Podcast Summary: Jill on Money with Jill Schlesinger Episode: Federal Employee Recently DOGE'd
Release Date: March 28, 2025

Introduction

In this episode of Jill on Money, host Jill Schlesinger, CFP®, engages with James, a federal employee nearing retirement. James seeks reassurance and validation of his comprehensive retirement plan. The conversation delves into the intricacies of federal retirement benefits, personal financial planning, and the emotional aspects of transitioning into retirement.

Guest Introduction and Retirement Background

[03:05] Jill welcomes James from Georgia, expressing appreciation for his participation.

[03:15] James introduces himself as a soon-to-be former federal employee, approaching retirement at the age of 58 with over 30 years of service. He opted for a deferred resignation, ensuring he receives his regular pay until September, after which he will retire.

Retirement Benefits and Income Streams

The discussion begins with a detailed breakdown of James' retirement income:

• Pension:
  [04:14] James expects an annual pension of approximately $31,000.

• FERS Supplement:
  [04:21] An additional $13,000 annually until age 62.

• Spousal Income:
  [04:50] His wife earns $65,000 annually and plans to continue working for another year.

[05:09] James elaborates on his Thrift Savings Plan (TSP), currently holding $645,000, predominantly in traditional accounts with a $43,000 Roth component.

Additional Assets:

• Rollover IRA: $62,000
• Inherited IRA: $6,600, requiring minimum annual distributions due to pre-new rule conditions.

Spouse's Retirement Accounts:

• 401(k): $124,000 (including $24,000 in Roth)
• Rollover IRA: $140,000

[07:07] They also maintain a brokerage account with $25,000 in a money market fund and a T-bill ladder, alongside $96,000 in separate cash savings, including $21,000 in CDs.

Property:

• Home Value: Estimated at $400,000 with an outstanding mortgage of $71,000 at 3.675% interest.

Family Considerations and College Planning

[08:01] James mentions having two children: a 26-year-old daughter planning to move out and a 16-year-old son.

[09:05] He details a 529 plan with approximately $60,000 earmarked for his son's college education. Additionally, he anticipates utilizing state scholarship programs to cover most tuition costs.

Retirement Lifestyle and Future Plans

[10:11] James discusses his Social Security plans:

• Personal SS: Planning to take at age 70, expecting $45,000 annually.
• Spousal SS: Starting at age 62, expecting $15,000 annually.

[11:16] Jill analyzes the overall financial picture, highlighting the sufficiency of pensions, supplements, and Social Security to cover current and future expenses.

[12:01] James reveals plans to relocate to Portugal by the end of 2026. He intends to rent rather than buy property, anticipating reduced living costs due to a more modest lifestyle for himself and his wife.

[13:04] He plans to utilize his TSP funds to cover any additional expenses, projecting that living costs will decrease given their frugality.

[13:42] Upon selling their home, James expects to have an additional $300,000 in the brokerage account, further solidifying their financial stability.

Emotional and Psychological Aspects of Retirement

[13:46] James admits struggling with the emotional acceptance of retiring, feeling overwhelmed despite having a solid financial plan.

[14:37] Jill encourages James by referencing a Charlie and the Chocolate Factory quote, urging him to embrace his accomplishments and the reality of his secure retirement plan.

[15:09] They discuss potential contingencies, such as his daughter remaining at home longer, but James remains optimistic about her independence and financial readiness.

Final Advice and Reassurances

[16:00] Jill emphasizes the importance of comprehensive planning, including healthcare considerations and estate planning to ensure all bases are covered should unforeseen circumstances arise.

[17:32] James expresses relief and gratitude, feeling more confident after Jill's reassurances and advice.

[17:42] Jill concludes by encouraging listeners in similar situations to reach out for personalized financial guidance, reinforcing the value of thorough planning and professional support.

Key Takeaways

• Comprehensive Planning: James' multifaceted retirement strategy, including pensions, TSP, IRAs, and savings, demonstrates the importance of diversifying income streams.
• Emotional Preparedness: Transitioning into retirement involves not just financial readiness but also emotional acceptance and confidence in one's plans.
• Future-Proofing: Considering potential future scenarios, such as relocation and family changes, is crucial for maintaining financial stability.
• Professional Guidance: Engaging with financial advisors can provide valuable validation and peace of mind during significant life transitions.

Notable Quotes

• Jill Schlesinger [03:09]: “If you have a question you want us to answer on the show… don’t forget to check out all of the content that lives there.”
• James [03:15]: “Our plan is to retire at the end of September… sometimes I have a hard time telling myself that everything is going to be okay.”
• Jill Schlesinger [14:37]: “Can't you just accept that you've done a great job, that you were in this strange situation where… this thing has happened?”
• James [17:42]: “I'm glad to have another set of eyes on it.”
• Jill Schlesinger [17:42]: “Support your wife while she's toiling away and get yourself set. I think the plan is moving on. It's really awesome.”

Conclusion

This episode underscores the complexities of transitioning from a stable federal career into retirement. James' comprehensive approach, paired with Jill's expert guidance, highlights the importance of meticulous financial planning and emotional readiness. Listeners are encouraged to assess their own retirement strategies and seek professional advice to navigate their unique financial landscapes confidently.