As we leave winter, many pilots are preparing for spring flying. We have our pre-flight, in-flight, descent, and other checklists ready, so we’re all good to go, right?
While you may be ready for everything that may happen when you’re in the air, what about your financial checklist back on land and at home? With a busy life, you may forget there is a financial side that the hourly rate and annual doesn’t cover.
Let’s review five key questions every pilot should answer before the new season of flying:
1. Do You Have Shared Ownership in the Aircraft?
Your ownership can impact financial implications. If you have shared ownership, review the agreement to see how it addresses health or death issues of a partner. Should your partner die or experience loss of medical, what would that mean for the aircraft and you?
You’ll also want to evaluate how you monetize those arrangements if you have shared ownership. If it’s been awhile since you last reviewed your agreement, it’s time to take a look at them and identify any gaps or areas for clarification.
2. How are You Investing the Hourly Dollars for Eventual Repair and Replacement?
It’s all too easy to deposit resources into your bank account or contribute a portion of it for future business needs, such as aircraft repair or parts replacement. But as you know all too well, repairs and replacements can be nearly devastating in costs, especially if it comes unexpectedly.
Rather than building a repairs reserve in a bank account with low interest, consider how you can invest that money for a higher rate of return. While you want to keep this fund as liquid assets for emergency repairs, it’s important to consider how you can invest it for faster growth.
3. Have You Compared the New Tax Law to Your Situation?
With the new tax law implemented, many people will see changes to their tax return this next filing year. Some of the most significant changes impact business owners, while on the individual level, many exemptions changed or were eliminated.
With the new tax law, don’t wait until the end of the year to review how it will impact your return. Start early with tax planning, as it may potentially help you save in the long run based on decisions you make today with your income and business structure.
4. How Does Aviation Impact Your Financial Plan?
Sharing ownership of an aircraft can make a financial plan complicated and messy if you don’t stay on top of its organization, from your insurance to your investments and business plans.
5. Will You Have Enough Money to Keep Flying in Retirement?
Flying and maintaining an aircraft can add up in costs. If you plan on flying in retirement, you’ll need to review your nest egg to see how you can accommodate for those costs.
You may need to readjust your plan, work longer, or take from other living expenses to cover the costs of flying.
Do you feel confident in your answers to these questions? If it’s been awhile since you last reviewed your financial plan, or have concerns regarding one of these questions, I encourage you to give us a call today.
Gary Lutrick, MBA, RFC is a financial advisor and partner at ATL Global Advisors, an independent financial services firm serving transportation and logistics employees in the greater Atlanta area. Along with nearly 30 years of industry experience, he holds an MBA in finance and the Registered Financial Consultant (RFC) certification. He focuses on helping his clients plan for retirement, manage risk, and define financial objectives that integrate their family values. Learn more by connecting with Gary on LinkedIn.