By Mike Cordak, RICP®
Becoming a professional pilot is a significant career accomplishment, marked by exceptional skill and dedication. But as a 25-year Delta pilot myself, I fully understand that with this newfound financial freedom also comes the responsibility of wise financial planning for Delta pilots.
I wrote this article to share the essential financial strategies I’ve learned over the years to help you with your financial future and make the most of your hard-earned income.
Build a Budget
Let’s start with the basics. Building a budget is fundamental to controlling your finances. Keep a record of your income and expenses to comprehend your spending patterns and pinpoint places where you might cut back. Set aside money for savings, investments, necessities, and discretionary expenditures. Having a budget enables you to manage your money and prevent financial surprises.
Prioritize Saving
One of the more critical steps of financial planning for Delta pilots is to optimize contributions to retirement accounts. Utilizing Delta’s 401(k) plan to its fullest extent is crucial. Be sure to add some of your own contribution to Delta’s.
Also consider opening a Roth 401(k) to gain from tax-free withdrawals. As a new hire, you’re making the least amount of money of your career, so don’t worry about not getting the tax deduction. Just get started. Because the effects of compound interest can be substantial, even small early donations can significantly impact your long-term financial well-being.
If you recently started a family, begin contributing to a 529 plan for educational expenses. Again, a small contribution each year can add up to substantial savings.
Manage Debt Sensibly
Newly hired Delta pilots often experience a significant increase in income. While this is an exciting time, it’s important to handle debt sensibly. Paying off high-interest debt should be your top priority. If interest rates are reduced, consolidating debt with a personal loan can be a smart move. Preventing setbacks requires avoiding the creation of new debt. Never forget that managing your debt strategically is the first step toward financial freedom.
Create an Emergency Fund
Even though your new income as a Delta pilot might seem significant, unforeseen costs can creep up. Having an emergency fund is essential to financial stability. In a high-yield savings account, try to accumulate three to six months’ worth of living costs. This fund acts as a safety net in the event of an untimely death in the family, illness, or other unforeseen events. This is one of the core tasks of smart financial planning for Delta pilots.
Safeguard Your Income and Assets
Safeguarding your income and assets is essential if you have a significant income. In order to replace lost income in the event of an illness or injury, think about purchasing disability insurance. If you pass away suddenly, life insurance can provide crucial financial safety for your loved ones. Also, to shield your possessions, look into possibilities for property and liability insurance.
Make Smart Investments
Now that you’re a professional pilot (congrats by the way!), it’s time to make smart investments. To increase your wealth, look at investment options outside of retirement funds. Consider investing in equities, bonds, property, or other asset classes that are in line with your financial objectives and risk tolerance. The secret to mitigating risk and optimizing returns is diversification.
Keep Learning
The world of finance is always changing, so it’s wise to keep up with tax legislation, investing methods, and economic trends. To increase your knowledge, go to financial seminars, study books, and follow financial professionals. Continuous learning equips you to make wise financial decisions.
Keep in mind that financial planning is a continuous process, so evaluate and modify your plans frequently to keep them in line with your evolving needs and goals.
Reach Out Today!
Optimum Wealth Management is here to help you make wise financial decisions so you can build a solid financial foundation for your future as a Delta pilot. As a fellow Delta pilot, I’m intimately familiar with Delta’s financial offerings, how you can optimize those offerings, and how to avoid costly mistakes.
To schedule a complimentary meeting, get in touch online, call (678) 778-2694, or email mcordak@optimumwlth.com.
About Mike
Mike Cordak is founder and owner of Optimum Wealth Management, a Registered Investment Advisor serving the financial, retirement, and wealth planning & management needs of airline pilots—from hiring all the way through the transition to retirement and beyond. As a Delta pilot himself for more than two decades, Mike’s goal is to cultivate authentic life-long relationships with pilots to help them and their families create, grow, and preserve their wealth. As someone familiar with the pilot lifestyle and their unique goals and concerns, he offers a different investment strategy than the average advisor. Combining a fee-only business model with a fact-based tactical investment management style, he creates an environment that allows him to fulfill his mission of bringing clients financial peace.
Mike received his finance degree from Gies College of Business – University of Illinois Urbana-Champaign before pursuing a career as a pilot. After losing the defined-benefit plan at his airline in 2006, he entered the financial industry, inspired to create his own firm and take control of his finances to pursue financial stability after retiring as a pilot. He obtained the Retirement Income Certified Professional® designation, which means he has a legal and ethical duty to put clients’ interests first.
Mike and his wife, now empty nesters, love getting together with their kids as often as their schedules allow. Outside of reading financial news, he enjoys flying his own plane, golfing, hiking, skiing, and playing tennis and pickleball. He also can be found enjoying good wine and food, spending time at the beach, or traveling to foreign countries. He also has an interest in the Atlanta Mission, which helps out homeless people, the Woodstock City church, and contributes to various young people going out on mission trips and working on college campuses. To learn more about Mike, connect with him on LinkedIn.
