Fdx vanguard after tax
06-20-2014, 03:31 AM
#31
Gets Weekends Off
Joined APC: Jun 2010
Posts: 442
Quote:
Originally Posted by CrakPipeOvrheat
I respectfully disagree. Your example of 401k matching doesn't make any sense. I'm not sure you understand it correctly. As for what is a better return, don't forget that you get to invest your money in your 401k and watch it grow over a long period of time. Consider how valuable those employer matches are when you multiply them by 1.08 (adding 8%) as many times as the number of years you have left until retirement. I don't know what the fedex pension is but most pensions I've heard of are a percentage of you're income for the rest of your life based on years of service and some other factors. Without knowing what the pension is at fedex I can't say for sure what is better but I will say that I've saved over 1 million dollars for retirement in the last 20 months working at a regional airline (disclaimer: based on 8% hypothetical market growth over 35-40 years). If you are aggressive with your 401k, IRA and have a pension, then more power to you. If you slack on the 401k because you are counting on a pension, that could potentially backfire. If you took full advantage of 401k employer match and had it invested well your whole career you would make more just off market gains off that money each year in retirement than you would get form your pension, if you had decent matching.
I am pretty sure I understand just fine. If you want to see what airline retirements are like, click on the airline profiles at the top of the page. Each is pretty specific. If you don't understand how a B plan works, it is a company contribution based on your annual salary. FedEx's is in the same funds as the normal 401k. Year 2 at FedEx is 148/hr. 7% is $10300. 50% of a max'd 401k is 8750. See the dif? Also as Lag said, then there is the A plan.
Originally Posted by CrakPipeOvrheat
I respectfully disagree. Your example of 401k matching doesn't make any sense. I'm not sure you understand it correctly. As for what is a better return, don't forget that you get to invest your money in your 401k and watch it grow over a long period of time. Consider how valuable those employer matches are when you multiply them by 1.08 (adding 8%) as many times as the number of years you have left until retirement. I don't know what the fedex pension is but most pensions I've heard of are a percentage of you're income for the rest of your life based on years of service and some other factors. Without knowing what the pension is at fedex I can't say for sure what is better but I will say that I've saved over 1 million dollars for retirement in the last 20 months working at a regional airline (disclaimer: based on 8% hypothetical market growth over 35-40 years). If you are aggressive with your 401k, IRA and have a pension, then more power to you. If you slack on the 401k because you are counting on a pension, that could potentially backfire. If you took full advantage of 401k employer match and had it invested well your whole career you would make more just off market gains off that money each year in retirement than you would get form your pension, if you had decent matching.
I am pretty sure I understand just fine. If you want to see what airline retirements are like, click on the airline profiles at the top of the page. Each is pretty specific. If you don't understand how a B plan works, it is a company contribution based on your annual salary. FedEx's is in the same funds as the normal 401k. Year 2 at FedEx is 148/hr. 7% is $10300. 50% of a max'd 401k is 8750. See the dif? Also as Lag said, then there is the A plan.
06-20-2014, 06:10 AM
#32
Gets Weekends Off
Joined APC: Jun 2010
Posts: 442
Fdx vanguard after tax
I'm not up to par on the A plan, B plan stuff. It doesn't apply to me right now. All I have is a 401k and IRA. I max out my IRA and 401k and get all the matching I can. The upper limits don't apply to me because my salary is so low.
I found a good resource.
http://www.shrm.org/hrdisciplines/benefits/articles/pages/2014-irs-401k-contribution-limits.aspx
I found a good resource.
http://www.shrm.org/hrdisciplines/benefits/articles/pages/2014-irs-401k-contribution-limits.aspx
06-20-2014, 06:15 AM
#33
Gets Weekends Off
Joined APC: Nov 2006
Position: 767 FO
Posts: 8,047
I'm not up to par on the A plan, B plan stuff. It doesn't apply to me right now. All I have is a 401k and IRA. I max out my IRA and 401k and get all the matching I can. The upper limits don't apply to me because my salary is so low.
I found a good resource.
For 2014, IRS Issues 401(k) and Pension Plan Limits
I found a good resource.
For 2014, IRS Issues 401(k) and Pension Plan Limits
06-20-2014, 06:40 AM
#35
Gets Weekends Off
Joined APC: Sep 2006
Position: Retired
Posts: 3,717
FDXLAG, I'm usually one who tries to defend FedEx, but in this instance, while CrakPipeOvrheat is a little off base, he's actually right in his initial assessment of the FedEx Express 401K matching. Obviously he's basing his opinion of what other companies do with their 401K matching, which as he's stated, are much, much better than what FedEx does for it's employees. And let's not forget that the pilot group at FedEx is the only one with the exceptional retirement benefits that we've earned. The other employee groups don't do nearly as well.
A few years ago a lady friend of mine, one that I'd worked with for many years in Information Systems (data processing) at a large insurance company, was offered a job at FedEx. It was a high paying job to boot. She called me to ask about the company, and when she brought up retirement benefits, and specifically our 401K plan, I told her that they only matched the first $500. She asked if I meant they only matched the first $500 of each paycheck, and when I explained that they only matched $500 period, she said she'd heard enough and thanked me for my time. Then she called up personnel and turned the offer down. The $500 match has got to be the laughing stock of corporate America.
A few years ago a lady friend of mine, one that I'd worked with for many years in Information Systems (data processing) at a large insurance company, was offered a job at FedEx. It was a high paying job to boot. She called me to ask about the company, and when she brought up retirement benefits, and specifically our 401K plan, I told her that they only matched the first $500. She asked if I meant they only matched the first $500 of each paycheck, and when I explained that they only matched $500 period, she said she'd heard enough and thanked me for my time. Then she called up personnel and turned the offer down. The $500 match has got to be the laughing stock of corporate America.
06-20-2014, 06:47 AM
#36
Gets Weekends Off
Joined APC: Nov 2006
Position: 767 FO
Posts: 8,047
This has absolutely nothing to do with the $500 401K matching which I have always assumed was never aimed at us but at the part time hubites. FDX offers us other methods to save for our retirement. It has to do with a guy asking a question and then instead of answering the question crack made assumptions that he was in no position to make about the OP retirement vs his retirement. If he has good advice offer it with out the snide it is too late comments.
BTW Crack I suspect a very large percentage of FDX Pilots reach the IRS limits on employer contributions every year.
BTW Crack I suspect a very large percentage of FDX Pilots reach the IRS limits on employer contributions every year.
Last edited by FDXLAG; 06-20-2014 at 07:00 AM.
06-20-2014, 07:08 AM
#37
Line Holder
Joined APC: Mar 2010
Posts: 42
Here's the deal at FedEx as it was explained to me by one of our pilots that seemed to know what he was talking about. I wrote this down...
The max 401K contribution for 2014 is 17500. This is about $12750 out of pocket if you consider a 25% tax bracket and a $500 company match.
If you are at or over 50 then you can contribute another $5500. This is $4125 out of pocket considering a 25% tax bracket.
FedEx will contribute 7% of your earnings (no money out of your pocket) up to a compensation limit of 260,000 (thats a coincidental figure and not related to our A plan). This means for 2014 FedEx can contribute 7% of 2600000 to your "B" plan which is $18200.
The total contribution limit as defined by the US Gov for 2014 is $57500 including the 50 and over catchup.
Based on $17500 401K plus $5500 catchup plus $18200 you have a potential of depositing $41200 (if you make at least 260K).....
Oh wait...Lets say you have your Disability Sick Account (DSA) full then you can contribute another 72 hours (yearly sick account) at your current pay rate . Lets use $250 per hour. 72 hours times $250 is another $18000.
So now you have $17500+$5500+$18200+$18000 deposited which is $59200. The government max is $57500 so you get $1700 back at the end of January.
You have now contributed the Government defined max of $57500 to your retirement and had $15175 deducted (considering a 25% tax bracket and $1700 back after your DSA return) from your earnings. Not a bad contribution considering you contributed $15175 and FedEx contributed $42325. The more you make the less you contribute because your hourly rate is higher. Thank about it (DSA contribution considering your hourly rate is higher).
No 401K match can touch that even without your DSA contribution.
Now....add your A plan on top of that (of course, that will probably go away about the time I retire in 6-7 years)............Note that it takes a little over 9 years to fill your disability sick account. Its worth it if you can do it (call in sick when you are sick and not to go fishing). My 2 cents and the way I see it. I DO NOT ADVOCATE FLYING SICK AND I NEVER HAVE FLOWN SICK. It does, although, justify MUS and MUD but please try to do that after we get a contract.....
The max 401K contribution for 2014 is 17500. This is about $12750 out of pocket if you consider a 25% tax bracket and a $500 company match.
If you are at or over 50 then you can contribute another $5500. This is $4125 out of pocket considering a 25% tax bracket.
FedEx will contribute 7% of your earnings (no money out of your pocket) up to a compensation limit of 260,000 (thats a coincidental figure and not related to our A plan). This means for 2014 FedEx can contribute 7% of 2600000 to your "B" plan which is $18200.
The total contribution limit as defined by the US Gov for 2014 is $57500 including the 50 and over catchup.
Based on $17500 401K plus $5500 catchup plus $18200 you have a potential of depositing $41200 (if you make at least 260K).....
Oh wait...Lets say you have your Disability Sick Account (DSA) full then you can contribute another 72 hours (yearly sick account) at your current pay rate . Lets use $250 per hour. 72 hours times $250 is another $18000.
So now you have $17500+$5500+$18200+$18000 deposited which is $59200. The government max is $57500 so you get $1700 back at the end of January.
You have now contributed the Government defined max of $57500 to your retirement and had $15175 deducted (considering a 25% tax bracket and $1700 back after your DSA return) from your earnings. Not a bad contribution considering you contributed $15175 and FedEx contributed $42325. The more you make the less you contribute because your hourly rate is higher. Thank about it (DSA contribution considering your hourly rate is higher).
No 401K match can touch that even without your DSA contribution.
Now....add your A plan on top of that (of course, that will probably go away about the time I retire in 6-7 years)............Note that it takes a little over 9 years to fill your disability sick account. Its worth it if you can do it (call in sick when you are sick and not to go fishing). My 2 cents and the way I see it. I DO NOT ADVOCATE FLYING SICK AND I NEVER HAVE FLOWN SICK. It does, although, justify MUS and MUD but please try to do that after we get a contract.....
Last edited by asiabased; 06-20-2014 at 07:20 AM. Reason: typo
06-20-2014, 09:02 AM
#38
Gets Weekends Off
Joined APC: Jun 2010
Posts: 442
This has absolutely nothing to do with the $500 401K matching which I have always assumed was never aimed at us but at the part time hubites. FDX offers us other methods to save for our retirement. It has to do with a guy asking a question and then instead of answering the question crack made assumptions that he was in no position to make about the OP retirement vs his retirement. If he has good advice offer it with out the snide it is too late comments.
BTW Crack I suspect a very large percentage of FDX Pilots reach the IRS limits on employer contributions every year.
BTW Crack I suspect a very large percentage of FDX Pilots reach the IRS limits on employer contributions every year.
06-20-2014, 01:02 PM
#39
Gets Weekends Off
Joined APC: Jul 2006
Position: 767 Cap
Posts: 1,306
FDXLAG, I'm usually one who tries to defend FedEx, but in this instance, while CrakPipeOvrheat is a little off base, he's actually right in his initial assessment of the FedEx Express 401K matching. Obviously he's basing his opinion of what other companies do with their 401K matching, which as he's stated, are much, much better than what FedEx does for it's employees. And let's not forget that the pilot group at FedEx is the only one with the exceptional retirement benefits that we've earned. The other employee groups don't do nearly as well.
A few years ago a lady friend of mine, one that I'd worked with for many years in Information Systems (data processing) at a large insurance company, was offered a job at FedEx. It was a high paying job to boot. She called me to ask about the company, and when she brought up retirement benefits, and specifically our 401K plan, I told her that they only matched the first $500. She asked if I meant they only matched the first $500 of each paycheck, and when I explained that they only matched $500 period, she said she'd heard enough and thanked me for my time. Then she called up personnel and turned the offer down. The $500 match has got to be the laughing stock of corporate America.
A few years ago a lady friend of mine, one that I'd worked with for many years in Information Systems (data processing) at a large insurance company, was offered a job at FedEx. It was a high paying job to boot. She called me to ask about the company, and when she brought up retirement benefits, and specifically our 401K plan, I told her that they only matched the first $500. She asked if I meant they only matched the first $500 of each paycheck, and when I explained that they only matched $500 period, she said she'd heard enough and thanked me for my time. Then she called up personnel and turned the offer down. The $500 match has got to be the laughing stock of corporate America.
Actually, since the company dropped the defined benefit plan for most all of the non-pilot employees, they have changed the 401k matching policy. It is now a full match of the first 1% you contribute plus a half match of the next 5% you contribute. So if an employee contributes 6%, the company matches with 3 1/2%. My wife is at Fedex and this is how her contribution is set up. That's an instant 58.3% return on investment before any other investment gains.
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