flythebus,
401K plan current contribution rate is 10,500 USD per year. Most airlines put money in these plans too. Legislation in the Congress should, if passed, raise this to 15,000 USD over the next five years or so. Compounding interest can be calculated with the "rule of 72". Basicaly to determine how often you double your money divide the expected return into 72. Expect 7.2% annuall return? Then your money doubles in ten years. There's probably a lot smarter people out here than me who can explain it better, but you get the picture. This is called a defined contribution plan. Most airlines also have a defined benifits plan also. These plans work along these lines. A pilots average earnings for the last ten years of his carrer is multiplied by a factor, a negotiated number, and then multiplied times his number of years of service. Say you were a UAL 747-400 capt. for the last ten years of your carrrer making 302,000 per year. With 30 years seniority and a multiplier of say 2% (my airline's is 1.9%). Then you would recieve 60% of 302,000 for the rest of your life. These benefits are sometimes paid for by an annuity that the airline has purchased upon the pilots retirement. His payout of a little more than 180,000 per year (tax law may limit that to 175,000) is the equivalent of having 3.5 million in the bank paying around 5% per year compound interest.