The Raven wrote: swervin wrote: At current pay rates for Captains after 30 years of service, you would make about $68,000 a year if you go at 60. With 35 years it's about $84,000 a year. That using the current Pension cap as well. Had one of the union guys calculate it for me.
Swervin According to my financial advisor you would need to save almost 2 million dollars to provide yourself with an income like that in retirement if you didn't have a pension. Not a lot of people have the discipline to save that kind of money over their career.
I'd find yourself a new financial advisor.
If I were 65 right now with $2 million, invested at a modest 5% rate of return, I could pay myself $80,000/year and increase it for inflation at 3%/year and live a VERY long life. I would be 81 years old before my account balance dropped below $2 million. If I were to find the fountain of youth and achieve immortality, I could pay myself $62,000/year, increased for inflation at 3% year and live forever.
Adjusting for inflation at 3%/year and investing at 5% rate of return I could pay myself:
$150,000/year and run out of money at age 81 (The average life expectancy in Canada in 2009 was 81.2 years)
$120,000/year and run out of money at age 86
So with $2 million in the bank at age 65 I can retire on a salary almost double what a Jazz pension pays, AND I can increase that salary by 3% / year to make up for inflation. Doing that, I will be able to live to the average age of death in Canada (which is what the Jazz pension formulas will be based on).
Jazz' pension is not inflation adjusted. So if I just paid myself $80,000/year, I would only need $1 million to be able to afford to live to age 85, or $1.2 million to be able to afford to live to 93.
If you start with nothing, and invest $500/month from age 30 to age 65 at an average of 8%/year, you'll have $1.1 million at age 65. If you invest through an RRSP, you'd get ~$150-200/month of that back from tax savings, so it would only cost you $300-350/month. If you double your investment to $1000/month, you'll have $2.2 million at age 65.
If you start by investing $500/month for the first 10 years (while you're an FO) then increase it to $1000/month for the last 25 years (when you're a Capt), you'll end up with $1.55 million.
DB pension plans aren't all they're cracked up to be. |
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Thats funny. Thanks for that 
