The New Airline Pilot Retirement

[B767Driver]

Since it's tax season, I've been doing my annual financial clearinghouse and planning with my accountant. I thought it might be interesting to look at what type of retirement one could expect at a certain Atlanta based major airline after the termination of its pilots' defined benefit pension plan.

Assumptions: 1) The pilot does no other savings other than 10% of his income. 2) The airline's contribution to the new retirement plan. 3) An average earning of $100,000 per year for the course of the pilot's careers. 4) A 10% rate of return. 5) Mandatory retirement at age 60.

If the pilot was hired at age 25, he would have $5.4 million.

If the pilot was hired at age 28, he would have $4.2 million.

If the pilot was hired at age 30, he would have 3.2 million.

If the pilot was hired at age 35, he would have $2 million.


If retirement age changes to 65.

If the pilot was hired at age 25 and could work until age 65, he would have $9 million.

If the pilot was hired at age 35 and could work until age 65, he would have $3.2 million.

 

[B767Driver]

To help you define an airline pilot's standard of living...after paying taxes and funding a portion of his retirement, a $150,000 per year B757 captain should have approximately $8000 per month to live on. (Of course it might take 20 years with the company to achieve that status!)


This is a look at compensation and retirement after all of the paycuts airline guys have taken recently. Hopefully, we've hit the floor and it'll go up some from here. Hopefully this will provide a little motivation to all those out there trying to make it happen.

 

[Seggy]

How do you feel about the age 65 rule?

I am a youngin but I am ALL for the age to be raised and this is one of the reasons why. Not saying I would work past 60, heck I want to retire at 55, but it will give me an OPTION to make more money over the length of my career.

 

[B767Driver]

How do you feel about the age 65 rule?

I am a youngin but I am ALL for the age to be raised and this is one of the reasons why. Not saying I would work past 60, heck I want to retire at 55, but it will give me an OPTION to make more money over the length of my career.

I understand both sides of the argument. I,personally, don't want to be doing the airline thing at age 65. But there definitely needs to be some bridge between age 60 and the standard population's access to retirment and medical without penalties at age 65.

 

[kellwolf]

Me personally, I'm with Seggy. I don't see why they can't make it "If you can hold a 1st class medical, you're good to go." A lot of guys will probably lose their medical long before they hit 60, much less 65. I'm just hoping I can keep flying long enough to be able to retire with only a small amount of stress.

 

[Fly4Pay]

Me personally, I'm with Seggy. I don't see why they can't make it "If you can hold a 1st class medical, you're good to go."

Ditto. I intend to retire before that, too, but I want to have the option NOT to if I feel like it!

 

[CoffeeIcePapers]

Go fly corporate at 60+

 

[Seggy]

Go fly corporate at 60+

And start anew at a company at 60? Lose seniority, lose what will most likely be a captain's seat, start with a new benefit plan, and pay so a newhire will get the opportunity to take my place?

Do a search about the age 60 rule and see WHY it was put in place.

 

[CoffeeIcePapers]

What I meant was, retire from the airline, and fly corporate. There isn't much seniority in Corporate flying. Most of it will be contract work, making good money, depending on the equipment. Not bad for someone who is retired.

 

[Seggy]

What I meant was, retire from the airline, and fly corporate. There isn't much seniority in Corporate flying. Most of it will be contract work, making good money, depending on the equipment. Not bad for someone who is retired.

Ahh but if you can fly till you are 65, no need to go to a corporate flying department!

 

[PositionAndHold]

Go fly corporate at 60+

As a current corp (part 91) guy I hate the fact that a lot of ret airline guys decide since they didn't plan well enough, they go corp after they ret. You had a good career, give the young guys a shot (pay it forward). I just read a good article in Aviation International News about ret airline guys under-cutting corp contract pilots.

I only feel like this because a lot of these guys walk around with their nose in the air. Like if you fly corp, your just a stepping stone, a little guy, in MY airspace. But now that my union/faa says they don't need me, I still want to fly, so I should get a corp gig.

Not trying to get any one riled(sp) up. Just my point of view.

 

[Maximilian_Jenius]

As a current corp (part 91) guy I hate the fact that a lot of ret airline guys decide since they didn't plan well enough, they go corp after they ret. You had a good career, give the young guys a shot (pay it forward). I just read a good article in Aviation International News about ret airline guys under-cutting corp contract pilots.

I only feel like this because a lot of these guys walk around with their nose in the air. Like if you fly corp, your just a stepping stone, a little guy, in MY airspace. But now that my union/faa says they don't need me, I still want to fly, so I should get a corp gig.

Not trying to get any one riled(sp) up. Just my point of view.

I thought you worked at a jail? Now you fly part 91 corporate???

 

[ComplexHiAv8r]

I'm thinking of retiring from my Corp91 flying to fly for an airline, isn't that the new pilot retirement???

 

[PositionAndHold]

I thought you worked at a jail? Now you fly part 91 corporate???

Max, both are correct. I thought I had explained my stiuation, but some may have missed it.

I work full time in a Jail, 12 hour shifts, 15 days a month. So I have half the year off. It has allowed me to fly a part 91 Lear 45 part time for the last 18 months or so. With some creative scheduling at the jail, I have managed to get about 275 hours of lear time. (right now I am in DC on a week trip)

Long story short when they sent me to school (the insurance said I could just go to recurrent, didn't have to get the full type) the other co-pilot was "supposed" to be finding another job, and had told the owners that himself. Well since that hasn't happened, I have been thinking of quiting the jail and trying for XJT, since they just opened a Socal base.

So I am in the middle of trying to decide if I want to take a 2/3 pay cut and go to a regional, or stick around and look for a better corp job. Either way it will be at least a half pay cut.

Hope that clears things up a bit, goood luck on your choice from the other thread Max.

 

[Ophir]

The assumptions probably hold water but I went back and looked at my 2005 return. My AGI was $14,165. That was being hired in May of 2005. OUCH! I'm gonna have to work my ass of to get to an average of $100,000 ever in my career and it means I most certainly have to leave SKYW.

Just a bit of info for those considering this glorious career.

 

[Velocipede]

Assumptions: 1) The pilot does no other savings other than 10% of his income. 2) The airline's contribution to the new retirement plan. 3) An average earning of $100,000 per year for the course of the pilot's careers. 4) A 10% rate of return. 5) Mandatory retirement at age 60..

2 questions...What is the airline's contribution rate? 5%? 10%? How many airlines contribute that much. AA does 11% (I think!), but they're about the top of the industry.

Do you REALLY think a 10% per year rate of return for 35 years is realistic? If you did that, you're in the wrong business. You'd be a Wall Street superstar!

 

[BoilerPilot2007]

Some mutual funds and retirement plans deliver about 10% returns. Sometimes its 8%, other times its 12%.. 10% is a good average.

Don't put all your eggs in one basket. IRAs, mutual funds, 401ks, save every way you can. Don't rely on one single source of retirement income.

 

[killbilly]

If you're getting less than 10% a year in your retirement investments you need to take another look at how you're invested. I can see a lot of typical corporate 401K stuff doing 10-12% but longer-term stock portfolios can do much, much, much better in the hands of a competent investment broker.

 

[wheelsup]

Comparing returns over the past 5-10 years doesn't mean much. The really important thing to look at it LONG term, say 100 years.

In the past 100 years, the DJIA has returned an average of 5.2% per year, a good portion of that being in the 90's. Most (something like 75%) professional money managers can't beat the average market returns.

7%-8% per year would be a much better assumption over the course of your entire retirement planning IMO. Sure, you might have some years that grow 10%-15% but statistics say you won't be able to get that year over year.

If you've got someone that you're using that has returned annualized gains for the past 20+ years of over 10% PM me...and let me know who! Thanks!

 

[jtrain609]

Long story short when they sent me to school (the insurance said I could just go to recurrent, didn't have to get the full type) the other co-pilot was "supposed" to be finding another job, and had told the owners that himself. Well since that hasn't happened, I have been thinking of quiting the jail and trying for XJT, since they just opened a Socal base. .

Wanna fly freight?