Hillbilly

That’s hilarious! Some days I feel more and more like that. Maybe I should be pushing for company paid Alzheimer’s care!!

iaflyer

For an investor like you, maybe the MBCBP works as the conservative portion of their investments. But there are 14,000 pilots, each with a different investment portfolio. I am probably 90% in S&P 500 ETFs because I'm mid-career and I can weather a long fall in the stock market. Do I want some of my money with a 5% return? Heck no.

So my major problem with the MBCBP is that it takes away *everyone's* ability to do what they want with the excess DPSP money. It throws it in a very low performing plan with what would likely be high management fees. Who is going to agree to that? If you want a 5% return and a management fee, use your $55,000 to do that and use the DPSP excess for the conservative option.

Gunfighter

A conservative investment like the MBCBP does have a place in most portfolios. The problem is that it overindexes the younger pilots into a low performing asset class, when they should be heavier in equities or non-market traded assets. It further complicates the issue for those in lower tax brackets who are planning for higher taxes in retirement, by taking DPSP cash created by the MBD Roth or Roth 401K.

As-is, the plan is not a good option for many in the pilot group. I appreciate the effort put forth looking at options and wish we could find a way to fine tune the modern DB plan. Why haven't we heard more about the VAP or VBP?

notEnuf

I was just saying that if this becomes a thing I could adjust. The more you make over $275000 the more likely you are to have a conservative component to your portfolio. I'm not "pro" anything other than more (ideally 20+%) company money. If you have an HSA, a 529 for kid/s, or are making catch up contributions there are ways to get more tax advantaged investments work for you. It just wouldn't be the end of my investing world is all.

Hank Kingsley

Now you know why management pays themselves with stock options. Takes a lot of work to avoid paying taxes. Long term capital gains are easy. And hence, $10-12 billion stock buy backs.

Gunfighter

Here are some ideas from the doctors and lawyers.

https://www.biglawinvestor.com/a-law...y-real-estate/

https://passiveincomemd.com/10-perfe...-physicians-2/

https://www.whitecoatinvestor.com/bu...-retire-early/

https://www.whitecoatinvestor.com/in...-or-apartment/

https://www.biggerpockets.com/renews...ting-worth-it/

For those who say RE takes too much time, I've spent more time on APC than I have on properties this month. In that amount if time, I've identified a dozen possible acquisitions including a couple foreclosed houses, a couple NNN investments, a small class B apartment complex and two storage facilities. I am leaning toward an established two tenant strip center with NNN leases. There will be little management involvement and I can bill back the cost of property management in CAM fees. The down payment is a mix of personal savings and two years worth of DPSP Cash.

At the risk of sounding like a late night infomercial, you can take control of your financial future by directing your own investments in real estate. As you near retirement, you can move from a more active role to a more passive one through 1031 exchanges into NNN investments. The analytical skills required to interpret a proforma and conduct due diligence are less that what is required to pass a check ride. Don't fall victim to putting all of your money in wall street investments that barely keep pace with inflation. A 5% return is only 1-2% when adjusted for inflation. .

Gunfighter

Perhaps we could negotiate an ISO (cant be NSO) in place of the MBCBP. Some of those stock buybacks could be used for option grants to pilots.

Any body else have ideas for generating money from long term capital gains? Trip7 any ideas?

notEnuf

Sitting reserve in base as a senior FO is the most passive income I have ever made.

just sayin'

The SFR market is tight right now so I'm stashing money in my own home's equity for the next foreclosure boom. I sold my rental after making 20% in appreciation in just a year. It cash flowed pretty well but I knew the renters were not great money managers living beyond their means and going to file for personal bankruptcy so I got out. It also happened that I got out before a major repair bill. I'm not saying its a bad business but I've always had good results value buying distressed property and other collectibles where I could get a good return on a value add through sweat equity. I need time for that, hence the passive Delta earnings.

Denny Crane

There is a lot truth in this post.

A lot of you are saying you could go along with the idea of a MBCBP if it was funded thru a separate company contribution. I get that. Have y’all thought of the long range goal here? Having the company fund a separate retirement plan (with a separate contribution) is the long goal. Maybe all that isn’t achievable in one contract cycle. So you get one bite now and another bite or two down the road. You younger guys/gals need to be thinking what the long term goals are here. Maybe that will give you a little different perspective.

Denny

mispoken

I agree, funding retirement is of the utmost importance here. However, I'm not interested in funding anything I am not in control of. Before we look at a DB plan of any sort, I think the other piece to the retirement puzzle is healthcare. That, along with taxes, are two of the hardest parts of retirement planning. All we can do is make an educated guess, but my educated guess is that both will be significantly higher when I retire. Because of this getting funds into a Roth account RIGHT NOW is important, getting the company to fund an HSA RIGHT NOW is important and negotiating a medicare supplement is extremely important.

Those are my priorities, not necessarily those of everyone in the pilot group, but they are the three things that make the most sense for me to ensure a stress free retirement.