I searched the forums but couldn't find a specific answer on 401K's.

The Frontier profile page says the company contributes 12% of wages, and it will increase to 15% by 2022. What exactly does this mean? Is a pilot contributing at all, or is this exclusively a company contribution to a pilot's 401K?

Also, does Frontier offer both a traditional and Roth 401K, or just traditional?

Thanks.

It is a direct contribution, not a match. employee doesn’t have to contribute to get the 12%

Outside of the 12% company contribution, pilots may also contribute up to the maximum IRS limit. Option,of either traditional or Roth 401k. Company DC increases each year by 1 % until reaching 15%.

Also, they offer traditional and ROTH options. Legally the company contributions cannot be ROTH but pilot contributions certainly can. Mine are.

What is the benefit of the company Roth vs ones availableto the general public?

To be honest for me it’s just a convenience thing. You definitely have more investment options if you go with an IRA outside of the company. I guess another potential benefit is that ROTH IRAs are capped at $6,000 per person (under 50 years old) while the 401k is capped at $19,000 (again under 50 years old) annually. The most prudent course of action should probably max out a ROTH IRA first and then invest into the ROTH 401k after the IRA is maxed out. Hopefully I’ll get to the point where I’m able to max them out annually within the next decade.

I just lit up my Google-Fu and it sure looks like there are some income limitations associated with funding a Roth 401k.

For single filers, 401k eligibility starts to phase out at $122k and is completely gone by $137k income.

For married filing jointly it looks like the phase out starts at $193k and is gone at $203k income.

All the captains and probably a good number of FO's should exceed the single filer limits and wouldn't be eligible to have a Roth based on what I'm reading.

Am I missing something? I guess I probably should have been funding a Roth when I was an FO under our old contract. I'm single and maxed out on the CA pay scale, so I think my opportunity for a Roth has passed.

Great question. It took me a while to find the answer.

The Roth IRA does have income limits, while the Roth 401k does not.

https://www.irs.gov/retirement-plans/roth-comparison-chart


Also, for those that don't know the difference between a standard 401k and a Roth 401k, the difference is when you pay the taxes. A normal 401k is pre tax, meaning you do not pay taxes on it now, and it lowers your income taxes. You will however pay income taxes on that money as you draw it out during retirement.

A Roth 401k is post tax, so you pay income taxes on all the money now, but get to withdraw the money in retirement tax free.

Pay now, or pay later.

You can still back door into a Roth IRA regardless of income.

Yes, this is allowed once a year. I highly recommend everyone take advantage of it.