Anxious About Retirement Plan

Summary

Podcast Summary: "Anxious About Retirement Plan"
Jill on Money with Jill Schlesinger
Release Date: April 16, 2025

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Introduction

In the April 16th episode of Jill on Money with Jill Schlesinger, host Jill Schlesinger and her co-host Mark, both Certified Financial Planners (CFPs®), delve into the often nerve-wracking topic of retirement planning. This episode, titled "Anxious About Retirement Plan," centers around a listener call from Laverne and Shirley, a couple from upstate New York grappling with uncertainties as they approach their planned retirement.

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Caller Profile: Laverne and Shirley

Laverne and Shirley, both 61 years old, have meticulously planned for their retirement, aiming to retire in September of the same year. Their house, valued at approximately $400,000, is nearly paid off with just $6,000 remaining on their 3% mortgage. Despite their financial preparedness, recent market fluctuations over the past two weeks have ignited anxiety about their retirement plans.

Jill Schlesinger (04:00) introduces the callers warmly:

“Welcome to the Jill on Money show. It is Laverne and Shirley from upstate New York.”

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Financial Overview

Jill begins by assessing the couple's financial standing, uncovering a robust portfolio designed to support their retirement.

Retirement Accounts:

• Laverne's 401(k): $752,000 (Traditional)
• Tax-Deferred Annuity: $95,000, providing $1,230 monthly for life
• Roth IRA: $10,000
• Certificates of Deposit (CDs): $25,000
• TIAA Intelligent Variable Annuity: Started at $100,000, now $212,000
• Inherited IRA: $16,000 with Required Minimum Distributions (RMDs) of $600 to $800 annually
• Shirley's Rolled-Over 401(k) into TIAA IRA: $294,000

Managed Portfolios:

• Bonds-Focused Portfolio: $988,000
• Equity-Mixed Portfolio: $961,000

Cash Holdings:

• Total Cash: $380,000
  • CDs: $100,000
  • Reserved for Renovations: $200,000
  • Checking Accounts: $30,000

Health Care:

• Shirley's RIPA Account: $130,000 earmarked solely for insurance premiums until Medicare eligibility

Monthly Expenses:
Approximately $8,500, including $1,000 allocated for travel, bringing actual living expenses to about $7,500.

Social Security Benefits:

• Laverne:
  • At 67: $3,124
  • At 70: $3,900
• Shirley:
  • At 67: $2,880
  • At 70: $3,574

Jill Schlesinger (06:03) acknowledges their substantial savings:

“That's a lot of moolah. You guys have done great.”

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Concerns: Market Volatility and Retirement Timing

The primary source of anxiety for Laverne and Shirley stems from recent market downturns, which have shaken their confidence in retiring as planned. They fear that a potential further 20% drop in the market could significantly impact their financial stability.

Laverne (04:42) expresses their dilemma:

“But the last two weeks has made us really nervous and anxious, and now we're not sure what we should be doing.”

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Expert Advice: Mitigating Retirement Risks

Jill and Mark provide strategic insights to help alleviate the couple's concerns, emphasizing their strong financial foundation.

Strategies Discussed:

1. Gradual Withdrawal Strategy:

   • Instead of withdrawing all funds at once, they suggest tapping into specific accounts first, such as the traditional TIAA IRA and the tax-deferred annuity. This approach preserves the bulk of their portfolio, allowing continued growth even if the market declines.

2. Annuitization:

   • Jill proposes annuitizing the traditional TIAA 401(k) to receive equal payments over a set period, thereby reducing the need to withdraw large sums during market lows.
   • Jill Schlesinger (15:37) recommends:

     “Maybe a way around that is to lock down the fact that you can cover your fixed expenses and not worry if the market were to tumble another 20% from here.”

3. Maintaining a Balanced Portfolio:

   • With an asset allocation of roughly 60% bonds and 40% equities, their portfolio is diversified to withstand market volatility. Bonds, having already performed well, provide a buffer against equity downturns.

4. Utilizing Existing Annuity Products:

   • Since they already hold multiple annuity products through TIAA, leveraging these can provide steady income without the need to liquidate investments during unfavorable market conditions.

Mark (10:29) reassures them of their financial health:

“They may be concerned over the, you know, because of the last couple of weeks or so, but I'm not very concerned.”

Jill Schlesinger (14:52) adds:

“If you're anxious, it may be worth it because you're already in this product and you already own the tax deferred annuity.”

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Reassurances and Final Thoughts

The hosts emphasize that Laverne and Shirley are well-prepared for retirement, highlighting their diversified investments, substantial cash reserves, and comprehensive health care plans. They encourage the couple to consult with their financial advisor to tailor the withdrawal strategy that best fits their comfort level amidst market uncertainties.

Shirley (17:17) shares her relief:

“I just gotta say, this really puts our minds at ease, Jill.”

Jill Schlesinger (17:35) concludes with optimism:

“You are very fortunate that you had family that left you these, you know, big pile of assets. Let's take advantage of it. You never know what happens next, so enjoy it.”

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Conclusion

This episode of Jill on Money serves as a valuable guide for retirees or those approaching retirement who may experience anxiety due to market fluctuations. Through a detailed analysis of Laverne and Shirley's financial situation, Jill and Mark demonstrate how comprehensive planning, diversified investments, and strategic withdrawal strategies can provide peace of mind and financial security in retirement.

For listeners with similar questions or concerns about retirement planning, career changes, or navigating economic uncertainties, Jill Schlesinger invites you to reach out via jillonmoney.com and engage with the show’s resources for personalized advice.

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Notable Quotes with Timestamps:

• Jill Schlesinger (04:27):

  “Well, my wife and I, we'd been planning on retiring in September of this year when our house is going to be paid off and we'll both be 61. But the last two weeks has made us really nervous and anxious, and now we're not sure what we should be doing.”

• Mark (10:29):

  “They may be concerned over the, you know, because of the last couple of weeks or so, but I'm not very concerned.”

• Jill Schlesinger (15:37):

  “Maybe a way around that is to lock down the fact that you can cover your fixed expenses and not worry if the market were to tumble another 20% from here.”

• Shirley (17:17):

  “I just gotta say, this really puts our minds at ease, Jill.”

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Resources Mentioned:

• Jill on Money Website: jillonmoney.com
• American Express Business Platinum Card: americanexpress.com
• Leukemia and Lymphoma Society – Student Visionaries: lls.org

Transcript

[Jill Schlesinger]

Hi, this is Jill Schlesinger. I used to own a small business and now I talk to a lot of business owners like you who know that having the right partners in place can help you take your business to the next level. Partners like American Express that give you access to world class business and travel benefits so you can get more for your business wherever it takes you. With the AMEX Business Platinum Card, you can earn 1.5x Membership Rewards points on select business purchases. And you can get complimentary access to more than 1,400 airport lounges worldwide, including the Centurion Lounge. So you can keep running your business while you're on the go. See how the AMEX Business Platinum Card gives business owners like you the tools and rewards that can help move your business forward. Terms and points cap apply. Learn [e-mail] AmExBusiness do you know a high schooler who's a natural leader who wants to create change by bringing people together? They could be one of the next Student Visionaries of the Year candidates across the country form power fundraising teams uniting with the Leukemia and Lymphoma Society to honor a local child with blood cancer. Through this seven week philanthropic leadership program, students build valuable skills like project management, entrepreneurship and financial literacy. Something I wish I'd learned at that age. Plus, it helps them stand out on college applications. But most importantly, it's a chance for students to connect meaningfully with their communities and make a real impact on blood cancer patients and their families. Learn more about Student Visionaries of the [e-mail] students that's lls.org students.

Welcome to the Jill on Money show. It's Wednesday, April 16th. Okay, no more whining about taxes. It's done. Either you filed extension or you didn't. But it may have even helped you surface some financial issues that you'd like to discuss with us. Because, gang, this is the program that takes the mystery out of your financial life. Mark and I are both certified financial planners. We love talking to you. This is the best part of my week. I mean, the television stuff is fine. They dial you up and all that nonsense. This is by far the best part of my job. Mark, I'm sure that the best part of your job is just listening to my unending, droning voice for hours and hours after we record. Every week, right?

[Mark]

It's all day. Every day. Yeah.

[Jill Schlesinger]

Oh my God. Do you hear my voice? More than anyone else in your life. More than your son, More than your wife.

[Mark]

Well, definitely more than Amanda. But Theo gives you A run for your money. Because Theo is a chatterbox. And sometimes I'm like, theo, isn't your mouth tired? I mean, he just goes, goes and goes.

[Jill Schlesinger]

That's so funny. Well, I go and go and go. And that's part of the allure of us. Mark is more of our behind the scenes guy, but I do love that he now is on the microphone. Mark, how long did it take us to get you out from the shadows and talking?

[Mark]

Well, we started working together in 2011. I don't think I really, really started coming on. It was probably around 2017 or 18.

[Jill Schlesinger]

It was like, maybe when you were. Got the CFP. Maybe.

[Mark]

Yeah. You know, it was probably even later than that. It was probably more like 2019. 2020.

[Jill Schlesinger]

Right. Because it was like, you're like, not until I have the credentials.

[Mark]

Yeah, Some sort of. Some. Some legitimacy. So, yeah, we. It was a good decade that we worked together. And you would just refer to me, and people are like, does this person even exist?

[Jill Schlesinger]

Well, the best one was when they thought we were married. I love that so much. As you now know, gang, not happening for either of us. Okay, so if you have a financial question, if something's going on, go to Jill on money dot com, click the contact us button. You know the whole drill. So listen, without further ado, let's get to our listeners who join us today. It is Laverne and Shirley from. Weren't they from Milwaukee? I think. But these guys are not from Milwaukee. They're from upstate New York.

Hello, ladies.

How are you?

[Laverne]

Good. Thanks so much for taking our call.

[Jill Schlesinger]

Oh, happy to do this for those who are not well versed in certain set television history. Mark, did you watch Happy Days and Reruns? You couldn't.

[Mark]

Oh, yeah, yeah, yeah.

[Jill Schlesinger]

Did you watch Laverne and Shirley?

[Mark]

Yeah, of course. Yep, yep. I can see. I can see the conveyor belt moving now.

[Jill Schlesinger]

Okay, very good. And it was, wasn't it Milwaukee? Isn't that where they were? Okay, very good either. Very good. Okay, ladies, what's happening? What can we do for you?

[Laverne]

Well, my wife and I, we'd been planning on retiring in September of this year when our house is going to be paid off and we'll both be 61. But the last two weeks has made us really nervous and anxious, and now we're. We're not sure what we should be doing.

[Shirley]

We're. When we got to let our employers know and.

[Jill Schlesinger]

Oh, okay. I was just going to say, what's. So what do we have in terms of, like, what the gun is to your head because you want to make sure you give enough notice. When do we have to really make the decision by?

[Laverne]

We think probably May, mid May. We need to know.

[Jill Schlesinger]

Oh, my goodness. Okay, so we've got a month. So let's see where you stand today. Let's do that. Are either of you entitled to pensions or both?

[Laverne]

We are not.

[Jill Schlesinger]

Okay, so no pensions. You said the house will be paid off. What's the house worth?

[Laverne]

It's worth about 400,000. And we've got about 6,000 left on our 3% mortgage.

[Jill Schlesinger]

Oh, my God. All right, so that's that. That's all done. Is that the only real estate you own?

[Laverne]

It is.

[Jill Schlesinger]

Okay. How have you saved for retirement? Give us the some of the breakdown, the numbers and the types of retirement plans you have.

[Laverne]

So with TIAA, I have a 401k worth 752,000. It was worth more last month, but.

[Jill Schlesinger]

Okay, okay, calm down. It was worth a lot less three years ago. So think about. That's a traditional, right?

[Laverne]

It is. And then I have a tax deferred annuity that our employer kind of put us into when I started it. I'm at a university and that's worth 95,000. But we'll provide $1,230 per month for life.

[Jill Schlesinger]

At what age do you have to trigger that? At 61.

[Laverne]

I could start. Yeah, I could start.

[Jill Schlesinger]

Okay, got it, got it. Okay, so 750 traditional TIAA tax deferred annuity. And the monthly amount. Okay, that's one. Okay.

[Laverne]

A Roth IRA worth 10,000. CDs of 25,000. And I have a TIA Intelligent Variable Annuity that I purchased with my inheritance. It's like 100,000 when I started, and now it's at 212. And then I have an inherited IRA that's worth 16,000. And I got that. It predates the 10 year rule, so I just take my RMD each year, which is anywhere from 600 to $800. And Shirley's got a former 401k that she rolled into a TIAA IRA that's now worth $294,000.

[Jill Schlesinger]

Okay.

[Laverne]

And then we have a couple of large portfolio accounts also held at TIA. One is more bonds. That's $988,000.

[Jill Schlesinger]

Hold it, hold it. That's all post tax money?

[Laverne]

Yeah.

[Shirley]

It's inheritance. Yes.

[Jill Schlesinger]

Okay, so that's 980 in bonds. Is that in like the TIAA bond account or a fixed account or is that an annuity? And like the T, the actual tiaa, the annuity side?

[Laverne]

No, it's not the annuity side. It's a portfolio account that's managed by tiaa. Kind of an asset mix, but it leans a little more heavily towards fixed or bonds.

[Jill Schlesinger]

Okay, got it.

[Laverne]

And then we have a second one of those accounts that's now worth $961,000 and that's got a little bit more of an equity mix.

[Jill Schlesinger]

Would you say, between those. Those two accounts, which is, you know, whatever, $1.9 million. What do you think the overall breakdown? And you think these are 5050 overall in terms of allocation, or do you think they're a little bit more bond? Are they more like 60 bond? 40 stock?

[Laverne]

Right. Now, we looked at kind of our overall asset mix. Yeah, it's 6.7 guaranteed, 43 equity, 34 fixed, and cash is 14%.

[Jill Schlesinger]

That's a lot of moolah. You guys have done great.

[Laverne]

Well, can't take a lot. Yeah, we did some and then we were born to the right people and got inheritance.

[Jill Schlesinger]

Thank. Well, okay. That's the. The wealth transfer that everybody's been talking about. Right. Anything else that we should know about? What about cash?

[Laverne]

We have cash. Our total cash holdings are at about 380,000 with a hundred thousand in CDs. We had been holding 200,000 aside to do large house renovations. We want to stay in our home, but now we're a little gunshot here with that, too. Yeah.

[Jill Schlesinger]

Okay.

[Laverne]

And we have just 30,000 in the bank, just in our checking accounts.

[Jill Schlesinger]

What are you going to do for health care when you retire?

[Shirley]

Well, that's. My previous employer left me with retired out with a. A RIPA account, a retirement health insurance premium account worth $130,000. It can only be used to pay insurance premiums, which is amazing.

[Jill Schlesinger]

Amazing.

[Shirley]

We are hoping that will carry us through till Medicare.

[Jill Schlesinger]

Absolutely amazing. Fantastic. What a cool benefit. I love that.

[Laverne]

Yeah. Really obscure benefit.

[Jill Schlesinger]

Right? I'm sure that doesn't exist anymore. I guess it was probably replaced by the hsa, but they probably put that away for you. You didn't probably do it yourself.

[Shirley]

That is absolutely true.

[Jill Schlesinger]

It's amazing. Yeah. This is great. You ready for the most important question? Oh, wait. Did you. Do you guys have kids?

[Laverne]

No.

[Jill Schlesinger]

Okay. No kids.

[Laverne]

Lots of furry animals.

[Jill Schlesinger]

Good.

Excellent. So how much do you guys spend, do you think?

[Laverne]

We. We've done a really deep dive on this, and we spend around 8,500amonth, but that includes 12,000 a year on travel. So we really. Our spend is really 7500 but we build in a thousand a month, good travel.

[Jill Schlesinger]

What's the Social Security benefit look like at 67?

[Laverne]

Mine is 3,124, and at 70, it's 3,900. And Shirley's at 67 is 2,880. And at 70, 3,574.

[Jill Schlesinger]

Mark, how do you think these millionaire ladies are doing? I think they're doing pretty well. What do you think?

[Mark]

They may be concerned over the, you know, because of the last couple of weeks or so, but I'm not very concerned.

[Jill Schlesinger]

I'm not either.

Do you just.

Do you like your jobs?

[Laverne]

You know, it's been a great career, but I feel like I've had enough. I feel like I'm ready to do something else and, you know, kind of taper. I've got some projects I'd be working on, but I think I'm. I'm kind of done.

[Mark]

I mean, if I was going to say, you know, without the inheritance, it would be a different answer. But the inheritance is a game changer.

[Jill Schlesinger]

Yeah. I mean, that's a lot of money you guys have. Whether it's, you know, those two managed portfolios plus the inherited assets and the fact that you have that nice health insurance coverage for the future. Your cash is great. Look, I think. And also, by the way, the tax deferred annuity, that'll kind of ease the burden to begin with, but I don't know, it feels like you're in very good shape. Is it going to make you nuts if you give your notice? Let me ask you this. Let's say you give your notice and the market goes down another 20% from where we are today.

[Shirley]

Oh, my God.

[Jill Schlesinger]

Are you going to.

[Laverne]

It'll make one of us more nuts than the other.

[Jill Schlesinger]

Because, I mean, I can't say that's not a possibility. That is a possibility for sure. I know. I'm sorry. But let's say that did happen. I hear the groan. Oh, my God. What is she saying? Here's what I think. You've got a portfolio that is. You're basically 60, 40. Okay. Right. And so your bonds have done well already. Right. And the equity's gone down.

[Shirley]

Yes, poorly, I guess.

[Laverne]

Yeah.

[Jill Schlesinger]

Well, not less poorly. Bond prices went up, so there is that. Okay, so in that respect, you are not necessarily going to take a 20% hit to your whole portfolio, but let's just say that you did that. Mark, what's their total assets right now?

Let's see.

Two, three, like three and a half million.

[Mark]

Yeah, I think it might be maybe four. Yeah, more like four.

[Jill Schlesinger]

All right, so there's $4 million. So let's just game it out a little bit. Let's say you go to 3.6 by the fall. And are you taking all of that money out at once? I don't think so. You don't need all that money at once. So what would happen is, you know, it would be a drag. I'm not saying it wouldn't be, but, you know, maybe I would say get the money out of your tiaa, the traditional tiaa. Let's get it out of there. Let's take it out and start using that to live on. We'll get that account finished up. You'll use that to live on. While you're doing that, all the other money is going to keep working for you. It's going to keep going. You're not going to zero. You're not going from 4 million to zero. You're going to be able to do this. The other thing that you could do potentially, is if you're really freaked out about it, is you could even annuitize the traditional TIAA 401K, because you're in traditional, and you could basically say to them, give me a substantial. Give me equal payments from that account for the next 10 years. They'll let you annuitize that. That, plus the tda of the 1230amonth. That might give you a little bit more comfort. That's like you're not pulling money out as things are going down, down, down, down, down. You might say, okay, we know that we have the bulk of our needs met through the money that's coming out of the traditional tia, plus the tda, and we don't have to touch anything else. And then that gives you plenty of time to recover. Do you work with a financial advisor?

[Laverne]

We, we do. Through tiaa, we have an individual who we've worked with for many years.

[Jill Schlesinger]

And you like this person?

[Laverne]

I think so. We kind of tried to shop around when we first got the inheritance, and we. We didn't have much luck. We met with some people, but they kind of wanted to pick stocks and really made us nervous and tried to claim they could actually game the market.

[Jill Schlesinger]

Yeah, yeah, right. We're so smart. Great. I would do this. I would talk to your TIAA person. Also. I'm going to give you the name of somebody that I'd like you to talk to who might be able to create a game plan for you where you could do a combination of annuitizing these fixed assets that you hold already giving you a lot of more comfort. If you really don't want to like tune out the roller coaster and you know that you're getting, you know, I don't know, let's say you're 80. Let's say you're taking $10,000 out a month and you're feeling good about that and it's basically gets you everything you need and then you can tune out the rest of the noise. Maybe that's the better way to approach this. And you leave the bonds alone. You know what I mean? Like, you leave a lot of this other stuff alone and you don't really freak out as much. And that way if there is some major market loss, you're not feeling like you have to go in and invade it and markets are down. Why would we do that? Maybe that's a better way to approach it for you guys.

[Laverne]

I don't think I've ever heard you recommend an annuity.

[Jill Schlesinger]

Well, you have the TIAA annuity. Okay. You have the 401K. TIAA is an incredible product. In this particular case, if you're anxious, it may be worth it because you're already in this product and you already own the tax deferred annuity. Right. And you already have the TIAA variable annuity. Like you already have three annuity products that you own because that exists already. Maybe that gives you more comfort. I think it's worth considering you're in this organization. So I, I think it's worth at least, at least considering it. You know what I mean? That would make sense to me. So why don't you talk to the person at tiaa? Mark is going to follow up with you. He will send you the name of somebody who I think you may want to talk to. I don't want you to like you're in such good shape, but I understand the volatility is very worrisome. I think maybe a way around that is to lock down the fact that you can cover your fixed expenses and not worry if the market were to tumble another 10 or 15 or 20% from here.

[Shirley]

Okay.

[Jill Schlesinger]

Does that make sense?

[Laverne]

Yeah, that, that helps a lot.

[Jill Schlesinger]

Yeah. I, I'm into like, let's, let's give.

[N/A]

You peace of mind.

[Jill Schlesinger]

Let's give you peace of mind. Let's get you out of here now, guys. You have your estate documents done?

[Laverne]

We do. We have to. We're just in the process of renewing our beneficiary forms on things. But we do, we have a will. We've got all that stuff all Right.

[Jill Schlesinger]

Perfect. Well, then, any other questions for us?

[Shirley]

I just gotta say, this really puts our minds at ease, Jill. I just really appreciate it. Unlike Laverne, I actually kind of love my job. But ever since we made the decision to retire in September, for the last year, I've. I've had, like, the worst senioritis I've had since I was 17.

[Mark]

Oh, I love that.

[Jill Schlesinger]

I love that.

[Shirley]

Anytime it gets the least bit stressful.

[Laverne]

I'm like, I hope Jill says we can read.

[Jill Schlesinger]

I know. Well, you know, you are now in the this very special one bad meeting away club, which is one bad meeting away from saying thank you very much, goodbye. So I think you guys are. You're. You're there, so I don't want you to fret. You're very fortunate that you had family that left you these, you know, big pile of assets. Let's take advantage of it. You never know what happens next, so enjoy it. Let us know if you have any further questions. Obviously. But there are times when I really do say to people like, can you hold on for a year? Can we get through the next year? I've said that before. Yeah, I don't think you're in that place. I think you've got a substantial amount of assets. You can do this. Okay.

[Laverne]

Oh, thank you so much.

[Jill Schlesinger]

It is our pleasure. Dream maker, Jill Schlesinger here to the rest of you, if you've got a question about retirement, maybe you want to switch careers. Maybe you're like, ugh, I hate where I am, but I'm scared of a recession. 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 don't forget to sign up for the free weekly newsletter while you're on the website. You can subscribe to us on the Odysee app or wherever you find your favorite podcast. Please leave us a rating and review you wherever you listen and, of course, lift someone up. Change your work, change your wealth, change your life. Thanks for listening. We'll talk to you tomorrow.

[N/A]

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