Flight Attendant’s Fears
The U.S. airline industry has been among the sectors hithardest by the COVID- 19 pandemic, as most Americansstopped flying for business and leisure as soon as the shutdowns began.
As a result, flight attendants, pilots and other employeesthroughout the industry — including a client of Alexandria,Virginia-based RIA firm Campbell Wealth Management —were urged by the airlines to take voluntary buyouts, extendedtime-off or early retirement packages.
Although U.S. airlines that accepted federal aid under theCoronavirus Aid, Relief and Economic Security (CARES)Act agreed to not cut jobs or salaries of employees until Oct.1, it is widely expected that many will slash jobs and payafter this date.
The situation directly affected Campbell WealthManagement’s client, a single woman who’s “worked forthe airline industry for decades as a flight attendant” andwasn’t planning to retire for a few years, according to CEOKelly Campbell.
The flight attendant contacted a Campbell Wealth advisorin early April and said the airline she works for gave her thechoice of taking a voluntary early retirement package or continuing to work for lower pay, at least for the time being. Thatcreated a dilemma for her, sinceshe’s “not quite ready to retire,”Campbell said.
Plus, she had a major concern
with continuing to fly — the
“danger out there” from poten-
tially contracting the corona-
virus, he said. “Several of her
coworkers actually tested pos-
itive for COVID, and two of
them actually passed away.”
The advisor noted at the
time, “There’s a lot of compet-
ing issues” that she had to
weigh. Moreover, the airline
didn’t give her much time to
make the decision.
As the firm does with everyclient, the advisor went overa financial plan with her andpointed out that if she retiredearly, she’d have less moneyin her retirement accountsand hence might need another source of funds to live onin retirement.
The advisor reviewed this client’soptions with her and how they wouldaffect her retirement planning andoverall investment portfolio.
“From a portfolio standpoint, we were able to really do a
few different things,” Campbell said, such as building “a much
better portfolio strategy.”
Both the advisor and client were optimistic that the airlines
would be back in business as usual eventually, he explained,
adding the client opted to go on a three-month furlough and
get paid just “a fraction” of what she was making.
“The biggest thing that helped her was having that financial
plan and someone to go through it with her and talk to her
about it,” Campbell explained. “She’s in pretty good shape
monetarily” and “did have some emergency funds that she was
able to tap into.”
Campbell also pointed to a client of his firm who works in
management for a public transit agency affected by the pan-
demic. She’s several years away from retirement and recently
widowed, he noted earlier this year.
“The transit system was down 90% on ridership,” the advi-
sor said. For this client, it was “another situation where you’ve
got different things hitting you at once.”
Unlike the flight attendant, this
client didn’t need to fear contract-
ing the virus at work, as the tran-
sit agency was letting her work
Still, “she’s nervous about themarket” and had concerns abouthow this pandemic might jeopardizeher retirement planning, he said.
Although her pay was not cutand “I don’t think” the possibilityof her losing her job was an issue,Campbell said, “it’s still a concern”for her, because there is no way toknow for sure what the future willbring.” What happens if ridershipremains way down even when thingsreturn to normal?
What eased this client’s concernswas that, as was the case with theflight attendant, she will be getting a pension in addition to SocialSecurity when she retires, and discussing her retirement and overall financial plan with the advisorhelped alleviate her fears.