Jill on Money with Jill Schlesinger

Episode 60: Planning for Retirement at 67
Release Date: July 25, 2025

Introduction

In Episode 60 of "Jill on Money with Jill Schlesinger," host Jill Schlesinger engages in a comprehensive discussion with Mike from Chicago about his retirement planning. The episode delves into Mike's financial strategies, concerns about future expenses, and Jill's expert advice tailored to his unique situation.

Caller Introduction: Mike's Financial Profile [02:21]

Mike, a 60-year-old teacher from Chicago, shares his current retirement plan:

• Employment and Income:

  • Plans to work until 67.
  • Current salary: $57,000 per year.

• Retirement Income Streams:

  • Social Security: Expected to receive approximately $2,600/month starting at 67, indexed for inflation.
  • Frozen Pension: Receives $460/month from a pension established 20 years ago, beginning at age 65 with no cost-of-living adjustments.
  • Fixed Index Annuity: Generates $2,200/month starting at 67, also without inflation adjustments.

• Savings and Investments:

  • 403(b) Plan: Approximately $170,000, contributing monthly with a 2% employer match (pre-tax).
  • Roth IRA: Balance of $130,000, contributing $300/month.

• Expenses:

  • Housing: Condo valued at $120,000, fully paid off.
  • Car Payment: $270/month lease, with plans to purchase the vehicle to eliminate this expense in retirement.
  • Other Expenses: Estimated $3,000/month covering utilities and discretionary spending, managed without accruing debt.

Assessing Mike’s Retirement Readiness [03:50 - 07:13]

Jill reviews Mike's financial situation, highlighting strengths and areas for consideration:

• Guaranteed Income:

  • Combined fixed income streams provide approximately $5,200/month, exceeding Mike's current salary.

• Inflation Considerations:

  • While Social Security adjusts for inflation, Mike's pension and annuity do not, potentially leading to a gap as living costs rise.

• Savings Strategy:

  • Mike effectively balances his 403(b) with his Roth IRA, optimizing tax advantages by leveraging pre-tax and post-tax contributions.

Notable Quote:

"You've done a perfect job. You live within your means."
— Jill Schlesinger [07:13]

Strategizing for Future Financial Needs [07:13 - 09:15]

Jill offers tailored advice to ensure Mike's financial stability:

• 403(b) Distribution Strategy:

  • Advises Mike to begin withdrawing from his pre-tax 403(b) at retirement to delay Social Security benefits, enhancing future Social Security payments.
  • Suggests gradual withdrawals to manage tax liabilities and avoid high tax brackets in later years.

• Health Considerations:

  • Mike discloses a diagnosis of a manageable, slow-moving blood cancer, influencing his desire to secure finances sooner rather than later.

Notable Quote:

"You're in really good shape... I like the game plan."
— Jill Schlesinger [13:25]

Managing Required Minimum Distributions (RMDs) [09:57 - 11:17]

Jill explains the implications of RMDs on Mike's 403(b):

• RMD Basics:

  • Calculated based on life expectancy; starting at age 75, Mike would need to withdraw approximately 4% of his 403(b) balance annually.

• Tax Implications:

  • Withdrawals from the traditional 403(b) are taxable, estimated between 12% and 24% depending on the withdrawal amount.

• Investment Strategy:

  • Jill commends Mike's choice of low-expense ratio index funds, emphasizing the importance of simplicity and cost-efficiency in long-term investment growth.

Notable Quote:

"Most people just meet the market... keep your expenses down and you should be fine."
— Jill Schlesinger [11:12]

Final Recommendations and Encouragement [12:22 - 13:27]

Jill provides concluding advice and encouragement:

• Debt Management:

  • Recommends eliminating the car lease to reduce monthly obligations in retirement, aligning with Mike's plan to purchase the vehicle outright.

• Overall Financial Health:

  • Reinforces that Mike is on a solid path towards retirement, with well-structured income streams and savings strategies.

• Personal Circumstances:

  • Acknowledges Mike's health condition, underscoring the importance of ensuring financial plans accommodate potential changes in life expectancy.

Notable Quote:

"I think you're in very good shape... I like the game plan."
— Jill Schlesinger [13:25]

Conclusion

Episode 60 of "Jill on Money" offers valuable insights into personalized retirement planning. Through Mike's case study, listeners gain a deeper understanding of balancing income streams, managing expenses, and preparing for unforeseen health-related financial needs. Jill Schlesinger's expert guidance emphasizes the significance of strategic withdrawals, tax management, and maintaining a balanced investment portfolio to achieve a secure and comfortable retirement.

For personalized financial advice or to join future discussions, visit Jill on Money and click the "Contact Us" button.