Podcast Summary: Jill on Money – "Income Streams in Retirement"

Host: Jill Schlesinger
Guest Caller: Stephanie from Austin, TX
Date: September 4, 2025
Duration: Approx. 17 minutes (excluding ads)

Episode Overview

In this episode, Jill Schlesinger tackles a real-life retirement income question. Stephanie, a recent retiree, calls in seeking advice on managing her retirement income streams and deciding how best to deploy a large cash reserve. Jill breaks down options for generating income in retirement, avoiding over-concentration in annuities, and how to structure an investment portfolio that balances safety with growth potential. The conversation highlights the importance of liquidity, careful risk assessment, and resisting unnecessary financial products.

Key Discussion Points & Insights

1. Stephanie’s Retirement Income Structure

• Post-retirement status: Stephanie, age 68, retired last summer.
• Income sources: Four income annuities (self-purchased), Social Security.
• Breakdown: Annuities comprise 44% of her total portfolio.
• Monthly income: ~$6,000 (post-tax), with taxes withheld directly.

  "Most of my retirement income comes from four different annuities, plus Social Security." — Stephanie [02:12]

• Supplemental withdrawals: Draws an additional $1,000/month from investments, landing at ~$5,800 sustainable income, with $1,000 pulled from inherited cash.

2. Assets Overview (Stephanie)

• Inherited cash/money market: $567,000 (Fidelity Money Market, interest fluctuating between 3%-5%, now ~4%).
• Retirement accounts:
  • 403(b): $106,000 in S&P 500 index fund (Fidelity 500).
  • IRA: $157,000 in cash (Fidelity), also Roth IRA funded by $35,000 pension rollover – invested in S&P 500 index fund.
• Home: Owns outright, valued at $390,000. No mortgage. Has executed estate planning documents.

3. The Annuitization Question

• Advisor suggestion: Fidelity advisor recommends shifting $100,000 from her cash/money market and $100,000 from her IRA cash into a USAA 3-year protected deferred annuity.
• Jill’s strong reaction:

  “Absolutely not. Absolutely not. No, I disagree with that.” — Jill [07:14]

• Jill points out Stephanie already has adequate annuity income, values flexibility, and doesn’t benefit much from locking up more funds, even at low cost and for a short period.
• Jill highlights the difference between typical annuity sales (commission-based) and the new annuity push from low-cost platforms like Fidelity, but still dislikes the loss of liquidity.

4. Optimal Portfolio Structure for Retirement Withdrawals

• Jill’s take: Move away from additional annuities, focus on market-based portfolio for remaining cash. Use a mix of stocks and bonds for growth and safety.

  “I want a plan where you lay out putting some of this money to work in a portfolio of cheap Fidelity index funds… more of a balanced investor.” — Jill [08:28]

• Risk tolerance: Stephanie is “a little” willing to take risk, but is squeamish about market drops at her age.
• Jill’s prescription:
  • Keep at least $50,000 (preferably up to $100,000 if desired) in cash as an emergency reserve.
  • Deploy excess cash in a split, e.g., 70% bonds/30% stocks, using low-cost funds, not a single target fund. Recommends a custom portfolio, not just a one-stop 60/40 or 70/30 fund.

  “Make them do some work. Build me a bond portfolio for 70% of the money… and just build it like that.” — Jill [10:50]

• Implementation: Dollar-cost average (“get it invested between now and end of the year”). Flex on pace for emotional comfort.

5. Time Horizon & Planning Mindset

• Challenge: Don’t plan short-term (e.g., 3-year lock-ins) when retirements often last decades.
• Jill’s advice: Adopt a 20- to 30-year outlook. Simulate the portfolio for longevity and consistent (but flexible) withdrawals.

  “You have a 30-year horizon ahead of you, I hope… You have a long retirement…” — Jill [13:25]

• Stress test: Ask advisor to run the numbers on a portfolio 70% in bonds/cash, 30% in stocks, and see if the withdrawal plan holds up.

6. Stephanie’s Goals & Family

• No need to leave large inheritances; kids and grandkids are financially secure.
• Primary goal: Not running out of money, maintaining flexibility.

  “I'm not running out of money.” — Stephanie [15:40] “It's very hard for you to run out of money.” — Jill [15:42]

Notable Quotes & Memorable Moments

• [07:14] Jill on annuities:
  “Absolutely not. Absolutely not. No, I disagree with that. …Why do we have to do that? I like you having access. You're young…”

• [08:28] Jill on investment structure:
  “I want a plan where you lay out putting some of this money to work, some of this half million dollars to work in a portfolio of cheap Fidelity index funds…I don't want to be more than 50% in stocks, by the way, like more of a balanced investor.”

• [13:25] Jill on longevity:
  “You have a 30-year horizon ahead of you, I hope… so you have to be willing to kind of take a little bit of a swing in terms of just putting some of the money to work and putting it at risk.”

• [15:42] Jill’s reassurance:
  “It's very hard for you to run out of money. ...I'd like to avoid tying up more of your money.”

Timestamps for Important Segments

• [02:05] Stephanie’s retirement income sources and structure
• [03:42] Stephanie breaks down her investment holdings
• [06:46] Fidelity advisor’s annuity product proposal
• [07:14] Jill’s strong opposition to new annuity investment
• [08:28] Jill suggests a balanced portfolio approach
• [10:07] Asset allocation discussion: stocks vs. bonds
• [12:30] Emergency cash reserve discussion
• [13:25] Long-term (20–30 year) planning mindset
• [15:16] Homeownership and estate matters
• [15:40] Stephanie’s financial security confirmed

Takeaways & Actionable Advice

• Don’t over-annuitize: If you already have sufficient guaranteed income, keep large sums liquid and flexible.
• Balance risk and safety: Use a mix of stocks and high-quality bonds; maintain at least two years’ worth of living expenses in cash or ultra-safe investments.
• Demand personalized plans: Push advisors for customized solutions, not one-size-fits-all products.
• Think long-term: Structure portfolios and withdrawal plans for multiple decades, not just 3-5 years.
• Stay engaged: Regularly evaluate your plan, communicate your risk tolerance honestly, and avoid hasty, product-driven moves.

Summary:
Jill guides Stephanie—and listeners—toward a retirement income approach that prizes flexibility, low-cost diversification, and a healthy skepticism of unnecessary annuities. The episode delivers practical, jargon-free advice, emphasizing the importance of long-term planning and maintaining control over one’s assets in retirement.