Valuation: GI Bill txfer vs. early employment
 

Gents,
Trying to figure out what value to apply to early airline employment vs. ensuring my GI bill benefits are transferred to dependents.

Here's the scenario: I can get out early 2015 at 20+yrs of service, and forfeit my GI bill transfer. Or, I can retire 6-months later (mid-2015) and have 21yrs of service with full GI bill transfer.

I can calculate the value of the GI Bill loss. I can also calculate projected differences in retirement pay. What I don't know is the value of getting hired 6 months earlier in this hiring wave.

What value do you place on 6 months of seniority at 100/month (DAL current projection)? What is the monetary value of that additional 6 months at the end of an airline career? Is it enough to offset 36 months of GI bill and a 1-yr difference in retirement pay?

Thanks for any advice/data you guys might be able to offer. Cheers!

Key word is being hired. Have you filled out your apps, networked like crazy, etc? Basically, do you have your exit lined up for early 2015, or would 6 more months put you in a better position. Guys are not walking off active duty and into an airline gig right away. Just something to think about. Good luck.

You may have already found this, but there is an excellent calculator showing you how much your Post 9/11 GI Bill benefit is worth depending on which college your kid(s) go to:

The New GI Bill - Calculator

Every seniority number is important. But no way in hell is bailing six months early ever going to pay back the fact that you sacrificed 36 months of college tuition, books, and E-5 (with dependents) BAH pay. Do your kids (and yourself) a favor and stick it out for 6 more months.

We're still early in the life of this long hiring wave. While I'm not going to say it's impossible, the odds that anyone hired in the next 1-3 years might face a furlough are fairly slim.

Unless you already have the class date at DAL and can't possibly move it, then do the extra six months. My daughter was born after I retired so I can't give her my GI bill. It makes me cry a little inside every time I think of what college is going to cost for here when my GI bill is just sitting there unused.

Thanks for the link! I had not seen it, so I built an excel sheet to do the same. Glad I had your link to compare it to--highlighted an error in my own calculations.

As for the 6-month issue, I'm still left wondering. The GI Bill is worth about $66k total (today's tuition rates) in my area. The difference (20yrs vs. 21yrs of service) in cumulative retirement pay (after taxes) 20 yrs after retirement (age 63) is $55k, and at 30yrs (age 73) it is $100k. So, in the end the monetary loss of bailing early is around $166k.

The question is...what is your last 6 months at an airline worth? I've heard rumor that the "pilot pay snapshots" don't fully account for a high-seniority individual's pay (due to international pay bump, other income?). Anyone out there with SA on this detail? What is the avg. annual income of a wide-body international pilot?

Feel free to shoot holes in my logic--if I'm missing something, I want to know it. Thanks!

I always assume the "what if".

Hate to be cynical, but like someone already mentioned - do yourself and your kids the a favor and transfer the benefits. Once you transfer, if something were to ever happen to you, you have that extra little piece of mind.

6 months of additional service - knowing that you are "short" is a no brainer. Working until you are 73 to offset tuition rates now = STOOPID!

As Angry Tanker noted, do you have a class date? Ask the guys hired six months after me at NWA in 1987 who sat second officer for three years on the B727 while I flew F/O on the B757 if it was worth it? Just the $2k pay difference over 36 months equaled $72k less early in their careers. Not to mention being A Scale when most everybody else was a B Scale hire. Or crappy schedules, working holidays and poor vacation times.

Don't pass on the job, you can save enough to offset the loss and actually own the money, not have some mythical, Congressionally changeable benefit allegedly out there on the horizon. Congress has changed VA benefits in the past, but your seniority number is forever.

In the second last pilot strike at Northwest a contract had been hammered out, but the Union was concerned about what they would have to give up for the back to work agreement. Finally a retired federal judge was brought in and briefed. His conclusion; seniority trumps all, just sign the agreement and make management bring you back in seniority order. It worked brilliantly and until NWA tried to break the non-pilot unions in 1998, there was a truce between management and labor at Northwest.

When do you need the money for college? Do you have enough time to save up that much money on your own if you get out six months early. Take a look at the interest rates on education loans and what you would have to pay to finance costs. IMHO having a bird in hand with the GI Bill is worth two in the bush (sts). If you have already been hired this might be a tougher question, if not I would take the GI bill and run. My son starts college in two weeks and using the GI bill, even at 60% this will get him $16k a year in benefits. Also, be very careful about assuming you are going to be an international wide-body captain. Anything can happen in this business.

This part of your argument is really where the gray matter lies. What if your kids are brainiacs and want to go to Stanford or Harvard? Are you willing to look them in the eye and say, "Sorry kiddo, that wasn't part of MY plans for your future. Let me show you this spreadsheet I made when you were three..."

Like I said, do your kids a favor and serve the extra six months.

ViperDrvr: I stand by my original advice, do not pass up a seniority number if you have a hire date after your 20 year point. Jimmy Carter decimated the VA educational benefits and it took until almost the year 2000 to get them restored.

As I always say, a bush in the hand is worth two at the bar. Lock in your military pension and don't delay the seniority number.