Planning For an Uncertain Future
With airline schedules cut back and airplanes grounded all over the world, it would be natural for you to be concerned about your job. For some of you, job loss is a very real possibility, for others, seniority may provide an additional layer of protection. No matter where you are on the seniority list, I’m sure you are feeling some stress. Your level of stress is probably amplified by the fact that most of what’s going on is completely out of your control. And, it may impact the job you worked so hard to get – and that job is almost impossible to replicate.
In order to help manage the stress, try to focus on things you can control. Things that will help your family get through the crisis and may put you in a better position to find a new job, if necessary.
- Evaluate everything you spend money on each month. Cut out all non-essential spending. Calculate your monthly “essential spending” number.
- Divide your emergency fund by the amount of monthly essential spending calculated above. The result is the number of months you can fund should you lose your job. Adjust this number if your spouse works. Knowing this number is important for you to understand your level of urgency.
- Calculate how much borrowing capacity you have: credit card limits, home equity lines of credit, 401k loan limits, etc. It may be hard to find a bank who is willing to open a home equity line of credit for you right now, but if you can open one, do it. If you are over age 62, reverse mortgage lines of credit may be available.
- Understand your options to defer debt payments should you lose your job. If you still have student loan payments, check out the provisions in the CARES Act.
- If the probability of job loss is high, consider stopping retirement plan contributions. At the very least, consider making new contributions to stable value or cash type investment options so that the money is not subject to market fluctuation in case you need it.
- If your spouse is not working, now would be a good time for him/her to polish off a resume, develop a LinkedIn profile and begin looking around…just to assess what might be available.
- Speaking of LinkedIn, how is your profile? This is the time to become a LinkedIn Superstar. Make your profile attractive to potential employers. Start connecting with others on LinkedIn, and begin networking. You never know when you will need it.
- Determine your Plan B. Your “what if I can’t fly for a while” plan to earn income to support your family. This one is the hardest action. But you can do it – you contingency plan every day. Find a plan B and own it. Get ready, just in case.
- If you are close to retirement, COVID-19 may have forced you off course. You definitely want to review your plan to determine what changes you need to make to your investments, retirement spending and possibly housing. You may also need to consider working after retirement. Now would be a good time to explore options.
Finally, remember that the airlines are a critical part of our nations’s transportation infrastructure and economy. They aren’t going away. You may get furloughed, but the fact remains that tens of thousand of pilots will be retiring in the next 10 years, and pilots will be needed to fill their seats. Or you may have to take a cut in pay or work rules, but you will still have a job. For decades, employment in the airline industry has been a roller coaster ride, and I don’t see any reason that will change going forward. The industry is simply too sensitive to economic downturns and external shocks.
Follow these tips above to help you reduce your stress. And hang in there…this too shall pass.
Information in this material is for general information only and not intended as investment, tax or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision.