#83 - Market-Based Cash Balance Plans with Jesse Reed

Passive Income Pilots

In this episode, hosts Tait Duryea and Ryan Gibson welcome back financial planning expert and pilot Jesse Reed to dive deep into market-based cash balance plans—a retirement vehicle being implemented by airlines specifically for high-earning pilots facing 401(k) spillover limits. Jesse unpacks how pilots can strategically manage these plans to maximize retirement savings and minimize tax burdens. Tune in to learn how to navigate 401(k) limits, Roth and after-tax contribution strategies, and advanced tax planning insights.

Jesse Reed is a seasoned financial advisor with Creative Planning, specializing in wealth management for airline professionals. With a background as both a financial planner and a pilot, Jesse has unique expertise in navigating complex airline contracts and retirement benefits. His insights on market-based cash balance plans, 401(k) limits, and tax-efficient investing make him one of the leading voices in financial planning for aviators. Jesse’s practical approach provides pilots with the knowledge and tools to optimize their retirement strategies and achieve lasting financial security.

🤝 Meet us in person on November 11th in Atlanta, GA. Space is limited, so be sure to RSVP: https://bit.ly/PassiveIncomePilotsATL112024.

Show notes:

(0:00) Intro

(6:54) 401(k) basics: contribution types, limits, and Roth vs. traditional

(12:47) What happens to contributions after hitting income caps

(15:28) Mega backdoor Roth strategies for pilots

(18:45) After-tax contributions explained for higher retirement savings

(26:27) Tax implications of withdrawals from Roth vs. traditional accounts

(30:47) Spillover 401(k) contributions: how cash balance plans work

(35:15) Conservative investment options within cash balance plans

(51:18) Managing cash balance options after retirement

(52:57) Outro

Article mentioned:

Market Based Cash Balance Plan Considerations for Delta Pilots (By Jesse Reed, CFP®, BFA™): https://creativeplanning.com/insights/financial-planning/delta-pilots-mbcbp/

Connect with Jesse:

• Website: https://creativeplanning.com/team/jesse-reed/
• LinkedIn: https://www.linkedin.com/in/jesse-reed-cfp%C2%AE-bfa%E2%84%A2-a265b335/

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*Legal Disclaimer*

The content of this podcast is provided solely for educational and informational purposes. The views and opinions expressed are those of the hosts, Tait Duryea and Ryan Gibson, and do not reflect those of any organization they are associated with, including Turbine Capital or Spartan Investment Group. The opinions of our guests are their own and should not be construed as financial advice. This podcast does not offer tax, legal, or investment advice. Listeners are advised to consult with their own legal or financial counsel and to conduct their own due diligence before making any financial decisions.