I'm 57, Can I Retire?

Summary

Detailed Summary of "I'm 57, Can I Retire?" Episode of Jill on Money with Jill Schlesinger

Podcast Information:

• Title: Jill on Money with Jill Schlesinger
• Host/Author: Audacy
• Description: Host Jill Schlesinger, CFP®, addresses sometimes uncomfortable and controversial money and investing topics without the financial jargon. She engages with listener calls and informative guests to uncover surprising insights and provide actionable information for financial empowerment.
• Episode: I'm 57, Can I Retire?
• Release Date: December 22, 2024

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Introduction

In the episode titled "I'm 57, Can I Retire?", Jill Schlesinger engages with Joe, a 57-year-old listener from Florida, who is contemplating retirement. The discussion delves into Joe's financial standing, retirement readiness, and strategic planning to ensure a secure and enjoyable retirement.

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Caller Background and Retirement Motivation

Jill Schlesinger [02:09]: "Welcome to the Jill on Money Show... Let's talk to Joe, who's on the line from Florida. What can we do for you?"

Joe [02:53]: "You know, it's. I have a classic 'Can I retire yet?' question."

Jill begins by understanding Joe's motivation for considering retirement beyond the surface level. She probes into whether burnout or dissatisfaction with his current job is influencing his decision.

Jill Schlesinger [03:14]: "Is the retirement because you're, you know, what's prompting it? Is it like I'm burnt out? Is it I hate what I do?"

Joe [03:35]: "It's not that I hate the organization I work for. It's been 20 years with them though, and it's getting... It's just played out. So I think I'm just done with this company."

Joe clarifies that his desire to retire stems from feeling that his long-term position has run its course, not from disliking the organization per se.

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Financial Assessment

Jill conducts a comprehensive review of Joe's financial situation to determine his readiness for retirement.

Income and Savings

Jill Schlesinger [04:29]: "How much do you earn right now?"

Joe [04:31]: "$142,000."

Jill Schlesinger [04:34]: "And are you contributing to a retirement account?"

Joe [04:34]: "Yeah, I fully funded both the HSA and 401ks for the last three years."

Retirement Accounts and Assets

Joe provides detailed information about his retirement accounts and other assets:

• Traditional 401(k): $436,000
• Roth 401(k): $356,000 (including a backdoor Roth)
• IRAs: $650,000 (combined for him and his wife)
• Brokerage Account: $279,000
• Cash in Bank: $102,000
• Home: Owned outright, valued at approximately $900,000

Jill Schlesinger [05:13]: "Wow, that's great."

Jill acknowledges the substantial savings and assets Joe has accumulated, indicating a solid financial foundation for retirement.

Living Expenses and Social Security

Joe outlines his annual living expenses and potential Social Security benefits:

Joe [06:55]: "46,500 is what I need."

Jill Schlesinger [07:00]: "It's shocking. When you hit your Social Security full retirement age, what will your benefit be? It will be 67, probably is the age."

Joe [07:13]: "$3,011."

Jill Schlesinger [07:15]: "Let me round it down to 3,000. And your wife would get half of that, or did she have her own record on which she can claim?"

Joe [07:23]: "She has her own record on which she can claim. It's probably going to be close to half of that, though."

Joe reveals that his Social Security benefit will be approximately $3,000 per month, with his wife having her own record to claim a similar amount.

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Retirement Strategy Discussion

Jill and Joe discuss the practical aspects of retiring at 57, considering the ages for accessing retirement funds without penalties.

Joe [08:00]: "What I'm thinking is it's gonna be cash in the brokerage account until I hit 59 and a half, and then I'll probably start tapping my IRA."

Jill Schlesinger [08:18]: "I think you can do it. I do think you can do it. But I would like you to have a little more cash now."

Jill suggests that while Joe's plan is feasible, increasing his cash reserves could provide additional security during the transition period before he can access IRA funds without penalties.

Managing Investments Post-Retirement

Joe considers withdrawing from a managed 401(k) account and transitioning to self-managed IRAs and brokerage accounts.

Joe [09:56]: "I have this 401k that's sitting around $437,000. When I do decide to pull the plug, I'm assuming I'm wrapping that into an IRA and a brokerage account. And then my question is the financial planner that's currently got my money under management for the, for my wife and I's IRA's, what is your opinion about just pulling from him and just going all because he's... I'm paying five basis points that I'm paying him. I'm thinking about just pulling it all, establishing the IRA's in the brokerage account."

Jill Schlesinger [10:34]: "Have to be great. It's not that hard... If you don't think that your advisor is providing you with enough of a value, then I have no problem with you doing it."

Jill assesses Joe's capability to manage his investments independently, considering his disciplined approach to tracking expenses.

Jill Schlesinger [11:10]: "It's certainly worth it if you are, don't trust yourself. And if you do trust yourself, then don't worry about it."

She emphasizes the importance of involving his wife in financial decisions to ensure continuity and preparedness.

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Recommendations and Conclusions

Jill provides strategic recommendations to Joe to enhance his retirement readiness:

1. Increase Cash Reserves: To better handle unforeseen expenses and provide a cushion during the transition to retirement.

2. Involve His Wife: Ensuring both partners are on the same page regarding financial management and future planning.

3. Consider Part-Time Work or Hobbies: Exploring alternative income sources or engaging activities to maintain engagement and financial flexibility.

Jill Schlesinger [09:10]: "I'm going to just encourage you to say, at least think about if there's something you can do that would be fun for you. Engaging. Because it's tough... There's a real, like that downshift can be helpful."

Jill concludes by affirming Joe's ability to retire while encouraging thoughtful preparation and holistic planning.

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Notable Quotes with Timestamps

• Jill Schlesinger [06:55]: "Are you kidding me? 50 grand a year? That's it?"

• Jill Schlesinger [07:15]: "Let me round it down to 3,000. And your wife would get half of that..."

• Joe [08:00]: "What I'm thinking is it's gonna be cash in the brokerage account until I hit 59 and a half..."

• Jill Schlesinger [10:34]: "Have to be great. It's not that hard."

• Jill Schlesinger [11:10]: "It's certainly worth it if you are, don't trust yourself. And if you do trust yourself, then don't worry about it."

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Final Thoughts

This episode serves as a comprehensive guide for individuals in their late 50s contemplating retirement. Jill Schlesinger adeptly navigates the complexities of financial planning, emphasizing the importance of disciplined saving, strategic investment management, and holistic life planning. Listeners gain valuable insights into assessing their financial readiness, making informed decisions about retirement timing, and ensuring that their retirement plans align with their personal and financial goals.

For those considering retirement, key takeaways include:

• Thorough Financial Assessment: Understanding income, expenses, and asset allocation is crucial.

• Strategic Withdrawal Planning: Knowing when and how to access retirement funds can optimize financial stability.

• Holistic Life Planning: Incorporating personal fulfillment and engaging activities can enhance the retirement experience.

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Transcript

[Jill Schlesinger]

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[Joe]

Foreign.

[Jill Schlesinger]

Welcome to the Jill on Money Show. It is Sunday, December 22, and we are here trying to help you navigate all the issues that stand in front of you and reaching your financial goals. Okay, not all of them, but if you've got a question, go to our website, jillonmoney.com, click the contact Us button. Let us know if you'd like to join us on the air live by checking the box while you're on the website. There's only a week and a half left to lock in a $35 fee for the next 12 months for Jill on Money Live. That is our subscription service where you have access to quarterly live webinars for the next 12 months. The back catalog of those webinars, bonus content, all for 35 bucks. So you should check it out. All right, let's talk to Joe, who's on the line from Florida. What can we do for you?

[Joe]

You know, it's. I have a classic can I retire yet? Questions.

[Jill Schlesinger]

Okay, tell us about yourself.

[Joe]

Well, I'm 57 years old, be 58 in September, and I live in Florida. That no tax state. But what I'm trying to figure out is have I saved enough?

[Jill Schlesinger]

But wait, I'm. Now I'm going to start asking this question more and more because we had this question yesterday and also a 57 year old. But I kind of want to know, is the retirement because you're, you know, like, what's prompting it? Is it like I'm burnt out? Is it I hate what I do? Is it I hate the organization where I work? You know, what's the prompting of the, of the actual question?

[Joe]

You know, it's not that I hate the organization I work for. It's been 20 years with them though, and it's getting. It's just played out. So I think I'm just done with this company. Will I work again? I'm not sure. If I do, it'll probably just be a part time, small gig.

[Jill Schlesinger]

All right, fair enough. I just think it's interesting to hear, like, I mean, maybe this is. I need a little coaching of my own, which is to hear what people have to say about why they're. Why they're making or why they're wondering about the next chapter. So, Joe, you said you're 57, about to be 58. Do you have a partner?

[Joe]

Yeah, I do. I have a wife and she is currently 52.

[Jill Schlesinger]

Okay, and does she work as well?

[Joe]

Nope, she doesn't work.

[Jill Schlesinger]

Okay. Kids? Grown?

[Joe]

No kids.

[Jill Schlesinger]

No kid. This makes the retirement planning a lot easier. How about any parents you have to still worry about or siblings?

[Joe]

No, they're all taken care of.

[Jill Schlesinger]

Great. Okay, so how much do you earn right now?

[Joe]

142.

[Jill Schlesinger]

And are you contributing to a retirement account?

[Joe]

Yeah, I fully funded both the HSA and 401ks for the last three years.

[Jill Schlesinger]

Are you using a Roth or a traditional.

[Joe]

I'm using a traditional 401k and then I'm funding the Roth on the side.

[Jill Schlesinger]

Little backdoor Roth?

[Joe]

Yeah.

[Jill Schlesinger]

Okay, so you got seven grand going in there and how much money's in the Traditional account right now, the 401k.

[Joe]

Is currently at 436.

[Jill Schlesinger]

Okay, and how much is the Roth?

[Joe]

Well, the two roths together are 356.

[Jill Schlesinger]

Wow, that's great. How about any other assets, Money in the bank or brokerage accounts? What do you got out there?

[Joe]

I have IRAs in both mine and my wife's name that's currently under management, but that's one of my questions. And that total for the IRAs is 650.

[Jill Schlesinger]

Wow, that's a lot of moolah. Brokerage.

[Joe]

I have one brokerage account with 279.

[Jill Schlesinger]

In it, also managed or are you doing that?

[Joe]

I'm doing that.

[Jill Schlesinger]

Okay, what about cash in the bank?

[Joe]

Cash in the bank. 102.

[Jill Schlesinger]

You guys own your home or do you own a condo? What do you got going on in Florida?

[Joe]

We own a home on the water.

[Jill Schlesinger]

Oh, very nice. How much is it worth?

[Joe]

Approximately 900.

[Jill Schlesinger]

And is there a mortgage that's still outstanding?

[Joe]

No mortgage.

[Jill Schlesinger]

Do you plan to stay there? I mean, most people are like, I'm going to move to Florida. But you've already moved to Florida. Is that. I don't know where one would go from there. Like, oh, we're going. We're in the east coast. We're going to go to the west coast of Florida. I mean, but what do you think?

[Joe]

I don't think so. I think we're going to stay put. If anything, I would downsize just slightly, but the real estate market's kind of crazy right now, so I'm just staying put for right now.

[Jill Schlesinger]

Okay. What do you think you need in terms of living expenses?

[Joe]

Okay, so I've been running my expenses for the last three years.

[Jill Schlesinger]

Oh, my God, the spreadsheet king.

[Joe]

I am. I'm sorry, but 46. 5 is what I need.

[Jill Schlesinger]

Are you kidding me? 50 grand a year? That's it?

[Joe]

Yeah, that's it.

[Jill Schlesinger]

It's shocking. When you hit your Social Security full retirement age, what will your benefit be? It will be 67, probably is the age.

[Joe]

Yeah. $3,011.

[Jill Schlesinger]

Let me. I'm going to round it down to 3,000. And your wife would get half of that, or did she have her own record on which she can claim?

[Joe]

She has her own record on which she can claim. It's probably going to be close to half of that, though.

[Jill Schlesinger]

Any other income that we should account for? Anything else that we should consider?

[Joe]

I have an irrevocable trust coming to me for 100,000 probably in the next 10 years.

[Jill Schlesinger]

Oh, that's interesting. If you go and if you say, like, can I retire, what are you going to live on for? Are you going to just use the brokerage and cash to basically live on to? I mean, because we have to generate that 4,500amonth, right? I mean, that 50 grand a year. So what's the game plan between now. So we have 10 years before you can claim Social Security.

[Joe]

What I'm thinking is it's gonna be cash in the brokerage account until I hit 59 and a half, and then I'll probably start tapping my IRA a.

[Jill Schlesinger]

Little bit at a time.

[Joe]

You'll pull it out and then supplement it with cash and the brokerage.

[Jill Schlesinger]

Okay. If that's the case, you can pretty much stop putting money into your retirement account right now and just your traditional Iraq. You can keep doing the Roths if you'd like and keep funding the hsa. I would stop putting money in your traditional account and I would just stockpile cash. And so then the idea would be that next year starts, you're retired, and then all of a sudden you're going to say, okay, you know what, I'll use the cash in the account for a couple of years. I get to 59 and a half or 60. Now I'm going to slow drip, drip, drip, take money out of my traditional accounts, pay the tax that's due, live on that, and do that every single year until I'm 67 and claim Social Security. Is that the right game plan there?

[Joe]

That's what I was thinking.

[Jill Schlesinger]

I think you can do it. I do think you can do it. But I would like you to have a little more cash now. Anything else? Like you have your estate documents, you got insurance, you got all that other stuff. Done, done, done, right?

[Joe]

Yeah, all done.

[Jill Schlesinger]

I'm going to just encourage you to say, at least think about if there's something you can do that would be fun for you. Engaging. Because it's tough. I'll tell you when I talk to people who do this. It is tough to go from full time work to zero work. There's a real, like that downshift can be helpful. Do you think you'd work your, your boss would want you to work part time, but just like as a transition.

[Joe]

Now, the company's really weird about that. They just do not accept part time. So you're in or you're out.

[Jill Schlesinger]

So that's bizarre.

[Joe]

It's very bizarre. And it's. I guess it's just old thinking. I'm not really sure.

[Jill Schlesinger]

Oh, my gosh. All right, well, that's whatever, right? What are we going to do? Okay, so any questions for us? You good?

[Joe]

Well, just one quick question.

[Jill Schlesinger]

Sure.

[Joe]

I have this 401k that's sitting around $437,000. When I do decide to pull the plug, I'm assuming I'm wrapping that into an IRA and a brokerage account. And then my question is the financial planner that's currently got my money under management for the, for my wife and I's Iraq IRAs, what is your opinion about just pulling from him and just going all because he's. I got five basis points that I'm paying him. I'm thinking about just pulling it all, establishing the IRAs in the brokerage account.

[Jill Schlesinger]

You tell me, how are you at managing money?

[Joe]

I'm decent, but I mean, you don't.

[Jill Schlesinger]

Have to be great. It's not that hard. It's not like kabuki theater or anything. It's really just like pretty straightforward and you know, all you really need to do is be disciplined. And it sounds like the kind of person who's tracked his expenses for three years probably can do this and be disciplined. If you don't think that your advisor is providing you with enough of a value, then I have no problem with you doing it. The most important thing that I can tell you about an advisor is that they will usually work with you to do the kind of analysis you and I just did, but in a much more, you know, obviously thoughtful way where they're, you know, building a model and making sure that you can do it. Now, if you're selling me that you don't, eh, you know, I don't really need that part of it. And you know, you're talking to us, not that person. My guess is that you probably are fine to do it yourself. The one caveat I will say is that, you know, you're going to have to bring your wife into this because God forbid something happens to you, you've got to have. She has to know what's going on and that, you know, she needs to have permission to say like either she gets to know what, how to do it or she, you say to her, you know, if something happened to me, here's what I think you should do and like give her a game plan from there. It's certainly worth it if you are, don't trust yourself. And if you do trust yourself, then don't worry about it.

[Joe]

Great. Excellent advice. Thanks Jill. I really appreciate it. You guys.

[Jill Schlesinger]

If you've got a question that's bubbling up and Maybe you're on vacation, maybe you're not really thinking about money. But then, weirdly, something just pops into your brain. Just go to our website jillonmoney.com, click the contact Us button, write us a note. And of course, if you'd like to join us on the air live, check the box. Mark will do everything else. You can subscribe to us on the Odysee app or wherever you find your favorite podcasts. Please leave us a rating and review. Wherever you listen, lift someone up. Change your work, change your wealth, change your life. Thank you for listening and we'll talk to you tomorrow. Hi, this is Jill Schlesinger. Being a business owner means you're always on adapting, innovating and making big moves to take your vision to the next level. You need solutions that match your pace, offering flexibility, rewards and tools to help you keep going strong. That's where the American Express Business Platinum Card comes in, a partner for navigating today's business world. You can have a flexible spending limit that adapts with your business, plus the ability to earn one and a half times membership rewards points on select purchases so you earn rewards that can take your business further. See how the American Express Business Platinum Card gives business owners like you the tools and rewards to do more of what they love. Not all purchases will be approved. Terms and points cap apply. Learn [e-mail] Amex Business I'm Jenna Fisher.

[Jenna Fischer]

And I'm Angela Kinsey. We are best friends and together we have the podcast Office Ladies where we rewatched every single episode of the Office with insane behind the scenes stories, hilarious guests and lots of laughs. Guess who's sitting next to me? Steve. It is my girl in the studio. Every Wednesday we'll be sharing even more exclusive stories from the Office and our friendship with brand new guests. And we'll be digging into our mailbag to answer your questions and comments. So join us for brand new Office Ladies 6.0 episodes every Wednesday. Plus on Mondays we are taking a second drink. You can revisit all the Office Ladies rewatch episodes every Monday with new bonus tidbits before every episode. Well, we can't wait to see you there. Follow and listen to Office Ladies on the free Odyssey app and wherever you get your podcasts.