B (4:33)

I am on the side, I would say. I'm not a big music person. I listen to music a lot, but, like, my husband knows dates and what. Who was in the band. I'm not that into music.

A (4:44)

All right, that sounds good. Well, all right. What brings you to us today? You love finances also.

B (4:49)

I do. I do. I love your show. I've Learned a lot. Thank you.

A (4:53)

Oh, that's so nice. Tell us what we can do for you.

B (4:56)

Well, I'm calling because my husband is 62 and just got noticed that he's getting laid off after 20 years.

A (5:05)

No way. Was this a surprise?

B (5:09)

Absolutely. Because part of his company had gotten bought out, and they said, you are safe.

A (5:15)

You're. No. Oh, no. They told him that.

B (5:18)

They said, you're safe, and then a week or two later, they said, sorry, you're out.

A (5:23)

Oh, I'm so sorry. That sucks.

B (5:27)

It does. But we're just trying to assess if. If we're gonna be okay. You know, we're. He's 62. I'm 63. We got. Later. We got married later in life, like, two years ago.

A (5:39)

Wait, what? Hold on, hold on, hold on. I want more of this story. Stop. You're 63. He's 62. You got married two years ago. So this is not your first wedding or your first marriage. Sorry.

B (5:50)

That is correct.

A (5:51)

So do you guys have kids from previous relationships?

B (5:54)

We do all.

A (5:56)

Are they all set and, like, ready to rock and roll and there's nothing you need to worry about?

B (6:00)

I have two adult kids that are launched and doing very well. He has one. One child who is launched but constantly asks for things.

A (6:12)

Well, maybe he should go to his mother.

B (6:18)

Concern of mine. And also, they just had a kid and they don't have life insurance, so I'm. I'm worried stuff, but.

A (6:24)

Oh, brother, that is another story. Cindy, are you working?

B (6:30)

No, I've been retired since 58.

A (6:32)

Did you retire from a profession like teaching, nursing, something with a. I'm looking for a pension is what I'm looking for. My. My friend.

B (6:39)

Yeah, I do have a pension, and I was a. Like, a process engineer.

A (6:44)

Oh, okay. How much is your pension?

B (6:47)

My pension is 47. 8.

A (6:52)

47,800 a year?

B (6:54)

Yes. But I will say we're kind of weird because since we got together later in life, we have separate kind of accounts, but then joint accounts that we kind of keep the house running jointly.

A (7:05)

Okay.

B (7:06)

Have my own money, and he has his. And I'm kind of thinking his money is what I'm trying to talk about.

A (7:14)

Okay. So for him, let's just talk. So with your money. Let me just get to you first, since I have you on the line. So you have 47. Eight in pension. Have you claimed Social Security yet?

B (7:26)

I have not.

A (7:27)

When do you plan to do that?

B (7:29)

Probably late as possible.

A (7:32)

I don't need it. Okay.

B (7:35)

Yeah.

A (7:35)

And do you know what that amount will be at your age? 70, Cindy?

B (7:39)

I do. It is 54.

A (7:42)

5. 54,500. Okay. And your. So the pension right now, does that cover half of the household stuff that you need to contribute to with your husband?

B (7:58)

Yes.

A (7:58)

Okay. So that basically covers your needs. How much was your husband making?

B (8:03)

He was making 120.

A (8:06)

And did he get any severance or anything?

B (8:08)

They still haven't told him.

A (8:12)

They don't like. They like to only communicate bad news and nothing else. So he's still working right now till mid April. Okay. Will he be entitled to a pension? No. Okay. Does he use a retirement account through that job?

B (8:29)

He has a 401k right now. It has 150 in it.

A (8:34)

Okay. Does he have other money?

B (8:36)

Yes, he has 760 in. Don't yell.

A (8:42)

I'm not yelling. I mean, they're fixed, they're not variable. So that's okay.

B (8:47)

Yeah. And it's roughly around 5%. He.

A (8:50)

Okay, sign. I'm not. What am I yelling at? I meet you where you are, Cindy, girl. I'm not. I'm not going to go back and rewrite things. Right. Okay, so 150 in the current 401k, 760 in fixed annuities. Are those fixed annuities? Retirement annuities or non retirement? It might say qualified or non qualified on the statement.

B (9:12)

They're non qualified. All of them.

A (9:14)

Okay, so they're non qualified. Okay, got it. And. And the 401k is traditional, I presume?

B (9:19)

Correct.

A (9:20)

Okay. What else does he have?

B (9:23)

That's it.

A (9:24)

Cash.

B (9:27)

Like 40,000 in the mattress.

A (9:29)

Okay. These are mattress times, I have to say. Okay, 40,000 in cash. Do you guys own your home together?

B (9:39)

No, we don't. He pays for it right now, kind of buying into it. We have about 148,000 left on the. On the house.

A (9:48)

How much is the interest rate on that? More on the. On the house. All right.

B (9:52)

Mark. 2.249.

A (9:54)

Oh, God. It's like they. You want to trade. They really want to. They. They just want to just tantalize you. Okay. Two and a quarter percent. What's it worth?

B (10:04)

Like 450.

A (10:06)

And you want to stay there, right?

B (10:07)

Yes.

A (10:08)

Great. So that's good. So carrying this house is not bad. And he's basically doing that.

B (10:14)

Yes. And it'll be paid off in like 10 years.

A (10:17)

Do you happen to know what his Social Security looks like?

B (10:22)

I do.

A (10:23)

Tell me what the choices are for him

B (10:27)

at 62 right now it's 26. 472.

A (10:31)

I'm sorry, let me just ask you this. Is he in good health? Not so good health. What's. What's his. What does he look like?

B (10:37)

It's interesting. We just had kind of a health scare, but went to the radiologist yesterday and they're like slapping him with a Stanton and off you go. So it wasn't as bad as we thought, but.

A (10:47)

Okay. Yeah, scary. Okay. What's 67?

B (10:52)

It is 41,436.

A (10:53)

41, 4, 3, 6. Look at that difference, Mark. 41 grand versus 26 grand. Yeah. That's a real number. That's a real number is right. For five years. Yeah, exactly. I have an idea. Anything else that we should know about when it comes to his financial life?

B (11:11)

Well, I guess the big thing we worry about is health care, because I was on his health plan until I'm 65. His cobra for him jumps from 273amonth to almost 600.

A (11:25)

Okay. All right. So it may be worth it for you to look, I mean, you may want to stay on Cobra for a bit, but I think the, you know, your only income right now. Okay. To be clear, is your pension when his stops. Right. So that'll be that. He may get severance. I hope he gets something, but it'll be your pension and whatever. Do you have a brokerage account? Let me just go a little bit about you. I know it's. You're not really asking about you, but I'm just trying to get a sense of this more from your tax position for the two of you because you are married. So. Cindy, your retirement assets.

B (12:03)

I have like a million.

A (12:07)

Okay, great. And that's mostly traditional. Mark, stop laughing. He's laughing because he's like. She's. She's rolling in it.

B (12:14)

I don't feel that way. I have. In my brokerage, that's a roth. I have 315.

A (12:22)

315. Okay, keep going.

B (12:26)

I have Roth annuities of 170.

A (12:29)

You guys in the annuities. I know some insurance salesman went crazy.

B (12:34)

He did a fixed IRA at 410. So that's my taxable stuff that I still. I've been doing Roth conversions.

A (12:45)

Oh, Great.

B (12:46)

Non qualified 86,000 and then a regular brokerage at 20.

A (12:52)

Right now you are converting the taxable into Roth and paying for it how? With what? Cash on hand. That 20 that's in the brokerage or what are you using to. When you have. Do the conversion?

B (13:05)

Yeah, I had been using money that I had in my mattress.

A (13:09)

And okay.

B (13:10)

I am. I do have. Actually, I have 26 in a high Yield interest I didn't put on here.

A (13:16)

All right, it's good. It's all right. Don't worry. And you're not worried about yourself, you're just worried about him.

B (13:22)

Yeah, I mean I always worry about myself, but I think the bigger thing is him.

A (13:26)

Okay.

B (13:27)

And he clips off about 5k in his monthly expenses a month.

A (13:32)

Okay. And what about you? Like, what are your, like if you. So his five. And what do you spend a month,

B (13:38)

you figure probably 4,500.

A (13:42)

All right, let's just say five grand each. Let's make it like that. Do you think that five grand includes helping his adult child or do we think that there's something else that's like floating around that you don't know about?

B (13:52)

That's the asterisk. Uh huh.

A (13:54)

Uh huh. We don't know. We don't know. Help for adult child. Okay, but here's something that's good that I see. Okay. Let's, let's just pretend it's the middle of April. He gets like how long he's been there for? 20 years.

B (14:11)

Yeah.

A (14:13)

Does anyone, has anyone else gotten laid off? I can't believe they're not going to give him any severance.

B (14:16)

That was one of his managers got laid off recently and they gave him. He had less years than him and they gave him three months. So we're not expecting a whole lot

A (14:30)

for 20 years, huh? I know. Unbelievable. Thank you. Corporate America, right? Is he still putting money into his retirement plan? Right now he is, but I just

B (14:40)

moved it once we got noticed. I moved it into the bond index fund instead of S and P. Does

A (14:47)

he have a match?

B (14:49)

He does. Starting this year he.2%. So he's barely gotten anything.

A (14:54)

So just pull, don't, don't put. I mean, just for the next bunch of weeks. I know that it's only like a few weeks, but like he should just put 2% in. Just reduce his retirement contribution to the match to 2%. Okay.

B (15:06)

Okay. Okay.

A (15:07)

I want to make sure he's got a little extra cash as much as possible. And also if you do it at 2%, that way it's. If he does get any severance, it'll be 2% of that severance that will hopefully be used, but nothing more. I don't want them to take a big chunk out of and put it into retirement right now. All right, so what we need to figure out is how he lives for five years, right. Until he claims Social Security and what he can do to make that work really well. Okay, I have an idea. You ready?

B (15:40)

Yes.

A (15:41)

I am thinking that one of these fixed annuities. You said fixed annuities. Are there a couple or. They're there like five. Five. Okay, five is a lot. Are they all basically the same?

B (15:56)

So the, the, the one maturing the soonest is in 28. That was paying 5.55. Yeah, that's a hundred. It's at 142 right now.

A (16:07)

Okay, great. What would happen if we annuitized it right now? Do we know? Would there be a fee? Would there be like a surrender fee or something?

B (16:15)

I'm assuming, yes, the surrender fee on.

A (16:17)

Okay, so here's what we're going to do. He's got this traditional account, the 401k, right. We know that he needs, you know, this five grand a month. So I think that at the very least what you could do is for the rest of this year, he's already made 30, right? He'll get paid whatever he gets paid in some severance couple months. You're going to take 50. When he retires, you'll take a distribution, take $50,000 out of the 401. You'll pay tax on it. Now, he's going to be fine for this year. Now the beginning of next year, 27, right. We're going to take another chunk of money out of that 401. He'll pay the tax on it, no problem. This is not a problem. Okay. You can pay the tax on it. Lower tax bracket. You're not claiming Social Security. He's not claiming Social Security. He's going to pull out, you know, let's say whatever's left in there. So let's say, you know, if he took 50 out this year, next year, let's just pretend there's no. Nothing more goes in. There's 100. He can take his, let's say 65 or 70 out of that, pay the tax that's due, use that to live on. That's his five grand a month, right. The following year, which happens to be 20, 28, he's going to empty out whatever's left in the 401k and then he's going to annuitize the annuity that's worth $142,000 now. And he's going to say, I want all the money out of this over the next, let's call it. Let me just see something. He's 62. It's five years. This is the third year. So he can get an annuitization of like get over five years or three years, whatever gets all the money out of that thing and the tax liability will not be as significant necessarily because you. He put some money in and the only thing that's taxable to him will be the growth. So if he put 100 in and it's now worth 142, you're only going to get taxed on the 42. It's whatever it has grown to since he put it in. And so you're going to say 40, 401k for this year. Just top it off, right? You're going to say like, all right, I already got paid 30 grand and maybe it ends up being 40 because of, you know, the severance. Then take out, say 50 grand this year from his 401k. You do it again next year, except you're going to need a little bit more because he hadn't been paid, right? And so he's going to take some money out of that 401k. Maybe it's 60, 70 grand. He'll get that. It's probably 70. Pay the tax on that gets him through 27. Now it's 28. He's going to finish out the 401k. He's going to annuitize one of those fixed annuities that gets him through 28, 29, 30. So he's going to basically take the money out of these annuity products to get him to age 67. Now, at age 67, he's got $41,000 a year coming. He'll still need to live off of some of these fixed annuities. He'll still need to pull some of that money out, but we'll have a different decision to make because he won't need as much money. So the annuities, it may be that you're just like, well, we don't have to annuitize them. We can just take a little bit out as we need it. But that's basically how he's going to. He's going to use the fixed annuities to top off what his needs are above Social Security. Here's the thing, he's going to basically end up plowing through all this money and you're going to help him out because you know why? Because you're married and that's just what's going to be. And you can afford it because honestly, you know, when you think about it, he has Social Security of 41, right? You have your pension at 47. He'll be able to contribute above, you know, he'll be able to really hold his own for a Few more years. Like probably when he's like 72 or 73, he's probably not going to have so much money, maybe even 75. You're going to need to actually say, okay, well, my pension, my Social Security, his Social Security, that's going to be what mostly floats us. And your money is going to be helpful in this, but you're not going to have to plow through all your money. You're going to have to just use your cash flow to help.

B (20:35)

Okay. Okay.

A (20:37)

How does that sound? It's not so bad, right?

B (20:39)

Not so bad. Nope.

A (20:41)

Does he think he might want to get another job, even just a part time job?

B (20:45)

Yeah, he will. And then the other thing, not to be morbid, but why not? Mom is 87 and she's got some properties that would go to him. But you know, I don't want to count on it until we know it.

A (21:01)

Yeah, I. Okay, well, that's good. I mean, not good. Sorry about that. I mean, like, it's good not to count on them is what I meant to say. Boy, I have some morose way of thinking about some of this stuff. You know, it's interesting. I wonder if he were to get another job or even to work part time, you know, that'll also help defray the extra cost for health care. But you know, that is what it is. But that's what I think the game plan should be. I think. So don't buy any more annuities, okay? Okay.

B (21:30)

I guess because he's very risk averse. When I first met him, it was all in the mattress and, and I, you know, CDs was high risk for him. So then I love that. I thought, you know.

A (21:43)

Okay, can I just give a special shout out to him as part of this episode?

B (21:48)

Sure.

A (21:48)

So you can play this for him. And this part is what's important. Cindy's husband, I need you to hear me. You cannot afford to help your adult child. You need your money to live on. This is an unexpected negative surprise that has just happened to you, which stinks. But during this period of time, you really need to be clear that the money you have already accumulated, which is great, you know, it's Fantastic. You've got $900,000. You need that money so that you can support yourself. If you're too generous with your adult child, what will happen is you are going to run out of money and then you will be stuck. So be careful with this adult child. Try to put some guardrails up. How's that, Cindy? Did I do okay?

B (22:39)

Amen Amen.

A (22:42)

Cindy, you guys have estate documents?

B (22:45)

Yes and no. He doesn't have a will, only because the only personal property he has is his vehicle. Okay, put a transfer of death with beneficiary on it.

A (22:56)

Okay, Wait, what happens if he gets sick? Who, who pulls the plug?

B (23:00)

I do.

A (23:01)

Is that on a document?

B (23:02)

Yeah, we do have.

A (23:03)

Oh, okay. Oh, okay, I see, I see. All right, well, is he will averse? It doesn't seem like that big a deal, but okay.

B (23:11)

I mean, right now the house is in my name because he's paying kind of into it.

A (23:17)

Okay, gotcha.

B (23:18)

Yeah.

A (23:18)

Okay, well, listen, if it works for you guys, as long as you have that, you know, and a power of attorney you have for him. Okay? Yes, it's very funny, Mark. I'd never heard of someone having those two documents, but not a will and everything. All the beneficiaries are designated. Everything is all clean, right?

B (23:35)

I checked them, yes.

A (23:37)

I love Cindy. Cindy from Texas. Keep us posted. I want to know, can you just shoot us a note and let us know what the severance was? Because I, I'm gonna lose my mind if it's not good. But that's just me. Thank you so much for getting in touch with us. I think your husband's gonna be okay. I'm sorry this is happening for you guys, but I, I, I do feel comfortable that, you know, you have a loose game plan ready to enact.

B (24:01)

Okay, thank you so much.

A (24:03)

Of course. Hey, if you have a negative shock in your financial life, maybe it is a losing of a job, maybe it's an illness, maybe it's something else. Give us a Holler. Go to jillonmoney.com, click the contact Us button. Let us know if you want to come on the air by checking the box. Don't forget to sign up for the free weekly newsletter, which comes out every single Friday. And that will also entitle you to our blog. Just remember, you can subscribe to us on the Odysee app or wherever you find your favorite podcast. 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. Hey, gang. I just made a first time ever purchase on behalf of the pod. I was so psyched because Mark and I don't do a lot of promotional materials, but I was able to create a branded sweatshirt. Yep, a Jill on Money branded sweatshirt with Vistaprint. Now, I'm not usually good at these things, but Vistaprint made it simple to bring this idea like, oh, wouldn't it be cool if Mark and I could create some sweatshirts that we'll try out and maybe the listeners would want to get them as well. They've got these great design tools. They have fast shipping human support if you need a little guidance along the way. Because the sweatshirts were so easy to execute. Now I'm thinking about doing some other stuff. Maybe there's some baseball caps or, I don't know, other fun stuff that you guys would want. You'll let us know. There's a reason that over a million people trust Vistaprint for their small business print needs. Vistaprint print your possible right now, new customers get 20% off with code new20@vistaprint.com have you ever felt like you were living just a B or B plus life? It's so dangerous to live that. More dangerous than a B or a

B (25:57)

C plus life life?

A (25:57)

Because when you're living a B or B plus life, you don't change it. You think it's good enough. Is it? I'm Susie Welch. I host a podcast called Becoming you.

B (26:07)

People think okay, an A plus life

A (26:09)

is not available to me, but there is a way. We are all in the process of becoming ourselves. Listen to Becoming you wherever you get your podcasts.