New Video-Every $ Earned & Yr Worked Matters?
12-24-2017, 09:25 AM
#81
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Thread Starter
Joined APC: Jul 2007
Position: Gear Monkey
Posts: 3,191
Originally Posted by Fdxlag2
I am a little confused you can be worried about B Fund performance but not concerned about variable benefit performance? You’re betting on the same pony.
For those who have maxed the A fund benefit, their "frozen Clydesdale" will be perfectly secure.
Their $130K guaranteed floor will be "frozen in". No need to negotiate that, it's already part of the current plan.
Only future benefits accrued under a new variable plan would be at risk. That will be a small portion of many senior/older pilots Total Retirement.
12-24-2017, 04:45 PM
#82
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Joined APC: Oct 2015
Posts: 751
Originally Posted by pinseeker
I think your numbers are a little off. The most that Delta can contribute each year to a pilots 401k is $42400. If a pilot got that contribution every year (they wouldn't get the $42400 until their income reached $265K) for 25 years at a 7% ROI, they would have $2.6 million in their 401K. That's about what it costs to fund our A plan. Now they get cash over cap, which everyone talks about, but which cap? Our B plan using the same numbers would be worth about $1.6 million, $900K more than what you say their profit sharing is worth. Does the cash over cap make up that $900K?
The point is, our current plan is not worse than Delta's plan. And our $130K is guaranteed. Can you guarantee a 7% ROI? The DOW has averaged 7% since 1988, but that is using the big gains the DOW made this year.
The point is, our current plan is not worse than Delta's plan. And our $130K is guaranteed. Can you guarantee a 7% ROI? The DOW has averaged 7% since 1988, but that is using the big gains the DOW made this year.
I fully admit there are most likely flaws in my numbers. I’m just plugging in some Excel numbers that are my best guesses. Here’s my final product. Feel free to break it down…
https://ibb.co/bVqxkR
https://ibb.co/k5tiQR
As far as the Cap, I was going off the 270K for 2017 ($43,200). Once I hit that cap, I took the extra and dumped it into the Profit Sharing pot. My Excel showed their 401(k) DC to be totaled at 2.8 over the course of my career (29 years). This is compared to my number at FDX of 1.6. We basically have the same numbers here. So Delta has the edge by 1.2 as expected with their higher contribution rate vice our B-Plan.
Since we are comparing retirement, I just grew the Cash over Cap into the Profit Sharing pot at 7% for the career (this is how I would use the profit sharing anyway, albeit absent of a tax protected account). Since PS has been in play at Delta, they have averaged somewhere between ten and twenty percent. I wanted to be conservative, so I chose 7%. I felt like this would average out over the course of a career to a slightly lower number. I even dropped every fifth year to 0 PS. With the combined cash over cap and PS payouts averaging a seven percent return, the career earnings came in at just under 1.2 (500K with 0% ROI). I did amend my numbers from my previous post so that they were less optimistic with the PS returns. I used 10% last time.
Again, you can break down my numbers. My goal is just to build some reasonable numbers so I can make an informed decision. I want to be accurate. But here again, Delta has 2.4 million dollars in the account after 29 years that I do not. It’s my responsibility to reason whether or not that is a better benefit than 130K per year. Personally, I prefer the pension. But if we can't ameliorate the present product, I think it’s a dead horse at this point. There’s no point in beating anymore. I know it’s worth $130K to the guy that retires tomorrow. That is fantastic for him. He earned it (and MORE I would argue). But my reality is different. My reality is that the pension is likely worth half of that. That means when I compare my pension of 2045 dollars, I get a benefit equivalent to $65K per year (this uses the past 15 year inflation numbers back to back for the next thirty). That becomes far less palatable to my Delta peer coming in with an extra 2.4 million in his own account that he can pass on to his kids.
https://ibb.co/hDvBem
This leads me to your question, ‘Can I guarantee a 7% ROI’? Ask that question to the guy in March of 2009. I would never say I would. But would I take my chances with the market vice my eighteen year stagnating pension? Without hesitation, absolutely. Every. Single. Time. I don’t have the fear that many on these boards do. Yes, I’ve been burned. But you do the best with what you have, and I’m not going to live in fear of the worst. I’ve made the best decisions I could thus far, and that’s all I can ask for in the future.
I believe we have the best retirement there is… bar none. But it’s languishing and needs to be addressed. I want to do what is everyone’s best interest, but I just wanted to fill you in on my perspective because you asked. I’m also concerned with the guy that has ten years left with fifteen served. That is the group that needs a clear vision of what can be achieved. The guys with 25 are already set and everything else is gravy. I feel I have enough time to survive some market bumps in the road. But for those with ten left, we need to give them some security and buffer from hiccups that are most likely due. That is the component that needs to be solved. I know things are personal on here, but I mean everything with all due respect.
12-29-2017, 05:45 AM
#83
Gets Weekends Off
Joined APC: Aug 2006
Posts: 1,820
Originally Posted by NotMrNiceGuy
I fully admit there are most likely flaws in my numbers. I’m just plugging in some Excel numbers that are my best guesses. Here’s my final product. Feel free to break it down…
https://ibb.co/bVqxkR
https://ibb.co/k5tiQR
As far as the Cap, I was going off the 270K for 2017 ($43,200). Once I hit that cap, I took the extra and dumped it into the Profit Sharing pot. My Excel showed their 401(k) DC to be totaled at 2.8 over the course of my career (29 years). This is compared to my number at FDX of 1.6. We basically have the same numbers here. So Delta has the edge by 1.2 as expected with their higher contribution rate vice our B-Plan.
Since we are comparing retirement, I just grew the Cash over Cap into the Profit Sharing pot at 7% for the career (this is how I would use the profit sharing anyway, albeit absent of a tax protected account). Since PS has been in play at Delta, they have averaged somewhere between ten and twenty percent. I wanted to be conservative, so I chose 7%. I felt like this would average out over the course of a career to a slightly lower number. I even dropped every fifth year to 0 PS. With the combined cash over cap and PS payouts averaging a seven percent return, the career earnings came in at just under 1.2 (500K with 0% ROI). I did amend my numbers from my previous post so that they were less optimistic with the PS returns. I used 10% last time.
Again, you can break down my numbers. My goal is just to build some reasonable numbers so I can make an informed decision. I want to be accurate. But here again, Delta has 2.4 million dollars in the account after 29 years that I do not. It’s my responsibility to reason whether or not that is a better benefit than 130K per year. Personally, I prefer the pension. But if we can't ameliorate the present product, I think it’s a dead horse at this point. There’s no point in beating anymore. I know it’s worth $130K to the guy that retires tomorrow. That is fantastic for him. He earned it (and MORE I would argue). But my reality is different. My reality is that the pension is likely worth half of that. That means when I compare my pension of 2045 dollars, I get a benefit equivalent to $65K per year (this uses the past 15 year inflation numbers back to back for the next thirty). That becomes far less palatable to my Delta peer coming in with an extra 2.4 million in his own account that he can pass on to his kids.
https://ibb.co/hDvBem
This leads me to your question, ‘Can I guarantee a 7% ROI’? Ask that question to the guy in March of 2009. I would never say I would. But would I take my chances with the market vice my eighteen year stagnating pension? Without hesitation, absolutely. Every. Single. Time. I don’t have the fear that many on these boards do. Yes, I’ve been burned. But you do the best with what you have, and I’m not going to live in fear of the worst. I’ve made the best decisions I could thus far, and that’s all I can ask for in the future.
I believe we have the best retirement there is… bar none. But it’s languishing and needs to be addressed. I want to do what is everyone’s best interest, but I just wanted to fill you in on my perspective because you asked. I’m also concerned with the guy that has ten years left with fifteen served. That is the group that needs a clear vision of what can be achieved. The guys with 25 are already set and everything else is gravy. I feel I have enough time to survive some market bumps in the road. But for those with ten left, we need to give them some security and buffer from hiccups that are most likely due. That is the component that needs to be solved. I know things are personal on here, but I mean everything with all due respect.
https://ibb.co/bVqxkR
https://ibb.co/k5tiQR
As far as the Cap, I was going off the 270K for 2017 ($43,200). Once I hit that cap, I took the extra and dumped it into the Profit Sharing pot. My Excel showed their 401(k) DC to be totaled at 2.8 over the course of my career (29 years). This is compared to my number at FDX of 1.6. We basically have the same numbers here. So Delta has the edge by 1.2 as expected with their higher contribution rate vice our B-Plan.
Since we are comparing retirement, I just grew the Cash over Cap into the Profit Sharing pot at 7% for the career (this is how I would use the profit sharing anyway, albeit absent of a tax protected account). Since PS has been in play at Delta, they have averaged somewhere between ten and twenty percent. I wanted to be conservative, so I chose 7%. I felt like this would average out over the course of a career to a slightly lower number. I even dropped every fifth year to 0 PS. With the combined cash over cap and PS payouts averaging a seven percent return, the career earnings came in at just under 1.2 (500K with 0% ROI). I did amend my numbers from my previous post so that they were less optimistic with the PS returns. I used 10% last time.
Again, you can break down my numbers. My goal is just to build some reasonable numbers so I can make an informed decision. I want to be accurate. But here again, Delta has 2.4 million dollars in the account after 29 years that I do not. It’s my responsibility to reason whether or not that is a better benefit than 130K per year. Personally, I prefer the pension. But if we can't ameliorate the present product, I think it’s a dead horse at this point. There’s no point in beating anymore. I know it’s worth $130K to the guy that retires tomorrow. That is fantastic for him. He earned it (and MORE I would argue). But my reality is different. My reality is that the pension is likely worth half of that. That means when I compare my pension of 2045 dollars, I get a benefit equivalent to $65K per year (this uses the past 15 year inflation numbers back to back for the next thirty). That becomes far less palatable to my Delta peer coming in with an extra 2.4 million in his own account that he can pass on to his kids.
https://ibb.co/hDvBem
This leads me to your question, ‘Can I guarantee a 7% ROI’? Ask that question to the guy in March of 2009. I would never say I would. But would I take my chances with the market vice my eighteen year stagnating pension? Without hesitation, absolutely. Every. Single. Time. I don’t have the fear that many on these boards do. Yes, I’ve been burned. But you do the best with what you have, and I’m not going to live in fear of the worst. I’ve made the best decisions I could thus far, and that’s all I can ask for in the future.
I believe we have the best retirement there is… bar none. But it’s languishing and needs to be addressed. I want to do what is everyone’s best interest, but I just wanted to fill you in on my perspective because you asked. I’m also concerned with the guy that has ten years left with fifteen served. That is the group that needs a clear vision of what can be achieved. The guys with 25 are already set and everything else is gravy. I feel I have enough time to survive some market bumps in the road. But for those with ten left, we need to give them some security and buffer from hiccups that are most likely due. That is the component that needs to be solved. I know things are personal on here, but I mean everything with all due respect.
I would also like to point out again that you are basing the $2.4 million over 29 years. Our current DB plan pay $130K after only 25 years.
12-29-2017, 06:56 AM
#84
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Joined APC: Nov 2013
Posts: 2,756
Originally Posted by pinseeker
I get what you are saying and there is a question of having $2.4 million, though that number would probably be less after you had to pay taxes on the cash over cap and profit sharing, and getting a $130k benefit for life. If you think you and your spouse will live 15 years or less beyond your retirement, then the $2.4 million is probable the way to go. If you think you will live longer, the $130K for life is probably the better bet. Only time will tell.
I would also like to point out again that you are basing the $2.4 million over 29 years. Our current DB plan pay $130K after only 25 years.
I would also like to point out again that you are basing the $2.4 million over 29 years. Our current DB plan pay $130K after only 25 years.
And one can never determine their lifespan, nor even take a decent guess. I've seen terrible things happen to the healthiest of people, and the couch potatoes live forever.
12-30-2017, 01:16 PM
#85
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Joined APC: Aug 2006
Posts: 1,820
Originally Posted by busdriver12
I see your point, however, there is plenty of value still having that $2.4 million to leave for your kids after you die. I'd take that lump sum any day, whether I was to live 50 years after retirement, or five.
And one can never determine their lifespan, nor even take a decent guess. I've seen terrible things happen to the healthiest of people, and the couch potatoes live forever.
And one can never determine their lifespan, nor even take a decent guess. I've seen terrible things happen to the healthiest of people, and the couch potatoes live forever.
12-31-2017, 05:54 AM
#86
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Joined APC: Nov 2013
Posts: 2,756
Originally Posted by pinseeker
That is the beauty of the DB plan over a 401K plan, you can't outlive your money. If you are healthy and have a family history of living into your 90's, you are betting against yourself by taking the $2.4 million lump sum over $130K for life.
12-31-2017, 07:02 AM
#87
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Joined APC: Nov 2016
Posts: 936
Originally Posted by busdriver12
Maybe. But I'm betting that I don't need to draw from the 2.4 million for some time, that my rate of return is pretty decent because I invest aggressively, and that my kids would get a nice sum at some point. Murphy's Law trumps family history. I'd much rather have the lump sum.
12-31-2017, 07:30 AM
#88
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Joined APC: Apr 2006
Position: MD-11 Captain
Posts: 4,304
Originally Posted by Fdxlag2
Yep, not that I advocate annuities, but 2.4 million gets you a lifetime annuity of about 128k at 60, 150k at 65, or 180k at 70.
That would make the 2.4 million equal 2.75 million. If you could earn 5% on 2.75 million = $138,000/yr.
The annuity has some limitations including penalties if you withdraw money before 10 years (but you can make withdrawals for medical bills or Hospital or Nursing Home Care without penalty).
There are LOTS of good (conservative) investments if you are inclined to be safe with your retirement options.
I'll stop my manifesto here so as not to be accused of morphing into FoxHunter (Happy New Year George!).
And Happy New Year to all my fellow APC'ers ...
12-31-2017, 08:48 AM
#89
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Joined APC: Aug 2006
Posts: 1,820
Originally Posted by busdriver12
Maybe. But I'm betting that I don't need to draw from the 2.4 million for some time, that my rate of return is pretty decent because I invest aggressively, and that my kids would get a nice sum at some point. Murphy's Law trumps family history. I'd much rather have the lump sum.
Originally Posted by Fdxlag2
Yep, not that I advocate annuities, but 2.4 million gets you a lifetime annuity of about 128k at 60, 150k at 65, or 180k at 70.
First, we are talking about a $2.4 million difference after retiring with 29 YOS. Our plan lets you retire after 25 years.
Not all of that $2.4 million was tax free, however, no taxes were taken out. It was assumed that every dollar went into savings and grew.
At 60, our DB plan pays $130K for life, where the $2.4 million would purchase a $128K for life annuity.
If your B plan accrued $1.6 million, as was stated in the original analysis, and it has already been stated that $130K alone for life isn't enough, how could you go some time without having to touch any of the $2.4 million. With aggressive investing after retirement, how can you be sure that you won't lose money? The market was flat for 11 years, what's to say that won't happen again?
The original analysis and the following comparisons have only showed us that a 29 year pilot at Delta has roughly the same retirement that we can achieve in 25 years.
With all of the angst about guys working past 60 and not enjoying their retirement years, why now is there talk of the benefits of working past 60? Do we want to encourage pilots to work until the regulated age? If so, then we should stop complaining about the guys over 60 with over 25 YOS still flying and taking our seats.
12-31-2017, 10:37 AM
#90
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Joined APC: Apr 2006
Position: MD-11 Captain
Posts: 4,304
Originally Posted by pinseeker
The original analysis and the following comparisons have only showed us that a 29 year pilot at Delta has roughly the same retirement that we can achieve in 25 years.
I have a couple of Delta Captain buds (former NWA Capts) that seem jealous of our retirement benefits!
Maybe the grass is always greener on the other side?
Happy New Year everyone!*?
MM
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