Do We Have Enough for Me to Retire? - Jill on Money with Jill Schlesinger

Summary

Podcast Summary: "Do We Have Enough for Me to Retire?"

Podcast Information:

Title: Jill on Money with Jill Schlesinger
Host/Author: Audacy
Episode: Do We Have Enough for Me to Retire?
Release Date: May 13, 2025

Introduction

In this episode of Jill on Money, host Jill Schlesinger, CFP®, delves into the complexities of early retirement through the lens of a listener's question. Joined by co-host Mark T. McGowan, they explore the feasibility of retiring before the traditional age, addressing financial planning, asset management, and the emotional aspects of such a significant life decision.

Listener's Question: Teresa's Early Retirement Plan

Teresa from Northern California reaches out seeking reassurance about her financial plan to retire early. Inspired by her father's ability to retire at 49½, she aims to retire within the next two years at the age of 58, while her husband plans to continue his business until 65.

Teresa's Financial Snapshot:
- Age: 58
- Spouse's Age: 60
- Retirement Timeline: Within the next two years
- Retirement Accounts:
  - Husband: ~$860,000 in IRAs
  - Teresa: ~$1,000,000 in IRAs
  - Taxable Accounts: ~$1,000,000
  - Home: Valued at ~$1,400,000 with a mortgage
  - Bank Assets: ~$100,000
  - Other: Inherited TIAA Annuity (details unspecified)
- Annual Spending: ~$180,000 combined ($15,000/month)
- Current Incomes:
  - Teresa: $150,000 (consulting)
  - Husband: Similar amount from his business

Financial Analysis and Strategy Discussion

Mark conducts a thorough analysis of Teresa's financials to determine the viability of her early retirement plan.

Income vs. Expenses:
- Post-Retirement Income:
  - Teresa ceases her consulting income.
  - Husband continues his business, projecting reduced income (~$100,000/year).
  - Combined Social Security (starting at 70): ~$9,000/month ($4,500 each).
- Adjustment Strategy:
  - Utilize IRA withdrawals to bridge the income gap.
  - Withdrawal Plan:
    - Approx. $80,000/year from the husband's IRA.
    - Gradual drawdown of Teresa's IRA and taxable accounts as needed.
Tax Considerations:
- Mark explains that withdrawals would be taxed at an estimated 22-24% bracket, aligning with their current tax situation.
- Emphasizes the importance of not altering their tax bracket significantly.
Asset Utilization:
- Primary Strategy:
  - Draw from retirement accounts first to cover expenses.
  - Allow brokerage accounts to grow, potentially reaching $2 million over time.
- Secondary Considerations:
  - Adjust spending if necessary to reduce the reliance on withdrawals.
  - Address the husband's concerns about depleting retirement assets.
Health Insurance:
- Confirmed that their current expenses include health insurance, eliminating the immediate need for additional funds in this category.

Emotional and Behavioral Considerations

Teresa is concerned about her husband's reluctance to deplete their retirement accounts. Mark and Teresa discuss strategies to gain his support:

Professional Validation:
- Hiring a fee-only financial planner to provide an objective assessment.
- Suggestion to involve their daughter, a CFP®, to present the plan professionally.
Communication Strategies:
- Emphasizing the benefits of early retirement while addressing potential fears.
- Utilizing family members' expertise to bolster confidence in the plan.

Conclusion and Actionable Insights

Mark and Jill conclude that Teresa's early retirement plan is feasible given her robust savings and manageable expenses. The key takeaways include:

Comprehensive Financial Planning:
- Detailed analysis of income sources, expenses, and asset utilization is crucial.
Professional Guidance:
- Engaging a financial planner can provide the necessary reassurance and detailed projections to support retirement decisions.
Flexibility and Adaptation:
- Being prepared to adjust spending or withdrawal strategies based on evolving circumstances ensures long-term financial stability.

Notable Quotes:

Mark T. McGowan [05:37]: "Let's run through some of the numbers to see if we can get you out of there by the end of the year."
Teresa [08:04]: "We spend about 15,000."
Mark T. McGowan [12:16]: "You could go talk to a fee-only financial planner and have them run these numbers for you and show him, from a professional what that would look like."
Teresa [15:47]: "We have."

Additional Resources

Listeners are encouraged to engage with the show by submitting their financial questions through jillonmoney.com and to explore the Jill on Money Live subscription for exclusive webinars and content.

This episode serves as a valuable resource for individuals contemplating early retirement, offering both financial strategies and insights into navigating personal and familial challenges associated with such a significant life change.

Transcript

Jill Schlesinger (0:00)

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Mark T. McGowan (0:49)

Home in California can certainly feel intimidating.

Jill Schlesinger (0:53)

We hear from listeners all the time throughout the state and they want to know where can they even start? Many of them find that turning to.

Mark T. McGowan (1:02)

A realtor changed everything.

Jill Schlesinger (1:04)

Realtors can help buyers understand what they can afford. They can explain all of the steps that are involved in purchasing a home, and they can walk you through every detail, from making an offer to closing the deal. Working with a realtor can help you feel less alone or unsure about the process and that peace of mind that is the power of having a realtor by your side. Whether you're ready to move or just starting to dream, don't go it alone. Don't let what you don't know stop you from starting your next chapter. Find your realtor@championsofhome.com that's championsofhome.com welcome to.

Mark T. McGowan (1:52)

The Jill on Money Show. It's Tuesday, May 13th and we are here answering your financial questions. If you have one, just go to our website jillonmoney.com click the contact us button, write us a note. And if you want to come on the air live, which Mark and I love so much, we actually much prefer you come on the air than send us emails even though you know we read emails. It's not a problem. But I love hearing from you. I like hearing what you're saying, what you're not saying. We can ask great follow up questions and if you would like to have that wonderful experience, you can change your name. It's okay if you, you just have to go. And when you log on and you do jillonmoney.com and you hit the contact us button and you fill out your note, just check the box Mark does everything else while you're on the website, don't forget we have a live subscription service. It happens to be called Jill on Money Live. For $45 for the next 12 months, you will have access to quarterly live webinars. Really cool guests. Lot of fun. In fact, our next live webinar is coming up just next month, a few weeks. Mike Quincy will be joining us. He is the car expert from the Consumer Reports, and he is fantastic. That will occur on Thursday, June 5, 7 Eastern Time. And it's so much fun. And we can ask Mike all these sorts of questions like what's going on with the car market? Should you trade your car in? Should you get new one? Should you lease, should you buy, should you buy the car off the lease? So many problems in the auto market. So join us for that again. In addition to that webinar, you'll get three more. You'll get all the back catalog of our webinars and bonus audio and video content only if you join us for Jill on Money live. Okay, now with the business done, let's talk about your business. We are talking to Teresa, who joins us from Northern California. Hello, Teresa. How are you? What can we do for you?