MBCBP implementation announced…
#271
It’s always good to get my conspiracy theory fix on off days when I’m not getting a steady stream in the cockpit!
As is usually the case, it’s all a bit more complicated than AM radio talk shows might have one believe.
https://www.cnbc.com/amp/2017/01/04/...ns-retire.html
As is usually the case, it’s all a bit more complicated than AM radio talk shows might have one believe.
https://www.cnbc.com/amp/2017/01/04/...ns-retire.html
#272
Gets Weekends Off
Joined APC: Dec 2005
Position: 7ER B...whatever that means.
Posts: 3,966
At the end of the day, the trend that seems to be emerging is that those who have taken the time to learn about this thing and expand their team by talking to experts are overwhelmingly finding the MBCBP to be a useful vehicle with a place as part of an overall retirement plan.
#273
Gets Weekends Off
Joined APC: Apr 2008
Position: DAL FO
Posts: 2,146
Stumbled across this guy’s personal site (he’s the 3rd SME on the Alpa podcast). I’ve never met the dude and have no connection with him.
Article on the MBCBP. Mostly factual info mixed with his recommendation (opinion) on the opt in vs opt out regarding alternative investments. Also some interesting notes on the fund’s performance:
https://pilotmathtreasurebath.com/20...-w-zoom-links/
This second article is kinda basic but still good background for those learning the ins and outs of spill cash:
https://pilotmathtreasurebath.com/20...trol-loophole/
Article on the MBCBP. Mostly factual info mixed with his recommendation (opinion) on the opt in vs opt out regarding alternative investments. Also some interesting notes on the fund’s performance:
https://pilotmathtreasurebath.com/20...-w-zoom-links/
This second article is kinda basic but still good background for those learning the ins and outs of spill cash:
https://pilotmathtreasurebath.com/20...trol-loophole/
#274
Gets Weekends Off
Joined APC: Feb 2007
Position: Big ones
Posts: 714
[QUOTE=freezingflyboy;3648596]At the end of the day, the trend that seems to be emerging is that those who have taken the time to learn about this thing and expand their team by talking to experts are overwhelmingly finding the MBCBP to be a useful vehicle with a place as part of an overall retirement plan.[
thank you. Any thoughts on whether the tax free benefits outweigh simply using the excess cash to pay off a house for younger pilots?
thank you. Any thoughts on whether the tax free benefits outweigh simply using the excess cash to pay off a house for younger pilots?
#275
Thanks for the additional perspective. I guess a more correct statement would.have been "In the absence of pensions, 401k plans provide incentive to work longer". I'm not saying it's a conspiracy, it's actually good economic policy to keep people contributing to GDP longer.
Money kept in pension plans is conservative money that is all locked up in bonds and VERY stable equities. A very nominal rate of return, along with a historically average interest rate is all it takes to keep DB plans funded. 30 year mortgages? Same thing. The money is locked up, and it does Wall Street no good just sitting there (the home buyer doesn't figure into this calculation, AT ALL). In either case, there is very little opportunity for Wall Street to make any money off of that.
So how does Wall Street get their grubby little hands on it? Push people out of pensions and into 401k style plans where it is the complete opposite. 401ks are nothing but churn, and people are practically mandated by the government to contribute every two weeks. Where would Wall Street be without the billions of dollars flowing into those index funds every two weeks? Mortgages? Same thing, lets let people cash out the stable equity in their homes with home equity loans. When even that wasn't enough, hey, sub-prime loans so we can get more suckers playing the game.
In both cases, Wall Street preys on people's inherent nature to get sucked into gambling, like it's the track, and to do everything they can do to not save money.
I would argue that if you want to be a real estate wealth builder like GF, DC plans are not the ideal setup. If you are interested in that program, you'd be much better off in a classic DB pension, where you contribute nothing, have guaranteed income on the back end, and use all of your available cash towards investing in real estate and related activities, without a requirement to use any of your own money for retirement.
#276
I agree with all of your facts. 401ks WILL be taxed but were designed to allow the accumulation to be untaxed. Roths... the same but different. All income is taxed even after retirement. And yes ALPA (national) made a money grab. DALPA has fixed it as best they could. BTW my REITs are getting killed but I don't miss managing real estate at all.
#277
Gets Weekends Off
Joined APC: Dec 2005
Position: 7ER B...whatever that means.
Posts: 3,966
The hurdle to clear is 7.9%. So if you had a mortgage at 10% I guess it would make sense? But in that situation, you are better off refinancing when rates are low. Historically speaking and in most cases, there are usually better ways to use excess cash than paying off a mortgage early.
#278
Stumbled across this guy’s personal site (he’s the 3rd SME on the Alpa podcast). I’ve never met the dude and have no connection with him.
Article on the MBCBP. Mostly factual info mixed with his recommendation (opinion) on the opt in vs opt out regarding alternative investments. Also some interesting notes on the fund’s performance:
https://pilotmathtreasurebath.com/20...-w-zoom-links/
This second article is kinda basic but still good background for those learning the ins and outs of spill cash:
https://pilotmathtreasurebath.com/20...trol-loophole/
Article on the MBCBP. Mostly factual info mixed with his recommendation (opinion) on the opt in vs opt out regarding alternative investments. Also some interesting notes on the fund’s performance:
https://pilotmathtreasurebath.com/20...-w-zoom-links/
This second article is kinda basic but still good background for those learning the ins and outs of spill cash:
https://pilotmathtreasurebath.com/20...trol-loophole/
ALPA needed a way to release their calculator, without liability. This guy in his YouTube videos assumes outside of the plan you can earn 8%. In the book he wrote he relayed funds that have historically earned over 11% annually. I don't understand his change of heart, or why everyone wants to sell this thing so badly. His calculator is great, but I would not use it blindly. Assuming 6.5% MBCBP and only 8% status quo gives you a predictable outcome. I think 5% would be a more appropriate rate for the MBCBP. Good Luck, we will know in 20 years who took the better path.
#279
Gets Weekends Off
Joined APC: May 2022
Posts: 328
This guy in his YouTube videos assumes outside of the plan you can earn 8%. In the book he wrote he relayed funds that have historically earned over 11% annually. I don't understand his change of heart, or why everyone wants to sell this thing so badly. His calculator is great, but I would not use it blindly..
#280
I would think advisors would recommend young pilots with long time frames to Opt Out. Subpar returns over long periods of time really hampers performance. In a land of possibly really high mortgage rates, unknown future taxes, unknown inflation, and a plethora of other variables, it seems there are big pitfalls to being locked into this plan and they aren’t being talked about.
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