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MBCBP implementation announcedÖ

Old 05-25-2023, 03:45 PM
  #11  
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Originally Posted by Jughead135 View Post
Does that take into account the tax-advantaged nature (deferred taxation)? You mention the lower tax rate expectation; what about avoiding current-year taxation on growth until withdrawal (at that expected lower tax rate)? I'm a big believer in maxing out tax-advantaged accounts....

I don't know anything (yet) about this investment vehicle (LIRKX--thanks to the OP for looking up the code), but, assuming it's at least middle-of-the-road, I suspect the tax treatment could make this more valuable than some critics would have us believe.
Be careful letting the tail wag the dog on retirement investing. Taxes are only one aspect. Return, liquidity and allocation are also important. If the DC excess is going into a similar investment regardless, then there is tax benefit. If the DC excess will be invested differently than the MBCBP plan fund the tax advantage loses validity.

Gunfighter opinion:
High income earners hitting the plan max should be investing in real estate. It is a great vehicle for storing wealth and creating retirement income.

YMMV DYODD BWYWWWYB Retirement is closer than you think it is.
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Old 05-25-2023, 03:55 PM
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Originally Posted by illini90 View Post
To go along with your 3% return on a bond fund? Thatís what it historically returns. Iíd rather have the 18% cash and invest some of it elsewhere, and use some of it towards fun today. If you put it in this plan, youíre there forever, watching it flatline. If you turn it down, you will have a bunch of cash and options to invest or spend. Investing isnít always a tax advantaged account. Sometimes you need to invest in enhancing your life today, while you can enjoy it. Buy your ski condo today, use it with your kids and grand kids, sell it when you canít ski anymore. I bet youíll make better than 3% return. At least way I see it.
Two of my best real estate investments were a swimming pool and a timeshare. I lose about $5k per year in exchange for a couple weeks of vacation and countless afternoons with the family.
You don't need the biggest pile, if you have a steady stream of income.
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Old 05-25-2023, 04:10 PM
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Originally Posted by Planetrain View Post
Are sure itís LIRKX?
I googled and found LIRIX.

Not sure if itís the right one.

First impression is use the MBCBP for your bond allocation and run the 401k plan a little hotter with equities. Take the 1.8% tailwind from lack of Alpa dues. Re-evaluate your asset allocation based upon your age.
Great point about the dues relief. OTOH, Iím disappointed the union knowingly skims off the spillover. This is my first year Iíll reach the spillover threshold.

The initial release did not specify LIRIX or LIRKX. Admittedly, I assumed the K class fund over the I class but if anyone knows for sure please set us straight. Weíll learn more when details are released. For purposes of this discussion the class of the fund is not significant, though the K classí expense ratio is about half that of the I class (0.11% v 0.06%). Regardless, performance is essentially identical between the two.

My time horizon to mandatory retirement is 20 years so Iím likely to decline but Iíve not run the numbers out yet.

-Bo
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Old 05-25-2023, 04:13 PM
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Originally Posted by Gunfighter View Post
Two of my best real estate investments were a swimming pool and a timeshare. I lose about $5k per year in exchange for a couple weeks of vacation and countless afternoons with the family.
You don't need the biggest pile, if you have a steady stream of income.

+1 on the pool. Great family time with all my little bandits.

-Bo
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Old 05-25-2023, 04:46 PM
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If ALPA is giving up dues then they’re making it up somewhere else. Probably getting a chunk of the management fees. No way they’re giving up dues out of kindness.
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Old 05-25-2023, 05:23 PM
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Iím leaning towards opting out.
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Old 05-25-2023, 05:32 PM
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Originally Posted by capncrunch View Post
If ALPA is giving up dues then theyíre making it up somewhere else. Probably getting a chunk of the management fees. No way theyíre giving up dues out of kindness.
They donít charge dues on retirement funds.
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Old 05-25-2023, 05:36 PM
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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
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Old 05-25-2023, 05:40 PM
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Originally Posted by Go Cards go View Post
They don’t charge dues on retirement funds.
We were paying dues on the excess that went to our checks. Now they won’t get those dues if you opt in.
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Old 05-25-2023, 06:00 PM
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Originally Posted by hockeypilot44 View Post
Iím leaning towards opting out.
same. I can definitely see the benefits for those close to retirement. But with 20, 30, or more years to go this is a tough sell. Itís too bad I canít opt out now and opt back in when Iím in my early to mid 50s.

based off what has been published I think Iíll be better off with the cash.
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