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Pilot Retirement Timeline

Age 50

  • Pilots with 10 years of service are fully vested in the plan at age 50.
  • You can make “catch-up” contributions to the 401K ($5,500 in 2012).
  • Life insurance resets to $70,000 death benefit.

Age 55

  • Allied Pilots Association (APA) Voluntary Supplemental Medical enrollment deadline. Super Saver 401K distributions—Pilots already separated from service can take 401K distributions not subject to the 10 percent penalty.

Age 58 (+8 months)

  • The APA disability income plan has a 14-month exclusion. They will not pay a new claim after this age.

Age 59 1/2

  • An active pilot may make an in-service distribution of the Super Saver 401K account (IRA rollover) and continue to fly for American Airlines.
  • Rule 72t—This technique avoids the 10 percent premature distribution penalty prior to 59 ½. It calls for withdrawal of ‘substantially equal payments’ from your IRA. Please note restrictions apply.
  • All retirements prior to age 60 are considered “Early Retirements” and the B-Fund lock-in feature applies.

Age 60

  • Pilots retiring on the month of their 60th birthday are making a “Normal Retirement,” based on the B-Fund adjusted unit value three months prior.
  • Pilots retiring after age 60 are considered a “Late Retirement” and no lock-in applies to the B-Fund.

Age 62

  • Earliest age to receive Social Security Benefits.
  • Employment income may significantly reduce Social Security benefits until Full Retirement Age (FRA).

Age 64 (+9 months)

  • If you are not already receiving Social Security retirement benefits, it is recommended that you enroll in Medicare three months prior to your 65th birthday.

Age 65

  • Mandatory pilot retirement.
  • If you are already receiving Social Security retirement benefits, Medicare enrollment is automatic.
  • If you elected the Value Plus retirement medical plan, it reverts to the standard plan at age 65.

Age 66

  • This currently is Full Retirement Age (FRA) for Social Security retirement benefits. (Note: FRA transitions to age 67 based on birth year).
  • Employment income no longer reduces Social Security benefits after FRA.
  • Pilots can choose to delay receiving Social Security; benefits increase about 8 percent per year.

Age 70

  • Social Security retirement benefits max out at 132 percent of Primary Insurance Amount (PIA). This is the highest retirement benefit election available.

Age 70 1/2

  • You must begin Required Minimum Distributions from all retirement accounts.

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