Jill on Money with Jill Schlesinger: Episode 39 – "Want to Retire"

Release Date: May 30, 2025

In Episode 39 of "Jill on Money," host Jill Schlesinger delves into the intricacies of retirement planning, addressing listeners' pressing questions and providing actionable financial advice. This comprehensive and engaging episode covers topics ranging from early retirement considerations to optimizing retirement accounts, all presented in an accessible manner devoid of complex financial jargon.

Introduction and Episode Overview

[01:07] Jill Schlesinger:
Jill opens the episode by encouraging listeners to reflect on their financial journeys. She emphasizes the importance of making informed financial choices tailored to individual life stages and goals. Jill invites listeners to reach out via jillonmoney.com to share their stories and engage with the show's content.

Listener Question 1: Early Retirement at 40

[04:00] Greg's Scenario:
Greg, a 39-year-old listener, presents a seemingly unconventional retirement plan. He and his wife, both approaching 40, boast substantial savings and investments:

• Income:

  • Wife: $90,000 per year as a full-time teacher with affordable health benefits.

• Investments and Savings:

  • Brokerage Account: $2.5 million
  • Roth IRAs: $560,000
  • Traditional IRAs: $685,000
  • Savings: $3.5 million

• Real Estate Holdings:

  • 13 rental properties valued at $3.75 million, with an outstanding loan of $2.5 million at 6% interest.

Greg's Question:
"Can we stop contributing to retirement and coast on our investments and rental income to live on $12,000 a month, allowing me to quit my stressful job and spend more time with my young children?"

[05:11] Mark Tularisio's Response:
Mark initially questions the plausibility of Greg's financial standing, suspecting the scenario might be exaggerated. However, addressing the core of the question, he assesses the viability of ceasing retirement contributions based on the provided financials.

Key Insights:

• Investment Growth: Mark emphasizes the importance of ongoing contributions to capitalize on compound growth, especially given the substantial existing investments.

• Debt Management: He advises prioritizing the repayment of high-interest debts, such as the 6% loan on rental properties, to enhance long-term financial stability.

• Sustainability: Before considering stopping retirement contributions, it's crucial to ensure that rental income can sustainably cover living expenses without eroding the principal investment.

Notable Quote:
[05:15] Mark Tularisio:
"I mean, I'm gonna assume it's obviously enough, but if that's the case, then yeah, he could probably do it, but he didn't tell us that."

Listener Question 2: Rebuilding Finances Post-Divorce

[07:00] Paul's Story:
Paul, a 59.5-year-old former professional musician, shares his journey of financial recovery following a divorce and the pandemic's impact on his career. His current financial snapshot includes:

• Income:

  • Truck Driver: $70,000 - $85,000 annually
  • Part-time Wedding Band Gigs: $10,000 - $15,000 annually

• Assets and Liabilities:

  • E*Trade Brokerage Account: $61,000
  • Fidelity Account: $5,500
  • Savings: $20,000
  • Home Equity Line of Credit: $25,000 at 8.75% interest
  • 0% Interest Credit Card Debt: $7,500
  • Home: Fully paid off, but roof requires $10,000 - $20,000 in repairs

Paul's Question:
"Should I convert my current brokerage accounts into Roth IRAs without selling, and is this a viable strategy for someone in my position?"

[09:30] Jill Schlesinger's Advice:
Jill recommends the following steps for Paul:

1. Debt Reduction:

   • Pay down the $25,000 home equity line of credit to eliminate high-interest debt.
   • Address the $7,500 credit card debt promptly to avoid accruing additional interest.

2. Asset Reallocation:

   • Consider partially liquidating the E*Trade account to fund debt repayment without jeopardizing essential living expenses.

3. Roth IRA Consideration:

   • After stabilizing his financial situation, Paul can explore converting remaining brokerage assets into a Roth IRA. This move offers tax-free growth and withdrawals, benefiting his retirement strategy.

Key Insights:

• Tax Implications:
  Converting to a Roth IRA requires paying taxes upfront, which Jill suggests weighing against the benefits of tax-free withdrawals in retirement.

• Financial Stability:
  Prioritizing debt repayment provides a risk-free return by saving on interest payments, enhancing overall financial health.

Notable Quote:
[09:00] Jill Schlesinger:
"A Roth IRA is essentially taking an after-tax dollar like you have in your brokerage account, putting it into an account and investing that for the future... when you take that money out of the Roth, there will be no tax due."

Listener Question 3: Over-Contributing to Roth IRAs

[10:30] Michael's Concern:
Michael inadvertently exceeded the Roth IRA contribution limits due to delayed K-1 income reporting from his LLC. He seeks guidance on rectifying the excess contribution.

[10:45] Jill Schlesinger's Guidance:
Jill reassures Michael that over-contributing to a Roth IRA is a common mistake and details the steps to correct it:

1. Recharacterization:

   • Contact the financial institution where the Roth contribution was made.
   • Request the removal of the excess amount.

2. IRS Notification:

   • Submit the necessary forms to the IRS to report the recharacterization.

Key Insights:

• Timeliness:
  It's essential to address excess contributions promptly to avoid penalties.

• Preventative Measures:
  Jill advises waiting for final tax documents before making IRA contributions to ensure adherence to contribution limits.

Notable Quote:
[11:20] Jill Schlesinger:
"You just have to recharacterize the money. You have to contact the place where you made the Roth contribution and say exactly what you just wrote to us. They'll take the money out."

Listener Question 4: Financial Literacy for Young Adults

[12:00] Tracy's Inquiry:
Tracy seeks recommendations for financial literacy resources for her four adult children, two of whom have taken her advice to engage in financial education during high school.

[12:49] Mark Tularisio's Suggestion:
Mark recommends "Money Watch," a second podcast by the team that focuses on foundational financial principles, making it an excellent starting point for young adults.

[13:00] Jill Schlesinger's Additional Recommendations:
Jill highlights two resources:

1. "Broke Millennial" by Erin Lowry:
   A series of books tailored for millennials seeking to manage their finances effectively.

2. Alternative Online Courses:
   Encourages exploring various online platforms that offer comprehensive financial education.

Key Insights:

• Early Education:
  Establishing financial literacy early greatly benefits long-term financial health and decision-making.

• Accessible Resources:
  There are numerous accessible and engaging resources available to cater to different learning preferences.

Notable Quote:
[13:12] Jill Schlesinger:
"Aaron Lowry's 'Broke Millennial' is pretty good. Check it out. She's a good writer also, and I like her."

Listener Question 5: Optimizing 401(k) Contributions Timing

[14:00] Anonymous Pilot's Debate:
A pilot contemplates whether to front-load 401(k) contributions for maximum investment exposure or to spread contributions throughout the year to mitigate risk during market downturns.

[14:52] Mark Tularisio's Analysis:
Mark advocates for front-loading contributions, emphasizing the historical advantage of getting funds invested early to harness compound growth. He references financial planning coursework that supports investing as soon as possible.

[15:04] Jill Schlesinger's Reinforcement:
Jill concurs, highlighting that market timing is less crucial over long-term horizons and that early investment often yields better returns despite potential short-term volatility.

Key Insights:

• Compound Interest:
  Early and maximum contributions allow investments to grow more substantially over time.

• Market Exposure:
  Staying invested avoids missing out on market gains, leveraging long-term growth trends.

Notable Quote:
[15:04] Jill Schlesinger:
"Even if it's a bad year, by the way, because then there's years where there are bad years. So just get the money to work and stop overthinking it."

Conclusion and Final Thoughts

[16:13] Jill Schlesinger:
Jill wraps up the episode by expressing gratitude to the listeners and encouraging continued engagement through subscriptions and interactive platforms. She underscores the show's mission to empower listeners to make informed financial decisions that align with their life goals.

Key Takeaways:

• Personalized Financial Planning:
  Understanding individual financial situations is crucial for effective retirement planning.

• Proactive Debt Management:
  Eliminating high-interest debts can significantly enhance financial stability and investment potential.

• Continuing Education:
  Leveraging available resources and seeking expert advice fosters better financial literacy and smarter decision-making.

Notable Quote:
[16:13] Jill Schlesinger:
"Change your work, Change your wealth, change your life."

Additional Resources Mentioned

• Upcoming Webinar:
  June 5th at 7 PM ET with Mike Quincy, Consumer Reports Auto Expert.
  Subscribers to "Jill on Money Live" can access this and other exclusive content.

• Books for Financial Literacy:

  • "Broke Millennial" by Erin Lowry
  • "Money Watch" Podcast

This episode of "Jill on Money" offers invaluable insights into retirement planning, debt management, and financial literacy. Whether you're contemplating early retirement, navigating post-divorce finances, or seeking to optimize your retirement accounts, Jill and her co-host Mark provide practical advice tailored to diverse financial scenarios.