10Basscat

Same here-late 40’s-I opted out for mostly the same reasons. Not that significant amount of money-low rate of return and I want control of the money now.

crazyjaydawg

Exactly this. I think most under-50s would benefit from opting out.

I would rather pay the extra 1.85% now and get 5% better returns for the next 30 years.

For those wondering, you can opt back in after opting out prior to July 31 at 2359. If you’re leaning towards opting out, I’d say opt out now so that you don’t forget; if you find a compelling reason to, you can opt back in until the deadline.

tennisguru

I am staying in for the exact same reason. What little money goes in on the front end will be dwarfed by the last 10-15 years of very high income with high DC excess at high tax rates. So yes, the first 10 years will be marginally break-even or some nominal growth, but it won't be a large sum of money. But I am staying in because I think I will appreciate the tax deferral down the road. And that will be a time where I'll already have plenty of excess cash flow per month to blow or invest so I may as well take advantage of every opportunity to be tax efficient.

Big E 757

I was going to opt out initially, because of the low return, but now I’m staying in because that money basically comes with a 35% +1.8% return, by virtue of not paying taxes on it when it goes in.. Also because a wise Captain once told me that once you think you have enough money to retire, save an extra 4 years of expenses and just put it in a CD. Then once retired, if a market correction occurs, stop drawing off your retirement and live off of the money in the CD until the market returns to previous highs, then go back to drawing off retirement savings. A typical correction lasts around 2 years, so the savings will help you weather 2 downturns. This will hopefully be my 4 years of expenses by the time I retire. I’m 52 1/2 so I’m almost in the window of people who benefit the most from the plan anyways. I’m hoping to be retired by 60-62 anyways. My son will be graduating College when I hit 62 and my wife and I will be snow birds when he leaves for college so I’ll hopefully be in good shape by then, financially. What I’m afraid of though, once my kids are graduated an out of the nest, I might actually enjoy this job a lot more, so maybe I stick around and partially retire, as long as Delta doesn’t sneak a minimum hours per month clause in one of our contracts by then.

m3113n1a1

Good plan for your situation and we really can't go wrong either way I think. However it's not 35% + 1.8%. Using your example the tax savings would actually be 35% minus whatever your tax rate is in retirement which is hard to predict. But if your tax rate in retirement is 25% then your immediate 35% return actually becomes 10%.

Big E 757

Fair enough….I am just looking at not having that tax money taken out, and letting the entire excess grow at 5% or so, vs. taking the hit and then investing…the numbers are closer to even than it looks, if you’re just looking at 5% vs. 10-12% in a S&P index fund. If I was younger, I’d be thinking differently. We all have our own reasons, and I agree, you can’t really go wrong, either way.

Schwanker

May not change the math, but you:

1. defer the income taxes
2. avoid 1.85% ALPA dues
3. avoid 2.35% medicare tax

#3 often overlooked

Meme In Command

I know someone starting indoc soon. If a new hire is here before the end of the deadline, can they opt out too?

DWC CAP10 USAF

All Delta pilots will be included in the MBCBP unless you notify ALPA that you prefer to maintain status quo retirement benefits instead of participating in Delta’s new MBCBP. You must notify ALPA before August 1, 2023

Gunfighter

No. Anyone hired 1 June 2023 and later is irrevocably enrolled. See NN 23-17