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How Airline Pilots Can Break Through 401(k) Limits

Allworth helps give pilots more runway for retirement.

[Credit: Shutterstock]
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Key Takeaways:

  • High-earning airline pilots face unique retirement savings challenges due to a short peak earning window and 401(k) contribution limits, leaving significant income exposed to taxes.
  • A "market-based cash balance plan" is proposed as a solution, allowing dramatically higher tax-deferred contributions by capturing overflow employer contributions that exceed 401(k) limits.
  • This strategy is typically implemented by first maximizing 401(k) contributions, including using a "mega backdoor Roth conversion," which then directs additional airline contributions into the separate cash balance plan.
  • The plan offers substantial immediate tax reductions and accelerates wealth accumulation during peak earning years, best suited for pilots with stable, high incomes seeking tax efficiency over aggressive growth.
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Most airline pilots are diligent savers. They max out their 401(k)s, capture every dollar of employer contributions, and stay on top of their investment allocations. Still, for many pilots in their peak earning years, even doing everything right may not be enough.

This is the central message of a recent webinar hosted by Allworth Airline Advisors, in which James Risalvato, a financial planner with Naval aviation experience, walks pilots through a retirement savings strategy that most have never heard of. The good news is, some airlines are already offering this plan.

Matt Herr

Matt Herr develops sponsored content for clients at Firecrown Media. He is a gearhead and motoring enthusiast with experience in tech, freight and manufacturing. He spends his free time hiking with his wife, son and German shepherds, or reading and writing hobby pieces.

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