Did I Pull the Plug Too Soon?

Summary

Podcast Summary: "Did I Pull the Plug Too Soon?" - Jill on Money with Jill Schlesinger

Released on May 7, 2025 by Audacy

In this insightful episode of "Jill on Money with Jill Schlesinger," host Jill Schlesinger, CFP®, along with co-host Mark, addresses common retirement concerns through a listener call that delves into the critical question: "Did I pull the plug too soon?" The episode offers a comprehensive analysis of retirement planning, asset management, and Social Security strategies, providing actionable advice for individuals contemplating their retirement decisions.

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Introduction to the Episode

Jill Schlesinger sets the stage by emphasizing the importance of making informed financial decisions to secure one's future. The episode is structured around listener interactions, aiming to demystify complex financial topics without the heavy jargon often associated with finance.

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Listener Call: John from Washington State

[03:53] John, a 60-year-old listener from Washington State, reaches out with two primary concerns:

1. Retirement Timing: Is he too early in retiring?
2. Social Security Benefits: Clarifications on accessing his ex-wife’s benefits.

John's Financial Profile

• Age: 60
• Marital Status: Happily divorced
• Children: Two grown and independent
• Income Sources:
  • Pension: $3,000/month with a 3% cost-of-living adjustment (COLA) [04:26]
  • Rollover IRA: $905,000 [05:04]
  • Roth IRA: $101,000 [05:13]
  • Brokerage Account: $172,800 [05:19]
  • Deferred Compensation: $20,000
  • VEBA Account: $12,000 [05:29]

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Discussion Points

1. Assessing If John Pulled the Plug Too Early

[06:32] Mark evaluates John's situation based on his income sources and monthly expenses.

Mark: "Answer, no, you did not retire too early." [07:19]

Key Insights:

• Income Stability: John's pension and part-time income of $1,800/month provide a reliable financial base.
• Low Expenses: With monthly expenses capped at $3,000, John remains within his means.
• Health Considerations: Good health and a supportive family background reinforce John's ability to sustain his retirement plan.

2. Social Security Strategy

John plans to initiate Social Security benefits at 65, receiving $2,851/month.

[06:58] Mark advises on the timing of Social Security benefits.

Mark: "If you're basically healthy, it is better to wait a couple years, but it's not imperative either way." [06:58]

Recommendations:

• Flexibility: While waiting can increase benefits, John's current health and financial stability make his plan feasible.
• Future Planning: Encourages evaluating the benefits of delayed Social Security based on longevity and financial needs.

3. Asset Management and Withdrawal Strategy

[08:30] Mark discusses the importance of managing retirement accounts to prevent mandatory withdrawals later in life.

Mark: "It would be good to take some of that money out of the rollover." [08:22]

Strategies Suggested:

• Partial Withdrawals: Gradually accessing funds from the rollover IRA to sidestep required minimum distributions (RMDs) at age 75.
• Reallocation: Moving excess funds to the brokerage account for greater flexibility and control.

4. Estate Planning Essentials

[10:15] Emphasis on having comprehensive estate documents.

Mark: "You should have the power of attorney and the health care policy. Just make sure you get that done." [10:07]

Key Actions:

• Power of Attorney: Designates someone to make financial decisions if John becomes incapacitated.
• Health Care Policy: Ensures medical decisions are managed according to John's wishes.

5. Accessing Ex-Spouse’s Social Security Benefits

John inquires about the validity and benefits of claiming his ex-wife’s Social Security.

[10:56] Mark clarifies eligibility and conditions.

Mark: "You can, if you're married for 10 years, you're entitled... but it would have to be that her benefit's higher than yours." [10:56]

Guidance Provided:

• Qualification: Entitlement is based on the duration of the marriage (minimum 10 years) and the relative size of benefits.
• Strategic Claiming: Advises assessing whether claiming ex-spouse’s benefits would be advantageous based on her benefit amount and age.

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Conclusion and Takeaways

Jill and Mark wrap up the discussion by reassuring John that his retirement planning is sound and that he has not retired prematurely. They highlight the importance of:

• Diversified Income Streams: Ensuring multiple sources of retirement income for stability.
• Strategic Social Security Planning: Timing benefits to maximize long-term gains.
• Proactive Asset Management: Regularly reviewing and adjusting retirement accounts to align with financial goals.
• Comprehensive Estate Planning: Protecting one's estate through proper documentation.

Jill: "Don't let what you don't know stop you from starting your next chapter." [03:24]

Final Advice:

Listeners are encouraged to reach out with their financial questions and consider participating live on the show for personalized advice. The episode emphasizes that informed decision-making and proactive planning are key to a secure and fulfilling retirement.

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Key Quotes from the Episode

• Mark on Retirement Timing:

  "Answer, no, you did not retire too early." [07:19]

• Mark on Social Security Timing:

  "If you're basically healthy, it is better to wait a couple years, but it's not imperative either way." [06:58]

• Mark on Asset Management:

  "It would be good to take some of that money out of the rollover." [08:22]

• Mark on Estate Planning:

  "You should have the power of attorney and the health care policy. Just make sure you get that done." [10:07]

• Jill on Moving Forward:

  "Don't let what you don't know stop you from starting your next chapter." [03:24]

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Final Thoughts

This episode of "Jill on Money" serves as a valuable resource for individuals approaching retirement. Through John's scenario, listeners gain practical insights into managing retirement finances, optimizing Social Security benefits, and ensuring their estate plans are in place. Jill and Mark's expert advice demystifies the complexities of retirement planning, empowering listeners to make informed and confident financial decisions.

For more personalized advice or to join the conversation live, visit jillonmoney.com and click the "Contact Us" button.

Transcript

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[Mark]

The Jill on Money Show. It's Wednesday, May 7th and we are here trying to help you make more considered financial decisions. Now, sometimes you call us with a dream like can I retire? And sometimes I crush that dream. But more often I try to figure out ways to help you get there. But the thing is about those dreams, it's so much easier for me to get underneath the motivations and what's happening for you if you decide to come on the air live with us.

[Jill Schlesinger]

Doesn't mean we won't do emails.

[Mark]

I'm just telling you that to get a more fruitful, enriching experience. I really do think coming on the Air is helpful.

[Jill Schlesinger]

So if you'd like to join us.

[Mark]

And talk about whatever is going on in your life that touches your money, of course, go to jillonmoney.com, click the contact us button, and let us know if you would be willing to come.

[Jill Schlesinger]

On the air by checking the box.

[Mark]

Now. Funny thing happened to me recently, Mark, one of the anchors, said to me, you should have called it Jill on the Money. And I said, well, you know, I thought about that, but obviously three fewer letters is better.

[Jill Schlesinger]

I said, but, you know, Jill on.

[Mark]

Money is like, I'm talking to you about your money.

[Jill Schlesinger]

Jill on the Money makes it seem.

[Mark]

Like I'm the person who's on the money. And I don't want that because the program and my entire ethos and the world that Mark and I have created.

[Jill Schlesinger]

Is about you guys.

[Mark]

It's not about us. It's about what you want to do. And what you would like to do drives the program. So again, go to jillonmoney.com, click the contact Us button, write us a note, let us know if you want to come on the air. Today. We are talking to John, who's on the line from Washington State. Hello, John. How are you?

[John]

I'm doing great. Good morning.

[Jill Schlesinger]

Good morning.

[Mark]

What's going on? How can we help you?

[John]

Well, I'm curious with two questions. One on whether I pulled the retirement plug too early, and then another is on Social Security.

[Mark]

Well, listen, let me just say one thing. If you've pulled the plug too early, are we actually contemplating going back to work if that's the case?

[John]

Part time? Yes.

[Mark]

Okay. All right, let's see. John, how old are you?

[John]

I'm 60.

[Mark]

Okay. And are you entitled to a pension?

[John]

I am.

[Mark]

How much is the pension?

[John]

I'm receiving $3, $3,000 a month.

[Mark]

Oh, and is that an inflation adjusted amount?

[John]

Yes, 3% a year.

[Mark]

Oh, 3% cola.

[Jill Schlesinger]

Great.

[Mark]

Okay. And are you married, single, partnered?

[John]

I am happily divorced.

[Mark]

Oh, my God, I love this guy. Do you have kids?

[John]

I have two kids, grown and launched and on their own.

[Mark]

All right. So we don't have to worry about them. Okay. When you retired, did you have a retirement account in addition to that pension?

[John]

Yes.

[Mark]

What's in that account?

[John]

In my rollover IRA, I have $904,764.

[Mark]

I'm saying 905,000.

[John]

Okay.

[Mark]

I'm giving you the benefit of the up. Okay. What else?

[John]

In my Roth IRA, I have 101,000.

[Mark]

Great.

[John]

In my brokerage account, I have 172,800.

[Mark]

Okay.

[Jill Schlesinger]

What else?

[John]

In deferred comp, I have 20,000. In my Veeba account, I have 12,000.

[Mark]

What's Veba?

[John]

Veeba is kind of like HSA.

[Mark]

Oh, yeah, yeah, yeah. I got it.

[John]

Cash out or sick leave.

[Mark]

Got it. I gotcha. Okay. And will you be entitled to Social Security?

[John]

Yes.

[Mark]

What will that amount be? And are you in good health? Are we waiting to take that? Are you gonna. What. What's the plan?

[John]

Right now I'm in regular, fairly good health. My. My father is 90 and still alive, but my mother passed at 80 and I follow her medical.

[Mark]

Okay, so what's your inclination on Social Security? 67 or 62.

[John]

I'm thinking 65.

[Mark]

Well, that's random, but okay. What's your Social Security benefit at 65?

[John]

At 65, it's 2,851.

[Mark]

Do you own your home?

[John]

I do.

[Mark]

How much is that worth?

[John]

300,000.

[Mark]

Is there a mortgage on it? Nope, Nope, nope, nope. Any other property?

[John]

Nope.

[Mark]

Ready for the big hard question. How much do you spend every month?

[John]

About $3,000.

[Mark]

That's it?

[John]

Yep.

[Mark]

Answer, no, you did not retire too early. Do you get health care?

[John]

I. I am. I'm working part time right now, two days a week. Where I get my health care through that. That job. And that's why I was thinking I could do this job until I was 65 and then stop.

[Mark]

Yep.

[John]

Draw my Social Security and my Medicare.

[Mark]

Okay. I mean, let's see how you do between now and then. If you're basically healthy, it is better to wait a couple years, but it's not imperative either way. Okay, I'm just gonna be clear about that. How much is your part time income right now?

[John]

About eighteen hundred dollars a month.

[Mark]

And it's no big deal. Like you enjoy it. It's fine. Everything's cool.

[John]

I enjoy it so much more than my previous job.

[Mark]

Oh, I can't wait to hear the details. Well, what do you do now just so I can pine after what you're doing?

[John]

I am a lab courier for a clinic.

[Jill Schlesinger]

Really?

[Mark]

Oh, so you're out and about and you're okay, this is good.

[John]

35 years in the classroom, it's a whole big change.

[Mark]

Oh my gosh, that classroom. It's hard, right?

[John]

Yes, it is.

[Mark]

Well, think about this way. You made a bunch of money and you. You had a wage, but you are getting the other half of your income right now, essentially through that pension. So thank goodness you're in great shape.

[John]

Yeah, I never complained about my income. We're paid very well out here in.

[Mark]

Washington and it's just a grind, right? The actual doing of the job. Okay. I think you're in really good shape. I think that the only thing if I, you know, you look at that rollover account, you know, that's the money. If you have something big happening and maybe what I would do actually is I would start pulling some money out of the rollover a little bit at a time just to get that money out of there. Because, you know, listen, by the time you're 75, you know you're going to have required minimum distributions, right? So I might just kind of take some money out of that account.

[Jill Schlesinger]

Be.

[Mark]

If you need it, spend it, fine. If you don't need it, put it in the brokerage account. It's fine. You don't need to burn up all of your cash to convert this to a Roth. You don't have to. But it would be good to take some of that money out of the rollover. And even if it were like you delayed taking your Social Security till 67, even for those two years, just use that money and pay the bills that you accumulate, it's not a big deal. But you have a very low level of spending. You really do. So the answer to your question, did you pull the retirement plug too early? The answer is no, you absolutely do not. You did not do that at all.

[John]

But that's what I was hoping for.

[Mark]

And then, you know, you got 15 years before that rollover is going to be forced out. So I would start tapping that money.

[Jill Schlesinger]

And start using that money to live on.

[Mark]

And you know, you have, it's funny because between your, your pension and the part time income, you know, you're, you're probably mostly in like the, you, you pay some income at 12% and then another chunk of 22%. Not bad. It's. Everything is fine. You could, but you could pull 30.

[Jill Schlesinger]

40, 50 grand a year from the.

[Mark]

Rollover every year and just get disciplined about that and use that money. And you know, if something big came up, like you said, the kids are grown and launched. Do you have like grandchildren? Is there a wedding? Is there anything big coming up?

[John]

No grandchildren yet and I've already paid for the weddings.

[Jill Schlesinger]

Oh my God, you are good.

[Mark]

Mark, anything else from John in Washington state that we should be worried about?

For him, there are no worries here. I mean the expenses are $3,000 a month. His pension is $3,000 a month, so.

And with a cola, it has a cost of living adjustment. Not even. And he's Bringing like amazing.

He's bringing in some money. He's got over a million dol. Good here, man. All good.

You are in. Great. I'm giving you a great bill of health. Now the other thing is, John, that you should have your estate documents done. You should have the power of attorney in the health care policy. Just make sure you get that done. But if there's a great. And if. But if there's a big expense, don't be afraid of taking out of the rollover. Don't be afraid of that. Okay.

[John]

And I, I had one more question.

[Mark]

Do it.

[John]

So I don't know what the validity of this is, but I was told that there's a chance that I can pull from my ex wife's Social Security first because we were married 20 years.

[Mark]

Well, okay. Is her Social Security benefit. Is half of her benefit larger than yours?

[John]

That I don't know.

[Mark]

That's the key. Yeah, you can. If you're married for 10 years, you're entitled. Okay. But it would have to be that her benefit's higher than yours.

[John]

Okay.

[Mark]

Is she older? Older or younger?

[John]

She's younger and she was in. She's a teacher also, so I doubt it. They're probably the same.

[Mark]

Yeah, I would, I wouldn't. I feel like there's like. And don't worry.

[Jill Schlesinger]

Nothing.

[Mark]

It can't harm her. So if you're being vindictive, it doesn't hurt her.

[John]

Oh, no, no.

[Mark]

I'm gonna nail her. Pull that Social Security. I don't think it's going to be necessary for you. I really don't. All right. Oh, my God. John from Washington State, the dream maker right here. You did not pull the plug too early. The patient is just fine. Don't worry if you are thinking about retirement, if you're thinking about making a big decision, maybe you're a teacher and you want to try a new career. Maybe you're in a career and you want to go into teaching. Maybe there's some change that's going on that impacts your money. Get in touch with us. Go to jillonmoney.com, click the contact us button, write us that note. And if you want to join us live, check the box. Mark will do everything else.

[Jill Schlesinger]

Don't forget, you can sign up for the free weekly newsletter on the website.

[Mark]

You can read all the content that is created there. You can watch videos and resources and it's all great. Mark does an amazing job. I mean, I do some of the work also, but he does the job of managing the website. You can subscribe to us on the Odysee app or wherever you find your favorite podcast.

[Jill Schlesinger]

Please leave us a rating and review.

[Mark]

Wherever you listen, don't forget to put your hands metaphorically, on someone's back. Change your work, change your wealth, Change your life. Thank you for listening. We'll talk to you tomorrow.

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