Podcast Episode 276: What Can Air Travel Teach Us About Financial Planning?
Traveling by plane is something we do every day and the simplicity of getting from one city to another by air is something that’s easy to take for granted.
But the truth is so much has to happen behind the scenes in order to get travelers from one place to the next on schedule and safely. When you think about it, flying and financial planning have quite a few similarities. On this episode, we’re going to make some comparisons between the two and help you understand the importance of planning.
First and foremost, you need a plan for where you’re going. Every pilot has a flight plan before they takeoff that lays out the path to get them from where they are to their destination. The same thing needs to happen for retirement. Once you’ve saved the money, the next step is to put a plan in place that can get you to where you want to go.
Once the plane has departed and you’re on the way, things often get put on autopilot. But that doesn’t mean the job is done. The pilot must periodically review his course to make sure things are on track and nothing needs to be adjusted. The further the plane goes off-track before an adjustment is made, the more work it will take to get things back in order.
The same thing can be said for your finances. Our job doesn’t end when a retirement plan is built. We need to review things periodically to see how internal and external factors might be affecting your plan and adjust as necessary. Doing this consistently ensures you remain on track for retirement.
When you’re in the air, there’s a pretty good chance you will encounter some turbulence along the way, and each of us will handle it a little differently. As you can guess, this is much like the volatility we get from the market.
Some people will take it in stride and continue following their plan for retirement while others will be extremely uncomfortable. While it’s nearly impossible to completely take the emotion out of the tough times, a proper plan can at least keep you from acting on those emotions, which rarely work out in your favor.
The final comparison we’ll make today is with air traffic controller. You could be the best pilot in the world, but without someone in the tower providing assistance and guidance, you open yourself up to much more risk than you need to. A financial advisor serves as the air traffic controller for a retiree and make you aware of those things you just can’t see or prepare for.
The next time you hop on a flight, take a second to think about all that goes into getting you from point A to point B and remember that the same needs to happen with you money to make sure you arrive safely and securely in retirement.
Here’s what we talk about on this show:
0:51 – You need a flight plan
2:12 – Even autopilot needs to be reviewed
3:51 – Turbulence affects us all differently
6:18 – Air traffic control
7:31 – Mailbag question on 401(k) with former employer
10:30 – Constants in retirement: inflation
13:46 – Planning for healthcare
16:46 – The variable of taxes
18:06 – Variable of life expectancy
19:09 – Variable of Social Security
