Originally Posted by
QRH Bingo
Not everyone can afford to max out their 401(k) right off the bat, as the maximum contribution for 2021 is $19,500, That's pretty much 1/2 of a new regional FO's salary. However, for those young folks out there that may be browsing this, it is excellent advice to start SOMETHING, ANYTHING toward your 401(k) (or other retirement like an IRA) At a minimum, you should contribute whatever gives you the maximum company match - it's free money (but know there is usually a vesting period to be able to keep it when you leave). Also, if you're healthy and are comfortable selecting a High Deductible Health Plan, you can also contribute to an HSA which can be invested to earn money (certain stipulations can apply, so be sure to read the fine print). You don't have to use it for current medical expenses and can also be saved for retirement, if desired.
I couldn’t max it out early on either, and I made less (inflation adjusted) than what many regional pilots do today. What I did was faithfully put 20% of my gross away every month, without fail. I also worked a second job because there wasn’t enough to pay the bills and save if I didn’t. Once my pay started going up I was able to ditch the second job and also afford to eat out and take moderate vacations. I now find myself surrounded by people nearing retirement with less saved than I have built up with 10-15 years remaining in my career. They’ll have to find work after retiring, while I will have the option of leaving early and retiring comfortably. It’s always better to be the ant than the grasshopper.