After earning a fortune in airline miles, I’ve figured out the economics of exactly how to spend them

Home sweet home.
Home sweet home.
Image: Reuters/Phil Noble
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I took it hard, the first time I had to wait. About 20 people in “Zone One,” not to mention the extra-special people before them, glided past, avoiding eye contact. Desperate to reassert my status, I turned and said to the woman behind me: “You know, I was 1k last year and several years before that.”

She looked at me blankly and asked, “What’s that?”

Exactly. For years, airlines had played on my deepest insecurities. Like most die-hard point-enthusiasts, my goal wasn’t just accumulating miles, it was building status—I lived in an elite-flying world the ordinary flier didn’t even know existed.

Just like the very rich, frequent fliers know that status isn’t just about special treatment. It’s an identity. More than upgrades, express security lines, special hotlines, and free alcohol, elite status defines your place in the hectic and unpredictable world of travel.

I built my mileage balance with a single-minded obsession the way some build their fortunes. Elite status on my airline—most airlines offer a similar status and benefits—could only be earned through sheer hours spent in the air, quantified as “Elite Qualifying Miles (EQMs)”. To make the top tier, 1K*, I had to accumulate 100,000 EQMs a year.

Designing savings and investment strategies for clients’ 401(k) plans, I made up to eight flights every month. To maintain my status, I invested through a complex strategy of buying miles, taking extra connections, and making unnecessary runs to gain more and more EQMs. Every year that I got my “1k” status felt like a huge achievement, celebrated with business-class sparkling wine.

I was a rich woman, in terms of miles. Unlike the common traveler, I never used my accumulated points to buy a flight, because that didn’t build status. I actually said out-loud to people, “Any journey that doesn’t build status isn’t worth taking.”

But as a retirement economist, I know that changing your lifestyle requires changing your investment strategy. For a living, I spend hours reassuring my parents, friends, acquaintances that it’s OK to spend some of their nest eggs in retirement, that’s what they worked so hard for. And now that I’ve retired from business travel and work locally, it makes more sense for me, too, to spend, rather than save my fortune: The low status “elite” levels (all I could hope to achieve now), are not worth the cost and energy of airline loyalty. I fly so irregularly that I’d rarely enjoy the perks anyhow. Yet I am still reluctant to spend down the miles I tried hard to earn. Me of all people.

The reason we save is to have money to spend in the future. But many retirees barely spend their 401(k)s more than the government requires, and I understand why: Running out of money in retirement is a terrifying possibility. I find it scary just to spend my airline miles. But I’ve learned a few lessons about how to “spend down” miles, along the way, without feeling like you’ve lost your identity or security entirely.

Spend strategically: use your miles on high value tickets

How to spend your miles is a hard question. I’ve gone back and forth on whether to spend as quickly as possible or save them. But I’ve settled that the best strategy is to use my miles strategically so I get the best, most comfortable mile for the buck: I pay out of pocket when I fly domestic, and I use miles to pay for expensive overseas flights in business class, and for upgrades.

That’s because domestic flights are shorter flights, so the relative comfort of a better seat feels less vital. They’re relatively cheap, if you book far enough in advance and are open to different airlines, so my mile-per-dollar rate exchange rate doesn’t go very far within the US. But international flights in business class cost thousands of dollars, money I’d rather keep in-pocket. And even then, I make sure I get a good, super saver, rate.

Invest hours and stopovers in your search for the best fare

When I spend miles, I spend hours searching for itineraries, sometimes combining airlines (aided by credit card points), to ensure I always get the super saver fare. If you are willing to put in the time and take a few stop overs, there is almost always a super saver fare where ever you are going.

Evidence shows that retirees save more money on food because they have more time to shop around. Now that I travel less, I also have more time to search for the best fare.

Have an emergency cushion for last-minute travel

There’s a part of me that also needs to keep a stock of miles available—just in case. It gives me some comfort I have enough miles take a spur of the moment trip. So while I’m spending more miles than I used to, I also have a reservation balance I don’t go below. I might change that floor someday, as my points wear down.

With a little creativity, you can still earn miles

To be fair, I am not a true non-saver. Much like modern retirement (which often includes part-time work), my mileage strategy includes creative ways to keep bringing in points even as I spend them. I’ve become strategic in how I use credit cards, using cards that offer point bonuses and allow me to transfer points at a favorable rate on airlines I like to fly.

If you are smart about it, you can enjoy the same old perks while spending less

Even if I am no longer elite, I’ve figured out how to simulate many of those same perks when I fly:

  • I maintain an airline credit card, so I still get priority boarding and checked bags (if I ever checked bags–which I don’t).
  • I may not get free domestic upgrades any more, but few elite fliers get them either anymore. Seat upgrades are now often available for purchase at fairly low prices, at the last minute, instead of given to elite fliers.
  • Besides, I never cared much about upgrades. In domestic the bulk head row can give you the same amount of legroom and proximity to the exit as business class. The only thing you miss is a marginally wider seat, bad free wine and mediocre plane food. If it’s a long flight, I just pay the fee for economy plus and get my favorite seat (7C on a 737).
  • Even in economy-class, you can bring first-rate food and accessories to improve the inflight experience. Of course, having to lug around supplies is contrary to the whole ethos of elite flying—so keep in mind, while it may be more comfortable to bring your own ice cream sundae on board, it does not an elite flier make.

Your status does not define who you are

Most important, I no longer care so much about airline status and am able to focus on more important things. Today, I sometimes feel some pity for elite fliers, because I remember how much time away from home it took to fly 100,000 miles a year. In the end, once I’m on the ground, I’m happier spending more time with friends and family, being able to make plans weeks in advance, and being fully engaged with the people in my life—instead of feeling constantly exhausted from my latest, elite-status trip.

*The highest tier on this particular airline is the super-secretive Global Services, which requires clearing opaque hurdles and a special invite.