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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 substantial income exposed to taxes.
  • A "market-based cash balance plan" is introduced as a solution, enabling pilots to make significantly higher tax-deferred contributions (potentially six figures annually) by capturing overflow employer funds after the 401(k) is maximized, often utilizing a mega backdoor Roth strategy.
  • This strategy offers immediate tax reduction and compresses significant savings into peak earning years, although it requires consistent funding, offers more conservative growth, and is best suited for pilots with stable, high incomes who have exhausted other saving options.
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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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