B (2:59)

Oh, yeah. I love that holiday.

A (3:01)

That's gonna be up right up there with you for. Is it Christmas now? It's like Christmas, Thanksgiving, Chinese New Year.

B (3:07)

Oh, yeah, for sure. It's definitely a top three. It might be top two. It's always a good time. This is my year. You're the horse. Won't have it again for another 12 years. Which means the next time it is the year of the horse, I will be 60 years old.

A (3:18)

Jill and I will be retired. Thank you very much, Mark. This has been lovely. It's been great. Hey, gang, if you want to think about your retirement or you maybe you're like, mark, you have a young kid and you want to think about how you're gonna pay for college or you' unnerved by the news flow and you need us to hold your hands. Remember, this program began in earnest almost six years ago, Mark. In fact, just six years ago. It was during COVID that we went to a daily programming. I wrote it down a long time ago, March 14th of 2020. We went seven days a week. That was our. That was crazy. What were we thinking?

B (3:56)

Kind of appropriate that the last week or so the market's been tanking.

A (4:00)

Yeah. And we actually created the seven week show because there were so many questions coming from you. And our sponsor had bailed on us and so we were like, let's just do the show we want to do. And Mark and I just decided we wanted to talk to you guys. And thanks to all those people in those large organizations who thought they knew how to actually program to the masses. They don't. You guys told us exactly what you needed and wanted, and that is how this show was born. So we're five days a week now. If you want two more days, you can just tune into Money Watch. That's our weekend podcast. But if you've got a question, this is why we are here. We hold hands. We kind of coach or mentor. Go to jillonmoney.com, click the contact us button. Write us a note if you would like to join us live on the air. Mark will do everything else. He is the best. He is simply the very best executive producer in the History of mankind. I mean, it's a hyperbole, but it happens to be true. Today we are going to talk to Chris, who joins us from Seattle. Hi, Chris. What's going on?

C (5:01)

Good morning, Jill and Mark. It's exciting to talk to you guys. Thank you so much. I love listening to your show.

A (5:07)

Fabulous. What's up? How can we help you out?

C (5:09)

Okay, so I retired about 1 1/2 years ago and I am just a huge time saver and kind of having a struggle moving from the saving mode to spending. And have a couple questions. Number one is, should I be doing any Roth conversions at this point? And then how do I develop a strategy as far as like, when I'm withdrawing money from like my 401 or my brokerage and like everybody just trying to minimize taxes as much as possible.

A (5:45)

Okay, so let's do some of the details first. Chris, how old are you?

C (5:49)

I am 61.

A (5:50)

Are you married, single, Partnered?

C (5:54)

Single.

A (5:54)

Are you entitled to any pension benefit?

C (5:59)

Yes, I am. And I can either start collecting it now and it would be about 3,500amonth, or if I wait till next year, February, it'd be go up to 3,800.

A (6:13)

Okay. Here, Mark, let's wait. Does it keep going up or is. Is next year the last year?

C (6:20)

Next year is the last year.

A (6:21)

Okay, so one more year. Okay. Now, Chris, tell us about all this money you save. Big saver, not such a big spender. Don't worry, Mark. And I'll spend your money. This would be very easy. So let's start with the easy stuff, which is let's start with your retirement accounts.

C (6:36)

Okay, so I have a 401 that I had through work. And in the roth there's about 600,000. And in the taxable is about 1.1.

A (6:49)

And is it still inside of that retirement account through work, or did you roll it over?

C (6:55)

No, it's still at work. It's with Fidelity.

A (6:57)

Okay. Okay, very good. So $600,000 in the Roth. Great. 1.1 in taxable. What about other retirement assets? Not the 401k.

C (7:07)

Okay, then I have a brokerage with Edward Jones. And in the Roth, I have about 250 there. And in the taxable is about 900,000.

A (7:21)

Mark, you're so funny. So that's brokerage. Okay. And you're paying someone at Edward Jones to manage that for you?

C (7:29)

Yes.

A (7:30)

Okay. And I note that you haven't rolled the other the Fidelity accounts over. Is that because you're kind of doing a death match? Fidelity versus Edward Jones?

C (7:42)

I don't know. And that's a great question, because that was one of mine, is when do I think about or do I combine? And how do I determine which one I do? I like them both. I like Fidelity for what they offer from work. I get better advice, I think.

A (7:59)

So in other words, in the Fidelity, have you gotten financial advice from them? Do you use that product from Fidelity?

C (8:07)

Yes.

A (8:08)

Okay.

C (8:08)

I can talk to somebody.

A (8:10)

Yep, I got you. Okay, what else is going on? So we have a Roth a taxable in the 401k. You've got a brokerage, and then a Roth at Edward Jones. What else is going on?

C (8:21)

So I have, in High yield savings, about 125,000.

A (8:26)

Okay, great.

C (8:28)

And in CDs, laddered CDs, I have about 250,000.

A (8:32)

Oh, my God. You're incredible.

C (8:35)

I know.

A (8:36)

I'm single.

B (8:39)

People watch. His pension is going to cover everything.

A (8:42)

I know, I know. But wait a second. How about a house? You have a house?

C (8:45)

I do, yes.

A (8:46)

How much is it worth?

C (8:48)

About 1.1.

A (8:50)

And let me guess, it's paid off.

C (8:52)

Yes.

A (8:53)

Shocking. Okay, I'm not going to say everything, but what is your general expense that you encounter on a monthly basis? Make it fat. Round it up a little bit.

C (9:05)

Okay, let's go with, let's say nine or ten thousand.

A (9:09)

All right. Okay. And so what is the source of covering that right now? Are you pulling money out of the CDs in the high Yield Savings account? What are you doing?

C (9:19)

I've been pulling some out of the fidelity, the. The 401, and a little out of the other brokerage and then using a little savings.

A (9:30)

Okay. And right now. So the only source of your income that is taxable is the interest from the High Yield Savings, the CDs, and the brokerage, right?

C (9:41)

Yes.

A (9:42)

Okay. So just for last year, not this year, for 2025, when you paid taxes, was that a year when you. Oh, you probably worked half the year, or did you not work last year at all?

C (9:56)

Yeah, I didn't work in 2025. I worked in 2024, but I got some payments in 2025 and I did. Honestly, Jill, just. I messed myself up taxes this last year because I got a bonus from when I worked through 2024, which was paid in 2025.

A (10:17)

Oh, I see. Okay.

C (10:18)

And then I had some RSUs that were vested. I don't know how it all works, but that amount got captured as income.

A (10:27)

So 2025, have you filed yet or not?

C (10:31)

Yes. And then I also did a Roth

A (10:32)

rollover Last year a Roth rollover or conversion.

C (10:36)

Or conversion.

A (10:36)

I'm sorry. Okay, so what was your taxable income last year for 2025 when you just filed your taxes, what was it?

C (10:44)

I think over 300.

A (10:45)

Okay, so that's not happening in 2026. Here we are in 26. Chances are if you really are, I mean you haven't received the pension yet, right?

C (10:55)

No.

A (10:55)

So this could be an opportunity to do a nice conversion for this year. Right. We have $1.1 million. You really don't have a ton of write offs. I imagine that you're probably, I don't know what your interest in dividend income looked like last year, but I presume that if we did nothing this year, you'd be in the 22% bracket and I think you probably should do some conversions. Mark, how do you feel about Chris converting 150 grand this year? And so he would take of the 1.1, he'd take $150,000 and convert this year in 26 he'd be in the 24% bracket. He would use money from his high yield savings and then the laddered CDs as they come due. You could roll that into your high Y yield savings just to have it. Right. You would be, you know, helping yourself in that. You would simply be able to get that money out of the growth factor for the taxed, the tax, the non taxed part of your retirement. Alternatively, what you could do is you could just say, well, Jill, I like my soft, cushiony high yield savings and CDs. I'm sure that I would like be a little bit worried because you're super duper saver. Maybe what you would do is just take 150 out of your 401k, use that to live on for the year, pay your tax that's due and be done with it. Those are kind of the two different options that you have. And then you could keep doing that. You could either convert or pull out. Once you claim your pension next year, you could just reduce the amount you pull out or convert to keep you in that 24% bracket. And you could do that until you claim Social Security. Your health, Chris.

C (12:47)

It's pretty good.

A (12:48)

Pretty good. Are you thinking of claiming it's 70 or 67?

C (12:52)

I was going to ask you that as well.

A (12:54)

I mean, pretty good sounds like 67. Really good sounds like 70. I mean if you're in good health, the longer you wait, the better off you are. But if you're like, I'm in okay health, not such great health. Then 67 is fine. What would the. Do you know what your amounts would be at 67 and 70?

C (13:10)

Yeah. At 67 it would be 3700.

B (13:14)

Mm.

C (13:14)

And 70 is 4600.

A (13:17)

Okay, well, you can make that decision as you get closer, right? Yeah, but how do you feel about. How do you feel about the difference between converting versus just pulling out? Do you like having the access to the money? Because you have plenty of money. You have plenty of money to last you. As you said, you're a big saver. You're not spending anything. So what feels right to you?

C (13:35)

I would, I don't know, I would probably conversion, I guess, because down the road then I'm not paying taxes on it. Right?

A (13:42)

Yeah, but you know when the money you pull out right now, if you've pulled. All right, so you're 61. Let's say, let's like pretend that 70 is the Social Security. It'll give you nine years to get the money out, to get to whittle it down. I'm good either way. Mark, do you have an opinion on a conversion versus just pulling the money out? Considering that like. Oh, Chris, I forgot to ask you, you have kids?

C (14:08)

No, no.

A (14:08)

No kids. So I mean, considering that you're never going to spend all this money, then the question is, Mark, do you think conversion or just yank the money out as needed?

B (14:18)

Eileen, yank it out and there's so much pre tax money. He's never going to get all this converted.

A (14:23)

I know.

B (14:24)

I'm fine just taking it out. The health is good. Wait for Social Security. You have your pension. That's a huge chunk of what he needs to cover his expenses. He can just use all that cash right now to live on and then

A (14:36)

you don't really have to worry about it. The other thing that you could start considering when you're in these larger tax brackets is let's kind of look at this brokerage account for a second. What's in that brokerage account? Is there still stock, company stock in there or RSUs or anything like that, or is it just investments that you purchased?

C (14:54)

It's just investments.

A (14:55)

Index funds, exchange traded funds, individual securities. What's in there?

C (15:00)

I guess, you know, it's just a mix. I. I don't know exactly what, but it's 60. I'm in a 60 stock. 30 or 40% bonds.

A (15:09)

Okay. Is that the same in your, in your Fidelity accounts or do you have a higher percentage in Fidelity?

C (15:16)

It's about the same.

A (15:17)

Okay. Are you charitably inclined at all?

C (15:20)

Yes, and that's when I do go. I will be giving it to charity.

A (15:25)

When I do go. I was like, where are you going? And now I understood what you were about to say. When I do. Okay, one thing, thing that you could consider as well is to look at that brokerage account and start to think about, well, wait, maybe I'll give some money away during my life and I'll open a donor advised fund. This to me is, could be a very nice way for you to really be a little more proactive about giving money away during your life. It is removing some of the low cost basis holdings inside the brokerage account, using those to fund a donor advised fund. So I don't know if you know we've been talking about donor advised funds because it's tax season, but the way it works is let's just, I'm going to make it up. You have an exchange traded fund or an index fund that tracks the S&P 500. You've had it in there for a long time. Let's pretend that you bought it for $25,000 and that position is now worth $100,000. You could essentially open a donor advised fund. You could contribute the $100,000 worth of that position into the donor advised fund. It would give you an immediate $100,000 deduction on your taxes. Okay, that's pretty sweet. Right? Now the critical part of this is that you don't have to pay the capital gains tax. The money that goes into this fund, it goes in as your position, your S&P 500 fund. You contributed in the donor advised fund. Whether it's at Fidelity or Edward Jones or wherever it is, they immediately sell the position. You can invest that $100,000 that went in in however you would like and then you can start to give the money away over time. You don't have to give it away all at once. You can give it away over a number of years. So let's just say your good old friend Jill, the gal who's always shaking down the listening audience for her big cycle for the cause, every year you say, oh, I'm going to throw Jill 100 bucks. You go and you check out and it says donor advised fund. And you shove $100 from your donor advised fund into my ride. Or you say, my friend is looking to raise money for whatever the Seattle foundation, and you say, okay, I'll donate that from my donor advised fund. Now you don't get a deduction from what you've given from your donor advised fund. Just the Money that went into the fund and you give it out over time. So it's kind of cool. And especially if we think you're going to be in a higher tax bracket for. I think I would have done it last year for you. If your advisor were using his or her head, that would have been a good year to do it because you had a big tax year that you didn't expect. You could have taken a big chunk of money from the taxable account, push it in a donor advised fund, get a deduction, lower your tax liability would have been great. You can still do it going forward though. And I think that is something worth talking about with the Edward Jones broker or if you decide to move everything to Fidelity. Fidelity also has a donor advised fund.

C (18:23)

Okay. And going back to that, then what should I be considering about combining? I mean, what are the.

A (18:31)

Well, okay, here's, here's what I think. I like combining. Why? Because it's easier to manage. So it would be nice if your two Roth accounts were one Roth account for 850. Right. It would be nice if your brokerage account lived in the same place as your Roth traditional retirement account and just the brokerage account. I just like that for ease of management. Now that said, if you like your Edward Jones broker and that person, how much are they charging you? Do you know?

C (19:01)

I don't.

A (19:02)

Okay, I want you to find that out. I'm going to give you a scolding for that. Even though you're such a good saver, you could basically throw your money away on anybody. If this person is just managing money for you and it's costing you money, then it's not a great deal. If that person is doing financial planning and telling you to open a donor advised fund, watching your taxable liability, trying to talk you through the conversion factor and really helping you manage your financial planning, not just your assets, then sure. But otherwise, if they're not doing that and you actually think the advice is better at Fidelity, then I would move everything to Fidelity. Mark, do you agree with that?

B (19:37)

Yeah, it all depends on what he's getting from Edward Jones. You know, like you said, if they're doing full blown financial planning, taxes, estate, all that other stuff, then, then maybe, yeah, maybe.

A (19:46)

But if they're not, then you rethink it.

C (19:48)

And how does that work? If I were to. I mean, that doesn't create any tax implications, anything by taking.

A (19:55)

No, the best way to do this is to call Fidelity, talk to Fidelity and say I have these other accounts and I'd like to move them to Fidelity. What is the best way to do that? They'll handle it with you. And you'll move from Edward Jones, you move the Roth into your Roth and then you'll move the brokerage account as is. You're not going to sell anything. Going to move it as is into a Fidelity brokerage account? No, nothing has to be sold to do that. So you don't need. Unless there's some weird asset that's like an Edward Jones specific asset that can't be held at Fidelity, although I think that would be highly unlikely. Then you should not have any tax liability doing this.

C (20:33)

Perfect.

A (20:34)

How are we going to get you to spend more money? We're gonna have you give it away. This is good.

C (20:38)

Yes, I know. That's what I say.

A (20:40)

Do you have siblings or nieces, nephews that you would. That would be beneficiaries if you were to pass away?

C (20:46)

Yeah, I have three brothers and then some nephews and a niece.

A (20:51)

Okay.

C (20:51)

So yeah. And I think about giving to them as well. So.

A (20:56)

Yeah. During their lives when they can use it. That's a good thing.

C (20:59)

Yeah.

A (20:59)

So, Chris, we're going to turn you into a spender or a philanthropist in about two seconds. So keep us posted. Let us know what you out about Edward Jones, how much you're paying, and we're happy to weigh in again. So just stay in touch with us. Okay, great.

C (21:13)

Thank you so much. I appreciate it.

A (21:15)

Of course. Thanks so much for joining us. And if you have a question about how you can become a better spender, Mark and I are very good spenders. We're happy to help you out or any other question that's on your mind. Donor advised funds how to be philanthropic. How to align your values and your investing. Those are great questions to be asking yourself. All you need to do is go to jillonmoney.com, click the contact us button, write us a note. And if you would like to join us on the air live, check the box. Mark will do everything else. You can subscribe to us on the Odyssey app or wherever you find your favorite podcasts. Do me a favor and lift someone up. Change your work, change your wealth, change your life. Thank you for listening and 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 hey there, Poodle and Maddie here from Reality Gays.

C (23:06)

Do you love reality shows about a

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