.e., the "Pilot Payment" for 2020 - 2022] does not.

m3113n1a1 05-26-2023 08:37 AM
Originally Posted by notEnuf (Post 3641911)
This fund is about what I expected. Diversified stable earnings with no real risk and the associated lower returns. I'll manage my cash overages to be minimal this year and see what ends up in there. I probably won't make it the total core low risk portion of my portfolio but will evaluate it in the next few years and opt out if the amount exceeds my target. The tax savings and dues savings are significant enough to try it out.
The way I read the email we only get one chance to opt out..if we don't do it now, we're in it forever. Correct me if I'm wrong.

mispoken 05-26-2023 08:46 AM
Originally Posted by Jughead135 (Post 3641976)
Yes, of course. But the act of rolling it over would not be a taxable event (which is how I read the original list of options).
rolling from MBCBP to IRA is not taxable. It would extend your tax deferral from retirement age to age 72. My point is that these taxes have to be taken into account to get a truly accurate picture. To simply say $1000 untaxed gets invested today vs $600 taxes today into a Roth is not the complete picture. Taxes on either method need to be factored in. But we are kind of just spinning our wheels at that point making guesses. Hard to know what taxes will be in 20 years, but they DO exist, even on MBCBP Deferrals.

crewdawg 05-26-2023 08:49 AM
Originally Posted by First Break (Post 3641854)
Yes, passive activity loss for someone who earns W2 income is a beautiful thing. But sure can take a lot of effort, speaking from experience.

Ya but flying a full 75+ hour at Delta requires lots of effort too lol! Good discussions so far.

notEnuf 05-26-2023 08:51 AM
Originally Posted by m3113n1a1 (Post 3641979)
The way I read the email we only get one chance to opt out..if we don't do it now, we're in it forever. Correct me if I'm wrong.
I reread it and you could be correct. I'm waiting on more details. My understanding was an out only once in your career and it may be wrong.

PilotJ3 05-26-2023 08:51 AM
Originally Posted by m3113n1a1 (Post 3641979)
The way I read the email we only get one chance to opt out..if we don't do it now, we're in it forever. Correct me if I'm wrong.
That’s the same way I read it. Also sucks for NHs, they have no say on it.

Wasn’t the MBCBP negotiated to be able to opt in every contract cycle??? What happened with that???

With 29yrs to go, my wife and I are 99% thinking in opting out.

Jughead135 05-26-2023 08:52 AM
Originally Posted by mispoken (Post 3641980)
rolling from MBCBP to IRA is not taxable. It would extend your tax deferral from retirement age to age 72. My point is that these taxes have to be taken into account to get a truly accurate picture. To simply say $1000 untaxed gets invested today vs $600 taxes today into a Roth is not the complete picture. Taxes on either method need to be factored in. But we are kind of just spinning our wheels at that point making guesses. Hard to know what taxes will be in 20 years, but they DO exist, even on MBCBP Deferrals.
Again, fair enough (& agreed). That same logic needs to be applied, though, to any tax-deferred annuity--which, on the original list, was the only one listed as "further deferral," vs "taxable" for the others. That's my only point, that an IRA rollover may be taxable (Roth IRA) or tax-deferred (traditional IRA).

mispoken 05-26-2023 09:08 AM
Originally Posted by Jughead135 (Post 3641987)
Again, fair enough (& agreed). That same logic needs to be applied, though, to any tax-deferred annuity--which, on the original list, was the only one listed as "further deferral," vs "taxable" for the others. That's my only point, that an IRA rollover may be taxable (Roth IRA) or tax-deferred (traditional IRA).
ok, think we are on the same page. I think this sidebar was started as someone mentioned that we control withdrawals and therefore the tax rate, which I don’t completely agree with. The tax ramifications of option 3, rolling it into an annuity, I’m uncertain of so I won’t comment on that.

First Break 05-26-2023 09:15 AM
Originally Posted by mispoken (Post 3641995)
ok, think we are on the same page. I think this sidebar was started as someone mentioned that we control withdrawals and therefore the tax rate, which I don’t completely agree with. The tax ramifications of option 3, rolling it into an annuity, I’m uncertain of so I won’t comment on that.
One thing is almost completely certain, even if progressive marginal tax rates are raised in the future, the effective tax rate of the dollars withdrawn from the plan will be significantly less than the tax rate applicable to spill cash, other than in some exceptional cases.

LumberJack 05-26-2023 09:19 AM
Originally Posted by Trip7 (Post 3641675)
Glad the Union made it optional. I'm out

I feel for new hires after June 1st that will be forced into this plan. Only reasonable scenario where the MBCBP is a good idea is someone close to retirement running their portfolio conservatively
Pretty sad that it's only optional for existing pilots. I was told this will be an optional plan. (Emphasis on the period). That was a lie.


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