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- [00:00]
Jill
Here's a stat that completely blew my mind. Nearly half of American adults say they.
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Policygenius Announcer
Would suffer financial hardship within six months if they lost their primary income earner.
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Jill
If that hits you close to home.
- [00:14]
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- [01:44]
Jill
Welcome to the Jill on Money show. It's Thursday, September 11th, so we do provide unconventional and entertaining insights on your money and life here. But it is September 11th and Mark and I are both New Yorkers and so we do like to mark this, this moment. And some of you are listening to this and early in the morning maybe exactly when the planes hit the Twin Towers and those horrible other planes went down. And so Mark, what were you doing on September 11, 2001?
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Mark
I was in Arizona. Yeah, that was like my second or third year in Arizona. So I just, you know, we've talked about this in years past, but I just woke up to the news. I think my sister was calling me or something saying, oh, don't worry, Dad's all right. I had no idea what she was talking about. Turn on the tv, saw what was going on because my father at the time, you know, he went into the city for work, so he was stuck on the GW Bridge. They shut it down. He was just kind of sitting there on the span until they reopened it. But yeah, crazy day. Hard to believe 24 years ago. It's crazy, man.
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Jill
I was living in New England and I'll never forget it because it was early in the morning and I was. I had been running on my treadmill and I'll tell you, I was not watching CBS because I was a fan of the Today show. And I remember that. The first thing I remember was that Katie Couric reported on this. And then I was moving to between NBC and cnbc. And Maria Bartiromo, who was then a young beat reporter, New York Stock Exchange reporter for cnbc, was live as it all happened. It was incredible. And, and also same thing for our family, which was we were trying to figure out where my father was because he was, we thought, going to a board meeting at the downtown and. And we couldn't find him. And then the phones were like impossible. And so we found him. Miraculously that we found that he was fine. But it was just such a. It is such a strange thing for me, Mark. I don't know about you, but like to be a New Yorker but not be in the city for that was a very weird feeling. It was actually probably the moment I knew that I had to move back to New York because I felt like a real. I felt that in like the pit of my stomach, like, ah, you know what? This New England thing has been interesting, but I gotta get out of here. I didn't know like when it was going to be, but I knew I was going to get out of there.
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Mark
Yeah, I knew I had to get out of Arizona. It just took me another five years before it actually happened, but. Yeah.
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Jill
Wait, what year did you move back to New York?
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Mark
Coming up on 20 years, 2006.
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Jill
Okay, so I moved back to New York. I mean, I was commuting for many years when I met the divine wife that I am married to now. But I full on moved back at the end of 2008.
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Mark
I was literally passed out in a hotel room in Vegas and I got.
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Jill
A phone call from Constance Lloyd, the Legend, one of our favorite people in CBS radio.
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Mark
I have a job for you. Do you want it?
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Jill
How did she know you. Were you an affiliate of cbs?
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Mark
We were an affiliate and she and I had been corresponding for probably a good two years. I had been on her radar, always checking in, saying, any jobs, any jobs, any jobs? And she always, not yet, not yet, not yet. I got nothing, nothing, nothing. When I have something, I'll tell you.
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Jill
Oh my God.
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Mark
You know, it's one of those things that you just kind of put on the back burner. And yeah, I woke up one day morning in Vegas with a message from Connie.
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Jill
Unbelievable. We love you, Connie. The rest, as they say, is histoire. L'. Histoire. All right, Mark, we're done with our 911 memories. And if you guys want to share yours with us, we're happy to have that. Or if you want to get in touch with us to run something by us, whether it's an opportunity. I keep saying this because I really think that there are so many people with wonderful opportunities. Don't squander those opportunities. You're not stuck where you are. Maybe there are different things that you, you could be thinking about. Maybe you're early in your career and you're trying to figure out how to catapult yourself forward. Maybe you're on your financial pathway and you say, gosh, you know, I really want to do something else, but I'm scared. But whatever's going on in your financial life, we want to help you out. All you need to do is go to jillonmoney.com, click the contact us button, write us a note, and if you'd like to join us on the air live, just check that little box and Mark will arrange everything. Don't forget while you are on the website, to sign up for our free weekly weekly newsletter, check out our other podcast which is called Money Watch. And also we've got lots of stuff in our resources section. We've got videos, blog, all this kind of fun stuff. So check it out. It all lives@jillonmoney.com let's do some emails, man. Mark is killing me with the emails because we got a lot while we were on vacation. So let's do it. Here is a subject from Joe Annuity or stay in a 401k. Okay, this is what Joe writes. I'm 60 years old. I still am working and will do so for two to seven more years. My advisor wants me to pull half of my 401k valued at about $500,000 and invest it in a 6 year annuity where supposedly I won't lose anything until the market goes down 20% or more, but the maximum return I can get is 11%. He thinks this would be best for me because he believes the stock market is going to go down considerably in the near future. Mark, keep laughing. I would really like your advice because I just want to stay in stocks and index funds. I've gone through downturns before. They usually come back and if they come back strong, I think I could get more than 11% that the annuity is offering. Thanks for your help. I really appreciate it. Well, Mark laughed. And the reason he laughed is that first of all, your advisor, he's not an advisor, he's a salesperson. So this is a terrible idea, number one. So I have two thoughts. One is that your advisor wants thinks the market's gonna go down considerably in the near future. How does he know? Hmm. How? This is baloney. I hate this advice. First of all, no one is really very good at predicting market up tops and bottoms. And even if he did, and as you said, even if the market were to go down, you know, 40%, okay, maybe, maybe that could happen. But you're going to work for two to seven more years. Maybe you work for five more years and you'll get back. And you know what? This is, I think one of those ideas that is really good for the advisor, but not for you. The advisor is going to make a big commission and you're going to get locked into something that has high fees. So I think this is a lousy idea. And I'll tell you what else, Joe. I think you might want to consider shopping around your advisor relationship because maybe you could just do this yourself and not get stuck or maybe find someone who's going to be really looking at your best interest, not somebody who wants to sell you something. So this email is from Anonymous. And anonymous writes, I stopped working several years ago to stay at home with my kids. At that time, I rolled over my 401k to an IRA rollover. And then we stopped contributing to Roths as we were down one income. Okay, makes sense. We did contribute to the employer 401k. Fast forward today. My husband and I have been wanting to start contributing to our Roths again, but now he makes over the limit. We would like to do a backdoor Roth, but I don't want to mess up. I understand that I cannot do a backdoor because I have a rollover ira, which means that we would subject to the pro rata rule. But I can't seem to get an answer. If my husband can contribute to his Roth, does my rollover cancel out my husband's ability to contribute to his Roth ira? Mark, yes or no?
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Mark
The answer is no. But he can't contribute. He would have to do a backdoor Roth.
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Jill
He has to do a backdoor Roth. But here's the other thing. Is it possible that your husband Has a Roth 401 option? That's what I'm interested in. If he does have a Roth 401 option, then what would be interesting would be for him to use that and not worry about doing a backdoor. Let's say he.
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Mark
Unless. Right, that's, that's true. Unless he's already maxing out his, his 401k and they just have excess funds that they want to contribute.
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Jill
Exactly. Now, if that's the case, as long as he doesn't have an old ira, then your old IRA would not preclude him from actually contributing to a backdoor Roth. If he does have an old IRA floating around, he would just put it into his current 401k. If they accept those funds. That's one of the big reasons that we like when people are thinking about doing backdoor Roths and you have like extraneous old accounts, a lot of these current plans will accept that money. So you might want to check that out next. All right, I'm blowing through these. Okay, here's from Darrell. I've listened to your show frequently for several years. The consistent advice of contributing to a Roth instead of a pre tax is consistent with the qualification of tax rates that could rise in the future. My question revolves around the fact that they haven't risen aside from the top bracket in decades. I'm 44 years old. I've been waiting for them to rise my entire adult life. They haven't. Even with Ed Slott urging the Roth position, why wouldn't I save the top marginal bracket today when my first dollar's in and retirement will be the lowest bracket in the Future? Also, the 72T position is rarely brought up early for earlier retirees and requires a larger pre tax position. Okay, so here's, here's how I want to think about it, Darrell. In my mind, you're right. If you're in the top bracket, we don't know whether that's going to change in the future. I think the difference is, even if it didn't change, the fact that you're in the top bracket now probably means you're going to stay in the top bracket for a while. I just, I really do, I really think that that's been the case. Like a lot of people who say that, like during your lifetime, if you're in the top bracket, it's hard not to be in the top bracket. But you could be right and it could be for you that a 72T, which is really a way to take an early distribution penalty free on assets in a retirement plan that have not yet been taxed, you would have like a schedule and sure, you can do that the problem is when with the substantially equal periodic payments as I see it, is that, you know, you won't get an early withdrawal penalty, you still have to pay the tax that's due. And I think it's kind of nice to know that you will have money that has already been taxed. And you know what that position is. For many of the people who are coming on and talking to us, there's been a back and forth many times with folks who are in top brackets. Like at first a lot of advisors were saying, oh, don't worry, just use pre tax. And I think that that advice has really shifted. So I think that pre tax contributions, if you have all this money that's socked away pre tax, I wouldn't necessarily want to compound that problem. And the benefits of having substantially equal periodic payments, of getting that money out, you know, it's great you don't have a penalty, but you know, it does mean that you're locked into a distribution schedule. So I don't love, I don't know, like, I really don't love the idea of being locked into anything. But you know, it is, it is, it's certainly an option. So I would say that if that's something you're interested in, whether you know, you, you get this withdrawal from your IRA or your employer sponsored plan and you want to start doing that, that's fine. But again, it requires a fixed schedule of substantially equal periodic payments and it is a rigid schedule. You cannot mess with it. That's why a lot of people do tend to do the rule of 55, which is like basically if you leave your job in or after the year you turn 55, you have a lot more flexibility and you don't have to pay the 10%. But both of these are interesting and they are interesting to talk about with an advisor for sure. I think tax rates are. I know we keep saying tax rates are going to go up, but I think there's going to come a time where they're going to go up. That's just my, that's like the math of the country's finances. Jackie's subject I love. Can I take a break? Oh man. Jackie, girl, I know how you feel. I don't feel that way because I just had a wonderful two week vacation. I come back to you all. But okay, here's what Jackie said. I'm feeling burned out. I just want to know if I can take a break from work. I am a primary caregiver for my elderly mom. I've got a demanding Job and managing her care for the past several years has taken its toll. Okay. Jackie has about $480,000 in Roth assets and then $133,000 in traditional IRA and retirement funds. Brokerage account of $49,000. An HSA with 16,000 85,000 in checking and savings, $10,000 in treasury bonds. Her spending. This is the good news, Mark. Her spending is only $4,000 a month. Incredible. In the next 10 to 15 years, I will inherit two different properties that I will split with my sister. Okay, well, here's. Here's. You left this to the end. I just turned 39. Is it crazy to take a break for several months and then try to reenter the job market? My current base, $185,000. I live in New York City, and I live in the city with my partner. We're going to move soon to lower our costs and to increase our space. Okay. 39 years old and burnt out. Mark, what do you think?
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Mark
Yeah, I mean, I get it. She's caregiver for her mom. I can understand how that has left her feeling this way. It's tough to take an extended break and. And try to get back in. I don't know what she does. I don't know what her industry is.
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Jill
Yeah.
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Mark
You know, she's going to inherit two properties eventually. I know where those properties are. One of them is going to bring in a lot of money.
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Jill
Yep. Yep. Here's what I think. I think that you should talk to your boss. So, first of all, I would say that if you can say to your boss, look, I need, like, a couple months here, and I'm losing my mind, that would be good. I'm worried about you being 39 years old, leaving the job market at a time when the job market's slowing down generally. And again, as Mark said, like, we don't know what you. Do you think you're confident you can get another job fast? You know, six months from now? That's possible. I really would need to hear about, like, the. A little. Few more of the details. I don't think it's a bad thing to take a break. I really don't. But I worry that if you do so, it could really be a while before you can land your next job. So if your partner would maybe. And you're, like, moving to a new space, and you could say to your partner, like, can we talk about this together? I know you're not combining your expenses, but if you're. If your costs are going down and you only spend Four grand a month. And, you know, you have money in savings and checking. You could float this. You could say, you know, here we are, it is September. I'm going back into the job market in January. If you feel comfortable that you can land a job in January, then sure, there's no problem doing this. But just beware that there, the job market is slowing down, and things can change very quickly. So it really also depends on kind of your emotional ability to weather a longer period of time being out of work. I think financially you can do it. I really do. But that's just, you know, you're 39. You got a bunch of money. This is all good, but I'd be careful with that. Okay, good. Sue says that she's got memberships in Experian, TransUnion, and LifeLock. I want to get rid of some of these expenses. I'm afraid I'll be hit. Would you recommend keeping all three downsizing to one? Thank you very much. Oh, okay. I'll tell you what. I'd get rid of all three, and I would just put a credit freeze on my credit record. What do you think about that, Mark?
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Mark
Yeah, 100%. I was going to say definitely, for sure, get rid of two of the three. Uh, but, yeah, the best. The best course of action that you can possibly take is to just freeze your credit files.
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Jill
Just freeze it, Sue. And then if you have to go borrow money, you have to unfreeze it, but freeze those credit files. You don't need a membership in Experian, TransUnion, and LifeLock. I. You know, definitely not if you're really worried. I guess I don't even know who I'd keep. I. I get Experian for free because I had, like, some data breach or something, and I got it, but, like, I don't pay anything for it. I would never pay for that. Just freeze your credit. Freezing your credit, gang, it means that nobody can open up your credit record for anything, not even you. You have to unfreeze it to go get new money.
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Mark
You have to thaw it.
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Jill
You have to thaw it. I like that. Okay, this is from Cynthia, who wants to know if she can do something called an off ramp. Okay. Cynthia says I'm a fairly new listener, and I've been voraciously listening this year. All right? She's 45, single, no kids. She spends six grand a month. She makes $143,000 a year. She contributes 5% to her traditional money to her traditional retirement account. She gets a 5% match there, plus she puts 2% into a Roth and $2,500 a year into brokerage Roth IRA. She saves a couple thousand dollars a month into savings. She just got out of debt. Woo hoo, way to go. Except for a mortgage. So here's what she has. Remember we're trying to get this off ramp going here. So 45, she's got $380,000 in a traditional 401k, 20,000 in a Roth, 401k, 10 in a brokerage, 10 in a Roth IRA. Her home is worth $475,000. Her mortgage is $300,000 which looks like it will remain in place until 2034. About $8,000 in savings. Okay, here's the issue. After my mortgage is paid off in 2034, I will only need $3,000 a month. Can I go part time or take a 50% pay cut for five and a half years to reach 59 and a half, then start to draw 3% from the expected $1.6 million in a traditional 401 covering expenses and healthcare until I reach 70 when my Social Security benefit will be around $4,800 a month. @ that point the calculators will say that I should have about $6 million in my accounts. Sounds all very good, doesn't it Mark? My goal is to simplify and decrease my expenses so I can have a more flexible, less demanding job to do more of the things I enjoy like volunteering and health and fitness and travel. I do have a gift that I receive annually. $10,000 tax free, no end date. So also when I'm part time pay cut, I anticipate my savings rate will decrease drastically and after 2040 no more contributions to a 401k. Will this plan work or is it unrealistic? 6 million is probably a best case scenario. Would love to hear your thoughts. Thank you for all you do to educate us. So okay now Mark, what do you think about this? What is your. I just want to do one quick thing which is what would happen. We haven't really. We haven't inflated your expenses. So the $6 million may even if it's 5 million. When you think about your expenses, we haven't increased them. Like $3,000 in today's dollars is going to be more money in the future. But Mark, what do you think of the plan of simplifying life? Have a 50% pay cut. And like how do you, how do you think that Cynthia's off ramp, off ramp sounds.
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Mark
I mean on the surface it's. I think it's probably doable just, just because she really, if $3,000 is the real number, I mean, she spends very, very little money. But I, you know, I'd really have to drill down and do a plan. But I think on the surface, it's probably doable. She's not talking about quitting altogether. She's still going to have income coming in, Right?
- [22:29]
Jill
And so I think that when a lot of people look at these, and even when we start with us, right, like, we'll say, like, yeah, we think you can do it. I think that it's probably pretty likely that you can do it. But as Mark said, things change. So I think it's a good working game plan. But because you're so young, because you're only 45 and we're talking about, you know, years in the future, I know it's not that doesn't feel like that long, but it's nine years from now. Things can change. It looks like you're on track. You can keep testing these numbers every year. If it makes you feel good to just sort of say like, this is my generalized game plan, then great. The one thing just to be careful about is I mentioned this recently, which is that sometimes you say, like, oh, I can go part time and I could take a pay cut. Like, yeah, maybe sometimes things don't work out that way. So if you feel comfortable understanding that maybe, you know, a 50% pay cut for five and a half years may not be 100% available to you, maybe nobody wants us. Maybe your job is being replaced by an AI bot. I don't know. I think you're on track and you need to keep retesting the assumptions. That's what I would say. So good luck. Let us know. All right. This is from Alex and I, like Mark, always likes to end these shows on a lovely note. Alex, subject is a heartfelt thank you. Hi, Jill and Mark. I just wanted to take a moment to say thank you. During the pandemic, your daily shows were a constant source of motivation and focus for me. I had always been interested in personal finance and had toyed with the idea of making a career change, but I was too scared to take the leap. Listening to your podcast, hearing the advice you gave, and learning from Mark's own journey to becoming a CFP made me think of maybe I can do this too. Fast forward to today. I passed the CFP exam in 2023 and completed my hours in 2024. What started as a personal passion has now become my career. And you both played a Big part in making that happen. It's funny. My mom loves watching Jill on CBS mornings. One day she asked me if I had ever heard of you, and I laughed and I said yes. That's why I'm a cfp. Just wanted you to know that your work makes a real difference in people's lives. I am one of them and I am grateful. Thank you. Woo. Yes, Alex, going for that cfp. And thank you for that lovely note. What a nice way to end the show. Boy, that was great. That's great.
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Mark
That's what it's all about. I looked him up. Alex is a. He's a CFP in the Chicago area.
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Jill
All right, go for it, Chicago. And Alex, thank you for writing, taking the time to write that note that is really so meaningful to us. And thank you all for listening because we take this pretty seriously. We like to have some fun with you, of course, but we know that you put us in this really wonderful position of being able to help you, and that's a gift that you give us, and hopefully you get something great out of it. Maybe not a career change, but that's, of course, something that's just delightful to us. So thank you so much for that, Alex. Okay, if you want to get in touch with us, go to jillonmoney.com click the contact us button. Let us know if you would be willing to come on the air live by checking the box. Mark will do everything else. You can sign up for the free weekly newsletter on the website as well as peruse all of our other lovely free content. You can subscribe to the Jill on Money show on the Odysee app or wherever you find your favorite podcast. As always, we ask that you may want to put your hands on someone's back. You may want to give someone, but you may want to just metaphorically reach out to someone. Say you're thinking about them. Do something nice for someone else today, like Alex did for us. We know that everybody appreciates that, and it's just a delightful gift that you can make every single day. Change your work, change your wealth, change your life. Thank you for listening. We'll talk to you tomorrow.
- [26:34]
Policygenius Announcer
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- [27:39]
Judge Dan Mentzer
Three judges, one bench, zero room for nonsense. I'm Judge Dan Mentzer. Joining me are Judge Rachel Juarez and Judge Yodit ToWelde. And on Hotbench, we don't just hear cases, we debate. What she's asking for is for the payments that she made on his car.
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Jill
But there's still payments to be made.
- [27:56]
Judge Dan Mentzer
Correct and we deliver justice. That is the verdict of the court. Following, follow and listen to the Hot Bench podcast on the free Odyssey app or wherever you get your podcasts.