Podcast Summary: "How to Invest Inheritance?"
Jill on Money with Jill Schlesinger
Release Date: August 13, 2025

In this insightful episode of "Jill on Money with Jill Schlesinger," host Jill Schlesinger delves into the nuanced topic of investing an inheritance. Throughout the show, Jill and her co-host Mark T. McGowan address real-life financial dilemmas posed by their listeners, offering practical advice tailored to individual circumstances. The episode is structured around several listener questions, each providing valuable lessons on managing inherited wealth, retirement planning, and safeguarding financial futures.

1. Michael's Inheritance Investment Strategy

Listener Profile:
Michael, 54, recently inherited approximately $428,000 from his father's trust. With minimal debt and a stable financial position, he seeks advice on investing this inheritance to grow it while minimizing potential losses.

Financial Situation Overview:

• Cash: $700,000
• Brokerage Account: $24,000
• Traditional Retirement Assets: $1.9 million
• Roth Assets: $383,000
• HSA: $11,000
• Company Stock: ~$100,000
• Annual Income from Condo: $250,000

Key Concerns:

• Balancing growth with risk management.
• Uncertainty about market timing.
• Emotional attachment to preserving inherited wealth.

Advice Provided: Jill emphasizes the importance of a game plan that aligns with Michael's comfort level regarding risk:

• Dollar-Cost Averaging (DCA): Investing the inheritance incrementally (e.g., $25,000 to $50,000 per month) into diverse funds to mitigate the impact of market volatility.
  • Jill Schlesinger (10:15): "Dollar cost average, pick an amount you can stick to."
• Immediate Lump Sum Investment: While statistically advantageous, Jill acknowledges Michael's reluctance to fully commit at once to prevent emotional distress during market downturns.
• Maintaining a Cash Reserve: Ensuring a two-year financial runway remains intact to cover unforeseen circumstances like job loss.

Notable Quote:
"Doing dollar cost averaging a little bit in a bunch of funds, maybe three or four different funds in that brokerage account on a monthly basis."
— Jill Schlesinger [12:45]

2. John’s Retirement and Social Security Timing

Listener Profile:
John and his wife, both 65, plan to retire at the end of the year. They reside in Minnesota with a combined income of $80,000 and have plans for part-time work post-retirement.

Financial Situation Overview:

• 401(k): $230,000
• Monthly Expenses: ~$4,000
• No major debts; house paid off except for a small equity loan.

Key Concerns:

• Optimal timing for claiming Social Security benefits.
• Balancing pension benefits and retirement income.

Advice Provided: Jill advises:

• Delayed Social Security Benefits: Recommending both spouses wait until age 67 to claim Social Security to maximize monthly benefits.
  • Jill Schlesinger (18:30): "If each of you has decent life expectancy, just wait till you're both 67."
• Strategic Use of 401(k) Funds: Drawing from retirement accounts to fill income gaps while keeping part-time work income minimal.
• Health Considerations: Encouraging John to reassess if their current Social Security claiming strategy is influenced by health issues or other personal factors.

Notable Quote:
"If each of you has decent life expectancy, just wait till you're both 67, it's fine and you can pull the money out of your 401k and she'll have a higher benefit then."
— Jill Schlesinger [22:10]

3. Mike’s SEP IRA Management at Age 72

Listener Profile:
Mike, approaching 72, seeks to transition his SEP IRA from a volatile stock-heavy portfolio to safer, income-producing investments without incurring penalties or significant taxes.

Financial Situation Overview:

• SEP IRA: ~$500,000
• Other Assets: Not specified

Key Concerns:

• Reducing portfolio volatility.
• Ensuring steady income streams in retirement.

Advice Provided: Jill highlights:

• Maintaining Tax-Deferred Growth: Keeping funds within the IRA to defer taxes until withdrawal.
  • Jill Schlesinger (28:05): "Anything you buy and sell inside of this account, no tax event because it's inside of an IRA account."
• Diversification with Equities: Advising a balanced approach that includes some equities for continued growth potential.
• Income-Producing Investments: Exploring bonds, dividend-paying stocks, and annuities as safer income sources.

Notable Quote:
"Even if you really want to get off the stock only portfolio, I really do think you're going to have to have some equities in there to provide growth for you."
— Jill Schlesinger [29:20]

4. Shauna’s Concerns on Inheriting a Large IRA

Listener Profile:
Shauna, aged 50 and 51, anticipates her child inheriting $3 to $5 million through an IRA and is concerned about the tax burdens and required distributions.

Financial Situation Overview:

• Future Inheritance: $3-5 million
• Current Planning: Shifting towards a brokerage account to avoid mandatory withdrawals from inherited IRAs.

Key Concerns:

• Managing Required Minimum Distributions (RMDs) under the 10-year rule.
• Structuring inheritance to minimize tax impacts.

Advice Provided: Jill recommends:

• Trust Accounts: Converting brokerage accounts into trust accounts to manage distributions effectively.
• Tax Bracket Considerations: Assessing current and future tax brackets to optimize tax liabilities.
• Estate Planning: Consulting with an estate attorney to structure inheritances in a tax-efficient manner.
  • Jill Schlesinger (35:40): "You put in a brokerage account, make that brokerage account a trust account, and then you could dribble it out."

Notable Quote:
"Convert this or pull the money out yourself... get a really good estate attorney to make sure that she's got someone who can help guide her."
— Jill Schlesinger [36:15]

5. Brenda’s Inquiry on Opening a Roth IRA at Age 70

Listener Profile:
Brenda, a 70-year-old widowed individual with $2 million in a traditional IRA, seeks advice on the benefits and feasibility of opening a Roth IRA at her age.

Financial Situation Overview:

• Traditional IRA: $2 million
• Social Security: $3,100/month
• Age: 70

Key Concerns:

• Tax implications of converting traditional IRA funds to a Roth IRA.
• Ensuring inheritance benefits for her children by minimizing their tax burdens.

Advice Provided: Jill explains:

• Roth Conversions: Brenda can convert her traditional IRA to a Roth IRA, allowing the heirs to inherit tax-free assets.
  • Jill Schlesinger (39:50): "It's much better to inherit an asset that has already been taxed a Roth asset."
• Tax Bracket Analysis: Evaluating whether Brenda is in a lower tax bracket than her children to determine the cost-effectiveness of the conversion.
• Financial Readiness: Ensuring she has outside funds to pay the taxes incurred from the conversion without tapping into retirement savings.

Notable Quote:
"She can't open up a Roth and just start contributing to a Roth because there's no earned income. This would be a conversion."
— Jill Schlesinger [41:10]

6. Maureen’s Financial Planning for Continuing Care Retirement Community (CCRC)

Listener Profile:
Maureen and her husband, both in their mid to late 70s, are evaluating the financial aspects of entering a Continuing Care Retirement Community (CCRC).

Financial Situation Overview:

• Deposit Paid: Initial payment for CCRC
• Credit Assurance: Assurance regarding future care levels

Key Concerns:

• Financial stability and management of the CCRC.
• Ensuring eventual reimbursement for deposits upon death or move to different care levels.

Advice Provided: Jill advises:

• Due Diligence on CCRC’s Financial Health: Reviewing the financial statements and stability of the CCRC.
• Consulting Professionals: Engaging with an accountant or a Certified Financial Planner (CFP) to assess the CCRC’s financial management.
  • Jill Schlesinger (45:30): "You need to have somebody look at the financials of this kind of facility."

Notable Quote:
"They have been very bad at managing their own finances... make sure that somebody is looking at these and helping you make that next decision."
— Jill Schlesinger [46:00]

7. Erin’s Financial Recovery Post-Reduction in Force

Listener Profile:
Erin, 41, a federal employee facing a reduction in force with impending lower pension benefits. She has $60,000 in emergency savings and anticipates a severance payout of $13,000 to $15,000.

Financial Situation Overview:

• Thrift Savings Plan: $633,000 (including $150,000 Roth)
• Roth IRA: $47,000
• Brokerage Account: $17,000
• Emergency Savings: $60,000
• Annual Salary: $150,000
• Planned Relocation: Moving from D.C. to Ohio to reduce cost of living

Key Concerns:

• Maximizing severance and emergency funds while maintaining liquidity.
• Managing retirement savings amidst job uncertainty and relocation.

Advice Provided: Jill recommends:

• High-Yield Savings Accounts: Storing severance and emergency funds in high-yield accounts to earn better interest while retaining liquidity.
  • Jill Schlesinger (50:25): "High Yield Savings account is the route to go."
• Retirement Savings Strategy: Continuing to contribute to retirement accounts, especially given the move to a lower cost-of-living area, which enhances financial stability.
• Job Transition Planning: Leveraging existing savings to bridge the gap during job searches in a lower-cost location.

Notable Quote:
"If you're just going to be putting away 15% of your income into retirement, I'm sure it's going to be fine."
— Jill Schlesinger [52:40]

Conclusion and Final Thoughts

In wrapping up the episode, Jill and Mark emphasize the importance of personalized financial planning, especially when dealing with significant life changes such as receiving an inheritance, retirement, or unforeseen employment shifts. They encourage listeners to reach out for tailored advice and to consider professional consultations to navigate complex financial landscapes.

Key Takeaways:

• Tailored Investment Strategies: Align investment approaches with individual risk tolerance and financial goals.
• Tax Efficiency: Optimize tax obligations through strategic account conversions and inheritance planning.
• Financial Stability: Maintain a robust emergency fund and consider cost-of-living adjustments during life transitions.
• Professional Guidance: Engage with financial advisors and estate planners to ensure informed decision-making.

Notable Final Quote:
"Change your work. Change your wealth. Change your life."
— Jill Schlesinger [19:50]

Listeners are encouraged to visit jillonmoney.com for personalized assistance and to subscribe to the podcast for ongoing financial insights.