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- [00:00]
A
Hey gang, when summertime rolls around, there's probably a lot of exciting plans. Maybe there's a big trip or you're doing something really fun. And if you're like me, sometimes this brings a heightened awareness of what you need to do to protect everyone in your life. Maybe you're wondering if something happened unexpectedly, how would that impact my family? Well, now you can stop putting off life insurance and check it off your list with policygenius. And it's an online marketplace where you can compare quotes from top insurers side by side for free. And their licensed team walks you through everything, coverage, pricing, all of it. So there's no guesswork. So instead of a summertime worry, it's a summertime win. You'll get that peace of mind knowing you've got the solid safety net in place. With Policygenius, you can see if you can find 20 year life insurance policy starting at just $276 a year for a million dollars in coverage and head to policygenius.com to compare life insurance quotes from top companies and see how much you could save. That's policygenius.com Most leaders have a clear picture of how work is supposed to get done, but almost no visibility into how it's actually happening day to day. Without that visibility, you're making critical decisions like where to automate or where AI will be most impactful based on assumptions and gut feel, not data. That's what today's sponsor, Scribe Optimize was built to solve. Trusted by 80,000 enterprises, including nearly half of the Fortune 500. Scribe captures how your team actually works across every tool in the background. No workshops, no manual discovery. When you log into the Optimize dashboard, you see exactly which workflows are happening right now, where the biggest inefficiencies are and AI powered recommendations to fix them. With estimated time savings built in all on admin approved apps with sensitive info automatically redacted. The kind of visibility that used to take months. Now it's just always on. Stop guessing and start seeing. Visit Scribe How Jill that's S C R I B E How Jill welcome to the Jill On Money Show. It's Tuesday, April 28th and we're here answ your financial questions if you've got one. All you need to do is go to our website. That's jillonmoney.com when you get to the website there are all these tabs at the top but no matter where you navigate on the site, in the upper right hand corner there is a Contact us button. When you click that button, a form pops up, you write a note. And if you'd like to join us live, just check the box. Mark will do everything else because he's the best. He's the man. And remember, both Mark and I are certified financial planners. So we're really, like, voyeurs. We love talking to, we love hearing your stories, but we do have a credential, so it's not just out of the blue. We're not one of those people. We're the kind of people who actually studied for hard tests. And I can't believe how long it's been since I actually was in the business, but I was a long time ago. Now I just talk about it. So get in touch with us and we'll happily help you along your way. Today we are talking to Brian, who joins us from Washington State. Hi, Brian, how are you?
- [03:19]
B
Hi, Jill. I'm doing good.
- [03:21]
A
Tell us what's happening, how we can help you out.
- [03:24]
B
Well, I've been saving for retirement for a bunch of years. Kind of got a slow start. Didn't really start putting into retirement until my 40s. And so my plan was always just to work till I was 67 and just put in as much as I could and figured whatever it is, is what it's going to be. But my wife turned 65 this year, and so Medicare, you know, and Social Security. And now I'm thinking I don't really want to work till I'm 67. You know, there's a lot of other things I'd rather be doing, and I like my job and everything, but if I could retire next year when I turn 65, that would be awesome. But I'm not sure if have enough money to make it.
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A
Okay, well, wait a minute, wait a minute. So your wife, she's. She's retired, right?
- [04:17]
B
She's retired, yes.
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A
Okay. And how much do you earn right now, Brian?
- [04:21]
B
Oh, about 110, 120,000 a year. Kind of varies. I work for the railroad, so kind of depends on how much overtime I get.
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A
Okay, but also, when you said railroad, you know why I said, oh, because I know that means you have a pension, right?
- [04:37]
B
Yeah. Yeah.
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A
Tell me about the railroad pension. Let's pretend it's a year from now. What would you get in terms of a pension payment?
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B
I don't have my 30 years in, which is what? You have to have to go out earlier than 67. So if I, if I started collecting my pension at 65, I would take. It's about A$600 a month deduction for the rest of my life with that
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A
$600 reduction at age 65, what would your amount be
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B
with my. My wife and myself or just me?
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A
Let's do your wife and you.
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B
Okay, it would be $6,640 a month.
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A
And that includes the reduction, right?
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B
Correct. Yes.
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A
Okay. Just got to make sure I got that. Okay, let's keep that one. That would just keep that in mind. 6,640amonth. And would you also both be entitled to Social Security?
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B
They kind of rolled Social Security into a tier one, and then pension is a tier two, but yes. Yeah, we would both be entitled to the tier one.
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A
Do you know how much that would be?
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B
I know my wife started collecting this year, and it's 18. She's getting 1800. We haven't got the first check yet. She just turned 65. She's a year older than me, so. Okay.
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A
All right. So she. So she gets 1800amonth. You will get, based on your joint life, 66, 40, plus some money for Social Security. Here's a big question. How much do you guys spend right now on a monthly basis?
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B
Well, we just started kind of tracking the nitty gritty on that, but we figured about 7,000amonth.
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A
Let's say that we're wrong. Let's say it's 8,000amonth. Just for fun.
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B
Okay.
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A
Okay, sure. Because you sound young and healthy and it sounds like you want to do stuff, right?
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B
Yeah, exactly.
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A
Okay, so it seems to me 6000, 640, plus the 1800 of your wife, plus some amount for your own Social Security. Even if it's just that same 1800 that your wife's getting, it's probably going to be more than that.
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B
Actually, Jill, that was. That was with the 1800 that my wife's getting, it's all kind of rolled into that number.
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A
The 6640.
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B
Yeah, that's with her Social Security, and. Yeah, all of it rolled up.
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A
And your Social Security also.
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B
Correct.
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A
Okay, so 6640 is total. And if you had $8,000 a month, how much money have you guys saved in other vehicles? Do you have a retirement account, a deferred account?
- [07:19]
B
Yeah, I have a 401k and it's got about 620,000 in it.
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A
Amazing. What about your wife? Does she have any money in retirement accounts?
- [07:28]
B
Yeah, she has an IRA and it has 230,000 in it.
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A
Any Roth accounts, anything like that? Any slides on the side? What do you got?
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B
Yeah, yeah, I have a roth that has 170,000 in it.
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A
It's amazing.
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B
And then we have some savings accounts that are in like the money market or a CD that's about $40,000.
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A
Do you guys own your home in Washington?
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B
We have kind of a strange setup. We are co owning a hobby farm with some close family friends. And so everything's 50. 50.
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A
Do you have to make a payment on that? Is there a mortgage on that or is this free and clear?
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B
No, there's a mortgage and we don't plan on paying that off. So that's our half of. That's about 1700amonth.
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A
That's great. Okay. Any other property that you own?
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B
No, that's about. We owe about 440,000 on that loan at 3.5% and it's worth over a million dollars. So there's. There's a little bit equity there.
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A
And I mean, it's a farm, so you can. Can you stay there? Is this a place you can age or not really?
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B
Our family's kind of scattered all over the states and I have a daughter that lives in Sweden. So we're probably do it for maybe 10 more years and then sell it, Sell our part. And we don't really know where we're going to land.
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A
But I like my daughter in Sweden. This is good. You have a couple kids? Just one. Everyone okay? Like grown and okay?
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B
Yeah, they're all grown. They're. My daughter lives in Sweden, is 40, and then the other two are in their mid to late 30s. And they're all good.
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A
Yeah, great. Fantastic. So if you right now are planning on a year from now, again, as you said, it's pretty easy to look at the math here and say that you can do this because I don't know, you said you got a slow start, but I have to be honest with you, it's like you got a million bucks. It's incredible that you like, if you just started in your 40s, it does kind of show everybody or everyone listening, you can hear this, that you know you can get a late start if you have a job with a pension. It's just a massive, massive difference. Right? Because if you were earning $110,000 in the world and you were just saving on your own, and there was no pension, I don't know if you'd really be able to make it at this level, but it seems like you can do this. Now. If you were to wait to 67. I know you don't want to, but can you just give me what that number would be of the amount at 67?
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B
Yeah. With no deductions and my wife and I combined, it would be $7,300 a month.
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A
Well, obviously, you know, that's a no brainer, but I still think it's a no brainer, I really do. You know, listen, it's better to get that extra guaranteed money, but it's not necessary.
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B
You said like, we've saved over a million dollars. And I was actually kind of surprised when I started putting this all together. I've just put my head down and do the work and I enjoy my job. And after we started adding this up, it's like, oh, we've, we've done pretty good. And so maybe I don't need to work till I'm 67, but I was thinking of stopping work next year at 65, roll into Medicare, but hold off on taking my pension until I'm 67. So living off of, you know, my 401k or.
- [11:00]
A
I think that might be a great idea. I think what you could do is you could, you know, if you hold off, right, and you just say, let me take some money out of the IRA or the 401k, you live on that money and you have that higher guarantee at 67, I think that will give you a lot of comfort. I mean, you just have to be willing to spend down from that retirement account. But you know what, you sort of think of it more like almost like if you think of it as a pension, you say, I put the money in, it was growing and now I'm turning the spigot back on. It's creating income for me. And so if you said I'm going to take, you know, at age 65, let's say I take 100 grand out of the retirement account. 66, I do it again, 67, you know, do it until you claim your Social Security. And I don't mind you taking that money out before that income comes in. I do love that guaranteed income and it is an inflation adjusted. So that's a real comfort for people like you guys, where you don't have tons and tons of money that's growing, but that growing is huge. So I think you can do it. And I like the idea of delaying the, the pulling the, the pension, letting it accumulate definitely for a joint life. Because, you know, I think that just unless you guys have really bad health, either one of you, presumably you're both in decent health. We know that statistically your wife should live longer than you. So we want her to make sure, you want to make sure she has Money coming in if you predecease her.
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B
Yeah. And they have the survivor's benefit, so whoever's left gets the higher amount. So.
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A
Great.
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B
Yeah, that's. That's kind of.
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A
You're in amazing shape, Brian. And. Okay, let me ask you the annoying question, because I'll have to do it, is do you have your estate documents? You have a will? Do you have a power of attorney? Do you have a health care proxy? Is that done?
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B
I have a will, but I need to get my wife on board and get her will together. So.
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A
Yeah, you know, why? Just tell her it's a real pain in the neck to settle an estate that doesn't have a will. Just let's, let's just do that. You know, like at some point we just have to guilt people into it. It makes it so much harder. It does. It makes it like the settlement of an estate is so much harder without a will. And also, like, you know, we're at the age. Once you get to be 60 years old, you know, people, bad things happen. Right. We just don't want a bad thing to happen without a document down on paper with what the person wants to occur. So you're in great shape, but that's really important to do. So pinky swear with me, you're going to get those estate documents done. Play this episode for your wife. Just.
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B
I like, I like playing the guild card. I'm going to do that.
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A
Yeah, you should, you should. You're like, oh, you don't want to put that on the kid. Especially like you got one who's overseas. Come on now. We're going to make this happen. Brian, anything else that we can do for you today?
- [13:53]
B
So as far as taking the money out for the two years till I get to 67, the best place is out of the Pre tax, the 401k or the IRA.
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A
Exactly right.
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B
Okay. And then paid the taxes on it.
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A
Yep. And then don't look back.
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B
And I think once we hit that $7,300 a month at 67, that'll pretty much pay for most of our monthly expenses other than, you know, going to Sweden to visit or going on a cruise.
- [14:21]
A
Exactly right. And it's amazing that you have that. So congratulations. Late start, definitely onto a great culmination of a career. So well done. And if you're listening to this and you want to figure out, like, how you jumpstart what's going on in your own financial life, you need some help. Just need a little guidance. 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 on the air, check the box. Mark will do everything else. While you're on the website. Check out all the great content that lives there. Got a lot there. So get going. And remember, you can subscribe to us on the Odysee app or wherever you find your favorite podcast. Please leave us a rating and review wherever you listen. And as always, we ask that you please try to lift someone up. Change your work, change your wealth, change your life. Thank you for listening. We'll talk to you tomorrow.
- [15:19]
C
Today's episode is sponsored by NerdWallet's Smart Money podcast. Ever Google a money question and end up 12 tabs deep with 12 different answers? This podcast is your shortcut back to clarity. NerdWallet's Smart Money podcast breaks down financial decisions with a team of trusted journalists. They explain the why behind decisions like investing, home buying and choosing credit cards. With clear research backed insights. No jargon, no misinformation. Make your next financial move with confidence. Follow NerdWallet's Smart Money podcast on your favorite podcast app.
- [15:49]
D
Hi, my name is Lloyd Lockridge and I'm the host of a new podcast from Odyssey called Family Lore. In this podcast I'm going to have people on to tell unusual and sometimes far fetched stories about their families.
- [16:00]
A
I've heard my whole life that she invented the margarita and then we're going
- [16:04]
D
to investigate those stories and find out how much of it is true. He gets a patent one month before the Wright Brothers. Oh my God. Please follow and listen to Family Lore, an Odyssey Podcast available now on Apple Podcasts, Spotify or wherever you get your shows.