Best 705 retirement plans

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Just another canuck
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Re: Best 705 retirement plans

Post by Just another canuck »

Dronepiper wrote: Sun Oct 30, 2022 8:04 pm
TheAlcalde wrote: Sun Oct 30, 2022 2:11 pm
Dronepiper wrote: Fri Oct 28, 2022 11:33 am Why do people worry so much about retirement?? I have seen so many people work their ass off to save so much money for retirement, just to either die before they hit 65, or die within 12 months of retirement.

I would much rather spend my money now and enjoy my life while I can. People need to remember that they are human.

I’m not saying you should not save anything, but I think people who work their ass off to save millions for retirement are idiots.

Life is short. Please make sure you do what you want now, and don’t wait for a retirement that may never come.
Im glad you wrote that. I needed a reminder that most of the advice on this site is from people who I wouldn’t trust with my dry cleaning.

How many people do you know who never made it to retirement? How many people do you know who died too young and never got to enjoy life because they were too busy saving money??

I’m not saying don’t save anything. That would be stupid. Everyone should have at least a paid off house, a reliable car, and a modest source of income for 10-15 years incase you live to 80 years old.

If you are able to save a bit more, great! But please don’t sacrifice life experience at young age for more retirement money.

What scares me is that no one in my family has actually made it to retirement. My mother died young (Under 50 years old), my Dad (Under 60), my grandfather also died 6 months after retiring at 65, and my great grandfather died at age 62.

What’s really shitty is seeing someone save and save and save for retirement, have all of these plans and bucket list items for retirement, just to not have the opportunity to fulfill any of those goals or bucket list items because they got cancer and died before they got use their money they worked so hard for.

I know of multiple Pilots who never made it to 65. I also know of lots of pilots who lived to 80. Honestly it’s a gamble.
I agree with Dronepiper on this one. My mother died in her early 50's just 6 months before retirement. My father was already done. They worked and worked so once the kids were gone and work was behind them, they could see the world and live the life of luxury. Then my old man found himself alone and miserable and no one to share it with. They drove the same vehicles, had the same furniture and never travelled all so they could do it in retirement.

Well no thanks.

I'll save a few bucks. I live a relatively modest lifestyle. But I'll enjoy myself and spend now. With my wife. With my kids. After all, I could be dead tomorrow and you can't take it with you.
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Liftdump
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Re: Best 705 retirement plans

Post by Liftdump »

POWER BALL
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altiplano
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Re: Best 705 retirement plans

Post by altiplano »

tbaylx wrote: Sat Oct 29, 2022 4:42 pm
altiplano wrote: Sat Oct 29, 2022 7:39 am At AC you would get a guaranteed pension for life with survivor benefits for your spouse.

If you joined at 40 you could go as early as 60 with an unreduced pension or stay longer, up until your 65 and increase your pension size.

It's not perfect because you don't have direct control and it's tied into your AC employment, but at least you'll know that you won't run out of money and the cheques will come every month.

Save another 10% of your income during your 20-25 years into a diversified investment account and you will come out alright. If you don't have the alimony to cover you'll still probably have the F350, boat, and condo in Florida to go with it.
I'm under the impression that AC is a defined contribution match like any other employer.

Do you have any information on how it is guaranteed for life with survivorship benefits? Is it not a simple employer match (+ a few% after YOS)?
AC Pilots post FOS after on CWIPP. It's a Target Benefit Plan provides a guaranteed pension for life. Based on fund performance, the benefit can fluctuate up or down within the target range, vs. a DB where the earned benefit is fixed at a defined amount.

The CWIPP plan our guys are on have only moved their benefit up during its history. Money is not held or controlled at all by Air.Canada, the fund is completely independent. No company financial involvement or management, no company paid supplementary top hat pension to realize your benefit. No MPUs to negotiate.

A big advantage of this plan vs your typical DC is that there is no limit to how much you can shelter under the plan, ie. 2022 limit is about $29K, but 18% of $200K and you'd be 20% over the limit on a DC. And again, it's independent of AC, no future pension crisis to contemplate, and it's a comparable benefit to the DB under average conditions.

I mean if a guy spends 30 years as an RP and then goes 777 CA for his last 5, he'll do better under the DB, but a guy that upgrades early in his career actually does better on the TBP. This plan pays a benefit based on the total amount you have earned and contributed, vs your best five on a DB.

20 years of service and 60 years of age brings an unreduced benefit vs. 25 years of service and 60 years of age for the DB.
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DanWEC
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Re: Best 705 retirement plans

Post by DanWEC »

altiplano wrote: Mon Oct 31, 2022 5:08 pm
I mean if a guy spends 30 years as an RP and then goes 777 CA for his last 5, he'll do better under the DB, but a guy that upgrades early in his career actually does better on the TBP. This plan pays a benefit based on the total amount you have earned and contributed, vs your best five on a DB.

20 years of service and 60 years of age brings an unreduced benefit vs. 25 years of service and 60 years of age for the DB.
If I'm reading this correctly however, you mean the guy who gets hired now and upgrades early can do better than the legacy DB because he has the ceiling to plow more of his income into the fund? So in essence, you can only match the eventual DB pension payout by paying more per month of your existing income into the current scheme. Correct me if I'm misinterpreting, but that's still a monthly net downgrade for your working life compared to the old DB, no?
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altiplano
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Re: Best 705 retirement plans

Post by altiplano »

DanWEC wrote: Mon Oct 31, 2022 6:18 pm
altiplano wrote: Mon Oct 31, 2022 5:08 pm
I mean if a guy spends 30 years as an RP and then goes 777 CA for his last 5, he'll do better under the DB, but a guy that upgrades early in his career actually does better on the TBP. This plan pays a benefit based on the total amount you have earned and contributed, vs your best five on a DB.

20 years of service and 60 years of age brings an unreduced benefit vs. 25 years of service and 60 years of age for the DB.
If I'm reading this correctly however, you mean the guy who gets hired now and upgrades early can do better than the legacy DB because he has the ceiling to plow more of his income into the fund? So in essence, you can only match the eventual DB pension payout by paying more per month of your existing income into the current scheme. Correct me if I'm misinterpreting, but that's still a monthly net downgrade for your working life compared to the old DB, no?
It's apples to oranges.

Everyone pays 7.5% of their gross.

But the DB guy that spends a career as an RP and then gets best 5 as a WB CA will get the same payout as the DB guy that upgrades early, spends his whole career as a CA and also gets best 5 as a WB CA. The second guy put way more in, but that's the DB pension.

The TBP guy is based on what he puts in, best 5 doesn't matter. The TBP guy that upgrades early and does a full career as a CA will do better than the TBP guy that stays senior FO or the DB guy that doesn't get his best 5 as a WB CA.

To maximize the DB you need best 5 as a WB CA, to maximize the TBP you just need to make more for longer.
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Joe Blow Schmo
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Re: Best 705 retirement plans

Post by Joe Blow Schmo »

I didn't realise AC had that TBP. No thanks. I'd much rather have a straight DC than that. I'll take 100% of my money any day over an amount decided by other people that may be reduced out of concern for future solvency of the plan. This seems like it would only benefit those who can't budget or manage their own money at the expense of those who can. If you're the type of person who would collect your DC lump sum at retirement and then blow it all in the first few years because you can't plan, then yes, the TBP is for you. Otherwise DC plans will almost certainly get you more money.
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altiplano
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Re: Best 705 retirement plans

Post by altiplano »

There are positives and negatives both ways for sure, But it isn't just someone arbitrarily reducing benefits and again it's within in target range and more prone to moving up, it's pretty laid out.

If I could only have one asset in retirement I'd probably want a lump sum too. But the fact that this allows more money to be sheltered as I described is pretty big. And it's just one component of a diversified plan when you stop working, most guys will have that lump sum too, a lifetime of TFSAs and RRSP and Spousal RRSP contributions. If they aren't still paying for their third wife and car lease payments, they will be doing alright...

I know that I'll be OK with that 10K cheque every month rolling in like clockwork when I retire.
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Re: Best 705 retirement plans

Post by rooster »

Dronepiper wrote: Sun Oct 30, 2022 8:04 pm
TheAlcalde wrote: Sun Oct 30, 2022 2:11 pm
Dronepiper wrote: Fri Oct 28, 2022 11:33 am Why do people worry so much about retirement?? I have seen so many people work their ass off to save so much money for retirement, just to either die before they hit 65, or die within 12 months of retirement.

I would much rather spend my money now and enjoy my life while I can. People need to remember that they are human.

I’m not saying you should not save anything, but I think people who work their ass off to save millions for retirement are idiots.

Life is short. Please make sure you do what you want now, and don’t wait for a retirement that may never come.
Im glad you wrote that. I needed a reminder that most of the advice on this site is from people who I wouldn’t trust with my dry cleaning.

How many people do you know who never made it to retirement? How many people do you know who died too young and never got to enjoy life because they were too busy saving money??

I’m not saying don’t save anything. That would be stupid. Everyone should have at least a paid off house, a reliable car, and a modest source of income for 10-15 years incase you live to 80 years old.

If you are able to save a bit more, great! But please don’t sacrifice life experience at young age for more retirement money.

What scares me is that no one in my family has actually made it to retirement. My mother died young (Under 50 years old), my Dad (Under 60), my grandfather also died 6 months after retiring at 65, and my great grandfather died at age 62.

What’s really shitty is seeing someone save and save and save for retirement, have all of these plans and bucket list items for retirement, just to not have the opportunity to fulfill any of those goals or bucket list items because they got cancer and died before they got use their money they worked so hard for.

I know of multiple Pilots who never made it to 65. I also know of lots of pilots who lived to 80. Honestly it’s a gamble.
Ok so what you're saying people should work hard to save for their retirement. Something you accused people of being idiots for :rolleyes:

I'm sorry to hear people in your family don't live longer lives than the ages you mentioned but to be honest that isn't common. Again, I don't know to many people who never made it to retirement or even just shortly after. Almost ALL the people I know have lived long lives. Including my family. Including my friends' families etc etc. So if people want to work their asses off to save whatever range of wealth they want for retirement, that is completely up to them and it does NOT make them idiots for doing so :roll:
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Re: Best 705 retirement plans

Post by newlygrounded »

rooster wrote: Sat Oct 29, 2022 9:12 am
Dronepiper wrote: Fri Oct 28, 2022 11:33 am Why do people worry so much about retirement?? I have seen so many people work their ass off to save so much money for retirement, just to either die before they hit 65, or die within 12 months of retirement.

I would much rather spend my money now and enjoy my life while I can. People need to remember that they are human.

I’m not saying you should not save anything, but I think people who work their ass off to save millions for retirement are idiots.

Life is short. Please make sure you do what you want now, and don’t wait for a retirement that may never come.
I think people who think others are idiots for doing what THEY think is best for THEM, are idiots. What a stupid thing to say. I don't know anyone who hit 65 and died. Honestly all the retired folk I know who worked their asses off to save for their retirement are living their best lives right now. So I don't know what the &^$% you're talking about Dronepiper.

My parents are in their late 70's, still bouncing around travelling the world. Guess what, my dad worked his ass off to save millions for his retirement and him and my mother are living the frickin dream. Same with my sister's parents :wink:
I'd rather live my best life when I'm not old and sore.
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negroni
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Re: Best 705 retirement plans

Post by negroni »

I'm in my late 30's and already feel old and sore and have back and knee problems, and avoid doing things I used to love. Like skiing, and golfing. Been trying to get fit again so I can enjoy camping (sleeping on hard ground), hiking, sports etc. Can't imagine how I'll feel in 20 years. I agree, I am doing what I can to enjoy life as I live it while being "smart" for retirement. When I'm old and grey I know I'll likely only need a few things to make me happy and that's a garage and tools, a project of some kind, my wife and hopefully grandkids coming to visit. That doesn't cost $200,000 a year (well with inflation, it might but you all get what I mean I hope).
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