The landscape of retirement savings is complex, particularly for United Airlines pilots who face unique choices with their 401k in planning their financial future. The recent introduction of the Market-Based Cash Balance Plan (MBCBP) offers an additional avenue for retirement savings complementing the existing 401k plans.

Today we’ll take an in-depth look at these choices, focusing on how United Airlines pilots can best navigate their 401k contributions in light of the new MBCBP. We will examine contribution limits, potential tax benefits, and the strategic implications of different savings approaches, all designed to assist pilots in making well-informed decisions for their long-term financial well-being.

Should United Airlines Pilots Maximize Their 401k Contributions with the new Market-Based Cash Balance Plan Available?

Many United Airline pilots fund their allowable 401k contribution along with receiving the 17% contribution to their 401k from United.

The most an employee can contribute to their 401k in 2024 is:

  • $23,000 if under 50 years old

  • $30,500 if 50 years old or older

United will also contribute to your 401k, whether you are contributing or not. An employee is only limited to contributing the above numbers, however, the 401k has a separate total limit that includes all contributions; both from you and from United. That 401a maximum is called the 401a Limit.

In 2024, the 401(a) Limit is set at:

  • $69,000 if under 50 years old

  • $76,500 if 50 years or older

Once that limit is hit, United’s 17% contribution does not stop. It must flow into a different bucket. Previously, the 17% went into the Health Reimbursement Account (HRA), which many pilots did not find beneficial. Many pilots we worked with wanted to reduce the spillover, so more company dollars went into their 401k, rather than spillover. However, the new Market-Based Cash Balance Plan, a retirement plan similar to the 401k, is a much more beneficial account that many pilots are wanting to take advantage of.

Now, pilots want to get as much spillover as possible, so this account gets funded more.

Why is the Market-Based Cash Balance Plan (MBCBP) a good option?

  1. The contributions from United are not taxed in the year of the contribution. They are deferred until you take the money out. You can also roll the funds into an IRA when you retire and manage the account by yourself or have a retirement planner like us manage it for you. Much like the 401k.

  2. It will allow you to save even more for your retirement. Many pilots that want to save more for retirement, or are nearing retirement and want to maximize savings, will find this account to be very useful.

  3. Your money will be invested for you, and aims to have a reasonable return of 5-6% per year.

With that being said, you may decide that you want to maximize what United “spills” into your new retirement account (MBCBP). But how can you do this?

Best way to maximize your savings:

The best way to maximize your savings is by maximizing your employee 401k contribution. If you are 50 years old, you can contribute $30,500 into your 401k. United, at 17%, will contribute up to the total limit of $76,500, meaning they will fund the rest at $46,000. Once United has funded $46,000, you have hit the max. From there, United’s 17% will fund the MBCBP. If you are under 50, your contribution max is $23,000 and total max is $69,000. So United still has a contribution of $46,000 to reach your $69,000 limit/

According to our math, if you maximize your 401k contributions, your 401k will max out once your salary reaches approximately $270,000. 17% of all dollars above that will flow to the MBCBP. For example, if your salary is $370,000, you will receive $17,000 into your MBCBP ($100,000 x 17%). In total, you would have added $93,500.

This is a better option than not contributing to your employee contribution. If you decide not to contribute at all, United will have to contribute up to 17% of your salary up to $345,000 into your 401k before it spills over (See 401(a) Limit). For example, if your salary is $370,000 that means your total retirement additions will only be $62,900.

Why Should You Maximize Your 401k Contribution?

In the past, United Airlines Pilots were hesitant to overfund their 401k’s because they did not want excess funds funding the RHA or the HRA. Going forward, pilots can now have the spillover continually fund a retirement account. The other reason to maximize your 401k is that you will be saving an additional $30,500 per year for retirement (50+), plus you can write it off as a tax deduction if you are funding the traditional 401k.

When we do a quick math calculation, we can see the major impact that saving $30,500 can have just on a 10 year timeline. Let’s say you contribute $30,500 per year, for 10 years, and you earn a reasonable return of 8%. How much money will you have after 10 years? When you include compounding interest, your total would be $441,840. Close to half a million dollars in additional retirement savings in just 10 years!

Which should you choose, the HRA or the MBCBP?

From initial discussions, it looks like pilots will only be allowed to choose one option or the other. Should you choose the HRA or the MBCBP?


  • Benefits:

    • Tax-Free reimbursement for most medical, dental, and vision expenses, including copays and premiums

    • Good option for paying medical expenses in retirement

  • Cons:

    • Non-portable. Meaning you cannot move this account at any time. It stays at a trust at United

    • If you and your spouse pass away without using the entire amount, the balance get reverted back into the trust


  • Benefits:

    • Can move the account to an IRA at 59 ½

    • Contributes and grows tax-free

    • Helps you save more for retirement above traditional limits

  • Cons:

    • Investment is controlled by a third-party committee

    • Cannot be used until retirement age of 59 ½

    • Pay income tax when you use the money


Want to maximize your financial plan?

As a CERTIFIED FINANCIAL PLANNER™, I’ve had the privilege of working with over 50 pilots, just like you, to help them chart a course toward a secure retirement and a prosperous financial future. My specialization in United pilot benefits helps equip me to guide you in maximizing your career earnings and benefits. There are many accounts and benefits that we want to help you get the most out of, before you are forced into retirement by current FAA laws. By working with us, we can help you get on the right track to the retirement and financial future you deserve. Let’s get started today.