At all stages in life, it’s important to start thinking about your family’s financial future. While most pilots retire comfortably with enough saved to support themselves, not all of them have taken the appropriate measures to discuss how this transition may affect their finances after retirement once the regular paychecks stop coming in.
Joint financial planning between pilots and their spouses helps families preserve their wealth and identify risks that may jeopardize their future financial security.
Communication Is Key
Open and honest communication between spouses about finances should be a priority. A solid financial planning strategy involves cooperation between couples and any other financial management parties that handle their accounts.
Couples should be open about their investments and their plans for the future. Though most pilots generate enough income to easily accommodate their immediate needs, financial circumstances change as people grow older. As you approach the age of 65, more concrete discussions about budgeting, debt, and retirement planning become necessary to ensure both short and long-term financial goals are achieved.
Wealth Management Discussions
Proper financial planning means peace of mind. Any financial discussion between family members should include strategies for the following:
Many people may believe their high income protects them from the need for a budget, but this isn’t entirely true. Consider the countless examples of professional athletes and A-list actors who have filed for bankruptcy, despite their (supposedly) immense wealth. Out-of-control spending, particularly on large-scale purchases, can seriously impact your family’s financial future. Discuss a reasonable budget with your spouse that accounts for all expenses, both individual and shared.
Remember, each party has his or her own approach to money. You should try to take the other person's perspective into consideration while discussing and creating a budget. It’s important to talk openly and frequently about money. Not just about what is not working, but also celebrate what you are achieving by working together.
For those who have read the above paragraph a little too late, creating a debt management strategy can help bring your finances back into the black. Discussing these issues with your spouse and developing a plan to reduce debt as quickly as possible can prevent arguments in the future. Your financial advisor will help you determine what assets could be parted with and what investments may not be worth their while. Short-term liquidation may be necessary to ensure long-term financial solvency.
Preparing for retirement can bring many important decisions to light. You may need to determine whether to roll your retirement benefits over into an IRA or which annuity to select from a defined benefit plan or PBGC benefit. These decisions can have a costly penalty if not chosen appropriately for your family’s situation. If you have questions, be sure to consult a professional who can help you assess the situation.
Planning for the Future
Money has the potential to lead to disagreements but it also pays for the wonderful experiences in your life like providing a college education for a child, owning a home and traveling. Beginning these discussions with your spouse as early as possible can help you develop the best strategies for your family’s financial future.
It’s never too late to make a financial plan. We can help you get started. Request a complimentary financial consultation with RAA today to begin the planning process.
Disclaimer: This blog is intended for informational purposes only and should not be construed as individual investment advice. Actual recommendations are provided by Retirement Advisors of America following consultation and are custom-tailored to each investor’s unique needs and circumstances. The information contained herein is from sources believed to be accurate and reliable. However, Retirement Advisors of America accepts no legal responsibility for any errors or omissions. Investments in stocks, bonds, and mutual funds may increase or decrease in value. Past performance is no guarantee of future results. Any of the charts and graphs included in this blog are not recommendations for the purchase and sale of any security.