I’m 47, Can I Retire Next Year?

Summary

Podcast Summary: “I’m 47, Can I Retire Next Year?”

Episode Overview

In the April 30, 2025 episode of Jill on Money with Jill Schlesinger, host Jill Schlesinger, CFP®, along with co-host Mark, delves into the intriguing question posed by one of their listeners: “I’m 47, Can I Retire Next Year?” This episode offers a comprehensive exploration of early retirement considerations, especially for individuals with unique financial circumstances such as military pensions. Through a detailed listener call, Jill and Mark provide actionable insights, addressing both the emotional and financial facets of the decision to retire ahead of the typical retirement age.

Listener Story: Athena’s Retirement Dilemma

Background Information

Athena, a 47-and-a-half-year-old listener from New Jersey, reached out to the show seeking advice on retiring the following year. She expressed feelings of burnout and exhaustion, exacerbated by global stressors like political turmoil and economic uncertainties. Athena’s primary motivation for retirement stems from her desire to prioritize her mental health and well-being.

Financial Snapshot

Jill begins by gathering Athena’s financial details to assess her viability for early retirement:

• Military Pension: $2,400 per month (tax-free)
• Civilian Pension: $472 per month starting at age 65
• Investments:
  • Individual Brokerage Account: $10,000
  • Roth 401(k): $52,313
  • Rollover IRA: $879,000
  • Additional Savings: Roth IRA ($57,000), HSA ($102,000), and $65,000 in the bank

Real Estate Holdings

Athena owns two properties:

1. New Jersey Home:

   • Market Value: $515,000
   • Outstanding Mortgage: $330,000 at a low-interest rate of 2.25%
   • Rental Potential: Approximately $2,525 to $3,000 per month for the two-family unit, including a one-bedroom studio for personal use during visits.

2. Condo in Panama:

   • Owned outright with no mortgage, intended as her retirement residence.

Hosts’ Analysis and Advice

Jill and Mark conduct a thorough analysis of Athena’s financial situation to determine the feasibility of her early retirement.

1. Income vs. Expenses:

   • Military Pension: $2,400/month covers most of her anticipated living expenses in Panama, estimated at $2,000/month.
   • Rental Income: Potential rental income from the New Jersey property ($2,525-$3,000/month) could cover the annual carrying cost of $36,033, nearly offsetting her mortgage and maintenance expenses.

2. Investment Assets:

   • With substantial funds in her rollover IRA ($879,000), Roth 401(k), and HSA, Athena has a solid financial cushion to support her retirement lifestyle and unexpected expenses.

3. Advice on Property Management:

   • Keeping vs. Selling the New Jersey Home: Jill advises Athena to retain the property for the time being, allowing her to generate rental income while maintaining a personal space for family visits. This strategy provides both financial benefits and personal flexibility.

4. Emotional Considerations:

   • Burnout and Mental Health: Recognizing Athena’s need for a break, Jill suggests exploring a temporary hiatus from work to decompress before committing to permanent retirement. This approach offers Athena the opportunity to reassess her long-term desires without rushing into a permanent decision.

5. Life Expectancy and Future Planning:

   • Jill highlights the importance of planning for a long retirement, potentially living until age 95. This underscores the necessity of ensuring that Athena’s financial resources are managed prudently to sustain her lifestyle over several decades.

Key Takeaways

• Comprehensive Financial Assessment: Early retirement requires a detailed understanding of one’s financial landscape, including pensions, savings, investments, and real estate assets.
• Rental Income as a Strategy: Leveraging property for rental income can significantly offset living expenses and mortgage obligations, providing greater financial stability.
• Emotional Health is Paramount: Addressing burnout and mental well-being is crucial. Sometimes, a temporary break rather than permanent retirement might be more beneficial.
• Flexibility in Retirement Planning: Keeping assets like real estate offers flexibility, allowing retirees to adapt to changing circumstances and personal preferences over time.

Notable Quotes

1. Jill Schlesinger on Real Estate Assistance:

   “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”
   (00:00)

2. Athena on Her Desire to Retire:

   “I’m actually really tired of working. [...] I just need to kind of save myself because I’m, like, not sleeping.”
   (03:19)

3. Jill Encouraging Athena:

   “Take a deep breath if you want to de-stress. You are one of the few people at age 47 and a half who’s not the beneficiary of a fancy trust who could be able to do this.”
   (09:10)

4. Jill on Athena’s Potential:

   “Athena, that's a very important name in mythology. And I feel like the wind is at your back. So this is an exciting time for you.”
   (10:33)

Conclusion and Final Thoughts

In this episode, Jill and Mark adeptly navigate Athena’s complex financial and personal circumstances to provide a nuanced perspective on early retirement. They emphasize the importance of thorough financial planning, the strategic use of assets, and the prioritization of mental health. Athena’s case serves as a valuable example for listeners contemplating early retirement, illustrating that with careful planning and a clear understanding of one’s financial position, retiring at 47 is achievable for those with the right resources and strategies.

Listeners are encouraged to assess their own financial situations meticulously and consider both the emotional and practical aspects of retiring early. For personalized advice, Jill and Mark invite listeners to reach out via jillonmoney.com, offering resources such as newsletters, books, and live webinar subscriptions to support informed financial decision-making.

Transcript

[Jill Schlesinger]

Buying a home in California can certainly feel intimidating. 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 a Realtor changed everything. 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.

[Mark]

Detail, from making an offer to closing the deal.

[Jill Schlesinger]

Working with a Realtor can help 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.

[Mark]

You from starting your next chapter.

[Jill Schlesinger]

Find your [e-mail] that's championsofhome.com hey Fidelity, can I get a second opinion on stocks in the Fidelity app? With Fidelity, it's easy to get an outside opinion from independent experts in a single score. And then when you're ready, trade US stocks and ETFs with no commissions. That's right. I am always right. Investing involves risk, including risk of loss, online US equity trades and ETFs and retail fidelity account sell order assessment fee not included, some account types and securities excluded. [e-mail] commissions Fidelity Brokerage Services, LLC Member NYSE, SIPC Foreign welcome to the Jill on Money show. It's Wednesday, April 30th. Oh, the month went by so quickly. Maybe that's because there has been a fire hose of financial, economic, tariff related stuff going on. And if all of that has made you kind of tune out a little bit and feel overwhelmed, don't worry. We are here for you. Mark and I are both certified financial planners and we can walk you through whatever is going on in your life and try to help you get to the place you want to go. I can't guarantee that it will happen, but what I can tell you is that often in our conversations what we're able to do is uncover some different ideas for getting you where you want to go and maybe you'll make a decision based on that. So if you've got something that needs a little bit of maybe caretaking, a little bit of advice or guidance, give us a holler. Just go to jillonmoney.com, click the contact Us button, write us a note, and if you want to join us on the air, check the box because Mark will then do everything else. All of our content lives@the jillonmoney.com website. You can sign up for our free weekly newsletter. You can buy my book, and you can subscribe to the Jill on Money Live service, where you have access to quarterly live webinars, the back catalog of those webinars, and lots of bonus audio and video content, all for 45 bucks for the next 12 months, Jill on Money Live, right there on our website. Okay, let us get to the matter at hand. We have Athena, who is joining us from New Jersey. Hello, Athena. How are you?

[Athena]

Hi, Jill. How are you?

[Jill Schlesinger]

Great. What's happening? What can we do for you?

[Athena]

So I am 47 and a half.

[Jill Schlesinger]

And a half. How's that half year gone so far?

[Athena]

It's going okay. I would like to retire next year around.

[Jill Schlesinger]

Stop it. You stop that. Why? You're too young.

[Athena]

I'm actually really tired of working.

[Jill Schlesinger]

Do you do. Wait a second. Maybe. You've got a ton of money. Okay, so 47 and a half wants to retire next year. Hmm. Are you, like, just burnt out, or is it the kind of job that would. Would cause burnout?

[Athena]

Um, I. I think that there's been a lot of stress with the world and politics right now, and I just need to kind of save myself because I'm, like, not sleeping. It's. It's kind of. Yeah. So the world right now, I just need to sort of relax and try.

[Jill Schlesinger]

What?

[Mark]

I need to reset.

[Jill Schlesinger]

So is it a permanent retirement or just a break? Yeah, maybe it's a break.

[Athena]

No, I think it's a permanent if I can do it.

[Jill Schlesinger]

Okay, so you're 47 and a half. Are you married? Are you single? Are you partnered?

[Athena]

I'm single. I just have two cats.

[Jill Schlesinger]

Single and two cats. Okay, very good. Athena, are you going to be entitled for any sort of. To any pension?

[Athena]

Yes. So I'm former military, and I have a pension of 2,400amonth.

[Jill Schlesinger]

Okay.

[Athena]

And then in my previous civilian or my, like, really my first civilian job, I worked there long enough. Where at the. At age 65, I have a pension of 472.

[Jill Schlesinger]

Great. Are you collecting that $2,400 a month from the military right now? Okay.

[Athena]

Yeah. And it's tax free.

[Jill Schlesinger]

What else have you squirreled away in addition to the two pensions that will come? And the 472 you said, was it at what age? 65?

[Athena]

Yeah, 65.

[Jill Schlesinger]

Okay, got it. Okay. 20 long years. 18 long years from now. Okay. What else do you have saved?

[Athena]

So my money is in three places in the Charles Schwab account. I have an individual brokerage account, about $10,000. I have a Roth 401K, 52,313.

[Jill Schlesinger]

Just give me round numbers, lady.

[Athena]

Okay.

[Jill Schlesinger]

Roth 401K, 52 grand.

[Athena]

52. And then rollover IRA. 879.

[Jill Schlesinger]

879,000?

[Athena]

Yes.

[Jill Schlesinger]

Wow. And that's a traditional, right?

[Athena]

Yes.

[Jill Schlesinger]

Okay. Do you own your own home?

[Athena]

I own. So I want to retire in Panama.

[Jill Schlesinger]

Oh, okay.

[Athena]

I own the condo in Panama. Free out. There's no mortgage. And then I currently have a mortgage in my New Jersey house.

[Jill Schlesinger]

How much is the house worth in New Jersey, do you think?

[Athena]

515.

[Jill Schlesinger]

And what's the outstanding mortgage?

[Athena]

330.

[Jill Schlesinger]

What's the rate of that mortgage?

[Athena]

2.25.

[Jill Schlesinger]

Oh, boy, that's cheap. So the retirement place in Panama, that's where you want to retire to? My question is, would you want to sell the house in New Jersey or would you think about renting it?

[Athena]

So that's the question for you. If, if I should sell it or is it better actually for me to rent it out?

[Jill Schlesinger]

How much money do you think you could charge and rent?

[Athena]

About 2,525 to 3,000. So what happened is the house in New Jersey, it's like a two family. So the upstairs, 500. And then I have like a one bedroom studio that I actually was maybe hoping to be able to keep. So when I come back and visit my family, I'll be able to stay.

[Jill Schlesinger]

Okay, you have a two family home. It's worth 515. There's a $330,000 mortgage. You could get 2,500 for the. Not for the studio, for the upstairs. Right. Okay. And what's the house cost you to carry on an annual basis? Do you have an idea? I mean, you got the mortgage, so you know what your mortgage payment is. But if I tallied it all up and I said principal, the interest, the taxes, the homeowners, what do you think that you're spending a year on? The house?

[Athena]

33.

[Jill Schlesinger]

36,033. Okay, so three grand a month. So if you could get. If you could rent out the three for 3,000amonth, it could basically cover your bills Almost. Not perfectly, but about right?

[Athena]

Yes.

[Jill Schlesinger]

Okay, so you ready for the important question here? When you live in Panama, since you know about this, I presume you understand what it would cost you to live there.

[Athena]

Yep.

[Jill Schlesinger]

What do you think you need to actually spend in Panama?

[Athena]

2,000.

[Jill Schlesinger]

That's it? Yep. And so your pension of $2,400 a month, which is tax free, that will basically cover Most of your needs.

[Athena]

Yes.

[Jill Schlesinger]

Okay. So essentially what you could do is.

[Athena]

Jill, I still have more money left.

[Jill Schlesinger]

To tell me more. Okay, Keep going, keep going. I love this.

[Athena]

In my. In like, an Sci Roth. 57,000.

[Jill Schlesinger]

Okay. That's in addition to the Roth with 52,000, right?

[Athena]

Yep.

[Jill Schlesinger]

Okay. Yep.

[Athena]

And then my. And then I also have, like a. I rolled over my. I did roll over my tsp.

[Jill Schlesinger]

Yep.

[Athena]

To the SEI. And that's 200,000.

[Jill Schlesinger]

I mean. And you have some money in the bank. And.

[Athena]

And also I have an hsa.

[Jill Schlesinger]

Oh, good. But you're covered for healthcare through the military, right?

[Athena]

Yeah, but my. I've been working for companies that been offering me hsa, so I've been using as a way to, like, save more money.

[Jill Schlesinger]

Fabulous.

[Athena]

102,000.

[Jill Schlesinger]

Whoa. That's awesome.

[Athena]

Yeah.

[Jill Schlesinger]

And money in the bank. Give me that number.

[Athena]

65.

[Jill Schlesinger]

Perfect. What are we talking about here? Like, do you. You know that you're fine, right?

[Athena]

I. So I can't really take my money, like, in my 401k or anything like that because I'm still too young. Of course.

[Jill Schlesinger]

But you have money.

[Athena]

You do have. So. So should I. Should I sell the house? Should I keep the house? There's, like.

[Jill Schlesinger]

I'd keep it for now. I'd see if I. If you could swing it. I like the idea that you have someplace to come back to. So now are you putting money into the plan right now? Stop doing that. Just start. Let's catch. We. I need cash. Let's pull back. Let's conserve some cash. And I get that you're exhausted. I also want you to leave open the possibility that maybe you'll want to do something. I don't know what it is. Like, maybe it'll be something. How are you going to pass the time? She's going to relax and decompress, and that's going to take three months. Okay, that is going to take exactly three months. And then on the other side of that, you might be like, you know what I want to do? I want to go work in someplace. I don't know. It's possible. It's a long life you have. You're only halfway there. Basically, your life expectancy is probably 95 right now. Okay. So take a deep breath if you want to de. Stress. De stress. You are one of the few people at age 47 and a half who's not the beneficiary of a fancy trust who could be able to do this. Okay.

[Athena]

Right.

[Jill Schlesinger]

I think that's it. Documents have to be in place. People have to be notified. And let's see, maybe next year you're going to be like, everything's better. Who knows? Athena, that's a very important name in mythology. And I feel like the. The wind is at your back. So this is an exciting time for you. I think it's good. Mark, any parting words before Athena starts basically chartering her her next trip to Panama? No. Like you say, not very often. We can tell somebody at 47 they can retire, but it's all about that military pension. Unbelievable. Well, thank you for serving, and I hope it didn't do too much damage to you, because you're about to have quite an interesting next chapter. So keep in touch with us. Send us a picture from Panama. Hey, if you are just fried and you want to de stress, maybe you cannot afford to retire like Athena. But maybe, just maybe you could do something different. Maybe you could take a little, I don't know, like a little timeout, and maybe it is time to reset, and maybe that's something that's important to you. Get in touch with us so we can walk through what your potential options might be. Go to jillonmoney.com, click the contact us button, write us a note. Let us know if you want to come on the air live by checking the box. Don't forget to sign up for the free, free weekly newsletter. And of course, you can subscribe to us on the Odyssey app. You can also subscribe to our Money Watch podcast that drops on the weekends, also on the Odyssey app, or wherever you find your favorite podcast. Okay, gang, you know what? It is time to put your hands, metaphorically on someone's back. Somebody like Athena is stuck in a job that she is not happy with, and she doesn't have the ability to make changes like Athena or he. So put your hands on someone's back. Reach out, give somebody a boost. That's really a helpful thing to do. Change your work, change your wealth, change your life. Thank you for listening and we'll talk to you tomorrow.

[Mark]

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