Flying on a Private Jet – Advantages and Costs


Taking a commercial flight today is “the equivalent of traveling via Greyhound bus in the 1970s,” according to Victoria Person-Goral, one of USA Today’s panel of frequent travelers.
 
It’s not hard to see why she says this. Today’s flight passengers are herded through slow-moving security checks that require the removal of shoes and jackets, as well as being subject to an invasive X-ray. Complain too loudly, and you may be placed on the Federal Government’s No Fly List or charged with a civil fine.
 
When you finally board the plane, you discover your assigned seat is between two strangers, one who keeps sniffling and another whose elbow continually trespasses into your space. There’s no room in the overhead bins for your carry-on. To add your misery, the child behind you spends the entire flight kicking the back of your seat. If you’re really unlucky, you discover on landing that your checked bags are on a different plane headed to the other side of the continent.
 
Fortunately, there is a better way to fly, and it’s not as expensive as you might think.

The History of Private Planes

The Piper J-3 Cub was one of the first airplanes designed for personal use. It sold for just under $1,000 in 1939 and became synonymous with the term “tail-dragger.” In the early years of flight, all planes were designed with a wheel under each wing and another under the tail, hence the name tail-dragger. This design was subsequently modified to simplify ground travel, takeoffs, and landings by moving the third wheel from the tail to the nose of the plane in a tricycle configuration. The Piper Cub carried one passenger and flew at a maximum airspeed of 74 mph. More than 20,000 Cubs were purchased by aspiring pilots, and many of these planes are still flying today thanks to committed hobbyists.
 
The personal aircraft market took off after World War II, with Piper, Cessna, and Beech offering multi-passenger, propeller-driven aircraft that could cruise at more than 100 mph. These light planes could utilize very short runways made of pavement or level pasture. The years between 1960 and 1980 were known as the “Golden Age of Flying” as small and large businesses used airplanes as a substitute for automobiles, trains, and commercial airlines.
 
Today, there are 14,485 private airports in the United States, according to the Federal Aviation Administration (FAA) – nearly three times the amount of public airports (5,116). There are almost 175,000 FAA-certified private pilots. According to the General Aviation Manufacturers Association (GAMA), more than 200,000 private planes were active in the U.S. in 2016, including almost 128,000 single-engine, piston-driven models. Pilots spent more than 24 million hours in flight that year, averaging 135 hours per plane. The average age of private pilots was 44.8 years, with most student pilots learning to fly in their early 30s.

My Experience as a Plane Owner & Pilot

I know from experience how rewarding private aviation can be.
 
In the 1980s, my company had subsidiary operations in small towns from New Mexico to Mississippi. The officers, including myself, visited each site monthly, so every week someone was on the road. Commercial airlines didn’t serve the small communities where our facilities were located, so we had to rent a car and drive several hours to and from our plants and larger airports. Missing a flight led to an overnight motel stay, wasting time and money.
 
In the summer of 1984, two of the traveling executives and I purchased a used 1969 Cessna 210 airplane. The plane had room to carry four to six people with luggage with a load limit of 1,012 pounds. The Cessna cruised at over 200 mph and utilized the short runways common to our sites.
 
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Stretching Your Income to Meet Expenses

Coin stacksIf you just retired, congratulations. You’ve received the gold watch, relished the looks of co-workers who envy your new freedom, and begun to plan that long-awaited European tour you had always hoped to take. Life is good, but you do have concerns – mainly, whether your future income can sufficiently cover your basic living expenses, plus those little extras that make retirement special.
 
Financial experts generally calculate that you need between 70% and 85% of your pre-retirement income to maintain your lifestyle. Even if you were diligent about saving during your working years, it’s likely that your investment portfolio has not yet fully recovered from the recession, and returns are still lower than you expected them to be. How do you ensure that your nest egg is big enough to meet ongoing expenses?

Significant Future Income Increases Are Unlikely

Your future income will be a combination of Social Security benefits and the systematic liquidation and withdrawal of your retirement assets over the remaining years of your life. At age 65, you can expect to live, on average, another 19.1 years, according to the Centers for Disease Control and Prevention (CDC). If you are genetically gifted, however, you may live to 100 or longer – the number of centenarians in the U.S. rose to 53,345 in 2010, a 65.8% increase from 1980.
 
Your initial retirement calculations were probably based upon an annual withdrawal rate of 4% of asset value, a figure most financial planners had generally agreed would provide a stable income for 30 years. Nowadays, however, that percentage is considered by some to be too liberal. Recent studies have suggested that in the current economic environment, withdrawing income at a 4% rate could increase the risk of depleting your assets during your lifetime. Since the level of your future income is uncertain and may be lower than originally anticipated, it would be prudent to reduce your living expenses where possible so that less income is needed to provide the same quality retirement for your remaining years, however long that may be.
 
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Shedding Excess Baggage and Downsizing Before Retirement

Senior coupleThis article first appeared on Forbes.com on February 19, 2014.

If a person’s lifetime was equated to the four seasons of a year, the time following retirement would be the equivalent of autumn. It’s when nature slows down, takes a breath, and appreciates the accomplishments of spring and summer. People generally reach this season in their 60s and 70s, some with trepidation preparing for their remaining years. Many mourn the passage of youth and resent the next generation taking their place in the sun while others, like the poet W.B. Yeats did, choose to “take up life in both hands and care more for the fruit than the flower” in the years following retirement.

Retirement means, for the first time in decades, you have the luxury of worrying only about yourself and possibly your spouse. A new life beckons, pregnant with opportunities and challenges. Unlike your youth, you’ve gained experience and wisdom as well as the confidence that comes from having survived the obstacles and setbacks of starting a family, raising children, and building and maintaining a career. You are free and now face a whole new life full of adventures just waiting to happen.

The End of Accumulation

Youth and middle age are spent chasing dreams, accepting responsibilities, and amassing assets – psychological and physical. If you’ve been diligent and lucky, you’ve accumulated financial wealth in the form of an IRA, 401k, stocks, bonds, and savings. Your employer might have provided additional assets in the form of company stock, a pension, or a profit-sharing account. You may own tangible assets like real estate, art, and collectibles and you’ve also acquired automobiles, furniture, tools, gadgets, heirlooms, and knick-knacks over your lifetime – most of which are rarely used or even remembered.

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Closing the Books – 4 Final Tasks Before Death

man at cemetaryLife’s race is almost over. It’s time to take your victory lap and start preparing for whatever comes next. Completing the following four tasks can help you meet any last obligations to your loved ones, ensure your final days are spent as you want, and reconcile your dreams with the realities of your life. Whatever you have done, or left undone, is past and now is the time to finally realize the wisdom of John Viscount Morley who said, “The great business of life is to be, to do, to do without, and to depart.”

1. Estate Planning
After a life accumulating assets, you want to make sure that they go to the people you love and trust when you pass. If your estate is valued at $5.25 million or less (indexed for inflation), your heirs are likely not subject to federal or state taxes. However, some states may impose a tax even if there is no federal liability (additional complications arise if the surviving spouse is a non-citizen). Executors of estates larger than that threshold must file Form 706 within nine months of the decedent’s death or receive an extension from the IRS.

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This article appeared on the Forbes website January 14, 2014.