Mark (2:35)

He is wildly entertaining.

Jill (2:38)

So if you want to just buy that one webinar cost you 15 bucks. Maybe it's a good thing to do before you start settling in to conduct your taxes for the year. Check. Check that out again, Jill, on Money Live. That is also where you can subscribe for the future. So maybe if you want, you just say, well, if I were going to spend $15 for ED slot, why not plunk down $45?

Mark (3:02)

That will get me the four subsequent

Jill (3:04)

webinars and you get the back catalog which would include Ed Slot. See how I did that, Mark?

Mark (3:09)

I made it appealing to go for the subscription.

Jill (3:12)

45 bucks. Totally worth it. Okay, gang, let's get on to you. We are talking to Jane, who listens to us in California. Hello, Jane, how are you?

Jane (3:23)

I'm great, thank you. I'm so excited to be here this morning.

Jill (3:27)

Amazing. So tell us what's going on? How can we help you out?

Jane (3:32)

Well, I was one of the cool kids who was laid off in 2024. I'm not yet landed my next role and, and I did receive a generous severance in which I put into high interest money market account. And then I've been kind of parsing out to pay myself a monthly amount from this account. But now that this. It's been 18 months. I'm doing a little worst case scenario planning in the event I do not regain employment or employment similar to my previous role.

Jill (4:10)

Okay, that seems to make sense. I'm always into like, let's have plan B. If everything works out, great, great. But let's make sure you have a plan B. So first of all, Jane, how old are you?

Jane (4:21)

I'm 57.

Jill (4:23)

Okay. And you're looking, are you. Have you been actively looking or have you been sort of like. I worked my butt off and I kind of chilled for a while.

Jane (4:32)

I took a little bit of a break right afterwards and I took a trip to toured around and some things. But then yes, I've been looking and I've been in final rounds a few times, but I'm not yet secured that.

Jill (4:47)

Okay. All right. Would it be like your wish list to never go back to full time work again or. No. What? Tell us about you. Like, how are you feeling about that?

Jane (4:56)

I actually liked working and I liked my job, so I thought I wanted to go back to full time work. The interview process has been so awful that it's making me not want to go back. And I've been considering other kinds of roles.

Jill (5:13)

Okay, so maybe part time and maybe a different industry where you would make less money. When you were laid off, how much were you making?

Jane (5:20)

190.

Jill (5:21)

Okay. Do you have a skill set that is such that you could find a way to grind out a Certain amount of money part time with that skill set and you could get a job, do you think?

Jane (5:33)

Yes.

Jill (5:33)

Okay. And if that were a part time job, what do you think it would be like? Oh, that's so easy. I could easily make blank fill in the dollar amount for us.

Jane (5:43)

I think there are retail jobs around here that could be 25,000 a year.

Jill (5:50)

All right. Okay, that's fine. I just wanted to get a sense of like something that you would do. Okay, so now you're 57. Are you married, partnered, anything there?

Jane (6:00)

Single, no partner.

Jill (6:01)

And kids?

Jane (6:03)

Kids are launched and self funded.

Jill (6:06)

Oh, nice. So no one, not no kids to worry about their launch.

Jane (6:11)

Still worry?

Jill (6:12)

Yeah. Well, I hear that among you parents, you breeders, poor thing. Always got to worry about them. All right, well, you own your home.

Jane (6:22)

Yes.

Jill (6:22)

Okay. What's it worth?

Jane (6:24)

About 2.2 million.

Jill (6:26)

Wow. Okay. Is there a mortgage outstanding?

Jane (6:31)

386,000.

Jill (6:33)

What's the interest rate?

Jane (6:34)

2.5%.

Jill (6:36)

Oh, gosh. Okay. And so this is a house you want to stay in or. Okay, wants to stay forever. Okay, good. All right, now tell us about the saving that you did in terms of, you know, while you were working and making the 190 grand.

Jane (6:52)

So I, I still have about 40,000 in my, in the severance okay. Account. I also self had been self escrowing my mortgage and insurance. So there's still 11,000 in there. That's enough to cover the next year.

Jill (7:10)

Year.

Jane (7:11)

I have a rainy day fund of 12,000.

Jill (7:15)

Okay.

Jane (7:16)

And then retirement, My retirement account starting with rollover IRA is one 1,046,000.

Jill (7:28)

Okay.

Jane (7:29)

An old, my former employer. Roll 401K. 400,000.

Jill (7:36)

Is that still at the old employer or are those two separate rollover accounts?

Jane (7:40)

Those are two separate accounts.

Jill (7:41)

Okay. Okay. So 1.046. 400. Those are old pre tax retirement accounts.

Jane (7:47)

It is with the old employer. It's still with them.

Jill (7:49)

Okay. Okay, so so needs to be rolled over though.

Jane (7:52)

Yes.

Jill (7:53)

Okay. What else?

Jane (7:55)

Roth IRA that I manage is 54,000. Traditional IRA that I meant for 4,600.

Jill (8:05)

Okay.

Jane (8:06)

SEP 3,600.

Jill (8:09)

Okay.

Jane (8:10)

And then I have three HSA accounts. One is 5,700.

Mark (8:18)

Why three?

Jane (8:20)

The employer has partnered with one HSA company the first year and the second one the second year. And then the reason there's a third is because this part of one of those is in a brokerage.

Jill (8:32)

Okay. So the brokerage part is What? How much?

Jane (8:35)

19,000.

Jill (8:36)

Brokerage. Keep going. Tell me about that.

Jane (8:40)

It's a brokerage. I'm, I'm managing so that's 10,000. Yes. And then my ESPP employee stock purchase, so I have a bunch of shares that is worth 148,000.

Jill (8:55)

Why wait a second? When you were let go, are those all vested? Is everything, like, good to go? So you could, you could sell this today. There'd be a tax event, but you could.

Jane (9:06)

Right, I could sell that today. So it, My, my logic in my. I had, I was new to that whole concept when I started that account.

Jill (9:15)

Yep.

Jane (9:15)

And so then I, I learned about the selling, which my colleagues were doing, but I ended up holding onto it. And then my logic was it was kind of the way I was. It pays out dividends, and I get quarterly dividends from that. That we're paying half of my property taxes.

Jill (9:34)

Oh, I like. You are. You're a bucket kind of gal. I got a bucket to do this. I got a bucket to do this. I got my 11,000. Do my property tax. I got, I got you. Now, we're not going to keep doing that, but I get on the, on the espp because you're in a grid tax situation right now. You, you got one lump sum in 2024 in severance. You got a big chunk of money or did that get paid out over time?

Jane (9:57)

No, I got a big lump sum.

Jill (9:59)

So you probably had a big tax year in 24.

Jane (10:02)

Have you.

Jill (10:03)

I'm not sure you filed for 25 yet, but, like. Okay, and so you were. Do you remember what your AGI was in 2025?

Jane (10:10)

2025. That's 25,000.

Jill (10:14)

Yes. Yes, my sister. This is good. This is why you're going to sell that. At least half of that ESPP this year because you're in a low tax bracket. Like, I wish, I wish we did it last year, but so be it. I know we are where we are. Okay, next question for you. What does it cost to live your life?

Jane (10:33)

It costs to live my, my life. 4,500amonth.

Jill (10:38)

That's it.

Jane (10:40)

I'm pretty.

Jill (10:41)

Yeah, that's the mortgage and everything and the taxes. You live in California. It's expensive.

Jane (10:46)

No, the mortgage. I'm not currently paying any health insurance. And like I said, the homeowner's insurance is made up. So then the next year, if I'm estimating, you know, the goal is to make more money, so I would be paying more probably than 6,500amonth.

Jill (11:06)

Let's say seven. Yeah, let's do seven a month in expenses. I forgot to ask you, are you entitled to a pension?

Jane (11:14)

Yes. So there is. And I'm using my air quote. There is a pension from my former employer. It is a cash balance program.

Jill (11:24)

Yep.

Jane (11:24)

And so the current balance ON that is 136,000.

Jill (11:29)

That could be rolled out as a lump sum if you wanted to. Right now. If, like, if we. Okay, so just to, like, clarify, everything between all these assets that have not yet been taxed, we have the two rollover IRAs. So, you know, essentially one, let's call it one and a half million. Right. Then there's also this 136 of this cash balance. Right. Then there's a traditional and a SEP. So 7, 8 ish, let's call it 9. So it makes up nice math. And that's it for retirement. And then we've got your brokerage account, your employee stock purchase plan. You got assets. I'm sorry, you've got expenses of around seven grand a month. And if we had to. Again, I'm not saying we will, but if we had to. And you like, said, oh, if I just had to make 25 grand a year, I could do that. Right. And it wouldn't be ideal, but so be it. And then you've got some Social Security that you'd be entitled to. Do you happen to know the, you happen to know the Social Security benefit offhand?

Jane (12:37)

I do.

Jill (12:38)

Give me 67.

Jane (12:40)

67 is 3700.

Jill (12:43)

Okay. And 70.

Jane (12:45)

46.

Jill (12:46)

Okay. Mark, have you gotten this all tidied up? I've got one. Let's call it 1.65 million, hasn't been taxed yet. Okay, so that's in traditional. Then we have some money in Roth. Not a huge amount, 54,000. We've got some money in brokerage.

Mark (13:06)

We have.

Jill (13:07)

Let's consider that the brokerage plus the stock purchase is probably all told after taxes, like 125 grand net. And we got some. Ten years from now, we have some Social Security at 67, 3,700 at 74,600. Mark, what would happen if Jane were to blow through? Let's think about this. So let's say she doesn't get a full time $190,000 or $200,000 a year job. She makes just 25 grand a year for a couple of years, whatever. She starts spending down some of the rollover assets, then she gets to retirement age of 67. What do you think this looks like for her?

Financial Expert (13:53)

And by the way, the cash balance plan, if she takes it as an annuity, will be about $1,200 a month at 65.

Jill (14:00)

Oh, okay. Well, that's interesting. That's a good number.

Financial Expert (14:02)

So tack that onto the Social Security and she's very close to what she needs.

Jill (14:07)

So.

Financial Expert (14:07)

Yeah, it's like a ten year window here. The thing that concerns me is the health care.

Jill (14:11)

Right. So what's with your health care? What do we got?

Jane (14:14)

I am currently on Medi Cal because I had no income.

Jill (14:19)

Okay. Aha. And that's, that's. And so if you were to go to the, if you did get a job, then that's taken care of. If you make too much money part time, you might qualify for Obamacare but not get the tax credits. Right. I mean, although I think if you had $25,000 a year, I think you'd be, you probably would qualify. I mean, look, I think that plan B is this. We got to give yourself like some. Now, now you have like a little bit of a better sense of kind of where we are, where you are. You've saved a lot of money. I think in general, what is important is that if you get some income in the door, even if I'm saying I, I mean, 25 grand a year is like if I work retail. But if you worked part time doing the thing you know how to do and you could make 50, I think that would be a huge, I think that would be a benefit. If you could bring in 50 grand a year for the next five years, seven years, I think that this plan looks a lot better. Otherwise. Your plan B is essentially that you, you've got your severance for, you know, that, that $40,000. We got to sell the stock purchase plan. We absolutely have to sell that. And maybe, I mean, unless you think you're really close, you could, you could sell half of it right now just to get half off the table and beef up your severance emergency reserve fund. But at least half this year, half next year, if you get to the end of this year, or you don't really have any prospects to have more income, then I would sell the whole thing this year. And that covers you. If you sold it at 150 and you netted 100 or 125, then we're good for a couple years. Then you're 59 and a half. You're going to start pulling money out of the assets that haven't been taxed yet, the retirement accounts that haven't been taxed yet. And then you hopefully have the ability at age 65, 67, you'll get some cash in the door. And I think that's your plan B. I mean, listen, Your real plan B is that you could sell your house. But you don't want to hear that.

Jane (16:23)

No.

Jill (16:24)

Okay, fine. I'm fine, I'm fine.

Jane (16:26)

I do hear it a lot though.

Jill (16:27)

You could. Do you have any family members you have to take care of? You said your kids are launched, but you have parents. You're sort of of that age, that sandwich generation age.

Jane (16:38)

I have four parents.

Jill (16:40)

Four Two's what made you. And you got some steps.

Jane (16:45)

That's correct. Okay, four parents. Luckily right now they are all in fairly good health. But probably five years from now I might have to be paying, spending more time involved.

Jill (17:00)

Well, you better make some money then for five, for the next five years. Make that, I think 50 grand a year. When we get off the air, I'm going to totally bother you about like what you actually do. So we don't want to out you, but I feel like it's close. But if that's your, if your plan B, like what is my plan B if I never get a job ever again? Is you get some job making 25, hopefully more like 50 grand a year part time. However, get it done and then we get you to, you know, we make sure you sell the employee stock purchase plan, use that to live on for the next couple of years. 59 and a half till 65, you're pulling money out of the retirement account. When you have the 1,200amonth from the pension at 65, you can use that to offset some of the expenses and we see where you stand. Maybe you're 67, maybe you're claiming it's 70. Let's see where you are. But I think it works. Mark, you agree?

Financial Expert (17:57)

Yeah, I agree. I mean, if she does nothing else, everything has to go exactly right. There's really little room for error here.

Jill (18:05)

There's not a lot of wiggle. No, there really isn't.

Financial Expert (18:07)

And it's a long time for everything to go perfect.

Jill (18:10)

Well, that's it, you know. And so you know, we know that things happen. That's why I think like the sooner you could just start getting some money

Mark (18:17)

in the door, the better.

Financial Expert (18:18)

Is there any future inheritance that we should know about?

Jane (18:22)

No.

Jill (18:23)

No. That's too bad.

Financial Expert (18:24)

Wrong answer.

Jill (18:25)

Wrong. Sorry. We want a different answer. But you know what? It's not terrible. And if my worst case scenario is that you spend down all of your money and then you're like 80 years old and we have to do a reverse mortgage, so be it. Like I'll live with that. That's the risk you take. But that's your only. That is your fail safe for sure. You'll get there. You'll get to 80, but I don't know if you'll have like a lot of fluff in the, in the, in the cash flow by them. Okay, all right. Not so bad.

Jane (18:58)

Not so bad. It. That was a different direction. I was going to focus on that pension. But you're right about the espp. I appreciate.

Jill (19:07)

Oh, my God. Get that money now. Now you're in a low tax bracket. That's the time. This is the time to do it. Really. All right. We are very grateful that you came. Get back in touch with us when you have more money. Listen, I have this feeling Jane's going to get back to us. She's like, guess what? I'm working part time and making 80 grand a year. All of you, pound salt. I'm fine. So that's what I'm. I'm putting out the good vibes for Jane. If you were laid off and you were laid off at the time where you were just not ready to be laid off, meaning your 50s or your 40s, get in touch with us. We really want to walk through what your options are. I like creating plan B's and C's and D's. So go to the website jillunmoney.com, click the contact us button. Write us a note if you want to come on the air live. Check the box. Mark will do everything else. And don't forget to sign up for the free weekly newsletter because it comes out today Fridays. And it will also entitle you to the blog. And that's fun too. Lots. Lots of. And Jill and Mark. A lot of Gyllen Mark in the. In your life. All right, it's Friday, so let me do some business. Our music is composed by Joel Goodman. Mark Telaris, who is the executive producer. He's also the king of all things web. We are distributed by the fine folks at Odyssey. We ask that you lift someone up. Change your work, change your wealth, change your life. Thank you for listening and we'll talk to you on Monday.

Mark (20:29)

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Ann Marie Green (22:37)

one of TV's most watched true crime series with the 48 Hours Postmortem podcast, where correspondents and producers take you inside each case. Every Monday, listen to a new episode of 48 Hours and then join me 48 Hours correspondent Ann Marie Green every Tuesday for a new episode of Postmortem. Follow and listen to 48 Hours on the free Odyssey app or wherever you get your podcasts.