A High-Class Problem: Why America's Pilots Are Doing Just Fine

Jeff Barath retired from United Airlines last year at 65 with a problem most Americans would love to have.

He has a partial pension, a brokerage account and a $3.5 million 401(k). Once his required minimum distributions kick in, his retirement income, including Social Security, will be well over $300,000 a year. That's more than he earned in most of his working years.

"It's a high-class problem," according to Barath.

He's right. And he's far from the only one.

Four times the average

Pilots earn, on average, more than four times what the typical American worker does. At the top of the seniority list the numbers get eye-watering. A senior pilot who lives near a hub, flies the biggest aircraft and picks up overtime-rate trips when the weather causes chaos can make as much as $100,000 in a single month.

The retirement side is just as generous. United, Delta, American and Southwest now put 18% of a pilot's pay into their 401(k), and the pilot doesn't have to contribute anything. Most also offer cash-balance pension plans to take the overflow once pilots hit the 401(k) limit. Advisers who specialize in aviation now talk pilots through backdoor Roth IRAs and tax-efficient brokerage accounts. Those are tools built for people with more money than the standard savings accounts can hold.

After a run of lucrative new contracts, advisers say many pilots are feeling flush.

Boats, fast cars and planes

Not all of that money gets saved. Max Palmer, who has flown for Southwest since 2019, says he sees "lifestyle inflation" set in once pilot pay jumps: boats, fast cars, even planes.

That's a familiar story in any well-paid profession. It's a less familiar one in most American households.

Turbulence, in context

None of this means the career is without risk. Pilots usually stay with one airline for life, and in a cyclical industry, timing matters. After 9/11, United went into bankruptcy. Some pilots took effective pay cuts of as much as 60%, and in 2005 the airline ended its pension plan. Barath sold a Chicago condo he had just bought and briefly considered a move to Wall Street.

He stayed. And that's the point. Through the worst downturn in modern aviation, a pilot who kept his head down and saved still retired a multimillionaire.

His advice is refreshingly simple. "Whenever we get a pay raise, always take half and save the rest," he said.

Demand is also on pilots' side. An average of about 4,300 airline pilots will hit the FAA's mandatory retirement age of 65 every year through 2042. Each one who leaves moves others up the seniority list, into bigger seats and bigger paychecks.

Meanwhile, in the tower

For perspective, think back to last autumn's government shutdown.

Air traffic controllers, the people guiding those same pilots through crowded skies, received their last partial paycheck on October 14. Then nothing. They were classed as essential, so they kept working, often six-day, 60-hour weeks. Some drove for Uber and DoorDash to cover their bills. Others waited tables after their shifts. At San Francisco International, Alaska Airlines crews delivered pizzas to the controllers in the tower. It was a kind gesture, and a telling one about who needed the help that month.

A sense of proportion

Pilots earn their pay. The training is demanding, the responsibility enormous, and a failed medical can end a career early.  But as the talk at the negotiating table turns to hardship, it helps to keep things in proportion. One person's rough patch is working out what to do with a $3.5 million retirement fund. Another’s is delivering takeout after work to keep the lights on. 

Barath called his situation a high-class problem. Most working Americans would gladly take it.