Yes I do.

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While I tend to agree that mathematically you can’t just stack those two numbers, don’t you also save the 1.85% every year on all new contributions? Therefor it is not simply a one time event divided by 30. In addition, you have 1.85% more principal to compound with future returns, so the straight line math really doesn’t play out like you have illustrated either.

Everyone keeps referencing 4.5% returns, but has anyone looked at what the 10 year return was at any other time in history? If we were having this conversation in 2021, we would all be looking at the same fund having over 8% annualized 10 year returns. Seems like right now is the worst possible time in recent history to be evaluating this fund because of the last 2 years in the bond market.

In other words, a dollar invested today has a much greater chance over 30 years of earning more than 4.5% than one that was invested in 2013 and sold in 2023.

Where are you seeing 8% returns? I just pulled up LIRIX from June 2011 to June 2021. Started at 9.86 and ended at 14.76, so basically right at 50% over 10 years, or dead on the expected 5% annual return.

For comparison, over the exact same time span, the S&P went from 1286 to 4229, a 328% increase.

I’m still confused on how this works. Does the company 401k contribution limit at $330k go up every year? If I make my own contributions and make $330k will the company excess/spill money happen before making $330k (so by contributing ANY money when I plan to make $330k am I forcing money into the MCBP?)? In a year when I make over $330k can I wait until hitting $330k and then start making personal contributions to the 401K? I guess I’m just wondering how someone who makes under $330k and how someone who makes over $330k can limit the amount that goes into the MCBP - while still maxing out the 401k.

16% of 330k is 52,800. So that is the max the company can put in. If you want to hit the 66k input max then you must personally contribute the additional 13,200. Assuming you make exactly 330k, every dollar you put in over 13,200, up to your personal contribution max of 22,500, will result in an equal number of dollars of spill cash into the MBCBP. If you make under 330k, the company contribution drops below 52,800, so you’d have to make that up in personal contribution. If you hit the 22,500 personal contribution limit, you will get spill cash over 271,875 in earnings. 16% of 271,875 + 22,500 = 66,000. If you earn under 271,875 it is impossible to hit the 66,000 max without doing the 401a game.

If you earn over 330k it is impossible to not get spill cash since every dollar over that amount will get the 16% paid out as spill. In this scenario the only way to minimize spill is to limit your personal contributions to 13,200.

And these limits are adjusted each year by the IRS, to answer your first question. So next year all of this will change slightly. Sometimes some numbers aren’t adjusted, but generally most of them will be. If one isn’t adjusted it tends to be the personal contribution cap. So I’d expect the 66,000 overall cap and the 330,000 income cap to bump up at a minimum. Also the math will change no matter what because next January we go from 16% to 17% DC.

You forgot to include dividends.

That fund has been around for 12 years. Not a whole lot of options for different 10 year look backs.

I started putting my extra cash in dividend stocks. Right now they make a couple hundred a month. Not sure it’s smart but it’s was just another tentacle in the retirement plan. Not sure I’m in for the MBCBP as I like what I’ve got going on. Plus, I can invest in Phillip Morris where I doubt BlackRock will.

I pulled the historical prices for LIRIX and the S&P 500. Isn’t that a no-dividends, apples-to-apples comparison? Where can you review a fund’s performance over different time frames that includes dividends?

Thank you Tennis324