Accurate from what I heard. Buddy of mine had a nov interview postponed and got the rescheduling email this week

 

I don’t believe that the average new hire would fall under the flat dollar rate after 10 years but rather final average earnings multiplier and that the actual UPS retirement will be lower than you stated. A-lot of people who look to come here believe they will fall under the flat dollar amount but afaik that isn’t true for all or even most.

With that being said, it is more accurate to state that someone in your stated position or similar could retire after 10 years of service rather than “Presumably, anyone who has been here more than ten years can retire comfortably.”

I want new hires to have realistic expectations and in your example the government is footing much of the bill.

My napkin math states 22500/YR in UPS retirement and 40000/Yr from the 401k for a total of 65-80k/YR and neither of these benefits are available until 55.

 

I come from outside your group, but truly like the early retirement discussion. So here is my input for what it is worth;

Early retirement

I really like this discussion and have had it several times. I share numbers very similar to yours, yet I have not fully retired. If I $10 from every 40-55 year old pilot that told me they were going to retire early, I would have been much wealthier, very few actually pulled the trigger when the time comes. It is interesting how one’s perspective can change when you actually make it to the age of retirement.This is due to multiple reasons.

As others have mentioned, life as a senior line holder can get really easy and lucrative. When the day comes to give up the easy 30-40k per month and transition to 12-15k it is not so easy.

Many of the economics that you mentioned can change. The next 10-20 years are difficult to guarantee or predict. I noticed you didn’t include SS as who knows what will be there in 20 years. Likewise there could be changes to your other pots, is our Military retirement and disability truly protected? Medicare/Tricare copays have and will increase. Are our 401ks
real? Retiring on 14-15k a month (even with some cost of living adjustments) may not be enough when you consider what money may be worth in 20-30 years.

There are a lot of other factors that can impact retirement plans. Health, yours, your spouse or kids. The health of your company and future work is never guaranteed. Recession or unexpected economic circumstances can seriously impact retirement. I happen to provide a safety net for kids and grandkids. Their economic situation is likely to be much more challenging then our generation and what we have experienced. Taking the group out for a family dinner can cost $4-500 and I don’t have to flinch too much when this happens.

There is a book by Rick Warren, “A Purpose Driven Life” which makes some good points. Many retire and find that tennis, golf, fishing, etc satisfies us for a few years, but usually find they need more in life. One of my pilot buddies did pull the plug and decided riding cross country was his mission. He went East to West, West to East, North to South and then seemed to realize that was enough. It was tiresome even to watch on social media. Point being, even if your economic plan holds together then I hope your plans for life after retiring from aviation are fruitful?

 

Perhaps I wasn’t clear in my intent. I was referencing someone hired at 50, so flat dollar would be in play. That in and of itself would be just under $50k/yr. Stock market returns can vary and the last ten years have been good. However, nine years of maxing out the 401k and using after tax to max out the B plan, plus VEBA, plus HSA would amount to roughly $720,000 in contributions. Sure you aren’t going to be able to maintain $30k/month lifestyle, but that’s enough to live well and travel every year. Pre-existing pensions, retirement savings, SS, etc only stack on top. You will be ahead of over 90% of your fellow Americans.

However, the real point is what are five additional healthy years of retirement worth to you. Already our “average” pilot retires at 62 not 65. So clearly those years are valued. Additionally, this job has a level of risk associated with it. The more you have the less sense that risk acceptance may make.

 

Understood. I think we will see a change in retirement trends. Our post 2014 newhire demographics are in their 40’s. It is likely that average retirement age will increase and said retirees will fall under the FAE calculation. This is an important distinction because most new UPS pilots I have talked to cite the flat dollar arrangement as a consideration for choosing UPS. I’m by no means an expert on this so feel free to correct me.

 

The Flat Dollar Amount concept was introduced in 2006 and extended/increased in 2016, 2020 and 2022.

I always hesitate to speak in absolutes but am completely confident that the IPA EB will not endorse, and IPA pilots will not ratify, any future TA that does not include an extension of the FDA eligibility "runway".

 

So you are saying it is possible to retire @ 64 or 65 and somehow not qualify for Flat dollar???

 

Yes. Under our current contract the average hew hire would not qualify is how I read it.

 

We haven’t been top of the pyramid for a while.

 

I would guess that number is much higher than 30. We had 6 in my class leave already of about 30.