Pilots at financially strong companies or those hoping to build up a B fund as part of their net worth need to be aware of some major drawbacks of changing the current retirement age. As explained to me:

B-fund: Ask an over-60 F/E if he is getting any contributions towards his B fund. No he is not; the section 415(b) does not allow it. This is also the section that allows us to have a tax deferred fund to make up for the requirement for pilots to retire earlier that Social Security limits. Theoretically, we could lose this entire benefit because it could be argued that we do not qualify for it.

That should be enough to encourage the 45-55 year olds to write their congressman!

 

"Pilots at financially strong companies "

Yeah, that's what - 2 companies out there?

Going to 65 works well for the other 95% of us out there.

 

Yep, right until management finds a way to screw you with it and you know they will.

We will all regret it.

 

Not that I'm in favor of age 65 retirement, but the primary benefit of waiting the extra 5 years to retire is delaying the drawdown of your retirement funds, as well as getting the larger Social Security check and Medicare coverage.

I recently ran my retirement numbers ( I'm 48), and there was a surprisingly small difference in my nest egg at age 60 if I continued to add $15k/year and if I stopped contributing. (I am still contributing, though.)

Try running a projection using five fewer years of retirement income needed; the results are dramatic.

Again, I prefer the age 60 rule.

 

Changing the age to 65 makes it much more likely that you will have to work until age 65 to build a suitable retirement fund. The reason for this is the delayed upgrade to captain that will be incurred for those of us who are FO's combined with the effect of the time value of money on the resulting loss of income.

For example, let's say you would have upgraded to captain at age 40. Now, age 65 passes and your upgrade goes to age 43 instead. Let's assume that the difference between captain pay and FO pay at your airline is $50,000 per year. Well, that means you are losing out on earning approximately 20 years of interest on that additional captain's income you would have earned for those three years. That loss of interest can be substantial and increases the chances that you will not be financially able to retire at age 60 if you want to.

On the face of it, the age 60 rule is unfair. The age limit should be raised. I do agree that it is an arbitrary limit. However, age 65 is no less arbitrary. In my view, what is patently hypocritical is the enthusiasm with which the current generation of older pilots argue for eliminating age 60. Where were their voices 15, 20, and 25 years ago? What is most unfair is that the older pilots who benefited from age 60 when they upgraded and accrued seniority didn't so much as raise a whimper when thousands of senior pilots were forced out during the period of their tenure.

I would be totally in favor of raising the age limit if it included a provision to phase it in. That way, the hypocrites who most vociferously argue today for age 65 would not benefit from it. I would like to see provisions that state the age limit is raised by one year for five years starting in 2012 or 2013.