← Jill on Money with Jill Schlesinger
Loading summary
Transcript26 lines
- [00:00]
Jill Schlesinger
Hey, gang. Whenever you call in and talk about some of the big milestones in your.
- [00:04]
Mark
Lives, like maybe having a baby, maybe.
- [00:06]
Jill Schlesinger
It'S buying a home, maybe it's getting divorced, you may find yourself drifting back towards the big question of do I have the right kind of life insurance and do I have enough life insurance? Lucky for you, you can head to policygenius where finding and buying life insurance is simple. That way, you can ensure that your loved ones have a financial safety net they can use to cover whatever obligations you have, as well as funding future financial goals. With Policygenius, you can find life insurance policies starting at just $276 a year for $1 million in coverage. It's an easy way to protect the people you love and feel good about the future. So secure your family's future with Policygenius. Head to Policygenius.com to compare free life insurance quotes from from top companies and see how much you could save. That's policygenius.com do you know a high schooler who's a natural leader who wants to create change by bringing people together? They could be one of the next Student Visionaries of the Year candidates across the country form powerful fundraising teams uniting with the Leukemia and Lymphoma Society to honor a local child with blood cancer. Through this seven week philanthropic leadership program, students build valuable skills like project management, entrepreneurship and financial literacy. Something I wish I'd learned at that age. Plus, it helps them stand out on college applications. But most importantly, it's a chance for students to connect meaningfully with their communities and make a real impact on blood cancer patients and their families. Learn more about Student Visionaries of the year@lls.org students that's lls.org students.
- [01:53]
Mark
Welcome to the Jill on Money show. It's Tuesday, June 3rd and we are here trying to help you make better, less bad, more considered financial decisions. If you've got a question, all you need to do is get in touch with us. And it's very easy to do it because Mark, the very best executive producer in the world, is able to put a contact Us button up on that jillonmoney.com website. And that button is always in the upper right hand corner. You click the button, you write us a note. If you want to come on the show, check the box. Oh, Mark, I forgot to tell you something very important. When we were recording last week, you. You got a huge compliment. Can I bring you on the microphone to receive the compliment?
- [02:33]
Yeah. Who's that? Somebody I know?
- [02:34]
Yes. Somebody who? Very high ranking person at CBS who said I couldn't believe that Mark sounded so great on the air and he really knows his stuff.
- [02:44]
Oh, who did I.
- [02:46]
How about that?
- [02:46]
Who has very, very low bar for me?
- [02:49]
No, somebody who has very well attuned ears. That's all I can tell you. I don't want to, I don't want to like break confidence, but it was very, it was an unprompted, like in the middle of a weekend, someone sent me a note like oh my God, Mark sounds so great on the air. And I forgot to tell you that. So shame on me. He is great on the air. Remember when you were just a mysterious guy behind the glass? Yeah.
- [03:11]
Somebody wrote an email the other day and they ended it by saying, I've been listening since when Mark was a mute.
- [03:18]
That's right. And not anymore. He's found his voice and maybe that's exactly like your son. He find when he finds his voice. Boy, it doesn't stop, does it?
- [03:26]
No, no, it doesn't stop.
- [03:29]
Okay, so I want to point you to the website also because this week we have our Jill on Money Live webinar. If you are a member of Jill on Money Live, don't forget the webinars on Thursday. This Thursday, just a couple days, June 5, 7 Eastern Time. Mike Quincy, car expert. Bring those car buying, truck buying questions, selling questions. We are very bad people, Mark and I. We are not car people. You may be car people. So come on and just test Mike. We're just like, what should we do, Mike? Because we're complete rubes. For those of you who know, Mark and I both drive very old cars. How many miles on your car, Mark?
- [04:05]
I'm about to hit, it's about to turn eight years old and I think I just hit 20,000 miles.
- [04:10]
Look at you. Well, our 10 year old Mini did climb over 8,000.
- [04:16]
That's incredible.
- [04:17]
I know. But the big car, the one we commute back and forth with is we've got like 110,000 on that. And that's when I called Mike, panic stricken from the dealership on December 30th. Like hurry up, give me a reality check. Should I hold out? And he's like, yes, hold out. And he was right. So I got a great deal thanks to Mike. And now you can get your great deal because of Mike. So join us Thursday, June 5th. That is in two days, you Jill on Money Live. The quarterly live webinar is going to be a blast. Okay, so right now let's do some questions. This is from Gregory who Says, hello, Jill and Mark. I'm an avid listener via YouTube. All right, Gregory has two questions on insurance. Number one, when does an umbrella policy make sense? Oh, so an umbrella policy sounds. Is what it sounds like, which sort of is like extra coverage. Like generally like when someone's doing work on your house and it kind of goes beyond the coverage of your homeowners or some general liability coverage. And Gregory says his net worth is $2 million. It's mostly IRA or 401k, the umbrella policy. If you've got a couple million dollars. If it's a 401k, no one can go after you for that. I guess an ira, they could actually, but they usually don't. They're very cheap. So if your net worth is 2 million and you had a $2 million policy, that would be fine. How much does an umbrella policy cost? Pretty cheap, right, Mark?
- [05:43]
Yeah, yeah, they're very cheap. But I always say the thing you have to keep in mind is that if you want an umbrella policy, they're going to make sure they're going to make you have very, very good coverage on your auto insurance and your homeowners insurance. You can't just like, go basic, basic. They're not going to like.
- [05:57]
It's not going to carry. It's not going to carry the extra. Beyond what you should have gotten on your primary coverages. Right. That's the real issue.
- [06:03]
Correct.
- [06:04]
Okay. So, you know, get in a policy. It's fine. You can usually just like it. By the way, everybody listening. You should actually go out and rebid your auto and homeowners policies anyway from every year. Like, you know, we. We talk about policy genius all the time, about life insurance. They've got homeowners, too. Go out. Or if you want to get an agent, get an agent. I deal with an agent. I love him so much because I'm so lazy. I don't want to go do those things that you guys all do. You guys are all do it yourselfers. I'm like a. I'm a kind of gal who likes to hire people to do stuff like that. All right, next question from Gregory is about a whole life insurance policy. He says he has one $225,000 since 1991. And then he says, I got sucked into an insurance invest. Insurance agent slash investment advisor. I just kept it going. I will soon call the company for the cash value. My wife really wants me to leave it in place for some sort of instant money when I die. So one thing to consider with an old whole life Policy is that if you want you can go. I mean again, since it's so old now that you know you're almost at this like 35 year mark, you might want to see what would happen if you paid created a paid up policy where you just said to the insurance company, I never want to put another dime in what would be the death benefit that I could keep where I never had to put another dime in. That to me is something that's a possibility. The other thing to do is to look at your, with your wife, really maybe look at your whole financial planning scenario and see whether or not you need this policy. You know, maybe for her keeping this policy in place, it's worth it. Peace of mind is worth something. But maybe if you kind of prove to her that you don't need it, then you can get the money. But let's see. Because maybe buying that, maybe buying a paid up or converting it to a paid up policy would make sense. So keep that in mind and everybody listening. Just in terms of all insurances, you know, insurance is this very amazing product where you can pay a company to take on risk for you. And so sometimes you have policies that you just have in place that you hope you never need. That's term insurance, right. And sometimes you buy insurance that's expensive, like long term care insurance. You keep that in place because it also gives you peace of mind. Just depends on your own situation. So if you're looking at insurance and you want to look at as part of your whole financial planning scenario, that's when I think working with an advisor, a fee based advisor, a fiduciary advisor can make a lot of sense. Try not to go back to the insurance agent because they'll usually try to sell you another policy. That's just my two cents. All right, here's a question from Kay about paying taxes in retirement. So what she is doing is she is doing a combination of pulling money out of her retirement account, her 401 live on and also converting it. So how do you pay taxes for that? Well, if you know that you're going to be doing this in say in the course of this year, I like the idea of doing the conversion, getting the money and paying your quarterly taxes along the way. That's what I would do. Because you set yourself up. There's no strange mystery as to what's going to happen. And I think that you could wait until April, but you may be subject to some penalties if the amount that you're paying is more than a certain percentage of the previous year. I think it's more than 110% of your previous year. So I would set it up as a quarterly payment just because it's easier and tidier. This is a question from Jeff about direct indexing strategies to reduce annual capital gains. Unlike putting money directly into say an index fund or an index exchange traded fund, what happens with direct indexing is that you're putting the individual stocks you own directly into something that sort of becomes your own index. That said, it's complicated and I don't want to go into this crazy convoluted conversation around this. But what I really want you to know is that these are expensive. Like I know fidelity. I think they. He says, I don't. I can't believe it's 4%. But there is annual fees to do this. 3%, 4% index ETFs usually have fees that are basically zero. So I don't love this. However, if you've got this very low cost basis stock portfolio, this is when people are starting to use this. I'm not a huge fan yet. I might get there, but I guess I feel like in some respects it's a tax vehicle that's really good if you have incredibly low basis stock in a portfolio. But don't do it alone and be very careful because it's expensive and there are very specific rules. Greg writes, I'm 67 this summer, looking to retire. I'm self employed. I'm married. I have three grown kids. Work has always been a big part of who I am. I spent too many years worrying if I'll have enough to retire and leave a legacy for each of my kids. I just built a new home. Selling our existing bottom line. Once the old home sells, we'll have no debt. Our new home will be worth about $3.2 million. Our current retirement funds are a mixture of IRAs, joint accounts and an annuity totals $1.9 million. Another $1.5 million after the old home sells. Okay, Social Security will be approximately $5,200. For my wife and me, we're going to take it. At 68, I don't spend money frivolously. My only vice is fishing trips to Canada twice a year. Our monthly net will be 8 to $8,500. I'm having a difficult time though with the thought of no money coming in. Mark this is a very common refrain I've spent the last 40 years working. The thought of stopping is hard to imagine. Leaving money for my kids has always been an important motivator a little background. I'm one of eight children. My dad works six days a week. We didn't have much then and we didn't need much. Most of my siblings are self employed. Our father taught us the importance of a strong work ethic. My parents have both passed away and my younger brother will need some support. My question is, do I have enough money to retire? All of my work comes through word of mouth. My phone never stops ringing. Being the main person who runs everything, I just can't sell my business. I, I am getting tired and I'd like to enjoy my life. Thanks so much. I love your show. All the best, Greg. Mark, this is my kind of guy. I wish I had him on the phone or on the line with us. I was just having this conversation with somebody. It is incredibly difficult for people who have worked their whole lives to conceive of a time when they are not. And you hear what Greg says, he knows himself. He said work has always been a big part of who I am. I think that when you look at someone like this and I don't have to run the numbers, you eye guys, you hear the numbers, right? He's going to get Social Security. It's 5200. He needs 8500. He's got plenty of money. Okay. He knows he can retire, right? Doesn't he? He knows he can retire. He's got all the money he needs. How can we get this guy to consider a way to bring it down a level? Now one thing I think is hard when you're a small business owner as he is, is he does not have the ability to go to a boss and say, hey, how about three days a week? But I guess what I'm also wondering is your phone never stops ringing. Could you stop answering as much? Could you wind things? How would you wind things down? How could we help you get there? You are tired, you say you want to enjoy life. You're not asking my permission, Greg, you're asking yourself permission. Can you give yourself permission to do this? The question I have is what we can do to get you there. It may not be possible, but I'd love to see how we could maybe cut back on the client base. Maybe it's not that kind of business, I don't know. But I think that, for example, let's just pretend, let's say, Mark, it's a certain person who's working full time at two different jobs like me. What would happen is I, I think to myself, oh my God, what happens if I'm not on TV anymore. What happens if I'm not doing network radio anymore? What if I'm just doing this podcast? How does that work? How do I think about that in my brain? Because it's hard. I think that if you can come to a place where you give yourself permission to even start really discovering what it is that you do, what do you like to do and how you can try to wind yourself down from the situation, that's where you're giving yourself permission. But it may be that you just don't have this ability and maybe you don't have the personality. Maybe you've got to close the doors one night and be done. And if that's the case, what I encourage you to do is before you do that, before you do that, to really think, how will I fill my days? I had such a lovely weekend recently with my brother in law who has retired from an incredible career as an attorney working on Wall Street. He's great guy and he started doing some volunteering and this led to a different part of his life that has been incredibly fulfilling. Does this, you know, a few days a week. He loves it. He feels like he's a place that is really valuing him and what he does and it gives him a lot of purpose. So I think, Greg, if you can find something like that, you can find yourself a life that has some purpose, you will be so, so happy. Okay. All right. That is a good place to end. If you've got questions about retirement and you're thinking about what you need to do going forward and how you manage this process and maybe how you can wind down and find an off ramp that makes sense for you and your life. Get in touch with us. Go to jillonmoney.com, click the contact us button, write us a note. And if you'd like to come on the air, check the box. Boy, I wish that guy came on the air. Mark. I'd really like to talk to him. Don't forget, while you're on the website, sign up for the free weekly newsletter comes out every Friday. Mark does a great job with that. You can subscribe to us on the Odyssey app or wherever you find your favorite podcasts. Do something nice for someone else today. Change your work, change your wealth, change your life. Thanks for listening. We'll talk to you tomorrow.
- [16:28]
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.
- [16:42]
Mark
A realtor changed everything.
- [16:45]
Jill Schlesinger
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 detail, from making an offer to closing the deal. Working with a Realtor can 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 you from starting your next chapter. Find your realtor@championsofhome.com that's championsofhome.com.
- [17:30]
Unknown
When you're with Amex Business Platinum, you have the card that helps businesses dream bigger, get a flexible spending limit that adapts with your business, and earn 1.5 times Membership Rewards points on select business purchases so you can stock up on what you need to take your business further and get rewarded for growing bigger. That's the powerful backing of American Express. Not all purchases will be approved terms apply. Learn more@americanexpress.com AmExBusiness.