Negotiator’s Notepad 23-17 outlines implementation of the MBCBP. The selected fund will be LIRKX. Thoughts from the financial gurus among us?

-Bo

Default is to opt in to the plan, and if you choose to opt out, you're never allowed back in. Guess I'll be passing. Would be nice to be able to change your mind as you get closer to retirement.

I'm going to wait until more plan details come out so I can have my financial planner look over it and offer his input, but my gut is to opt out. Between company DC, my 401k contributions, my wife's 401k contributions, and backdoor Roth IRA's, we're already putting close to 100k/year into tax advantaged stock investments. That alone will be millions of dollars by retirement, and I'd like to have the cash in my own hands to be able to branch into other investments such as real estate instead of putting it into another stock vehicle with less than stellar returns.

Good for some, bad for others, glad it's optional.

​​​​​​The best use case I can argue for is short term income tax arbitrage. Using it to defer income in expectation of a lower tax rate in a couple years could be a benefit to some older pilots.

A younger pilot using it for a long term retirement savings could do much better.

​​​​

Does that take into account the tax-advantaged nature (deferred taxation)? You mention the lower tax rate expectation; what about avoiding current-year taxation on growth until withdrawal (at that expected lower tax rate)? I'm a big believer in maxing out tax-advantaged accounts....

I don't know anything (yet) about this investment vehicle (LIRKX--thanks to the OP for looking up the code), but, assuming it's at least middle-of-the-road, I suspect the tax treatment could make this more valuable than some critics would have us believe.

In addition to being tax deferred, the contributions are exempt from ALPA dues so there’s an instant 1.8ish% boost.

Are sure it’s LIRKX?
I googled and found LIRIX.

Not sure if it’s the right one.

First impression is use the MBCBP for your bond allocation and run the 401k plan a little hotter with equities. Take the 1.8% tailwind from lack of Alpa dues. Re-evaluate your asset allocation based upon your age.

That is another point in favor of the short term arbitrage approach, especially when combined with the possibility of an in service withdrawal. If you are over 59 1/2 it could be an instant 1.8%.

I don’t think I have ever gotten excess 401k cash. Is it combined company/personal contributions over $56k? So by lowering your own contributions you have some control over how much and how soon in the year money would go into the MBCP? Or is it just the $19k 401 limit?

To go along with your 3% return on a bond fund? That’s what it historically returns. I’d rather have the 18% cash and invest some of it elsewhere, and use some of it towards fun today. If you put it in this plan, you’re there forever, watching it flatline. If you turn it down, you will have a bunch of cash and options to invest or spend. Investing isn’t always a tax advantaged account. Sometimes you need to invest in enhancing your life today, while you can enjoy it. Buy your ski condo today, use it with your kids and grand kids, sell it when you can’t ski anymore. I bet you’ll make better than 3% return. At least way I see it.