Given the Options, Are We Saving in the Right Places?

Summary

Jill on Money with Jill Schlesinger

Episode: "Given the Options, Are We Saving in the Right Places?"

Date: July 28, 2026

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Episode Overview

In this listener call-in episode, Jill Schlesinger, CFP®, helps Mike from New England think through how best to allocate his and his wife's future savings as their children finish college and as they near retirement. With a strong financial foundation—including high income, significant retirement savings, and generous pensions—the discussion explores optimal next steps for their surplus income, how to balance helping aging parents, and how to adjust strategy in this “sandwich generation” phase. As always, Jill’s advice is clear, practical, and filled with her signature humor and empathy.

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Key Discussion Points and Insights

1. Mike’s Financial Snapshot

• Ages & Family: Mike and his wife are both 52. Two sons: one recently out of college, another graduating next year.
• Income: Household income of $450,000/year.
• Savings:
  • 401(k)s: $1.6 million (all pre-tax)
  • Backdoor Roth IRAs: $120,000
  • Taxable brokerage account: $160,000
  • High-yield savings/cash: $60,000
• Real Estate:
  • Primary residence: worth approx. $1M, $210,000 remaining mortgage at 2.625%
  • Vacation home: worth approx. $700,000, no mortgage
• Pensions:
  • Mike: $7,700/month at age 65
  • Wife: $2,300/month at age 65
• Social Security:
  • Mike: ~$5,000/month at 70
  • Wife: Minimal, may qualify for spousal benefit (half of Mike’s)
• Spending: ~$12,000/month, exclusive of future elder care costs
• Parental obligations: Mike anticipates providing ~$40–$50k/year for his father's care.
• Retirement Goal: Retire at 60

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2. Primary Listener Question

Where should we put our future savings once the boys finish college and cash flow increases? Are we saving in the right places, especially with large pensions and strong retirement accounts already set up?

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3. Deep Dive: What Should Mike Do With Extra Savings?

Maximizing Retirement & Roth Contributions

• Both Mike and his wife are already maxing out their 401(k)s—including catch-up contributions—and executing backdoor Roth IRAs annually.
• Jill underscores that these remain the priority for tax-advantaged savings, especially considering their high income and current tax bracket (32%).

Taxable Brokerage Accounts: The Flexible Choice

• After maximizing retirement and Roth contributions, any additional savings should go into the taxable brokerage account.
• Jill (13:15):

  “If there's any money after that, then I would do a brokerage account. ...just to have that money [accessible].”

Roth vs. Pre-tax 401(k) Contributions

• Discussed shifting some 401(k) contributions from pre-tax to Roth, in light of already significant pre-tax balances and likely high income in retirement due to pensions and Social Security.
• Mark (14:12):

  “I don't see any need for [all pre-tax] anymore. ...Maybe you say alright, let's scale it in, we'll do half. Just experiment with it, with your cash flow. ...But it would be nice to start getting you more Roth...”

• Jill suggests a “blended approach”—some pre-tax, some Roth—so as to have more tax flexibility later.

Managing Current and Future Parental Expenses

• Mike’s growing responsibility for his father’s care could require $40–$50k/year. Jill and Mark discuss that, if needed, savings otherwise destined for the brokerage account can be redirected to help, or in pinch, reduce 401(k) contributions temporarily.
• Jill (16:28):

  “If the needs for your father ratcheted up and you didn't have enough cash flow to really help? ...You could spend some of your brokerage money. Worst case, you could sell a vacation home, or get a mortgage on it... There are things you could do to tide you over.”

Backup Plans & Flexibility

• Multiple fallback options discussed:
  • Use brokerage funds or home equity if cash flow tightens
  • Sell or mortgage the vacation home when necessary
  • Sell Mike’s father’s house if he needs facility care
  • Temporarily reduce retirement account contributions if necessary

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4. Healthcare Planning in Early Retirement

• Jill highlights the importance of planning for health coverage between 60 and 65 (Medicare eligibility).
• Mike expects coverage through his wife's civil service benefits via the state.
• Jill (15:24):

  "When you retire at 60, how are we going to cover health care? ...We believe it'll be through the state."

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5. Notable Quotes & Memorable Moments

• Pension Envy:
  • Jill (07:12):

    "Oh my gosh, I'm—Mark, I'm so jealous and so happy for you. Pension envy is all about what we are feeling right now."

• Financial Health Check:
  • Jill (12:55):

    "If things change with dad...you could...spend some of [your] brokerage money. Worst case scenario is you could sell a vacation home. You could get a mortgage on the vacation home. There are things that you could do..."

• On Being ‘The Sandwich Generation’:
  • Jill (16:13):

    "You're the sandwich man. This is it. You got the kids, you got the dad. This is life. This is like, hello, I'm in my 50s. Right."

• Contingency Planning:
  • Mark (17:09):

    "You could also just reduce his contributions at work."

  • Jill (17:20):

    "Pensions gives you the ability to reduce your contribution."

• Mike on his situation:
  • (16:23):

    "We're doing fine here, Jill, but really appreciate the recommendation there."

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6. Timestamps for Key Segments

• [04:05] Listener Call Begins: Mike from New England
• [06:23] Info on Income & Major Savings Buckets
• [07:01] Pension Details Revealed
• [09:20] Elder Care/Mike’s Father’s Needs
• [10:28] Income Stability & Social Security Planning
• [11:12] Estimating Surplus Cash Flow
• [13:42] Backdoor Roths and Where to Put Next Dollars
• [14:06] Roth vs. Pre-tax 401(k) Contributions
• [15:24] Healthcare Planning in Early Retirement
• [16:13] Sandwich Generation Discussion
• [17:09] Contingency Planning for More Expensive Parental Care
• [17:44] Wrap-up & Call to Listeners

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Summary Takeaways

• Continue maxing out retirement accounts (including Roth options and backdoor Roths)
• Build taxable brokerage savings for accessibility and future flexibility
• Plan for growing elder care costs, but don’t lose sleep—there are multiple options and strong financial footing
• Review healthcare coverage availability in early retirement via civil service
• Remain flexible and prepared for life changes by having liquid assets and a willingness to shift strategy as family needs evolve

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Jill and Mark close the call reaffirming that Mike and his wife are “in really good shape,” owing in large part to exceptional pension benefits and disciplined savings. Their recommendation: keep up the smart saving, be prepared to pivot for parental care, and perhaps tuck a little more into Roth and brokerage for ultimate flexibility.

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For more questions or advice, visit jillonmoney.com and use the "Contact Us" feature to submit your own questions for Jill and Mark.

Transcript

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[Jill Schlesinger]

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[Jill Schlesinger]

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[Jill Schlesinger]

Welcome to the Jill on Money Show. It's Tuesday, July 28th and we are here providing you with unconventional and entertaining insights on your money and your life. Mark I always like to say that every so often because it's like the orig thing we wrote, I believe for the radio show 15 years ago. We are still doing that. I am Jill Schlesinger, your hostess. I Am a certified financial planner, which means that I took a bunch of hard tests and a long time ago, I used to actually be a financial planner. That was my main job. Now I'm kind of a talking head on television and here on podcasts. And if you actually have a need for a financial planner, Mark and I, although we're both CFPs, we are not those people. But we love talking to you about whatever's going on in your finances, financial life, whatever questions you may have. To reach us, all you need to do is go to our website, jillonmoney.com, click the contact us button, write us a note, and if you'd like to join us live, then just check the box. Mark will arrange to do everything. Now, while you're on the website, don't forget, we've got all this content that lives there. And we also have a button that says, check out our new show, which is called Money Moves. You can subscribe to Money Moves, which is both a podcast and as well as a YouTube show. So there's a little video, little audio, something for everyone. All the stuff is there on our website. You can click through or you can just go wherever. Go, just go to YouTube, search for money Moves with Jill Schlesinger. Or you can just subscribe to it wherever you get this podcast. Okay, now today, let us go to Mike, who joins us from New England. Mike, what is going on? We are talking to you as the Red Sox are completing quite a amazing streak. Let's not dwell on that since both Mark and I are Mets fans.

[Mike (Caller)]

Yeah, I got a Jill and Mark, great turnaround for the Sox here. Been a big fan of your podcast for a long time. Been listening probably before Mark started talking and really appreciate the folks you bring on.

[Mark (Co-host)]

That's a long time.

[Jill Schlesinger]

That is a long time. Thank you for that. We appreciate you.

[Mike (Caller)]

Hey, looking to see if I could get some help, recommendations on where to go with maybe future contributions, future savings strategies as our boys complete college. Here I have one at home, 23 done and one in his last year of college. And just really trying to figure out where the best place is to put the next dollars, especially after he graduates from college in next summer.

[Jill Schlesinger]

That's great. So we have one more year of college and is that paid for? Have you guys already saved the money for that?

[Mike (Caller)]

Yeah, we've been doing 529s and paying the right out of savings, so.

[Jill Schlesinger]

Okay. So are they both going to be home with you or what do you think is going to happen here?

[Mike (Caller)]

Yeah, for a While now the oldest will eventually launch here shortly. We're not really paying any bills any longer. He's kind of on his own, just saving some money for some housing. And the younger one will be graduating next summer.

[Jill Schlesinger]

Okay, great. Okay. Mike, how old are you?

[Mike (Caller)]

My wife and I are both 52.

[Jill Schlesinger]

Okay. And are you both working full time?

[Mike (Caller)]

Yes, both.

[Jill Schlesinger]

Okay, is this sort of that moment where you're like, okay, the kids are rolling off the payroll, we still make a bunch of money. What should we do next? Is there a goal in your, in your sight? In other words, are you saying like, I want to do something? Is it. Whether it's retire or change or whatever, what's. What are we reaching for here?

[Mike (Caller)]

Yeah, I think the, you know, longer term goal is to grad to retire at the age of 60, really have an ability to put some money away in the next seven, eight years and sure, we're putting it in the right place.

[Sally Helm]

Okay.

[Mike (Caller)]

As you can imagine, we've been contributing to the 401k and building that up. And it's all pre tax and will at some point need to be taxed when we're not completely liquid. But we do have some, some savings and some brokerage that we started.

[Jill Schlesinger]

Okay, how much do you guys earn?

[Mike (Caller)]

About 450k.

[Jill Schlesinger]

And you're both maxing out your retirement accounts, right?

[Mike (Caller)]

Yes, including the catch up.

[Jill Schlesinger]

Okay, right now in all of that 401k that has not yet been taxed, how much is in there?

[Mike (Caller)]

About 1.6.

[Jill Schlesinger]

Okay. And any Roth money or.

[Mike (Caller)]

No, just the back doors that we've been doing. Probably about 120k combined.

[Jill Schlesinger]

Okay. Is there any pension benefit that either of you will be entitled to?

[Mike (Caller)]

Yeah, both of us. Jim.

[Jill Schlesinger]

Oh, hello. Tell me more.

[Mike (Caller)]

We're excited, right? Yeah, about at 65 for both of us, about 7,700amonth for me and oh my God, 2,300amonth for my wife.

[Jill Schlesinger]

Oh my gosh, I'm. Mark, I'm so jealous and so happy for you.

[Mark (Co-host)]

Pension envy.

[Jill Schlesinger]

Pension envy is all about what we are feeling right now. So. Okay, 1.6 pre tax, backdoor Roth 120. You got the pension money? Some brokerage account money maybe?

[Mike (Caller)]

Yeah, about 160.

[Jill Schlesinger]

Any like high yield savings, checking, money market boring stuff?

[Mike (Caller)]

Yeah, that's about 60.

[Jill Schlesinger]

And you own your home?

[Mike (Caller)]

We do.

[Jill Schlesinger]

How much would you guess it's worth?

[Mike (Caller)]

Probably about a million.

[Jill Schlesinger]

Any mortgage remaining?

[Mike (Caller)]

210,000 at 2 and 5, 8.

[Jill Schlesinger]

Oh my God. Should only borrow more money, right? Also, I like the fact, Mike, that You are like. You are like I am, which is. I always defer to a fraction. I understand we're. That's old school, but thank you for that. I appreciate that. Okay. Is there any rental property? Is there a vacation home, Anything else that's floating around out there?

[Mike (Caller)]

Yeah, vacation home up in the mountains. We don't have a mortgage on that.

[Jill Schlesinger]

How much is it worth?

[Mike (Caller)]

Probably about 700.

[Jill Schlesinger]

And you want to keep both of these houses, like when you turn 60, chances are you want both of them, right?

[Mike (Caller)]

Yeah, chances.

[Jill Schlesinger]

Okay, good. All right. What about your spending? And let's try not to do like too much kids stuff because I do feel like that's winding down.

[Mike (Caller)]

Probably about 12k a month. You know, really driven by both properties. A lot of taxes, right? Sure.

[Jill Schlesinger]

And upkeep. Do you guys have parents that you need to take care of?

[Mike (Caller)]

Yeah, me. So my dad's got a small pension, owns his house outright. Really? Cash Flow limited. He's got a small pension that comes in to cover some of the bills every month. And he's really been burning down his savings recently, so. I see that. Starting to need some help with. With him next year.

[Jill Schlesinger]

How much do you think?

[Mike (Caller)]

About 40k a year for some help coming in, some services coming in the house to help take care of them.

[Jill Schlesinger]

Even if we said 50. If I said four grand a month, like on top of your 12 grand plus four grand a month for dad.

[Mike (Caller)]

Yep. That would be.

[Jill Schlesinger]

Makes sense.

[Mike (Caller)]

Yes, it does.

[Jill Schlesinger]

Okay. And your wife's family?

[Mike (Caller)]

No, no help needed.

[Jill Schlesinger]

Any inheritance perhaps?

[Mike (Caller)]

Doubtful. My dad's house, maybe.

[Sally Helm]

Okay.

[Jill Schlesinger]

In your next seven or eight years, do you think that you will be making about the same amount of money? This 450, do you think it could change substantially? Is there any risk that you guys would be looking at lower income for any reason?

[Mike (Caller)]

No, no, no risk. And probably about the same amount. My position is always subject to being consolidated or moved somewhere else. So nervous about that. But I've been at the same company for quite some time.

[Jill Schlesinger]

Yeah, for both of you. Social Security wise, what's your benefit look like?

[Mike (Caller)]

About 5,000. At 70.

[Jill Schlesinger]

Okay. For each of you?

[Mike (Caller)]

No, for me. And my wife is a civil servant, so she does not have much Social Security. I don't believe she has enough orders, so.

[Mark (Co-host)]

Okay.

[Jill Schlesinger]

She would get half of yours, though.

[Mike (Caller)]

Yeah, that's. That's what I was going to ask you.

[Jill Schlesinger]

Right.

[Sally Helm]

Okay.

[Jill Schlesinger]

On this 450 you're maxing out, plus the catch up. Now, once the kids are done. Done. Do you sense that there will be some Excess cash flow that you would have available to you. In other words, like what do you think that is?

[Mike (Caller)]

Yeah, I think so. Probably somewhere around 50 a year. We've been covering again for the tuition out of pocket.

[Jill Schlesinger]

Right.

[Mike (Caller)]

You know, that would probably be available what isn't spent taking my dad. So.

[Jill Schlesinger]

Okay, so but for now, you know, you guys are both putting money away. You got your contribution plus the catch up contribution you're putting. Like for you that's 32,5. Is that 32 five times two. Is your wife limited because she make less than you? I guess I, I didn't ask like I asked you to get.

[Mike (Caller)]

Yeah, she does.

[Jill Schlesinger]

So you're putting like 40, 50 grand into retirement. You have another probably 50 grand, but maybe it's 40 and maybe you just use that for dad. But you know, eventually we got some extra money, you'll be able to sock that into the brokerage account. So big picture is that at the worst case scenario, meaning like you have to really like every single excess dollar that you have coming in has to go to help your dad. If the only thing you were doing was paying your bills and then putting money into your retirement accounts, then you get to age 60 and at that point I imagine what happens is we are looking at that pre tax 401k which will grow, grow, grow. Right. And we will draw that down 60 to 65. You'll use money from that pre tax account, you'll pull the money out as you need it. Then at 65 you'll have your 10 grand a month coming in from your pensions and you'll use whatever keep, you know, and then continue to tap the pre tax money. And then you are claiming Social Security at age 70 and then you know, in today's dollars I'm just going to use today. Right. We're at 17,5 in your income and you are spending that much money and like you're good, you're all good to go. The more that you can put away, the better it looks. But on the other hand, I'm not like that concerned. You've got to help your dad. You will help your dad. Right, Right, right. And so I think you're in good shape. If I had excess cash flow in your situation right now, I would look to take my excess cash flow and build up my brokerage account. That's what I would do just to have that money, you know, so. Well, I shouldn't say that. You have two things that are happening. You have your retirement account contribution through work, but you also are doing backdoor Roths, right?

[Mike (Caller)]

Correct.

[Jill Schlesinger]

So the combination of those two, if there's any money after that, then I would do a brokerage account. Mark, am I missing anything? I feel like Mike and his wife have a really good trajectory mostly because those pensions are massive. They're incredible pensions.

[Mark (Co-host)]

Yeah, that's like having three plus million dollars saved. The Are your current contributions Roth or pre tax?

[Mike (Caller)]

They're pre tax, Mark, and that's.

[Jill Schlesinger]

Mark's going to want you, Mark's going to want you to do a Roth.

[Mark (Co-host)]

I don't see any need for that anymore. I mean you already have a lot of pre tax money.

[Jill Schlesinger]

You could do it and you would don't have to do it all at once. You know, you got, you know, if you just because you are so you're in your Highest bracket is 32%. Right, right. Because that's, that bracket is 4 to 5 12. So maybe you say all right, let's, let's scale it in. We'll do half. Just experiment with it, with your cash flow. You know, we'll do some money. Right. And, but, but it would be nice to start getting you more Roth because obviously the pre tax will just keep growing for you. And then I think otherwise. Are you managing the investments yourself like in the backdoor Roth and the brokerage account? You do it. You like, you feel good about that?

[Mike (Caller)]

Yes. Every, everywhere is. Got a, you know, similar stock bond ratio and some diversification within, within the stock funds.

[Sally Helm]

All right.

[Jill Schlesinger]

But, but mostly either exchange traded index funds. Okay, good, good, great. When you guys. I just wondering from the. When you retire at 60, how are we going to cover health care? Are you entitled to some health care because you guys, your wife's a civil servant or you know, do you have access?

[Mike (Caller)]

We, we believe it'll be through the state.

[Jill Schlesinger]

That's great. That's awesome. I mean like that's the. As you know, that can be expensive. But you know, I guess the only other thing I'm wondering is with dad, does he live on his own right now?

[Mike (Caller)]

He does and we have help coming in that's paid out of pocket.

[Jill Schlesinger]

Do you ever. Do you foresee that you would either want to move him in with you or he would have to go into a facility?

[Mike (Caller)]

Yeah, he, he might have to go into a facility at some point. We're trying to make do at home for now and you know, we'll probably have to help pay that bill at that Right. Time.

[Jill Schlesinger]

I mean listen, it comes when it comes, right?

[Sponsor/Ad Reader]

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[Mike (Caller)]

Yeah. Yeah.

[Jill Schlesinger]

And you do the. Are you do you have siblings who can help, or is this mostly on you?

[Mike (Caller)]

It's mostly on me. Okay.

[Jill Schlesinger]

All right. Well, I mean, you're the sandwich man. This is it. You got the kids, you got the dad. This is like. This is life. This is like, hello, I'm in my 50s. Right.

[Mike (Caller)]

We're doing fine here, Jill, but really appreciate the. The recommendation there.

[Jill Schlesinger]

I think you guys sound like you're in really good. A good situation. If things change with dad. If. If the. You know, I guess if you always want to know what your plan B is. Because I like to have a plan B. Yeah. Mark knows this. I'm very, you know, like, I just like, oh, what would happen if. If, like, all of a sudden the. The needs for your father ratcheted up and you didn't have enough cash flow to really help? You could conceivably, you know, spend some of brokerage money. And I guess, like, the worst case scenario is you could sell a vacation home. You could get a mortgage on the vacation home. Like, there are things that you could do that would tie you over for a period of time. Time, right, yeah.

[Mark (Co-host)]

You could also just reduce his contributions at work.

[Jill Schlesinger]

Yeah, exactly. You could, like, chill out on, like, let's see how it goes with dad.

[Mark (Co-host)]

Yeah, yeah. Pensions gives you the ability to reduce your contribution.

[Jill Schlesinger]

Right.

[Mark (Co-host)]

If you have.

[Mike (Caller)]

Right. That's a great point, Mark. Yeah, he, you know, we. He does own his house outright, but he's house poor. So, you know, if we got to a point there, we could. And he goes into a home, we could sell that.

[Jill Schlesinger]

Yeah, you could sell it.

[Mike (Caller)]

Yeah.

[Jill Schlesinger]

Your mom is no longer with us.

[Mike (Caller)]

No.

[Jill Schlesinger]

Oh, poor Mike's dad. I hope he's a Red Sox fan for his sake. Probably is.

[Mike (Caller)]

Right long. You got it.

[Jill Schlesinger]

All right, listen, good luck to you. Let us know if there's anything else we can do, okay?

[Mike (Caller)]

Appreciate that, Jill. Thank you very much.

[Jill Schlesinger]

All right, if you're like Mike in New England and you don't have a big fat pension, but you do have those needs. The kids, as they're graduating school, they're young adults. They need help. They got a launch with a little bit of a assist from mom and dad, and you've got parents who might need your assistance, get in touch with us. Go to jillonmoney.com, click the contact us button. Let us know if you want to come on the air by checking the box. Mark will do everything else while you're on the website. Check out all of the content that lives there. We've got another show which is called Money Moves. There's a blog, there's a weekly newsletter that is free and there are resources. So do check that out. If you wouldn't mind, please, please put your hands metaphorically on someone's back. Change your work, change your wealth, change your life. Thank you for listening and we'll talk to you tomorrow.

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[Sally Helm]

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