Episode Summary: "Can I Buy That Dream Retirement Home?"

Podcast: Jill on Money with Jill Schlesinger
Host: Jill Schlesinger, CFP®
Release Date: June 11, 2025

Introduction

In this episode of Jill on Money with Jill Schlesinger, host Jill Schlesinger delves into the financial intricacies of purchasing a dream retirement home. The discussion centers around real listener questions, offering actionable insights into major financial decisions related to retirement planning, investment strategies, and housing.

Listener Question 1: Should I Buy My Dream Retirement Home?

Listener: Sarah
Timestamp: [03:46]

Sarah’s Financial Snapshot

Sarah, a 52-year-old high-income earner, is contemplating purchasing her dream retirement home priced at approximately $600,000. Located in a desirable coastal area in New England, the market there has shown resilience, with median home prices increasing by 45% over the past five years.

Key Details:

• Current Assets:
  • Owns her primary residence, expected to yield $400,000 upon sale.
  • Pre-tax retirement accounts projected to reach $3.5 million by age 65.
  • Husband’s retirement accounts totaling $2.5 million.
• Proposed Home Purchase:
  • 10% down payment ($60,000).
  • 30-year mortgage, potentially refinancing if interest rates decrease.
  • Monthly expenses estimated at $6,500, manageable without compromising retirement savings.
• Additional Considerations:
  • Plan to eventually sell the primary home to fund the retirement home mortgage.
  • Potential to rent out the retirement home if needed.

Jill and Mark’s Analysis

Jill's Perspective:
Jill commends Sarah's financial preparedness, noting, "Sarah, go ahead and buy your house. Calm down. I'm not worried about it. Seems like you have plenty of money" ([03:46]). She emphasizes that Sarah’s ability to maintain her expenses across both residences without affecting her retirement savings positions her well to proceed with the purchase.

Mark's Input:
Mark concurs, adding, "No, she answered it for me when she said she's still going to be able to cover all her bills in both locations without compromising what she's putting away for retirement. For me, that's the big thing. If you can pull this off and not sacrifice any of your retirement savings, then you can do it" ([07:12]).

Conclusion

Both experts agree that Sarah is in a strong financial position to purchase her dream retirement home. They highlight the importance of maintaining financial stability and ensuring that such a significant purchase does not impede retirement savings.

Listener Question 2: Investment and Career Advice for a 24-Year-Old Gen Z

Listener: Anonymous
Timestamp: [07:25]

Listener’s Financial Situation

A 24-year-old Gen Z listener seeks advice on investment diversification and career progression. Here's a breakdown of their financial status:

Key Details:

• Income:
  • Full-time job: $50,000 annually.
  • Part-time job: $1,300 monthly.
• Expenses:
  • $2,000 monthly.
• Savings and Investments:
  • $69,000 in a regular savings account.
  • $17,000 in unused 529 funds.
  • $15,000 in I bonds (purchased at 9.62% interest).
  • $10,000 in a Roth IRA.
• Other Information:
  • No debt.
  • Considering graduate school.
  • Currently contributing 10% to a traditional 401(k).
  • Seeks advice on investing, diversification, and career advancement.

Jill and Mark’s Guidance

Jill's Recommendations:

1. 401(k) Strategy:
   "Stop putting money in a pre-tax 401k. Do not use a traditional 401k. If you have the option, put please put the money into a Roth" ([09:00]).
2. Investment Diversification:
   Suggests reallocating investments from I bonds to high-yield savings accounts and diversifying with international funds.
3. Career Advice:
   Encourages maintaining the full-time job and reassessing the necessity of the part-time job to focus on career advancement.

Mark's Input:
Affirms the strategy to shift from traditional to Roth 401(k) and supports reducing reliance on I bonds due to tax liabilities. He concurs with the importance of maintaining the primary job for career growth ([11:38]).

Conclusion

Jill and Mark advise the listener to optimize retirement contributions by favoring Roth accounts over traditional ones, diversify investments beyond I bonds, and focus on career stability and growth. They emphasize the importance of long-term financial planning and strategic investment diversification.

Listener Question 3: Are Reverse Mortgages Worth It for Retired Couples?

Listener: Karen
Timestamp: [15:26]

Karen’s Inquiry

Karen seeks advice on whether a reverse mortgage is a beneficial financial tool for a retired couple. She is considering leveraging the equity in their home to create a stream of income.

Jill and Mark’s Recommendations

Jill's Analysis:
Explains that reverse mortgages can be advantageous but are complex financial products. She advises, "If you are thinking about a reverse mortgage, I would absolutely engage the services of a fiduciary planner to review those numbers" ([15:26]).

Mark's Addition:
Emphasizes the importance of professional guidance to navigate the complexities and ensure that a reverse mortgage aligns with the couple's financial goals ([15:29]).

Conclusion

Jill and Mark caution Karen about the intricacies of reverse mortgages and strongly recommend consulting a fiduciary planner to assess whether this financial strategy suits her and her spouse's unique circumstances.

Listener Question 4: Early Retirement and Financial Sufficiency

Listener: Maureen
Timestamp: [17:14]

Maureen’s Financial Profile

Maureen, a 58-year-old federal employee, was recently forced into early retirement. She is evaluating whether she has sufficient funds to live comfortably without continuing to work.

Key Details:

• Income:
  • Early retirement payout: $25,000.
  • Pension and healthcare: $20,000 annually.
  • Supplemental income (if making less than $23,000): $11,500.
• Assets:
  • $1.3 million in Thrift Savings Plan.
  • $200,000 in a Traditional IRA.
  • $780,000 in a Rollover IRA and Inherited IRA.
• Property:
  • Home valued at $1.2 million with $100,000 remaining mortgage.
  • Rental unit contributing to mortgage payments.
• Expenses:
  • Combined monthly expenses: $6,000 - $10,000.
• Additional Factors:
  • Husband earns $150,000 annually and intends to keep working.
  • Child in college with a funded 529 plan.

Jill and Mark’s Assessment

Jill's Evaluation:
Concludes that Maureen's financial standing is robust, stating, "you've got plenty of money, and so I think you're fine" ([15:26]). She suggests that Maureen does not need to find a new job for financial reasons and encourages her to continue seeking employment out of personal fulfillment rather than necessity.

Mark's Perspective:
Echoes Jill's sentiments, asserting that based on her expenses and assets, Maureen is financially secure and does not require additional income sources ([17:01]).

Conclusion

Jill and Mark affirm that Maureen's financial portfolio is sufficient to support her retirement without requiring her to continue working. They recommend focusing on personal satisfaction and leveraging her strong financial foundation to maintain her desired lifestyle.

Final Thoughts and Wrap-Up

In this episode, Jill Schlesinger and Mark provide comprehensive financial advice tailored to individual listener scenarios, emphasizing the importance of personalized planning and strategic financial decisions. Key takeaways include:

• Assessing Financial Readiness:
  Carefully evaluate whether significant purchases, like a retirement home, align with long-term financial goals without compromising retirement savings.

• Investment Strategies:
  Favor Roth accounts over traditional ones when possible, diversify investment portfolios, and reallocate assets to optimize growth and tax benefits.

• Retirement Planning:
  Understand the complexities of financial products like reverse mortgages and seek professional guidance to ensure they fit within your retirement strategy.

Jill encourages listeners to engage with the show by submitting their questions via jillonmoney.com and to subscribe to the free weekly newsletter for ongoing financial insights.

Notable Quotes:

• Jill: "Sarah, go ahead and buy your house. Calm down. I'm not worried about it. Seems like you have plenty of money." ([03:46])
• Mark: "If you can pull this off and not sacrifice any of your retirement savings, then you can do it." ([07:12])
• Jill: "Stop putting money in a pre-tax 401k. Do not use a traditional 401k. If you have the option, put please put the money into a Roth." ([09:00])

For more personalized financial advice, visit jillonmoney.com and connect with Jill on money through various platforms, including the Odyssey app and popular podcast services.