Best Strategy for Flexibility

Summary

Jill on Money with Jill Schlesinger

Episode: Best Strategy for Flexibility

Date: November 7, 2025

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Overview

In this episode, Jill Schlesinger, CFP®, takes a call from Tom in Arizona, who—alongside his wife—wants advice on structuring their savings and investments to allow for maximum flexibility with an eye toward retiring (or at least downshifting to part-time work) in 15 years. The episode covers the nuances of prioritizing different investment vehicles, balancing retirement planning with near-term accessibility, and the mechanics of making such a long-term, flexible plan work. Co-host Mark joins to lend perspectives, especially around Roth strategies.

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Key Discussion Points & Insights

Tom & Family's Financial Snapshot

• Ages: Both 40
• Children: 2 (8 and 5 years old)
• Income: ~$260,000 combined
• Retirement Savings:
  • $1.1 million in traditional 401(k)s
  • $50,000 in Roth IRAs
• Taxable Brokerage Account: $20,000 (newer focus)
• 529 College Savings: $30,000 combined
• High-Yield Savings: $80,000
• Home:
  • Value: ~$1 million
  • Mortgage: $450,000 at 6%
• Health Savings Account (HSA): ~$30,000–$35,000
• Other Notes: No pensions, no expected inheritance, "term" life insurance at $500,000 each, estate docs completed

Tom’s Big Question:

"What should our savings strategy be for flexibility, especially since we hope to retire (or downshift) in 15 years? We’ve been maxing out 401(k)s, but is that the best path now?"

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Detailed Breakdown & Advice

1. Importance of Consulting Before Big Moves

Jill (01:45):

"If you're thinking about what happens next, or if you're weighing two different jobs, or if you're wondering whether it's time to buy a home, sell a home... get in touch with us. That's when we'd love to chat with you, not after you've already done something that it's harder to undo."

2. Current Savings Allocation

• Previously maxed out traditional 401(k) contributions
• Recently shifted strategy: Now only contributing enough to 401(k) to get the employer match (5% each), redirecting additional dollars into a taxable brokerage account (currently $1,200/month, going up to $2,000/month once youngest child enters elementary school)
• Ongoing 529 contributions ($250/month per child)

3. Should They Shift to Roth 401(k)?

Mark, Roth Subject-Matter Expert (10:03):

"I would obviously make the switch. I mean, they got a huge pile of pre-tax money already and they're so young. That's just going to keep growing and growing and growing. Yeah, I would make the switch."
Jill: Agrees, and notes if they need to access money before age 59½, taxable (brokerage) accounts offer flexibility.

4. Retirement Flexibility & Accessible Funds

• Jill and Mark agree that having a robust brokerage account is crucial given early retirement goals, since drawing from retirement accounts early is tricky/penalized.
• Brokerages offer access for living expenses, healthcare, or unexpected needs before traditional retirement age.
• Mark does a conservative projection:

  "Conservatively, in 15 years, they keep saving at their current pace, they're gonna have at least $4 million... Probably not enough to pump $10K a month in today's dollars, but you said you're open to a career change or downshift."

5. Life Insurance Needs

Jill recommends:

• Get more term life insurance (quote $1 million, 10–15 year policies for each spouse, given current $500,000 per person will be tight for family with kids).

6. Investment Choices

• Tom and wife mostly use plain index funds; Jill strongly affirms this.

  Jill (13:12): "Yeah. You know why? Because it works."

• Both Jill and Mark approve the move to prioritize brokerage with continued retirement and Roth contributions.

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Notable Quotes & Memorable Moments

[04:15] Jill (about Tom’s 401(k) balance):

"Wow, you're so young. And look at all that money you’ve saved. Holy moly."

[06:05] Jill (on Tom’s wife wanting to retire early):

"Oh boy. She's putting the pressure on us. I feel like my neck is hurting already."

[10:23] Mark (on shifting to Roth 401(k)):

"They got a huge pile of pre-tax money already and they're so young. That's just going to keep growing and growing and growing. Yeah, I would make the switch."

[11:43] Jill (on the strategy):

"I love the idea of looking ahead... at least get you in the ballpark. I'm going to add to your actual expenses, because I think you need more life insurance."

[13:12] Jill (on index funds):

"Yeah. You know why? Because it works."

[14:01] Jill (on the time horizon):

"I never thought in terms of 15 years because it seems so far ahead."

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Timestamps for Important Segments

• [02:44] — Tom introduces his family’s goal and situation
• [04:42] — Current investment accounts rundown
• [07:37] — Changing approach: from maxing 401(k) to match-only, rest into brokerage
• [09:04] — Discussion of Roth 401(k) option at work
• [10:23] — Mark: Strongly recommends Roth 401(k) contributions going forward
• [10:50] — Family's monthly expenses ($10,000 including mortgage)
• [11:43] — Jill and Mark: Projecting future plan, validate current approach
• [12:40] — Life insurance advice: seek $1M each in term coverage
• [13:12] — Index fund reassurance

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Final Takeaways

• Flexibility is Key: For a 15-year (early) retirement plan, balancing accessible funds (brokerage) with tax-advantaged accounts is crucial.
• Shift to Roth 401(k): If you already have significant pre-tax savings and your employer offers it, especially while you’re young.
• Beef Up Life Insurance: With two young children and only a half-million each in term, get quotes for $1 million per spouse.
• Stay the Course: Index funds remain an optimal, low-stress approach; don't chase complexity.
• Check Back as Life Changes: Increase savings if income grows, and periodically reassess.

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Quick Summary Table

| Account/Asset | Current Value | Recommendation | |-------------------|-----------------|--------------------------------------------| | Traditional 401(k)| $1.1M | Contribute only up to employer match | | Roth IRA | $50,000 | Continue maxing out annually | | Taxable Brokerage | $20,000 | Direct additional savings ($2000/mo soon) | | 529 College Funds | $30,000 total | Maintain $250/mo per child | | Home | $1M value, $450k mortgage (6%) | Stay, no immediate action | | HSA | $30k–$35k | Continue maxing | | Term Life Ins. | $500k/spouse | Increase to $1M 10-15 year term |

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Bottom line:
Jill, Mark, and Tom all agree: the blended approach of securing retirement coupled with near-term flexibility is the best bet for early (or just flexible) retirement goals. Index funds, the right insurance, and intentional, forward-looking planning make this a model case for listeners aiming for similar outcomes.

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For your own 15-year, 15-month, or even 15-day financial planning questions, Jill encourages you to reach out at Jillonmoney.com.

Transcript

[Jill Schlesinger]

This message comes from Jill on Money sponsor Charles Schwab. Independent financial Advisors focus on building a relationship with you that goes beyond your portfolio. As fiduciaries, they must act in your best interest always. The relationship they have with you will be based on transparency and trust, and they're committed to bringing you advice that fits your values. That's why Schwab is proud to support them. Visit findyourindependentadvisor.com hey gang, have you noticed how everything costs more these days? But sometimes when you're shopping, you might be preparing for bad news. But then you're pleasantly surprised that something is way cheaper than you thought. Turns out the same thing can hold with life insurance. In fact, 72% of Americans overestimate what it actually costs. PolicyGenius makes life insurance fast, simple and surprisingly affordable. You you can compare quotes from America's top insurers in just a few clicks, and licensed agents are there every step of the way to answer your questions, handle the paperwork and make sure you understand your options. With Policygenius, real users have gotten 20 year 2 million dollar policies for just $53 a month. It's a smart way to give your loved ones a financial safety net without any stress or confusion. Secure your family's future with Policygenius. Head to Policygenius.com to compare life insurance quotes from top companies. How much you could save? That's policygenius.com welcome to the Jill on Money Show.

It's Friday, November 7th and we are here answering your questions. Now, you will often reach out to.

Us when you are maybe percolating on.

Something, like you're thinking about doing something, that's when we'd love to chat with you, not after you've already done something that it's harder to undo. So if you're thinking about what happens next, or if you're weighing two different jobs, or if you're wondering whether it's time to buy a home, sell a home, or thinking about how the difference between sending your kids to private university versus public university is going to impact your own retirement.

Get in touch with us.

Go to jillonmoney.com, click the contact Us button, write us a note, and if you'd like to join us live, you just check the box, Mark. We'll do everything else. That is what Tom did. He is listening to us and contacting us from the beautiful state of Arizona. Now, Tom, this is when all the snowbirds start coming back into town. So getting a little more crowded?

[Tom (Caller)]

Yes, sure. As the weather is Getting nice. Summer is, I would say it's over. It's been in the 80s. That's a high. So it's been very nice here and pleasant.

[Jill Schlesinger]

Lovely. And Tom, what is it that we can do for you?

[Tom (Caller)]

Well, yeah, thank you so much for having me on the show. I am calling today to get some guidance and feedback regarding our really, our current investment direction. My wife and I actually have a goal to be able to retire in 15 years or hopefully at least be able to work part time. And we really wanted to make sure what we're doing with our money right now is best to set us up to achieve that goal.

[Jill Schlesinger]

Okay. Tom, how old are you?

[Tom (Caller)]

I am 40.

[Jill Schlesinger]

40. So you want 55 to be the number?

[Tom (Caller)]

Yes.

[Jill Schlesinger]

Oh, my gosh. Okay. How old's your wife?

[Tom (Caller)]

Same. About 40.

[Jill Schlesinger]

Okay. And you have kids?

[Tom (Caller)]

We do.

[Jill Schlesinger]

How?

[Tom (Caller)]

Yeah, one is eight and one is five and one's in the older ones in public elementary. And the other one is going into kindergarten next year.

[Jill Schlesinger]

Thank God, right?

[Tom (Caller)]

Yes. Yeah, that daycare cost is.

[Jill Schlesinger]

Yeah, I was just talking. I was talking about this with one of my colleagues and he was saying, like, he goes, I've never been so happy when kindergarten started. Daycare is for real. You're both working full time right now?

[Tom (Caller)]

That's correct, yes.

[Jill Schlesinger]

Okay, how much do you guys earn?

[Tom (Caller)]

Roughly? About $260,000.

[Jill Schlesinger]

Okay, that's great. And are you actively contributing to retirement plans?

[Tom (Caller)]

Yes, we are. So we have in a combined and traditional 401k, about $1.1 million.

[Jill Schlesinger]

Wow, you're so young. And look at all that money you've saved. Holy moly. Okay, traditional. What about Roth?

[Tom (Caller)]

So we were really focused on the traditional for the past, you know, or all the years that we've been working full time. But with the Roth ira, we really only started that about a few years ago. So combined right now we have about 50,000.

[Jill Schlesinger]

Okay, that's great. Do you also have money outside of retirement plans, like in a brokerage account?

[Tom (Caller)]

Yes. So that's kind of one of the shifts and maybe questions that we had as well, but currently we do have about 20,000 in a brokerage.

[Jill Schlesinger]

And what about saving for the kids? Is there 529 accounts that have been established or not?

[Tom (Caller)]

Yes, there is. There's a combined 30,000 at this time.

[Jill Schlesinger]

Great. Okay, so you've got a bunch of money saved in traditional, you know, bid in the Roth started the brokerage, the 529. What about savings accounts? Just boring money.

[Tom (Caller)]

Yeah, we have about $80,000 in the high yield savings.

[Jill Schlesinger]

Great. And do you guys own your home?

[Tom (Caller)]

We do, yes.

[Jill Schlesinger]

How much is it worth?

[Tom (Caller)]

It's currently worth, I would say maybe about $1 million.

[Jill Schlesinger]

Okay. Is there a mortgage outstanding?

[Tom (Caller)]

Yes, there is.

[Jill Schlesinger]

How much?

[Tom (Caller)]

It's about $450,000 and it's at a 6% interest rate.

[Jill Schlesinger]

So any other assets that we should know about as we think about your 15 year game plan?

[Tom (Caller)]

No, just, you know, we max out our HSA. I mean, there's about 30,000, 35,000 in that, but outside of that, that's really all the assets that we have working for us.

[Jill Schlesinger]

And both of you have this 15 year game plan. It's not as if you say, like, yeah, I'm out of here. But my wife, she's a lifer. She's going to keep doing what she.

[Tom (Caller)]

Does more so the other way around. She maybe wants to even do it earlier if possible.

[Jill Schlesinger]

Oh, boy. She's putting the pressure on us. I feel like my neck is hurting already. There's no pension assets that we have to think about, right?

[Tom (Caller)]

No, we do not.

[Jill Schlesinger]

Do you guys have any desire to move in? If in 15 years we, you know, we, we run these numbers and things look good. Is that house the house you want to hang out in or do you feel like that would be sold?

[Tom (Caller)]

No, we, I mean, we moved into this house a few years ago. It's a new construction, new build house. So we definitely want to stay here for the long term, at least, you know, until kids, you know, make it to college.

[Jill Schlesinger]

Sure. Okay. What about family? Do you guys have parents that you help out or need to think about in the future?

[Tom (Caller)]

No. There's not an expectation financially to help them in the future or.

[Jill Schlesinger]

And they're okay?

[Tom (Caller)]

Yes, they're doing well.

[Jill Schlesinger]

Great. Okay. Any inheritance potential?

[Tom (Caller)]

No.

[Jill Schlesinger]

Okay, good try. Right? I was working on it.

[Tom (Caller)]

There you go.

[Jill Schlesinger]

Do you guys have life insurance?

[Tom (Caller)]

Yes.

[Jill Schlesinger]

Term. Okay. How much do you have?

[Tom (Caller)]

For each of you, it's about $500,000 each.

[Jill Schlesinger]

Can you buy more through work, through your employers or not?

[Tom (Caller)]

That was actually the maximum that was allowed.

[Jill Schlesinger]

So I think you need more life insurance, but I'm going to just. It doesn't have to be this second, but let me just make a note to myself. Okay, so right now you guys are maxing out retirement. You're putting in the absolute most you can.

[Tom (Caller)]

So that was really the shift in kind of one of our questions that we had because we were maxing out the traditional 401k for the past eight years or so, and now we Realize that, hey, maybe we have a good amount in that kind of bucket, and maybe we should focus on something else and free up some capital. So what we did this year was really reduce that contribution to just a match with our company.

[Jill Schlesinger]

Okay.

[Tom (Caller)]

So now we're doing just a 5% with a 5% match with the.

[Jill Schlesinger]

So you guys each have. It's. Both of you have a 100% up to 5% match?

[Tom (Caller)]

That's correct, yes.

[Jill Schlesinger]

So 10% of this 260 going away going into these account every year.

[Tom (Caller)]

Yes. And what we did with the remaining amounts or the. The one that we're not investing, we're just contributing towards our brokerage now, which is roughly about 1200amonth. And once our younger one goes to the elementary school, we'll kick ramp that up to maybe about 2,000amonth.

[Jill Schlesinger]

Ooh, what about the 529s? Are you making contributions on an ongoing basis or not?

[Tom (Caller)]

Yes, it's roughly about 250 each monthly for each child. Yeah.

[Jill Schlesinger]

All right, so next year we go 2 grand a month into brokerage and 500 grand a month in. 500 grand. Wow, $500 a month into the 500,000 DOL. 529, right?

[Tom (Caller)]

That's correct, yeah.

[Jill Schlesinger]

Okay. Do you have a Roth 401K option?

[Tom (Caller)]

That's the. Another question that we had is, should we do a Roth 401K? Because our work does offer that as an option. The match would go into the tax deferred account. But yeah, There is a 401k Roth. Yes.

[Jill Schlesinger]

Okay, so Mark, I'm going to bring you on because he's the Roth expert of this family. I want to ask you what you think of Tom's plan of he and his wife shifting away from traditional into brokerage. I mean, the reason why I think it's good is that, you know, 15 years from now, or 12 if you're your wife, that, you know, we need to have access to money and we'll need money to, you know, access for health care, which you won't have, you know. Well, we're going to need money, so I think that brokerage money is going to be useful. But, Mark, do you think that they should switch over to the Roth for their contributory 5%? I do.

[Mark (Co-host/Expert)]

You know, it's funny, despite the new rules, I have yet to find an employer who actually matches in the Roth. It's like, why make the rule nobody does it?

[Jill Schlesinger]

Because they haven't changed their, like, coding yet, that's why.

[Mark (Co-host/Expert)]

Well, it's optional. They're not required to do it.

[Jill Schlesinger]

Right.

[Mark (Co-host/Expert)]

Yeah, I would obviously make the switch. I mean, they got a huge pile of pre tax money already and they're so young. That's just going to keep growing and growing and growing. Yeah, I would make the switch.

[Jill Schlesinger]

Okay, so, but what about the two grand a month into brokerage? Do you think that that's the right amount? Do you think that there should be more money going into the Roth and.

Less into the brokerage?

[Mark (Co-host/Expert)]

I mean, just knowing what their goals are, I mean, they really, they kind of seem set on early retirement. They're going to have to have some money that's, that's going to float them, so.

[Jill Schlesinger]

Right.

[Mark (Co-host/Expert)]

It's probably the right approach.

[Jill Schlesinger]

I think so too. Tom, one thing I forgot to ask you, which I think is important. How much money do you guys spend?

[Tom (Caller)]

Yeah. So our monthly spend is roughly about 10,000, including our mortgage. Yeah. But we also, I'm sorry, we also max out our Roth IRA as well.

[Jill Schlesinger]

Oh, okay.

So you are.

I'm sorry, I don't think I got. So you guys are putting also the 14 grand into the Roth?

[Tom (Caller)]

Yes.

[Jill Schlesinger]

All right. You're saving a lot of money. You really are. I mean, I think this is a good game plan. I don't know if it's going to be 100% working to like pump 10 grand a month out in 15 years. Mark, do you think it's doable for Tom, for Tommy boy in Arizona and his wife to do this?

[Mark (Co-host/Expert)]

I mean, conservatively, in 15 years, they keep saving at their current pace, you know, they're gonna have at least $4 million. That's conservatively, I don't know, you know, 10, 10 grand a month? Probably not, but you know, he said they're open to doing stuff as well. You know, they just wanna maybe have a career change or downshift.

[Jill Schlesinger]

So you would be, I mean. Okay, here's what I think. I think you are doing everything you should be doing in terms of the way you think about this. I really do. And I love the idea of looking ahead and saying this is something that's important to us. We believe that we'll need to beef up that brokerage account. So I do think that's the right thing to do. Again, I don't know, 100%. I don't know if the 10 grand, based on inflation in 15 years, if all the money is going to generate exactly what you need. But I know that this is the right strategy to at least get you in the ballpark. I'm going to add to Your actual expenses, because I think you need more life insurance. So I would go to, you know, one of the aggregation sites, like one of our sponsors, policygenius, go look there. Do you guys make about the same amount of money when you said it was 260 combined? Does one make more, a lot more than the other?

[Tom (Caller)]

Yes, it's about the same.

[Jill Schlesinger]

Okay.

Yeah.

I would just go price out a million dollars of 10 or 15 year term for yourselves and get two of those, just get two of those policies. I would definitely do that.

[Tom (Caller)]

Excellent. Thank you.

[Jill Schlesinger]

Do you guys have your estate documents done?

[Tom (Caller)]

We do, yes.

[Jill Schlesinger]

Of course you do. And is there any, I mean, you feel comfortable with the way you're investing? You feel good? Like, anything else that we can do for you?

[Tom (Caller)]

Yeah, the investment directions, we're just doing plain old index funds. So that's, we're happy with that.

[Jill Schlesinger]

Yeah. You know why? Because it works. It's a good thing we are here for you as you continue this journey. Let us know if there's anything else we can do. But I think you're on the right track and I don't know if it's, if it's exactly going to be there for you, but I think this is the strategy I would pursue given your goals. So I think you're, you're, you're getting there. And certainly if anything changes along the way, if all of a sudden, you know, you're like, holy moly. I said we make 260. One of us just got a raise and now we're making a lot more.

Money and then you might be able to accelerate this.

So I don't know. But this is where you need to be. Go get that life insurance and keep squirreling away your money. So if you are like Tom and his wife and you got a 15 year plan, I never thought in terms of 15 years because it seems so far ahead.

[Mark (Co-host/Expert)]

I do now.

[Jill Schlesinger]

You do?

[Mark (Co-host/Expert)]

Yeah. I'm in that 15 year window right now.

[Jill Schlesinger]

Oh, I'm in that 15 minute window. If you need some assistance, get in touch with us for your 15 year, 15 month, 15 day or 15 minute Jill Schlesinger plan. Go to jillonmoney.com, click the contact us button. Write us a note, let us know if you'd like to come on the air with us. Don't forget to sign up for the free weekly newsletter. Check out all the content that lives on our website. You can subscribe to us on the Odyssey app or wherever you find your favorite podcasts. It is Friday, so let's do some business. Our wonderful music is composed by Joel Goodman. Mark Telerstio is our executive producer and the king of all things Web. And as as I said, we are distributed by the fine folks at Odyssey. We ask that you please, please do something nice for someone else today. Change your work, change your wealth, change your life. Thank you for listening and we'll talk to you on Monday.

This message is from Jill on Money sponsor Charles Schwab. It's important to have a healthy relationship with money. One that serves both your short and long term personal goals. But it's equally important to have a healthy relationship with your financial advisor. And that's where an independent ria, a registered investment advisor, can be a game changer. They have a fiduciary duty to put your interest first. Always. They're invested in you. With an ria, you get accountability, transparency, integrity. Their relationship with you isn't transactional, it's personal. They take the time to understand your life goals, not just your money goals. Everyone has a big picture. Their job is to help you invest in yours. Financial advice, like a good suit, is best when tailored just to you. And that's what an independent RIA does.

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[Von Miller]

Is Vaughn Miller, Super Bowl MVP, chicken farmer, and now host of Free Range. This is a show where I go off the field and off the script. We're talking what's hot in music, film, trending news and everything blowing up your feed. If you love football ball, you'll feel at home. But if you're here for the vibes, the Internet deep dives the conversation. This is your podcast. Join me every Wednesday. Follow and listen to Free Range with me, Von Miller. Everywhere you get your podcast.