Am I Okay to Retire in a Year?

Summary

Podcast Summary: "Am I Okay to Retire in a Year?"

Podcast Information:

• Title: Jill on Money with Jill Schlesinger
• Host/Author: Audacy
• Episode: Am I Okay to Retire in a Year?
• Release Date: April 21, 2025

---

Introduction to Retirement Planning

In the April 21, 2025 episode of Jill on Money with Jill Schlesinger, hosts Jill Schlesinger, CFP®, and Mark Tularsio delve into the complexities of retirement planning. The episode centers around a listener’s inquiry, providing a real-world scenario to explore essential financial decisions surrounding retirement.

---

Listener Profile: Wade from Kansas

At [03:15], Wade from Kansas reaches out seeking guidance on retiring within the next year. Wade is 64 years old, and his spouse is 61, both contemplating retirement. His primary concern is ensuring a smooth transition without financial missteps.

---

Financial Overview and Assets

Wade provides a comprehensive overview of his financial landscape:

• Pension: He is entitled to a pension of approximately $78,000 annually with a 50% survivor benefit for his spouse. Opting for a 100% survivor benefit would slightly reduce this to $70,800 annually ([04:20]).
• Retirement Accounts:
  • Wade: $800,000 in deferred compensation, $300,000 in Roth IRA, and $500,000 in Traditional IRA.
  • Spouse: $600,000 split evenly between Traditional and Roth IRAs.
  • Additional Investments: Each has $16,000 in Roth IRAs, $35,000 in HSA, and significant rental real estate valued between $1 to $1.2 million with minimal mortgage remaining.
• Real Estate: Wade owns six rental properties generating $40,000 to $50,000 annually post-expenses.
• Savings: Approximately $80,000 in plain savings.
• Primary Residence: Valued between $450,000 to $500,000 with no remaining mortgage.
• Dependents: Two adult children, with potential responsibilities towards aging parents.

---

Retirement Strategy Discussion

At [08:55], Mark poses the crucial question regarding Wade’s monthly expenditures of $7,000. This prompts an in-depth discussion about aligning Wade’s income sources with his retirement expenses.

Key Points Discussed:

1. Pension Decisions:

   • Mark's Recommendation: Retire next year and secure the $70,800 pension with a 100% survivor benefit ([09:25]). This ensures stability and maximizes survivor benefits for his spouse.
   • Wade's Consideration: Evaluating whether to delay Social Security benefits to age 70 for increased payouts.

2. Social Security Strategy:

   • Delayed Benefits: Mark advises delaying Social Security to optimize benefits, leveraging lower tax brackets and maximizing growth in retirement accounts before withdrawal.

3. Investment Management:

   • Traditional IRA Utilization: Suggesting withdrawals or conversions to Roth IRA to manage tax liabilities effectively.
   • Brokerage Accounts: Considering opening a brokerage account with firms like Schwab for flexible investment options post-retirement.

4. Rental Property Management:

   • Current Setup: Generating substantial income but requiring significant management effort.
   • Options:
     • Maintain Ownership: Continue managing with potential hiring assistance.
     • Sell Property: Weighing the tax implications, including capital gains and depreciation recapture, against the hassle of management.

5. Estate Planning:

   • Confirmation that estate planning is in place, ensuring assets are managed according to Wade and his spouse's wishes ([15:00]).

6. Pension Lump Sum Option:

   • Decision Against Lump Sum: Mark cautions against opting for the lump sum, emphasizing the value of the guaranteed pension income over potential, but uncertain, gains from lump sum investments ([15:27]).

---

Insights & Expert Advice

Mark provides tailored advice, emphasizing the importance of guaranteed income streams and strategic timing for Social Security benefits. He highlights the benefits of maintaining pension structures over risky lump sum alternatives, especially given Wade’s solid financial foundation and health status.

Notable Quotes:

• Mark Tularsio at [09:25]: “My inclination is you retire next year and you take the $70,800 that guarantees, that one with a 100% survivor benefit.”
• Mark Tularsio at [15:27]: “I like a guarantee. And you've got plenty of money and you've got plenty of risk. And there's no reason to buy or pay for somebody's services when you have all the money you need.”

---

Conclusion: Confidence in Retirement Readiness

By the end of the discussion ([15:53]), Wade gains confidence in his retirement plan, appreciating the hosts' emphasis on secure income sources and strategic financial planning. Mark and Jill encourage listeners in similar situations to reach out with their questions, reinforcing the show's mission to provide clear, actionable financial advice.

---

Final Thoughts: This episode serves as an invaluable guide for individuals nearing retirement, illustrating the significance of comprehensive financial assessments and informed decision-making. Through Wade’s example, listeners gain insights into balancing pensions, Social Security, investments, and real estate to achieve a secure and fulfilling retirement.

Transcript

[Jill Schlesinger]

Hey gang, I was a small business owner. I know how hard it is and starting your business should actually be simple. Now you can get more when you start your business with Northwest Registered Agent, your entire business Identity in just 10 clicks and 10 minutes. Northwest registered agent provides more privacy, more guidance, and more freedom to run your business from anywhere. If you want to build your business while keeping your personal information secure, Northwest is the partner you need. In just 10 clicks and 10 minutes, they'll form your business. Create a custom website and set up your local presence wherever you need it. Don't wait, protect your privacy, build your brand and set up your business in just 10 clicks. In 10 minutes, visit northwestregisteredagent.com Jill and start building something amazing. Get more with Northwest registered [e-mail] Jill hey everyone, quick shout out to Whole Foods Market. You know I'm all about eating fresh and finding quality ingredients and that's exactly what Whole Foods delivers. Whether you're grabbing organic produce, high quality meats, or just a quick healthy snack, they've got you covered. Plus they're all about sustainability and supporting local farmers, which I love. Next time you're grocery shopping, check them out. You'll taste the difference. Spring is the perfect time to refresh your table and Whole Foods Market has everything you need hosting brunch. Picture this. Flaky buttery quiche, crispy bacon, fresh berries, and of course cold pressed orange juice to brighten up your morning. And if you're in the mood for something fizzy, check out their seasonal Italian sodas, Berry blend and orange hibiscus are total must tries. So whether you're planning a casual get together or a full on feast, Whole Foods Market has you covered. Make Whole Foods Market your destination for all spring gatherings.

[Mark Tularsio]

Welcome to the Jill on Money show. It's Monday, April 21st and we are here trying to help you make better or maybe less bad, maybe just more thoughtful financial decisions. And so often our finances and our real lives are very interconnected. So really when I think about it, if you're making a big decision about your life, maybe it's a relocation, a new job, whether or not to send your kid to a very expensive private school or whether you should take an early retirement or can you afford to retire at all? Any of those questions, we are here to help. Both Mark and I are certified financial planners so we took a bunch of hard tests. I was actually a financial planner, a working one for a while, 15 years or so and don't do that anymore. But we Love talking to you. We love hearing what's on your mind. If you've got a question, go to jillonmoney.com, click the contact us button. And if you want to join us live after you write that note, just check the box, Mark. We'll do everything else. While you're on the website, sign up for the free weekly newsletter. Check out all the good stuff that lives there. We've got podcasts that are like this one. And Money Watch, our sister broadcast. We've got a radio show, blog, video, book, resources.

[Jill Schlesinger]

It's all there.

[Mark Tularsio]

Okay. Right now, let's talk to Wade, who joins us from Kansas. Hello, Wade. What can we do for you today?

[Wade]

Well, good morning. I am looking at retiring in about a year, and it seemed like there are a lot of decisions to make. We just want to make sure we don't mess things up.

[Mark Tularsio]

Okay. How old are you, Wade?

[Wade]

I'm 64.

[Mark Tularsio]

Okay, and who's the we? You got a spouse?

[Wade]

I do have a spouse.

[Mark Tularsio]

And how old she is?

[Wade]

61.

[Mark Tularsio]

Okay. And is she working also?

[Wade]

Yes, she is.

[Mark Tularsio]

Is she going to retire with you in a year?

[Wade]

She's looking at about the end of next year when she reaches that magic age of 62.

[Mark Tularsio]

Okay, so for you, you want to basically, would it be ideal to give your notice, like, at the end of this year and be done, like, what are we looking at? What do you think?

[Wade]

Probably looking at about April, April 1st of next year? No.

[Mark Tularsio]

Okay, got it. No fooling. Got that, Mark. Okay, so are either of you going to be entitled to a pension?

[Wade]

Yes, I will be.

[Mark Tularsio]

Tell me about that pension.

[Wade]

We kind of are settling on A. About 78,000 a year with a 50% survivor benefit.

[Mark Tularsio]

Wow, that's a nice pension. That's great. So a 50% benefit for your wife. And do you have any idea what the number is? If it were 100% survivor benefit? I just wanted to understand, like, the differential.

[Wade]

If we did the 100% Survivor, it's about 5,900amonth. So 70 short of 72,000.

[Mark Tularsio]

Not that big a difference. Why did you think about the. I'm just wondering for the. For you guys.

[Jill Schlesinger]

Why.

[Mark Tularsio]

Why do you think the 50% and maybe it's like your health issues, but, like, you know, obviously women, she's a little younger, and women do tend to have longer life expectancies than men. So why do you think you're settling at the 50% survivor?

[Wade]

Because we were thinking of taking Social Security at different times. Me waiting till 70 and her taking it at 62. And if I predeceased her, then she would step up to a higher amount. But we're open to suggestions.

[Mark Tularsio]

Okay. All right, so I just want to make sure I got the numbers here. So 78,000 is 50% survivor. About a little over. It's 70,800 with 100% survivor. Okay, now tell us about what you've saved so far. In addition to that pension, I have.

[Wade]

About 800,000 in our deferred comp plan, about 300 in Roth and about 500 in traditional.

[Mark Tularsio]

Wow, that's great. You got into the Roth, you know, to defray some of that time bomb that's ticking, going to explode for the required minimum distribution. So that's great. Okay, 300. 500 for your deferred components. How about your wife? Does she have a retirement plan as well?

[Wade]

She does. She has about 600,000 in hers, and that's about evenly split between Traditional and Roth.

[Mark Tularsio]

Okay, great. Do you guys have other investments besides those retirement accounts?

[Wade]

We do. We have about 16,000 each in Roth IRAs.

[Mark Tularsio]

Okay.

[Wade]

We have about 35,000 in HSA. We have rental real estate worth probably a million to a million two.

[Mark Tularsio]

My goodness. My goodness. Okay, and is that. That's generating lots of cash flow for you guys. Do you own it outright?

[Wade]

We have a small mortgage left, about $30,000.

[Mark Tularsio]

How cute, right? It'll be paid off in three months or something. Okay. And it's worth a million bucks. And so. And you're renting it out. And it's. It's easy. You're gonna keep this property or you intend to sell it?

[Wade]

We might sell it. And that was another question is what would we do after paying capital gains tax if we netted a million dollars?

[Mark Tularsio]

What'd you pay for that rental? I said, because there's only 30 grand left. I wonder how long ago you must have purchased it.

[Wade]

We've had them about 12 years, and we've got quite a bit of gain.

[Unknown]

Is this in Kansas?

[Wade]

Yes.

[Unknown]

It's one property for a million dollars.

[Wade]

It's a group of rental. Group of houses.

[Mark Tularsio]

There's okay, six.

[Wade]

Six properties.

[Mark Tularsio]

Oh, my God. And you manage the whole thing yourself?

[Wade]

Yes. With her?

[Mark Tularsio]

Well, yeah. I mean, see you. You guys, the royal you. Wow, that's a lot of work, huh?

[Wade]

It is. That's why there's contemplating maybe.

[Mark Tularsio]

Yeah, right. Exactly how much income does that rental generate for you?

[Wade]

After all expenses, taxes and everything clears. 40 to 50,000 a year.

[Mark Tularsio]

Okay, so we got the two Roth IRAs, the HSA, all your retirement Accounts? Any brokerage accounts?

[Wade]

No, we don't right now.

[Mark Tularsio]

Okay. Plain old savings money in the bank, about 80,000. Okay. How about your primary residence? How much is that worth?

[Wade]

450 to 500,000.

[Mark Tularsio]

And is there any mortgage remaining?

[Wade]

No, there's not.

[Mark Tularsio]

Do you want to stay there?

[Wade]

Yes.

[Mark Tularsio]

Ah, that was easy. You have adult kids, all set, grown and things like that?

[Wade]

We have two. One's all set. One's almost all set.

[Mark Tularsio]

Okay. Parents that you have to take care.

[Wade]

Of potentially, but I don't think it's. I mean, there could be some things there as they're getting older.

[Mark Tularsio]

Okay, fair enough. All right, you ready for the hardest question? As always, Wade.

[Wade]

Yes.

[Mark Tularsio]

You've come in, you've given me all this beautiful information. How much money do you guys spend right now?

[Wade]

7,000Amonth.

[Mark Tularsio]

What?

[Jill Schlesinger]

That's it?

[Mark Tularsio]

So what's going on for you? Why'd you call us? You wanted, like, a strategy. You want, like, tell me what's really behind this. If you only spend seven grand a month and we know that your pension is going to be, you know, maybe 70 or 78,000, what. Is there something that's worrying you?

[Wade]

I think what we're looking at is the best strategy for moving forward. Should we delay that Social Security, like we're thinking? Should we begin to take it at retirement?

[Mark Tularsio]

You and your wife are in good health, is that right?

[Wade]

Yes, we are.

[Mark Tularsio]

Here's my inclination. My inclination is you retire next year and you take the $70,800 that guarantee, that one with a 100% survivor benefit. Okay.

[Wade]

Okay.

[Mark Tularsio]

And then you delay. Everyone's going to delay their Social Security. You know, you're going to basically wait. She'll wait to her full retirement age. She doesn't have to claim at 62. There's no reason to. She's gonna have a long life, I hope. And you've got plenty of money. Is there any reason, Mark, that Wade's wife should claim at 62?

[Unknown]

Unless there's something that we don't know. No, I don't see it. Based on the information we know, and definitely 100% survivor benefit, the difference is not that big.

[Mark Tularsio]

It's really not that big. It's a guarantee, Wade. You know, and that's the thing. That's nice. And you guys will have. Between your Social Security benefits and your pension will cover most of your needs. I would even think delaying your Social Security to 70 will allow you to start taking some. A little bit of money out of that traditional IRA or convert some of that IRA money Because, I mean, you don't have a ton of risk here. But you know, the half a million dollars that you have in your traditional. The 300 in her traditional, just going to keep growing. So it would be nice to kind of start to get it out when you know your tax bracket's low. That might be another reason to just start to either convert and, or take money out of those accounts just to kind of get the money taxed already and you got a beautiful asset to live on or leave to your kids. The rental is kind of interesting to me, Mark. You want to sell the rental?

[Unknown]

I mean, it just depends on how much of a burden it is. It's generating pretty good cash flow.

[Mark Tularsio]

Yeah, that's what I'm thinking. But do you have kids? Will either of your kids be interested in that property?

[Wade]

They have both said no.

[Mark Tularsio]

Oh, okay. That was very clear, I guess. Could you hire someone to do the maintenance and like manage it for you?

[Wade]

We could do that.

[Mark Tularsio]

I mean, it would eat into your profit. But I mean, if you bought that property, I don't know how much you paid for it. But when you have rental property, of course once you sell it, you have to pay a capital gains on the difference between what you bought it for plus any improvements and then what you sell it for. Right, right. But with rental income, you also have to recapture the depreciation that you claimed on your taxes all those years when you owned it. So what does that mean? It means that it could be a significant tax bill. I mean, it doesn't. I don't want it. Doesn't mean you shouldn't sell it. But I'm just saying it could be. If you're going to sell it, just you're like, you know what, I'm done. Who cares? Then what I would do is I would think about perhaps using some of that money and just putting it into a brokerage account. How do you feel about managing your own investments?

[Wade]

I think we're good with that. We've pretty much done that over the course of time.

[Mark Tularsio]

Okay, great. So where is the Roth IRA account and the traditional. Like when you, when you're done working, where, where we roll, we may leave it with the employer.

[Wade]

With the employers? The company that does the employer plan.

[Mark Tularsio]

Okay. And you'll manage the investments. But if you were to open a brand new brokerage account, where do you think you would do that?

[Wade]

Probably with Schwab.

[Mark Tularsio]

Okay, great. So if you open up a Schwab account and then you would invest it and you know, obviously this is money that you can use very easily for anything you want but you don't have to make it like so risky. Right, right. That's what I would say. It's hard to sell that thing because it is going to trigger a tax liability. On the other hand, I don't know where taxes are going to go in the future. So the only way that it works, you know, best for you in terms of your family, not you personally, is if you were to pass away or I guess upon the death of the second of your survivor, you or your wife, whenever the second one passes away, the kids would inherit the property and they would get a step up in cost basis. Meaning, I don't know. Let's say you bought the property for $300,000 and now it's worth a million and you drop. You guys died the next day. It would be as if your kids inherited the house, as if they bought it at a million dollars. So the advantage of a step up is for the next generation, not for you personally, if that doesn't bother you, maybe just, you know, and it does get to be somewhat cumbersome, then you can sell it and pay the taxes. It's not that big a deal. Or let's find out if there is a management fee of some sort.

[Wade]

I think that we would be looking at today about $150,000 in taxes, capital gains tax and a management fee of about 10% of the gross rents.

[Unknown]

So I mean the pension plus the rental income, boom.

[Mark Tularsio]

Yeah, it's all good. I would hold on to it. I would hold onto it for a little bit and just see how things move. And maybe someone comes in and pays you a dumb price. You know, things have happened like that. But if it's not too much of a burden. You will not make a mistake either way, Wade. You really will not. It'll be fine. I think. I really think you're going to be good. Have you guys done your estate planning?

[Wade]

We have done that, yes.

[Mark Tularsio]

Excellent. I think we're done with you. Do you need anything else from us?

[Wade]

I've got one more question.

[Jill Schlesinger]

Do it.

[Wade]

Going back to the pension, there is a lump sum option and I've had a couple of advisors say that they could make us more money. We took the lump sum.

[Mark Tularsio]

Did you hear Mark Tularsio laugh in the background, Wade? Did you hear him say, I heard.

[Wade]

That and I've kind of laughed myself.

[Mark Tularsio]

Yeah, I think that is often what an advisor would say. I like a guarantee. And you've got plenty of money and you've got plenty of Risk. And there's no reason to buy or pay for somebody's services when you have all the money you need. Are they going to guarantee that? I doubt it. That pension is a guarantee, and that's one of the reasons we like pensions. Guarantees are very nice, especially as you.

[Unknown]

Get older and especially with a survivor benefit.

[Mark Tularsio]

Yeah, exactly. Right, exactly. So I think no to that. That's your extra bonus question. You get a no, thank you. No, thank you. Very nice to talk to you, but no, thank you. Wade, we wish you the very best of luck. Enjoy your last year of work. Savor all of those times where you'll be like, oh, this is the last time I'm going to have to listen to this person drone on at a meeting. That's going to be great. And you just, like, click it away in your head. If you are like Wade and his wife and you are thinking about retirement or you've got a conversation started about when you might want to retire, or maybe it is something completely different. You're just starting out and you want to know the game plan that you should pursue, maybe trying to help you with your prioritization. Give us a Holler. Go to jillonmoney.com, click the contact us button, write us a note, let us know if you want to come on the air live. And Mark will do everything else. Don't forget that everything that we do lives on our website, jillonmoney.com youm can subscribe to us on the Odyssey app or wherever you find your favorite favorite podcast. Please leave us a rating and review wherever you listen and, of course, lift someone up. Change your work, change your wealth, change your life. Thank you for listening. We'll talk to you tomorrow.

[Alex Asulin]

Hi, I'm Alex Asulin, and I'm inviting you to listen to Asulin's official podcast, Culture Lounge. For the last 30 years, Asulin has created books at the center of culture and luxury, covering everything from wine and watches to fashion, travel and Formula One. Now we're inviting you into our world through a new and exciting medium. Join me on Culture Lounge, where you will hear intimate conversations with icons like Erin Lauder, Linda Fargo, Mario Carbone, curators from Sotheby's, and the world's best sommelier, all gathered like old friends at a beautiful bar, discussing their deepest passions, sharing stories, and giving us their best advice. It's like eavesdropping on the most interesting conversation you could ever imagine. Culture Lounge is available wherever you get your podcast. Tune in now to be inspired and learn something new.

[Jill Schlesinger]

Buying a home in California can certainly feel intimidating. We hear from listeners all the time throughout the state, and they want to know, where can they even start? Many of them find that turning to a realtor changes changed everything. Realtors can help buyers understand what they can afford. They can explain all of the steps that are involved in purchasing a home, and they can walk you through every detail, from making an offer to closing the deal. Working with a realtor can help you feel less alone or unsure about the process and that peace of mind that is the power of having a realtor by your side. Whether you're ready to move or just starting to dream, don't go it alone. Don't let what you don't know stop you from starting your next chapter. Find your [e-mail] that's championsofhome.com.