Podcast Summary: "Can We Self-Manage Our Money?"

Podcast Information:

• Title: Jill on Money with Jill Schlesinger
• Host/Author: Audacy
• Episode: Can We Self-Manage Our Money?
• Release Date: April 8, 2025

Introduction

In this episode of Jill on Money with Jill Schlesinger, host Jill Schlesinger delves into the topic of self-managing personal finances. The episode features a listener call from Miriam, a late retiree seeking advice on whether to continue managing her finances independently or to rely on professional financial advisors. Jill, along with her co-host Mark, provides comprehensive insights and actionable recommendations to help Miriam navigate her financial decisions.

Listener Call: Miriam's Financial Situation

[03:24] Miriam: "I am not very experienced in finances and my husband and I are edging towards a late retirement..."

Miriam from the Pacific Northwest reaches out with concerns about their approaching retirement. Both she (66) and her husband (71) are still working intermittently, primarily due to the seasonal nature of their income sources. Their financial landscape includes:

• Social Security: Husband receives $2,200 monthly; Miriam plans to start at age 70, approximately $1,750 monthly.
• Real Estate: Owns a commercial building valued at $600,000, free of mortgage, with rental income from a cafe and a short-term holiday rental.
• Savings and Investments: $90,000 in a commercial savings account, $40,000 in personal savings, $20,000 in her husband's personal account, and $312,000 in Fidelity accounts (including IRAs).
• Additional Assets: An extra commercial lot valued at $120,000 and a land trust residence paying $800 monthly, inclusive of property taxes.

Miriam seeks advice on whether to accept Fidelity's hybrid advisor role to better manage their finances.

Discussion Highlights

Assessing Financial Health

Jill begins by evaluating Miriam's current financial status, revealing that despite irregular income streams, Miriam and her husband are in a stable position due to low expenses and substantial real estate holdings.

[12:52] Jill Schlesinger: "...you guys have got enough money and the only reason it's looking this way is, you don't spend any money."

Jill emphasizes that their minimal monthly expenses ($4,000) and significant savings contribute to their financial resilience.

Investment Allocation Strategies

The conversation shifts to investment strategies, particularly the allocation of funds between stocks and bonds.

[16:36] Mark: "I don't think they need a ton of risk at this stage of the game. I mean, you know, 50, 50, even 40% stock, 60% bond is fine with me."

[16:48] Miriam: "I'll tell you what the advisor said... 70, 30 is what I was thinking."

Miriam contemplates a more aggressive allocation (70% stocks, 30% bonds) contrary to Mark and Jill’s more conservative suggestions (50-60% stocks). Jill advises against excessive risk, highlighting the potential negative impact of market downturns on their financial security.

[17:03] Miriam: "Is it?"

[17:04] Jill Schlesinger: "Why would you do. Well, I don't know. I don't think you would do it for yourself."

Jill stresses the importance of balancing growth with risk management, especially as they approach retirement.

Self-Managing vs. Financial Advisors

Jill explores the pros and cons of self-managing finances versus hiring a professional advisor.

[19:53] Jill Schlesinger: "Mark. Should they hire an advisor or not?"

[19:56] Mark: "I mean, I don't know. It just depends on her comfort level."

Jill advises that self-management requires discipline to stick to an investment plan, especially during market fluctuations. If Miriam is confident in her ability to adhere to a strategy without getting swayed by market volatility, self-managing could be feasible. However, if she feels uncertain, a financial advisor could provide valuable guidance and emotional support.

[21:55] Jill Schlesinger: "Do you guys have all of your estate documents done?"

Final takeaways include the importance of estate planning and ensuring that all legal documents are in order to secure their financial legacy.

Key Insights and Recommendations

1. Consolidate and Adjust Savings:

   • Shift Funds: Move $20,000 from the CD to short-term cash, increasing accessible funds to $60,000.
   • Increase Brokerage Investments: Add $100,000 to the brokerage account, bringing it to $290,000 for better growth potential.

2. Investment Allocation:

   • Recommend a balanced portfolio of 50% stocks and 50% bonds or 60% stocks and 40% bonds to optimize growth while managing risk.
   • Advise against a 70% stock allocation due to increased vulnerability to market downturns.

3. Utilize Retirement Accounts Strategically:

   • Encourage taking withdrawals from the husband’s retirement account during low-income years to stay within a favorable tax bracket.
   • Suggest leveraging Roth conversion strategies if applicable to optimize tax efficiency.

4. Consider Selling Real Estate Assets:

   • Reevaluate the necessity of holding onto the commercial building and lot.
   • Liquidating these assets could provide additional liquidity and reduce reliance on property income, offering more flexibility for unforeseen expenses.

5. Estate Planning:

   • Emphasize the importance of completing estate documents, including wills and medical directives, to ensure a smooth transfer of assets to heirs.

6. Evaluate the Role of Financial Advisors:

   • If Miriam feels confident and disciplined in managing investments, self-managing could be a viable option.
   • Alternatively, hiring a financial advisor can provide expertise and alleviate the emotional strain of financial decision-making during volatile markets.

[22:55] Jill Schlesinger: "It's worth thinking about. And as you edge towards late retirement, I think the takeaways are get your cash to work, use the money in the retirement account..."

Conclusions

Jill concludes by underlining the significance of proactive financial management, especially for late retirees like Miriam. She encourages evaluating comfort levels with investment strategies and making informed decisions that align with long-term financial security and personal peace of mind.

[23:07] Miriam: "No, I know, I know. We're trying to actually be more proactive at this point."

Jill reinforces the message that whether self-managing or seeking professional help, the key is to have a clear, disciplined plan to navigate the complexities of late-stage retirement finances.

Notable Quotes:

• Jill Schlesinger [12:52]: "It’s because you don’t spend any money. Right?"

• Miriam [16:48]: "70, 30 is what I was thinking."

• Jill Schlesinger [17:14]: "I totally disagree with that, but that's me."

• Jill Schlesinger [21:55]: "Do you guys have all of your estate documents done?"

• Jill Schlesinger [22:55]: "It's worth thinking about. And as you edge towards late retirement, I think the takeaways are get your cash to work, use the money in the retirement account..."

Final Thoughts

This episode offers valuable insights for late retirees contemplating self-managing their finances. Through Miriam's real-life scenario, Jill and Mark provide practical advice on investment strategies, the role of financial advisors, and the importance of estate planning. Listeners are encouraged to assess their financial situations critically and choose the path that best aligns with their comfort levels and long-term goals.

For more information or personalized advice, visit jillonmoney.com and connect with the show’s experts.