Podcast Summary: Jill on Money with Jill Schlesinger Episode: A Money Reset With Pension Options
Release Date: June 5, 2025

Introduction to the Episode

In this episode of "Jill on Money," host Jill Schlesinger, CFP® delves into the intricate world of pensions and retirement planning. Joined by co-host Mark, Jill addresses a listener's real-life financial dilemma, providing actionable insights to help navigate significant career and financial decisions.

Listener Call-In: Sam’s Financial Situation and Job Transition

Timestamp: [03:20]

Listener Sam from the Midwest reaches out with a compelling financial scenario. After 24 years with his current company, he's contemplating a significant career shift into a new technology role that does not offer a pension plan. Sam's primary concern revolves around how this transition will impact his retirement savings and long-term financial security.

Sam shares:

"24 years with my current company and looking to make a change... the biggest thing I've had to calculate when doing negotiations was I'm an active pension employee in the private sector, and where I'm moving does not have a pension."
(03:27)

Evaluating Retirement Savings

Timestamp: [04:08]

Jill begins by unpacking Sam's current financial landscape. Sam and his wife have meticulously built a robust retirement portfolio, comprising:

• 401(k) Accounts: Approximately $1.6 million combined, with 60% pre-tax and 40% Roth contributions.
• Roth IRAs: Over $400,000, fully converted to avoid pro-rata taxation issues.
• 529 Plans: $170,000 earmarked for their children's education.
• Health Savings Account (HSA): $55,000, primarily unutilized.
• Charitable Self-Directed Account: $10,000, intended for occasional lump sum contributions.
• Brokerage Account: $650,000, self-managed.
• Cash Reserves: Approximately $50,000 to $60,000.
• Primary Residence: Valued at $850,000, with a remaining mortgage of $159,000 on a 15-year term, resulting in a modest monthly payment of $275.

Sam remarks:

"We save. We live below our means."
(07:49)

Pension Options and Retirement Planning

Timestamp: [08:42]

The core of the discussion revolves around Sam's pension options as he contemplates leaving his current employer. Jill outlines the choices:

1. Lump Sum Payment: Sam can cash out his pension, receiving $251,000, to be rolled over into an IRA. However, this option introduces potential tax liabilities and shifts investment risk to Sam.

2. Annuity Options: Opting for a steady income stream starting at different ages:

   • Age 60: Approximately $3,062 per month with a 50% survivor benefit.
   • Age 65: Approximately $4,400 per month with the same survivor benefit.

Jill advises:

"At age 65, you got nothing to worry about. You got nothing to worry about."
(20:05)

Both Jill and Mark analyze Sam's retirement projections, emphasizing that his substantial savings should comfortably sustain his family's financial needs, even without the pension. They consider Sam's plan to continue maxing out retirement contributions and his approach to savings and investments.

Mark adds:

"These guys don't really need it right now... they're in great financial shape."
(17:16)

Financial Planning Insights and Advice

Jill and Mark provide a nuanced perspective on whether Sam should take the pension as a lump sum or opt for the annuity:

• Lump Sum Considerations: While having complete control over the funds, it introduces variables like tax implications and investment performance.

• Annuity Advantages: Offers a guaranteed income stream, providing peace of mind, especially given uncertainties around future Social Security benefits.

Given Sam's strong financial position, the hosts lean towards advising him to defer the pension benefits and continue leveraging his diversified investment portfolio for retirement.

Jill concludes:

"There is no mistake that you could make that would not generate your 10 grand a month that you need in today's dollars."
(12:02)

Conclusions and Takeaways

By the episode's end, Sam opts to enhance his pension benefits by selecting the age 65 annuity option, aligning with his long-term financial strategy and ensuring a stable income stream in retirement.

Sam reflects:

"The lump sum didn't make sense, but unless you gave me some... this is kind of what I was hoping for."
(20:48)

Key Takeaways:

1. Comprehensive Financial Review: Sam’s scenario underscores the importance of evaluating all retirement assets and understanding how changes in employment impact overall financial health.

2. Pension vs. Investment: Deciding between taking a pension lump sum or opting for an annuity requires careful consideration of personal financial stability, investment acumen, and retirement goals.

3. Professional Guidance: Engaging with financial experts can provide clarity and confidence in making significant financial decisions.

4. Personalized Strategy: Tailoring retirement strategies to individual circumstances ensures that financial plans are robust and adaptable to life changes.

Final Thoughts

Jill Schlesinger wraps up the episode by congratulating Sam on his well-informed decision and encourages listeners facing similar dilemmas to seek personalized financial advice. She also reminds listeners about the upcoming webinar with Mike Quincy from Consumer Reports and the benefits of becoming a member of Jill on Money Live for exclusive content and live interactions.

Jill states:

"Change your work, change your wealth, change your life."
(21:40)

Note: The timestamps correspond to the positions in the provided transcript and serve as references for the quoted sections.