In this episode, Tim asks the question many pilots hear in the cockpit: Is your 401(k) a scam? He walks through why 401(k)s exist, how they replaced pensions, and what today’s airline plans actually offer: contribution mechanics, investment menus, legal protections, and employer contributions specific to the majors. Tim also shares a listener email requesting a cargo-carrier disability deep-dive and invites other cargo pilots to weigh in.

What You'll Learn from This Episode

• Pensions vs. 401(k)s: Why pensions faded (PBGC oversight, funding issues)
  and how 401(k)s became the primary retirement tool.
• How Airline 401(k)s Work: Salary deferrals: pre-tax and Roth, after-tax
  contributions, investment menus, brokerage window.
• Contribution Limits & Employer Money: What “up to $70,000 per year”
  includes: deferral, after-tax non-Roth, NEC; why big plans mean lower-cost
  funds.
• Ownership & Vesting: Immediate vesting when dollars hit your account: what it means if you stay or leave.
• Legal Protections & Risks: 401(k)s protected from creditors, suits, bankruptcy; IRA and Roth IRA bankruptcy protection to ~$1.7M through 2028; civil-suit rules vary by state; QDROs in divorce are the exception.
• Beneficiaries that Bypass Probate: Keep beneficiaries current to speed
  distributions and reduce taxes.
• What Might Be Coming Next: In August order asks DOL to review alternatives
  in 401(k)s: private equity, private credit, crypto, real estate, digital assets

Resources:
Schedule An Appointment
Our Practice’s Website
Send Us Your Questions: [email protected]

This episode is sponsored by: Beacon Relocation

Beacon Relocation is a real estate firm helping pilots and air traffic controllers save money on their real estate transactions. By tapping into their network of over 1500 real estate agents across the country, pilots can save 20% of the real estate agent’s commission towards your closing cost on the sale or purchase of your home. Visit https://www.beaconrelocation.com/ to learn more. 

Timothy P. Pope is a Certified Financial Planner™and principal owner of 360 Aviation Advisors, LLC (“360 Aviation Advisors”), a registered investment advisory firm. Investment advisory services are provided through 360 Aviation Advisors, in its separate and individual capacity as a registered investment adviser. Podcast episodes are provided through Pilot’s Portfolio, in its separate and individual capacity.

We try to provide content that is true and accurate as of the date of publishing; however, we give no assurance or warranty regarding the accuracy, timeliness, or applicability of any of the contents. We assume no responsibility for information contained on this website and disclaim all liability in respect of such information, including but not limited to any liability for errors, inaccuracies, omissions, or misleading or defamatory statements.

Links to external websites are provided solely for your convenience. We accept no liability for any linked sites or their content and remind you that we have no control over their content. When visiting external web sites, users should review those websites’ privacy policies and other terms of use to learn more about, what, why and how they collect and use any personally identifiable information.

Usage of this content constitutes an explicit understanding and acceptance of the terms of this disclaimer.