A Five-Step Retirement Plan for Airline Pilots

If you fly for a Part 121 airline, you already know when that career ends. Federal law sets age 65 as the limit. The finish line is set by law, not by you.

The date is not the hard part. The hard part is everything that converges around it. Retirement plan elections, health coverage, Social Security, deferred compensation, taxes and investment risk all start interacting at once. The order matters.

This guide walks through five steps, in the order a pilot usually meets them. It is educational, specific to airline careers, and takes about fifteen minutes to read.

Before Your Last Flight guide cover
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Inside the guide

  • Know what you actually hold. The 401(k) and company contribution, a cash balance plan where your contract has one, a retiree health account, any older pension, deferred compensation and Social Security.
  • Protect the income you have not earned yet. Furlough exposure, the size of the cash reserve, and what happens if the medical certificate goes away.
  • Use the peak years deliberately. How federal contribution limits can affect what goes into the plan, and how pretax, Roth and taxable savings change your options later.
  • Set the order for age 65. Payout elections, health coverage before and after Medicare, Social Security at a full retirement age of 67, and deferred compensation already on a schedule.
  • Plan the ten years after your last flight. Withdrawal order, partial Roth conversions, the Medicare surcharge two-year lookback, preparing for required distributions, and market risk in the early years.

The guide also includes a worked planning example showing how one captain’s decisions interact, and three charts you can use with your own benefits office.