What happens to your 401k and IRAs when social security runs out and they are confiscated. You can "what if" anything to death. A VEBA is money in your name to be used for medical expenses in retirement.

Denny

 

nobody asked me but my heartburn is this....

ALL your excess 401k money (over $37,500 company $$$$) goes into your VEBA so Delta gets a HUGE tax windfall not paying matching FICA taxes ......and you don't get the payraise.....

You die, and there may not be an opportunity to pass those $$$ to your heirs...if they are over 26 y/o, if your wife pre deceases you....It's absorbed by the borg...

A HUGE pot o' money controlled by someone OTHER than you looks pretty cool to a company or govt. in dire straights, and JUST WHO determines if your medical expenses are covered etc......?

There is not enough information out there yet.....

Oh, and what about the TriCare guys/gals? They probably don't want to contribute.....

We need to see the details BEFORE we make the decision IMHO.

 

LeineLodge,

The actual age is 65 where you're HSA is treated like a traditional IRA. Just looked it up. I edited my previous posts.

Denny

 

Insurance companies that do research on this say to expect around $250K AVERAGE in retirement towards health care costs. Medicare Parts B and D are not free with premiums based on Adjusted Gross Income, you'll want to buy a Medicare Supplement to help with copays and deductibles, and you will have those copays and deductibles. End of life expenses can be particularly expensive even if you've been healthy for most/all of your life so I wouldn't worry about too much in the HSA until you get to that $250K (of course you can invest a good portion of that into the market for returns)>

 

But I did ask

Your first point is the biggest one. The video seemed to indicate there was a possibility of it being up to an individual as to how much, if any, of the 401c excess would be allocated to the VEBA. Of course that won't be known until the IRS issues a ruling.

So using current limits - I'm looking at 2:45 in the video - of $265k x 16% (latest company DPSP table position), we come out with $42,400 before the excess would become a consideration. Sooner if you mis-manage your individual contributions.

Can't really answer the rest of it, until/if the IRS rules. I'd be a lot happier if it was totally pilot option of where any excess goes, so we could manage it to keep the balance under control or take the distribution as cash. All that said under the auspice of "it's a good problem to have"

 

With the VEBA the devil will be in the details and who know when we will have the details....

Denny

 

Added complexity, and a trust managed by DALPA... all to possibly shelter $50,000.

No Thanks.

And now I'm sure this was not a line pilot ask. Polling must show... support? Yeah, right!

 

Snark and agenda aside, can you explain the $50k shelter?

As I understand it, only $50k could be passed on to heirs? Otherwise, for personal/spouse healthcare spending, the entire amount would be available. Correct?

DAL73n posted ~$250k in retiree health expenses which jives pretty much with what the Fidelity numbers were in the slide show. I can only assume that number is going to be way higher in 3 decades.

Unless I die, and my wife dies before we can spend the $ (in which case do I care? ) then we will be able to shelter more than $50k. Denny's point about basically using the HSA as an IRA is well taken, and could allow flexibility on the back end.

I think the biggest issue is the use it or lose it aspect, especially in a large community pot. I'd like the ability to manage how much is being diverted into this account, but we've already pretty well covered that we won't know for sure until there is a ruling.

Complexity is hyperbole. Just because it's complicated means we shouldn't consider it?

As far as not trusting DALPA to manage it, I'd point to DPMA. It has a lot of parallels to this program (potentially), and AFAIK it runs very well and is beneficial to us all. Once you get out of the political side of the ALPA office, we have some really good volunteers that keep their heads down and provide a lot of value for the pilot group (if you're who I think you are, we worked together doing some of that very work several years back.) Should I be ****ed that I'm paying into DPMA every month and may never use that money?

 

If this were an option only, fine. I choose not to allow others manage my money (been burned already) when I can. DPMA is insurance I hope I never have to use, therefore money spent. Once I had my six month fund, I gave serious consideration to ending it. The point is that this is going to be valued as a gain on the pilots side of the ledger. It's neutral at best. If this is sold as the retiree medical solution it's a huge fail. This is a no cost, limited value item. We are talking about a tax shelter, not a medical benefit.

 

I don't disagree with anything you said there, other than it will be used against us. Costing is pretty much above the table for both parties (and the NMB) to see.

If it's neutral, fine. We can move on to arguing other things - like where's the $$$?

I'm still waiting for someone to point out all the egregious/nefarious things in a VEBA. So far, all I'm coming up with is I may inadvertently end up with a bunch of cash to pay for healthcare expenses. What am I missing other than it's a "tax shelter?"

All that said, I certainly didn't ask for it in my survey. I'd be curious to see where it came from. However, I'm not seeing the dark side of it, and certainly wouldn't hold my pay raise hostage over it.