Downsized in Paradise, Can We Retire?

Summary

Jill on Money: “Downsized in Paradise, Can We Retire?”

Episode Date: August 4, 2026
Host: Jill Schlesinger, CFP®
Main Guest: Kelly from South Carolina

---

Episode Overview

In this episode, Jill Schlesinger answers a listener question from Kelly in South Carolina, who, with her husband, has recently downsized their home and wants advice on retirement timing and financial security. The discussion hits on major retirement topics: income and pensions, downsizing strategically, Social Security timing, handling healthcare through transition, mortgage decisions, and getting estate documents in order.

---

Key Discussion Points and Insights

Kelly’s Retirement Situation (03:39–14:00)

Current Status and Goals

• Kelly (69) and her husband (60) recently downsized into a “small villa”; both are still working but considering retirement transitions.
• Kelly wants to retire at the end of this year; her husband is considering going part-time (four days/week) within two years, aiming to keep health insurance.
• Target spending: ~$6,000/month.

Income Breakdown (04:19–05:12)

• Kelly’s current income: $40,000/year (part-time).
• Husband’s current income: $85,000/year (full-time).
• Anticipated part-time income for husband: Estimated at $65,000/year if reduced to four days/week.

Pensions (05:12–05:55)

• Both receive moderate pensions with no cost of living adjustment (COLA).
  • Kelly: $1,100/month (already started at age 65).
  • Husband: Could receive ~$1,600/month now, or $1,700/month if delayed to age 62.

Jill (05:55): “These are just flatline. This is your amount. It'll be worth less every single year. So be it.”

Home and Downsizing Details (06:19–06:53)

• Recently bought a villa worth ~$470,000; remaining mortgage ~$90,000 at 6.9%.
• Mortgage payment: $780/month.
• No children.

Retirement Savings (07:10–08:13)

• No taxable investment accounts; all investments in retirement accounts, plus savings.
  • Kelly: ~$500,000 (IRA: $360k, Roth: $140k).
  • Husband: ~$640,000 (IRA: $432k, Roth: $208k).
  • Liquid savings: ~$74,000 (high-yield money market).

Social Security and Retirement Timetable (08:13–09:46)

• Kelly: Already collecting Social Security ($3,774/month gross; $3,140 after Medicare/taxes).
• Husband: Eligible for $3,550/month at age 67. In good health, so Jill strongly recommends delaying to maximize his benefit and leverage COLA.

Jill (09:46): “If you’re in good health, it just makes so much more sense for you to just have that benefit keep rising. And because your pensions are not cost of living adjusted, Social Security is. So the higher that base amount, the better off it would be.”

Healthcare between Retirement and Medicare (09:13–09:21)

• Husband plans to keep work-sponsored health insurance by reducing his hours; if he retires fully before Medicare, will purchase individual coverage out-of-pocket.

---

Jill’s Analysis & Major Advice (10:00–13:51)

Income Sufficiency & Withdrawal Strategy

• With current and anticipated income, plus Social Security and pensions, Kelly and her husband’s expenses are well-covered—even before tapping retirement savings.
• Upon full retirement, the couple should consider tapping pre-tax retirement accounts before accessing Roth accounts.
• For larger one-time purchases (trips, car, or paying off the mortgage), they can safely draw from retirement accounts, pay taxes, and move on.

Jill (12:07): “If anything, I would delay Social Security and start pulling money out of those accounts that have not yet been taxed and get the money out, pay the tax that’s due, and live your life. You guys are in great shape.”

• If mortgage balance becomes bothersome, it’s reasonable to consider withdrawing from retirement savings to pay it off (especially with a high 6.9% interest rate).

Downsizing Reflections (13:05–13:19)

• Kelly and her husband sold their multi-level, high-maintenance home and intentionally chose a place suitable for aging in place.

Kelly (13:17): “We just kind of looked at it and said, can we see ourselves 80 years old and living in this house?... [We] said no.”

Jill (13:18): “That’s a great way to really think about your future self.”

Estate Planning (13:50)

• Kelly confirms they have estate planning documents in order.

---

Notable Quotes & Memorable Moments

• On Social Security Planning

  Jill, to Kelly’s husband (09:46): “Husband of Kelly, don't take Social Security until… if you’re in good health, it just makes so much more sense for you to just have that benefit keep rising. And because your pensions are not cost of living adjusted, Social Security is. So the higher that base amount, the better off it would be.”

• On Use of Retirement Savings

  Jill (12:07): “If anything, I would delay Social Security and start pulling money out of those accounts that have not yet been taxed and get the money out, pay the tax that’s due, and live your life. You guys are in great shape.”

• On Downsizing

  Kelly (13:17): “We just kind of looked at it and said, can we see ourselves 80 years old and living in this house? And we said no.”

  Jill (13:18): “That’s a great way to really think about your future self.”

---

Timestamps for Important Segments

• [03:39] – Kelly introduces situation: recent downsizing, retirement plans.
• [04:06] – Ages and income breakdown.
• [05:12] – Pensions: amounts and lack of COLA.
• [06:19] – Villa details and mortgage.
• [07:10] – Retirement account and savings overview.
• [08:21] – Social Security claimed by Kelly; net numbers.
• [09:13] – Health insurance strategy before Medicare.
• [09:46] – Social Security timing advice for husband.
• [12:07] – Withdrawal strategy and dealing with major expenses.
• [13:05] – Reflection on downsizing choice.
• [13:50] – Confirmation of estate planning.

---

Practical Advice Recap

• Retirement Readiness: Kelly and her husband have more than enough income streams and financial assets to retire securely.
• Social Security: Delay husband’s benefit as long as possible for increased security and inflation protection.
• Health Insurance: Maintain with part-time work until Medicare, purchase as needed after.
• Mortgage: Pay it down from savings only if psychologically burdensome.
• Withdrawals: Prioritize taxable and IRA money before Roth, especially when income is low.
• Lifestyle: Smart downsizing for aging, estate planning complete.

---

Final Words

Jill’s Encouragement

• “You are well on your way… Do something nice for someone else today. Change your work, change your wealth, change your life.”

---

Transcript

[Jill]

Many of you have grown up in a household where money was a stressful topic, and that may leave you anxious about your own finances as an adult. But your money story may change completely when you start using Monarch. Monarch can give you the clearest picture of your finances by tracking all of your accounts, investments and savings goals in one place. It's like having a little financial advisor right in your pocket. Monarch provides an AI weekly recap which flags sudd spending spikes or net worth shifts before they become problems completely taking the mental load off your plate. Unlike other apps that only show you what you've already spent, Monarch helps you look forward. You can even ask the AI assistant direct questions like can I afford this vacation without touching my savings? Write your own money story with Monarch Use code Jill [e-mail] to get your first year of Monarch Corner Core Half off at just 50 bucks. That's 50% off your first year at monarch.com with code JILLONMONEY hey gang, you

[Mark]

know, over the years I've realized one

[Jill]

of the biggest limitations in business isn't

[Mark]

a lack of an idea. It's the manual follow up the legacy systems that demand your constant attention. Way back when, I remember the frustration of having to take a morning off just to drive to a physical branch to sign a piece of paper, which felt incredibly outdated in a world of digital first companies. Banking on Mercury eliminates that frustration entirely. It's a best in class software experience that feels intuitive and reliable. From day one you can apply online in minutes and immediately start using smart features like bill pay where you can just scan an invoice and the system handles the rest. You can even set up recurring payments and automated transfers to keep your accounts balanced perfectly. It's a smart all in one home for your finances that scales with you, allowing you to focus on the big picture of while the software handles the details. Visit mercury.com to learn more and apply online in minutes. Mercury is a fintech company, not an FDIC insured bank. Banking services provided through Choice Financial Group and Column N A Members FDIC.

[Jill]

Welcome to the Jill on Money show. It's Tuesday, August 4th and we are here answering your financial questions. If if you have one, all you need to do is go to our website. That's jillonmoney.com in the upper right hand corner there is a Contact Us button. When you click that button a form pops up. That form is an email that we receive if you are shy. You do not think you want to come on the air with us. Give us a lot of detail and the one piece of information that you often forget when you're sending us an email, especially if it's sort of a future planning question. You. You need to tell us how much you're spending now because that's usually the basis for so many of the future questions that we're answering. So do that. Write us a comprehensive note about what's going on and we'll actually answer it when we do an email episode. Otherwise, check the box and Mark will be very happy to arrange to bring you on the air live with us while you're on the website. Don't forget to check out all the content that lives there. We, we have another podcast called Money moves. We've got a blog, we've got resources, and we have a weekly newsletter. So check all of that out [e-mail] today we are chatting with Kelly from South Carolina. Hello, Kelly. How can we help you out today?

[Kelly]

Well, we recently downsized to a smaller home and we're still working. So I'm working part time and I'd actually like to retire at the end of this year and my husband would like to go part time in within two years or maybe even retire completely.

[Jill]

How old are you guys?

[Kelly]

I am 69 and my husband is 60.

[Jill]

Oh, very smart of you. That is how most women should roll given the whole life expectancy thing. Very smart. Okay, so right now, in your part time income for you, Kelly, how much are you earning?

[Kelly]

About 40,000.

[Jill]

And your husband full time right now, how much is he earning?

[Kelly]

He's earning about 85.

[Jill]

And if he were to go to part time like immediately or by the end of this year, what do you think?

[Kelly]

I was thinking about four days a week.

[Jill]

Okay, so would four days a week just be a 20% reduction or should we just take him down to like halftime? Like, what do you think?

[Kelly]

Yeah, like 20% reduction because he wants to try to keep his health insurance.

[Jill]

Ah. So you have to do four days to get the health insurance, Right. Okay, I got you. So let's presume that instead of 85, then you know, he's. Let's. I'm gonna bring him down a little bit more. Let's say he's 65,000 just for the heck of it. Okay. And that would be for two more years.

[Kelly]

Right.

[Jill]

How much do you guys spend?

[Kelly]

We're figuring about 6,000amonth.

[Mark]

Okay, great.

[Jill]

Will either of you be entitled to a pension?

[Kelly]

Actually, both of us.

[Jill]

Really? Tell me about that. Exciting. How much?

[Kelly]

Well, it's there, it's it's kind of moderate.

[Jill]

We.

[Kelly]

I have my pension now because I had to start taking it when I turned 65. I'm getting 1100amonth and depending on when he starts his. Like if he could start it right now, it would be about 1600amonth. If he starts it at 62, it would be like about 1700. It would go up about $40 a month each year he waits.

[Jill]

Do both of your pensions have a cost of living adjustment?

[Kelly]

No.

[Mark]

No.

[Jill]

Neither does correct. So these are just flatline. This is your amount. It'll be worth less every single year. So be it. Okay, I gotcha. Any other income besides the pension? Do you guys have any rental property? Are you doing anything like that? Any passive income floating in? And when you downsize, tell us what you, what did you buy?

[Kelly]

We bought a small villa. We own it, but we still have a little bit of a mortgage on it.

[Jill]

How much is the villa worth? I like the word villa. I'm conjuring up like an Italian villa. So it's kind of awesome.

[Kelly]

Yeah, lots, lots smaller than our original home, but it works perfect for us. It's, it's worth about 470 and we still owe about 90 on it, but it's, it's about, it's like 780amonth. So it's manageable.

[Jill]

What's the interest rate on that 90?

[Kelly]

Not great. 6.9.

[Jill]

Okay. But that's what it is now, so.

[Kelly]

Yeah.

[Jill]

And you're affording it, right? Like you're doing it? It's okay. Right. Okay. Do you guys have kids?

[Kelly]

No kids.

[Jill]

No kids. Okay. In addition to the pension, I know you guys probably have some investment accounts. So tell us about those investment accounts. What do you have? Let's do retirement accounts first.

[Kelly]

All right. For me, I total, I'm right around 500,000. I could break it down easy. I have about 360 in an IRA and about 140 in Roth.

[Jill]

Great.

[Kelly]

And my husband right now has about 640 total. He's about 432 in Ira and 208 in Roth.

[Jill]

Got it. Okay, great. So is the game plan. Let's just pretend like by, we're like, okay, you're done, we lose your income. You then get his part time income plus the pension that you're receiving. And then you have all this money that you've saved. Do you also have a, an investment account besides these retirement accounts?

[Kelly]

No, that's pretty much it. I mean we have some savings.

[Jill]

Yeah, let's do the savings. Tell me about that.

[Kelly]

And just like high yield money market, we have about 74,000.

[Jill]

Terrific. And have you, you have not claimed Social Security yet, Kelly?

[Kelly]

No, actually I did.

[Jill]

Okay.

[Kelly]

Yeah, just this year I start. Yeah, it's about 3,700, 3,774. But once they take out Medicare and taxes, it drops down to 3140.

[Jill]

All right, so let's just say you got 3100 from Social Security, you got 1100 from your pension. Right? So right there we got 4200. So we know that your husband, even if he works like you're saying four days a week, I'm just pulling him down a little bit more, he's going to have 65 grand. So we know that he, his income, his part time income, plus your Social Security and pension, you're good, right? You're not a problem. Cause you only spend six grand a month. Then he works part time for a couple more years, but that still brings him shy of Medicare. So what are you guys thinking for those three years? Just pay out of pocket for that?

[Kelly]

Yeah, we'd have to. We actually started checking with a broker to see, you know, some of his options for getting it on his own.

[Jill]

I mean, it's not cheap, but, but, but it's not terrible either.

[Mark]

Right.

[Jill]

So. And when do you think he. If. What's his Social Security benefit? At 67.

[Kelly]

67 would be like 3550.

[Jill]

Okay. And is he in good health?

[Kelly]

Oh, yeah, yeah. And that's what I'm trying to convince him, to not take his Social Security like super early.

[Jill]

Yeah, yeah. It doesn't make any sense. I know he's listening in the back. So, husband of Kelly, don't take Social Security until. Cause if you're in good health, it just makes so much more sense for you to just have that benefit keep rising. And because your pensions are not cost of living adjusted Social Security is. So the higher that base amount, the better off it would be. So I think that if your question is like, can we do this? Absolutely. Just think about this. At 62, even if he just like, even if he takes the pension at 62, his 70, he'll have that $1700 a month in his pension. Right? Think of that as like, okay, we'll pay for health care with that. Seriously, like just pay like use that and be like, all right, that's healthcare, we got that covered. That's seven. And then once you go into Medicare, maybe you need it, maybe you don't, but you'll have plenty of income. Because you'll have that 1700. You'll then have, you know, eventually have his Social Security. So I don't see any reason. And we haven't even touched your retirement accounts yet, so I think it makes a ton of sense for you to just make it the. Make your part time for you, Kelly. You can be, like, done whenever you think it's done. Like, when do you want to give your notice? Should we get your. Should we just do it right now? Send the email. But I mean, for your husband, I think it makes sense to go part time as soon as possible. It really will give you a little bit more longevity anyway. Does he like his job, out of curiosity?

[Kelly]

Um, he likes it, but he's stressed out. He's. He's ready to do stuff.

[Sally Helm]

Yeah.

[Jill]

I don't want him to be stressed out.

[Mark]

And if.

[Jill]

If the stress reduction is like, go four days a week and then maybe three days a week, if you can still keep your insurance for that, do it. And then you got, you know, $1.1 million in retirement. And then if there's anything big that you want to do, you know, over time, what you would do is, like, let's just pretend. Let's say that you went part time and you. I'm sorry, you quit. You're part time, he goes part time, and you want to go. You want to start taking some money out of these retirement accounts. Pay the taxes that are due and you're fine. Like, if anything, I would delay Social Security and start pulling money out of those accounts that have not yet been taxed and get the money out, pay the tax that's due, and live your life. You guys are in great shape. Even if your pensions don't have a cost of living adjustment, you just. You don't spend a ton of money. And if you want to go on, like, a big, huge trip or you got a car, take it out of the retirement account, pay the tax it's due, and move on. But you're in great shape. Remember, last money you spend is Roth money. That's the only thing I will say. And other than that, even if you said I could almost make this case, but I wouldn't. But, like, if, like, all of a sudden you're like, you're paying off the house and you get close to the end, and you're like, you know what? Like, we have 30 grand left on this mortgage. Like, pull it out of your retirement account, pay the tax, and get rid of the 6.9% loan. If you. That's bugging you. But you're in great shape. I feel like you, like, I don't know what your downsize, like how you made this decision. Was it a hard decision to do that?

[Kelly]

Well, the house was multi level and there was a lot of maintenance to it. And we just kind of looked at it and said, can we see ourselves 80 years old and living in this house?

[Jill]

And you said no.

[Kelly]

And we said no.

[Jill]

That's a great way to really think about your future self. I know we always talk about that with people, but if you say, you know, you live in some three story house, it's beautiful, it's great. But is that the life we're going to live? You know, when a few aches and pains start popping up? No. Now you're in your villa and I can't wait to see the villa. And so give your notice. I'm ready to rock and roll. Last question. Do you guys have your estate documents done?

[Kelly]

Yes, we do.

[Jill]

Then you are well on your way. Kelly from South Carolina, thank you so much for getting in touch with us. Hey, if you're like Kelly and her husband and you're living in a big old house and you can't see your way out of it, get in touch with us. I love trying to figure out the whole downsize thing. Most people don't actually downsize. What they do is they sell their houses and then they end up buying something as expensive that doesn't work quite as well. But maybe you just have to do that anyway and bite the bullet to get in a place where you can age. So this is important conversation to have. We'd love to hear from you. Get in touch with us. Go to jillonmoney.com, click the contact Us button. Check the box if you want to come on the air. Mark will do everything else. And don't forget, you can subscribe to us on the Odysee app, which is also where you can subscribe to our sister broadcast called Money Moves. And you can also just subscribe wherever you find your favorite podcasts, which is easy, easy peasy. Do something nice for someone else today. Change your work, change your wealth, change your life. Thank you for listening and we'll talk to you tomorrow.

[Mark]

When a child faces a serious medical challenge, a children's hospital quickly becomes a family's entire world. Whether they're helping a child recover from a sudden injury or helping them manage a long term condition, these hospitals provide an irreplaceable community resource. Children's Miracle Network is dedicated to supporting this specialized care by securing the crucial funds these medical centers depend on Daily Children's Miracle Network is a leading charity

[Jill]

impacting the health of all kids.

[Mark]

They raise funds for 170 children's hospitals across the United States and Canada, protecting healthcare access for millions of families.

[Jill]

Their fundraising network brings together corporate partners,

[Mark]

local grassroots programs, and everyday donors like you and me. Your donation directly empowers your hometown hospital

[Jill]

to use those resources exactly where they are needed most.

[Mark]

Wherever you see the Children's Miracle Network balloon, you're helping a local child receive care. Visit cmn.org today to learn more and make a donation to your local children's hospital.

[Sally Helm]

Sometimes it feels like the news is full of things that have never happened before. And that is not exactly true. In fact, it may have happened this very week, hundreds or thousands of years ago. I'm Sally Helm, host of the podcast History this Week from the History Channel. Trade embargoes. Thomas Jefferson tried them Rent too high. We've been arguing about that for for a while. Each episode is proof the past isn't that far away. Listen to History this Week, available now on Apple, Spotify, or wherever you get your podcasts.