In this episode, Kevin Gormley, CFP®, CPA, PFS, breaks down the “Race to 72” and why mastering the sequence of your 401(k) contributions is critical for airline pilots in 2026.

What looks like a simple limit increase is actually a strategic challenge. Kevin explains why pilots must manage their $24,500 deferrals to “beat the company” non-elective contributions (NEC). If company contributions fill the available space too early, you may lose the opportunity to utilize your Roth catch-up space entirely.

Kevin walks through the math for high-earning captains and explains why a “positive election” is no longer optional, especially for Southwest pilots who have a specific new requirement in their portals. Whether you are navigating TFP (Trips For Pay) or hourly rates, understanding these 2026 contribution limits—including the “super catch-up” for ages 60–63—is the key to maximizing your retirement wealth.

The goal is simple: ensure you stay in control of your deck, hit your $80,000+ annual savings target, and avoid the common pitfalls that may stall your retirement strategy.

Key Topics Covered

• The “Race to 72” Overview: Understanding the $72,000 and $80,000+ limits.
• Beating the NEC: Why you must hit $24,500 before the company hits $47,500.
• 2026 Contribution Limits: Breakdown of the $8,000 catch-up and $11,250 super catch-up.
• Southwest Airlines Specifics: How to navigate the new portal “switch” and TFP math.
• Percentage Targets: Why 10% to 13% is the “lucky number” for most pilots.
  
  

Actionable Takeaways:

• Log into your 401(k) and confirm your Roth catch-up election; for Southwest pilots, ensure you have manually entered a percentage.
• Front-load your contributions to ensure you reach $24,500 before company contributions fill the remaining IRS space.
• Aim for the “Lucky Number”: Review your deferral rate and consider targeting 10–13% to ensure your catch-up dollars actually flow in.
• Reach out to the Leading Edge team for a customized calculator walkthrough to confirm your plan settings and math.

The Race to 72 may move fast, but with the right strategy, you can ensure you capture every dollar available for your future.

Timestamps

00:00  Introduction
00:32  New catch-up contribution rule
00:50  The race to $72,000
02:28  What this means for a high-income pilot
03:12  Example calculation
04:52  SWA catch-up contribution positive election
06:10  Wrap up and disclaimers

For personalized guidance, visit Leading Edge Financial Planning or reach out to our team anytime.

Connect with Kevin Gormley

kevin@leadingedgeplanning.com 
865-217-7779