HerMoney with Jean Chatzky: Mailbag Episode Summary Episode: “I’m single and retiring soon, how can I make my money last?”
Release Date: June 6, 2025

Introduction

In this episode of HerMoney with Jean Chatzky, Jean addresses pressing questions from single women approaching retirement. Focusing on strategies to ensure financial stability, she delves into topics such as annuities, TIPS ladders, Roth conversions, long-term care insurance, and managing retirement income amidst inflation. The episode features insightful conversations with two listeners, Liz and Bernadette, who share their unique retirement concerns and seek personalized advice.

Caller 1: Liz’s Retirement Planning Concerns

Timestamp: 00:27 – 16:00

Background:
Liz, a longtime listener from outside Washington, D.C., is nearing retirement in the next 12 to 18 months. Without a pension, she relies on Social Security, a Roth IRA, and a traditional IRA. Seeking greater financial security, Liz explores options like annuities and TIPS ladders to ensure a steady income stream in her golden years.

Key Discussions:

1. Annuities vs. TIPS Ladders:

   • Liz’s Consideration: Liz expresses interest in annuities for their guaranteed income but is concerned about the cost, especially with CPI escalators. She transitions to considering a TIPS (Treasury Inflation-Protected Securities) ladder as a more flexible and potentially cost-effective alternative.
   • Jean’s Insight:

     “When we get our money in some sort of a paycheck, we feel a lot more comfortable spending it than if it's an asset that we then have to pull out of an account to spend.” (04:18)
     Jean emphasizes the psychological comfort of receiving a steady income versus managing withdrawals from an investment portfolio.

2. Managing Market Volatility:

   • Liz’s Experience: Reflecting on the 2022 market downturn, Liz notes she managed to stay calm and even invest more during the dip because she was still employed.
   • Hypothetical Scenario: Jean probes how Liz would handle withdrawing funds if she weren't working during a market decline, highlighting the importance of having a reliable income source.

     “I would have a little bit of that [worry], but I kind of like knowing I definitely am covered.” (07:14)

3. Exploring QLACs (Qualified Longevity Annuity Contracts):

   • Jean introduces QLACs as a deferred annuity option that provides income later in retirement, helping to manage longevity and reduce the impact on required minimum distributions (RMDs).

     “A QLAC can help with that [long-term care], but you need to be of the mindset that you're going to live that long and that you're going to want an additional chunk of money at that point.” (11:00)

4. Long-Term Care Considerations:

   • Jean advises Liz to consider hybrid long-term care policies that combine annuities with long-term care benefits, offering flexibility and protection without completely locking up assets.

     “You could build a smaller TIPS ladder and annuitize a smaller amount and know that you are covering your bases that way.” (12:53)

Conclusion for Liz:
Jean recommends a balanced approach, utilizing both TIPS ladders and annuities to secure essential income while maintaining market exposure for growth. She encourages Liz to consult with her financial advisor to run different scenarios and determine the most cost-effective strategy.

Caller 2: Bernadette’s Long-Term Care Insurance Dilemma

Timestamp: 17:35 – 34:37

Background:
Bernadette, a 53-year-old civil engineer from Arlington, Virginia, is single with no dependents. Planning for retirement, she is particularly concerned about long-term care (LTC) insurance. After consulting with an insurance broker, she faces “sticker shock” due to the high costs of traditional and hybrid LTC policies.

Key Discussions:

1. Long-Term Care Insurance Options:

   • Bernadette’s Situation: She received quotes ranging from $3,800 to $4,500 annually for a $6,000 monthly LTC policy, with premiums increasing by approximately $150 each year.
   • Jean’s Explanation:

     “Traditional long-term care policies allow you to use the benefits or you don't, but that's basically what they are.” (21:23)
     Jean explains the basics of traditional LTC insurance and the importance of understanding coverage limits, inflation riders, and premium caps.

2. Hybrid LTC Policies:

   • Bernadette’s Inquiry: She was offered a hybrid LTC policy that combines life insurance with long-term care benefits but found it to be nearly double the cost of traditional LTC.
   • Jean’s Advice:

     “Hybrid policies do double duty. You might buy a life insurance policy that has a bucket of benefits where you can use the benefits for long-term care if you need them.” (24:14)
     She highlights the advantages of hybrid policies, such as providing death benefits if LTC is not used, making them more expensive but offering additional value.

3. Exploring Deferred Annuities:

   • Jean suggests considering deferred annuities as a less expensive alternative to LTC insurance. These annuities provide a stream of income later in retirement, which can be utilized for LTC needs without the high premiums.

     “A deferred annuity... is another chunk of money that you can count on receiving whether or not you need it for long-term care.” (26:27)

4. Employer-Provided Benefits:

   • Bernadette checked with her employer and found no LTC benefits available, prompting Jean to suggest reaching out again or considering group policies through employers, which can be more affordable.

     “He was able to continue that benefit... it was a good way to go about it.” (29:48)

5. Mortgage Considerations:

   • Jean advises Bernadette to factor in mortgage payments into her LTC strategy, suggesting that paying off the mortgage earlier could free up funds for future care needs.

     “When we finish paying the mortgage, we have this additional stream of money that we can use for other things.” (32:08)

6. Balancing Savings and Expenses:

   • Bernadette aims to be "80% there" with her retirement savings, intending to be work-optional within three to five years. Jean emphasizes the importance of balancing current savings with future LTC needs without compromising the ability to enjoy life now.

     “I don’t want to see you put so much into it that you don't feel like you can live your life.” (33:19)

Conclusion for Bernadette:
Jean advises Bernadette to obtain multiple quotes, consider smaller or hybrid policies, and explore deferred annuities as part of a diversified strategy for long-term care. She underscores the importance of not overcommitting financially to LTC insurance to the detriment of current quality of life.

Key Takeaways

• Diversified Income Streams: Combining different financial instruments like TIPS ladders, annuities, and deferred annuities can provide a balanced approach to retirement income, addressing both immediate needs and long-term security.

• Long-Term Care Planning: Early consideration of LTC insurance, including traditional and hybrid policies, is crucial, especially for single individuals. Exploring various options and understanding policy details can help mitigate high costs and ensure appropriate coverage.

• Psychological Comfort: Receiving a steady income through annuities or similar products can provide peace of mind, reducing the stress associated with managing withdrawals from investment portfolios during retirement.

• Professional Guidance: Consulting with financial advisors and insurance brokers is essential to evaluate different scenarios, compare costs, and choose the most suitable strategies tailored to individual retirement goals and circumstances.

Additional Resources and Programs

• Finance Fix: Designed to provide a comprehensive money makeover, helping listeners optimize their finances for retirement and beyond.

• Investing Fix: An investing club for women that meets bi-weekly on Zoom, focusing on building investing knowledge and confidence.

For more personalized advice and in-depth financial planning, listeners are encouraged to subscribe to the HerMoney newsletter at HerMoney.com/subscribe and explore the interactive programs offered by HerMoney.

Note: This summary excludes sponsored segments, intros, outros, and non-content sections to provide a focused overview of the episode's main discussions and insights.