Financial Planning for Women in Aviation

 Tips for Saving for Retirement in the Airline Industry

I have been flying a lot lately and became curious about how Covid has affected those working in aviation. For one, I noticed most of the flight attendants were closer to my age (mid-50’s) -relative to before Covid when they were all ages. I began to wonder if they are thinking about retiring and how are they saving for retirement? Fortunately, I was able to get some answers from a friend of mine who has been flying for 33 years.

She told me that since Covid hit the less tenured flight attendants were furloughed leaving the more senior attendants onboard. She herself has been fortunate to have worked through most of Covid. But a lot has changed. The biggest change is in the number of passengers that have never flown. Since the government has been handing out stimulus checks and airline travel is less expensive, she has experienced a whole new level of clientele. More demanding! When they board the plane, they think they can sit wherever they want, they demand alcohol and food believing that comes with their flight. They don’t understand that Covid has restricted the amount of service that can be given.

I asked her if scenarios like this made her think about retiring. “No”. When she began her career, her initial thought was to retire at age 55, then 65, and now she feels most confident retiring at social security’s full retirement age of 67. Interestingly, twice in 2020 and March of this year, her airline offered an “early-out” package. This package was worth $150,000 and was designed to be used as a “medical bridge,” to help pay medical expenses not for medical premiums. In her case, being just shy of 60, she decided she was too far from receiving Medicare, (which pays premiums for Medicare Part A), to benefit from taking this package.

As a financial advisor I was curious how she saved for retirement. Did she have a pension, 401k, etc.? Did she feel confident in how she was saving for retirement? She admitted that for a long time she didn’t know where to invest her 401K contributions. Then she found an investment newsletter, put out by two former pilots, that helped her figure out where to invest her money. Now her money is working 24/7 and she is much more confident about her retirement. My friend isn’t ready to retire. She loves what she does and enjoys the benefit of free travel which has saved her thousands of dollars throughout the years.

Three Tips for Retirement Savings

At the end of our conversation, I asked if she had any tips on saving for retirement for her fellow aviation peers:

1. Invest in your 401k right away and join your airline’s credit union if they have one.

2. Do NOT rely on the pension plan. (She has seen two airlines’ pensions reduced to nothing through bankruptcies and mergers.)

3. Find a reliable source to learn about where to invest your 401K money to create growth. Don’t leave it in cash!

Thank you to my friend for sharing her recent experiences during Covid and her thoughts about retirement. Women in aviation work hard and do not have a lot of spare time to think about their finances. If you would like a partner to help you with your financial planning, I would love to help. Schedule a free consultation and we can explore your retirement dreams!