This is not to hard but I will take a stab......
I’ve grown tired of reading all the reasons why “junior guys” should want to work till 65. We will make more money and have more saved up for retirement. I decided to run the numbers myself. This is based off CAL current contract, which is a concessionary contract and will get better which will further skew the numbers against the junior guys.
These calculations are based off:
1. 2008 contract rates:
2. Figuring 20% 401k (includes companies 12% defined contribution)
3. 76 hours guaranteed (also a low number but that’s our reserve B number) any increase in hours will increase the difference between delay and no delay.
4. 6% compounded interest over the career to the age of 60.
5. All these numbers are base on a 3 year delay in upgrade. (Just a guess, no one really knows the exact affect, obviously more than 3 makes it worse on the junior guys, less makes it better)
No delay-
Total salary earned $3,096,968
Total 401k savings $1,257,321
Total $4,354,289
With delay
Total salary earned $2,821,468
Total 401k savings $1,182,318
Total $4,003,786
Total difference $350, 503. This means that I would have to work an additional 2 ½ years to break even with the loss of income putting me at 62 ½ years of age, essentially working for no pay given that I would have had that with no delays. That leaves me 2 ½ years to “make more money” These numbers are all conservative, you can see that with a better contract the differences in total income would increase. This also does not include the quality of life issues especially with PBS. There are also several recent studies that show the longer you work the average person has a shorter life span. I have listed a current report ALPA has. Here is the link to it, very interesting: http://www.mytruebrain.com/Creativity%20&%20Longevity.pdf
I don’t plan on working past age 60. I am planning on the age change to happen and am increasing my retirement savings to 24% a year (including CAL contributions) to offset this loss in wages. I shouldn’t have to.
To The Pain,
I will try to address your calculations. I am, however at a disadvantage in that I do not have access to all the data you've used to complete your analysis. I think I can introduce a reasonable estimate with just what's available on airlinepilotcentral as far as your contract goes. Having said that, we must also agree that all the variables that may effect your pay/upgrade/transitions have to be eliminated from the discussion as they are unforcastable and would effect everyone.
Your first assumption concerning your 401K needs to be addressed. The IRS has established limits on how much
pre-tax money can be contributed to your retirement fund. If you'd like to contribute after tax money to a separate fund that's entirely up to you, but should be removed from this analysis. The ceiling figure kicks in at approximately $100/hr which is approximately the same as a 5th year WIDE F/O. So any hourly increase beyond 5th year, whether it be due to longevity or upgrade, would have no effect on the amount contributed to your 401K. I think we can agree that upgrades will extend beyond 5 years, so the 401K is even, Captain or F/O.
For calculating career earnings I again did not have access to your total longevity, etc., so I examined things from a differences perspective. It is generally accepted that should the retirement age change to 65 that some will take it, some won't and some will be somewhere in between. The net effect has been calculated to somewhere between 2 1/2 and 3 years delay.
Using the last contract rates and a worst case scenario (6th year WIDE F/O vs. 6th year SN Capt) the hourly pay difference is $23/hr. For this examination we have to discount intangibles like quality of life of a senior F/O with 17days off/month (and 5 more off in Europe) with a commutable line versus a junior Captain sitting reserve in a crashpad in Newark. Based on your assumption of 76 hours that is $1748/month difference, admittedly a sizable sum. If we extrapolate that out to 3 years, that is $62,928.
Now if you choose to make up that pay difference and work beyond age sixty you've come up with a figure of 2 1/2 years. I calculate that at WIDE Capt pay of $186/hour, as that is everyone's "career expectation." $62,928 divided by $186/hour is 338.32 hours, or 4.45 months. Or just cash in your sick bank, your choice. For those in similar shoes that choose to work beyond that and retire on their 61st birthday, they will earn $106,868 more. Continue working to age 65 and you will earn $169,632/year or $785,396
after you've made up the "loss" from your delayed upgrade.
Less than 4 1/2 months. To correct an artificially placed restraint on our careers that had and continues to have no foundation whatsoever in medical fact. As stated in another thread, the age restriction was established by
airline management to hold down payroll costs from all the WW2 pilots then populating the seniority lists. And the life expectancy of the average American has increased 20 years since then.
This measure is not about the immediate financial impact on you or me or anyone else currently on the payroll. No one will get the check without working for it. This is primarily about giving the option of a "normal" retirement age to every pilot that comes after us. For less than what you will give in union dues over the rest of your career you can positively impact each and every pilot that follows in your footsteps.
This is also about choice. Whatever the reasons behind the decision, I should be able to choose to work beyond an artificially placed limit. You don't have to if you so choose. It will be up to the unions to establish the right to retire at 60 without penalty, but that is a separate arguement. The point is, each of us should have the
choice.
As far as the other issues raised, PBS is a fact of airline life. It can be great or it can severely hamper "career progression," it all depends on who pulls the strings. That is an excellent opportunity for your union to get involved in a joint-control committee. As previously stated, quality of life issues are intangibles and different for everyone and so a comparison for age 60 purposes is unfair.
As far as your (ALPA's) longevity study, Harvard Medical School has published several studies that conclude that you actually live
longer if you work beyond retirement age. Admittedly, this does not necessarily mean at your full-time career, only that you work at something post-retirement (for normal careers), but it does not preclude you from continuing your career.
Let me also say this. I am a first year F/O at a major. I have been furloughed 4 times in my career. If this measure passes it
will delay my upgrade. But I support this for ALL pilots, present and future. My support is based on the idea that it is for the good of the profession, not just MY wallet.
Your mileage may vary......