More Cargo Cutouts
05-20-2024, 09:39 AM
#91
On Reserve
Joined APC: Dec 2022
Posts: 16
Yes, and what I am trying to get at is how much the company funded DC plan would have to be worth so that an individual could purchase that lifetime annuity. See my reply to moneybags.
No, Fedex did not stop purchasing annuityies for retiring pilots, THEY NEVER STARTED PURCHASING ANNUITIES FOR RETIRING PILOTS.
If you don't purchase a lifetime annuity, then the 4% rule is a pretty safe rule of thumb. If you are insistant on comparing it to an annuity, then the $169,000 per year pension would require a one time payment of about $2.5 million today. If you took that money from the company DC plan, you would pay taxes on it as ordinary income, so to end up with the required ammount after taxes, that plan would need to be worth about $3.97 million. That is a lot closer to my number of $4.225 million than your $1.7 million. Again, the company doesn't purchase an annuity. The question is how much would your company funded DC plan need to be worth for you to get the same monthly payments as the pension guaranteed for life.
No, Fedex did not stop purchasing annuityies for retiring pilots, THEY NEVER STARTED PURCHASING ANNUITIES FOR RETIRING PILOTS.
If you don't purchase a lifetime annuity, then the 4% rule is a pretty safe rule of thumb. If you are insistant on comparing it to an annuity, then the $169,000 per year pension would require a one time payment of about $2.5 million today. If you took that money from the company DC plan, you would pay taxes on it as ordinary income, so to end up with the required ammount after taxes, that plan would need to be worth about $3.97 million. That is a lot closer to my number of $4.225 million than your $1.7 million. Again, the company doesn't purchase an annuity. The question is how much would your company funded DC plan need to be worth for you to get the same monthly payments as the pension guaranteed for life.
05-20-2024, 12:13 PM
#92
Gets Weekends Off
Joined APC: Aug 2019
Posts: 1,066
Justinfacts, Juststoptalking. You’re now comparing an after-tax purchased annuity to a pension that will be entirely taxed as gross income in order to artificially inflate the value of the pension. And stop talking about the 4% rule, it has no bearing on comparing a 401k nest egg to a pension. If you want to compare these retirement products, you either need to find the lump sum value of the pension to compare it to a 401k nest egg, or you need to find the cost of a lifetime annuity that will generate income similar to your pension. Juststopsaying4%, it doesn’t apply.
You can't equate the pension to an annuity because the company funds the pension and YOU would have to pay for an annuity. A FREE lifetime benefit, pension, is a golden gift few get anymore. BUT, if it doesn't match inflation, it's value is going to be less to everyone, everyday from now on. The problem is, what is the pension value in terms of negotiating captial? I think the MCBP is probably what we are going to get. What was once a great deal, pension, is now a noose around our necks in trying to appease alll pilots. But with the USPS contract gone, now definetly over staffed, yep, We have the company on the ropes. Thanks to all those who worked extra during negotiations, here YOU are.
05-20-2024, 02:40 PM
#93
Gets Weekends Off
Joined APC: Feb 2013
Posts: 640
Add him to your ignore list. Just like anthrax and globalflair.
You can't equate the pension to an annuity because the company funds the pension and YOU would have to pay for an annuity. A FREE lifetime benefit, pension, is a golden gift few get anymore. BUT, if it doesn't match inflation, it's value is going to be less to everyone, everyday from now on. The problem is, what is the pension value in terms of negotiating captial? I think the MCBP is probably what we are going to get. What was once a great deal, pension, is now a noose around our necks in trying to appease alll pilots. But with the USPS contract gone, now definetly over staffed, yep, We have the company on the ropes. Thanks to all those who worked extra during negotiations, here YOU are.
You can't equate the pension to an annuity because the company funds the pension and YOU would have to pay for an annuity. A FREE lifetime benefit, pension, is a golden gift few get anymore. BUT, if it doesn't match inflation, it's value is going to be less to everyone, everyday from now on. The problem is, what is the pension value in terms of negotiating captial? I think the MCBP is probably what we are going to get. What was once a great deal, pension, is now a noose around our necks in trying to appease alll pilots. But with the USPS contract gone, now definetly over staffed, yep, We have the company on the ropes. Thanks to all those who worked extra during negotiations, here YOU are.
I don’t have any proof of this, but I bet you smell really bad. I can’t say how I know this I just do. Smelly Stan, as Trump would say.
05-23-2024, 02:34 AM
#96
Gets Weekends Off
Joined APC: Aug 2023
Posts: 404
So, which is it, 4% or 6.5%? What happens if you get the time wrong and you outlive your savings? You like to say that if you and your spouse die the day before retirement, the pension is worth $0. Well, if you outlive your DC plan by multiple years, you will probably wish you had that pension. The pension is for your retirement, not for passing on to your kids. You still haven't provided the cost of a guaranteed monthly payment for life. You haven't accounted for withdraws in down years, yet mention fear of the pension not being around in 60 years. If the pension won't be worth much in 25 years, then that money you saved for your annuity will have decreased in value as well.
05-23-2024, 02:36 AM
#97
Gets Weekends Off
Joined APC: Aug 2023
Posts: 404
Justinfacts, Juststoptalking. You’re now comparing an after-tax purchased annuity to a pension that will be entirely taxed as gross income in order to artificially inflate the value of the pension. And stop talking about the 4% rule, it has no bearing on comparing a 401k nest egg to a pension. If you want to compare these retirement products, you either need to find the lump sum value of the pension to compare it to a 401k nest egg, or you need to find the cost of a lifetime annuity that will generate income similar to your pension. Juststopsaying4%, it doesn’t apply.
05-23-2024, 06:37 AM
#98
Gets Weekends Off
Joined APC: Sep 2007
Posts: 110
A plan
The pension is a very interesting vehicle to me partly because it prevents intergenerational wealth transfer. I'm not suggesting that the government should garnish inheritance to solve anything, yet nepotism causes a lot of problems at a societal level. Many complain about taxes and trust fund babies, and are trying establish thier own dynasty. If you have raised your children well hopefully they will go on to achieve as much or more than yourself and become productive members of society and form their own families. A comfortable retirement is very much in question in this contract negotiation. At best lets hope we don't become a burden to our children.
05-23-2024, 09:30 AM
#99
Line Holder
Joined APC: Feb 2024
Posts: 89
The pension is a very interesting vehicle to me partly because it prevents intergenerational wealth transfer. I'm not suggesting that the government should garnish inheritance to solve anything, yet nepotism causes a lot of problems at a societal level. Many complain about taxes and trust fund babies, and are trying establish thier own dynasty. If you have raised your children well hopefully they will go on to achieve as much or more than yourself and become productive members of society and form their own families. A comfortable retirement is very much in question in this contract negotiation. At best lets hope we don't become a burden to our children.
i'd like to think after pensions were lost at the pax airlines and the cost of pensions went up over time for the company, some would've started to diversify their retirement. the classic pension has been slowly phased out since the 90's, i personally don't see this as a surprise. if we're at this stage of the game and one isn't prepared for retirement with the pension as it stands (or even without a pension), i think we know what party to blame.
05-25-2024, 07:00 AM
#100
Gets Weekends Off
Joined APC: Sep 2007
Posts: 110
Pension risk
Why yes, there are many stories of dudes who swung for the fences and lost everything, and the pension is the only thing that saved them. Now we are at the point where you can't count on entitlement programs, the pension, or the stock market. Better start a business and become independently wealthy, or a side gig, or keep working after you retire from this place. Much like the fall of Rome, the government is debasing the currency faster than we can outrun it with the investment strategies which have worked since the 80s, or negotiate a raise, taxes are going up, and people have to speculate/ gamble with their paychecks to attempt to keep up. Sad to say the vast majority of women die alone in poverty, after caregiving for children and nursing parents and spouses. It's outrageous that anyone in the top 10% is worried about running out of money or buying groceries, but here we are.
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