Need a Better Plan to Retire in Three Years

Summary

Podcast Summary: "Need a Better Plan to Retire in Three Years"

Podcast: Jill on Money with Jill Schlesinger
Host: Jill Schlesinger, CFP®
Release Date: July 18, 2025

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Introduction

In the episode titled "Need a Better Plan to Retire in Three Years," host Jill Schlesinger engages in a comprehensive discussion with John, a listener contemplating early retirement due to health considerations. The conversation delves into John's financial standing, retirement readiness, and the complexities introduced by their unique circumstances as cancer survivors.

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Listener Profile: John's Financial Situation

John and his wife are in their early 60s, considering retirement earlier than their peers due to their experiences as cancer survivors. Their financial overview is as follows:

• Ages:

  • John: 63 years old (turning 64 soon)
  • Wife: 62 years old

• Income:

  • Combined Gross Income: $304,000 per year

• Retirement Savings:

  • 401(403)B: $900,000 (pre-tax)
  • IRAs and Rollover IRAs: $713,000
  • Roth IRA: $66,000
  • Other Savings:
    • Checking and Savings: $4,000 - $5,000
    • ALI Account: $25,000
    • HELOC: Originally $100,000 (paid off)

• Assets:

  • Home Value: Approximately $750,000 (expected to net $700,000 after fees)
  • Mortgage: $124,000 at 3.25%
  • Collectibles: Some collector quarters and half dollars

Notable Quote:

"We have about $4,000, $5,000 in the checking and our savings account, which is our overflow." ([04:40])

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Retirement Timing and Health Considerations

John and his wife are debating the right time to retire, feeling societal pressure to wait until age 70, which they are hesitant to do. Their status as cancer survivors influences their decision, as their life expectancy may differ from their peers.

Key Points:

• Life Expectancy:

  • John perceives no significant change, but his wife, an oncology nurse, mentions a potential reduction of five years ([07:33]).

• Health Insurance Pre-Medicare:

  • Neither is 65, necessitating a plan for health insurance if retiring early.

• Monthly Expenses:

  • Without retirement, medical expenses are just under $11,000 per month ([06:51]).

Notable Quotes:

"Everybody in our peer group seems to say we wait till 70, but we don't wanna wait." ([02:25])

"Five years less." ([07:45])

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Jill’s Financial Analysis and Recommendations

Jill conducts a thorough analysis of John's financials to assess their readiness for early retirement.

Social Security Benefits:

• John's Benefit at 67: $3,867/month (pre-deductions) ([09:37])
• Wife's Estimate: Approximately 16% less than John's benefit ([09:57])

Retirement Income vs. Expenses:

• Projected Needs:
  • Estimated monthly expenses post-retirement: $12,000
  • Expected income from Social Security: Approximately $6,000
  • Deficit: $6,000 per month, necessitating withdrawals from retirement accounts.

Golden Parachute Option:

• John mentions a potential $250,000 pre-tax payout if he remains employed for three more years ([10:58]).

Health Insurance Solution:

• By staying employed until 67, John's wife can remain on his health insurance until she qualifies for Medicare, alleviating immediate healthcare concerns.

Recommendations:

1. Delay Retirement: Staying employed until 67 to maximize Social Security benefits and secure health insurance coverage.
2. Utilize Retirement Funds: Strategically withdraw from pre-tax retirement accounts to cover the income deficit before Social Security kicks in.
3. Engage a Certified Financial Planner (CFP): To navigate complex decisions and ensure both spouses are actively involved in financial planning.

Notable Quotes:

"I think that this works really well because what you could do is... you keep working, you pull what you need out of the IRAs." ([12:58])

"I think it's all doable, John." ([14:19])

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Estate Planning and Future Considerations

Jill emphasizes the importance of comprehensive estate planning, especially given their health circumstances.

Key Points:

• Current Status:

  • Life Insurance: In place
  • Wills: Not established ([16:32])

• Adult Children:

  • Ages 30 and 27, facing challenges in the current housing market.
  • Plans to assist them financially in the future.

Recommendations:

1. Draft Wills: Essential for ensuring their assets are distributed according to their wishes and to provide for their children.
2. Engage in Estate Planning: To address potential future needs and protect their legacy.

Notable Quotes:

"We have life insurance, but we do not have our wills in place." ([16:32])

"It's nice to tell her that there's like, it's not like... we need to say, 'babe, I know.'" ([15:21])

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Conclusion and Final Advice

Jill wraps up the conversation by reinforcing the importance of a structured financial plan tailored to their unique situation. She encourages John and his wife to consult with a CFP to solidify their retirement strategy, ensuring both their financial needs and personal well-being are addressed.

Final Takeaways:

• Customized Planning: Each couple's retirement plan should reflect their individual circumstances and goals.
• Professional Guidance: Engaging with financial planners can provide clarity and confidence in making significant life decisions.
• Holistic Approach: Consider all aspects, including health insurance, life expectancy, estate planning, and familial obligations.

Notable Closing Quote:

"Change your work, change your wealth, change your life." ([19:00])

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This episode provides valuable insights for listeners facing similar retirement dilemmas, highlighting the interplay between financial readiness and personal health considerations. Jill Schlesinger effectively guides John through evaluating his options, demonstrating the critical role of personalized financial planning in achieving a secure and fulfilling retirement.

Transcript

[Jill Schlesinger]

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[Kristen Bell]

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[John]

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[Kristen Bell]

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[Jill Schlesinger]

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[Kristen Bell]

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[Jill Schlesinger]

Hello other truckee.

[Kristen Bell]

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[Jill Schlesinger]

Welcome to the Jill on Money show. It's Friday, July 18th and we are here talking to you about whatever is going on in your financial life that needs an extra set of eyes and ears on the situation. For many of you, this is a conversation that you probably know a lot of the answers to already. You you're looking for some confirmation. Mark and I are both certified financial planners and just before we came on the air we were talking about how much we love what we do, how much fun it is to be able to have the privilege of talking to you guys every day, Monday through Friday. And we take it seriously. So if you'd like to come and chat with us, all you need to do is go to our website, jillonmoney.com, click the contact us button, write us a note if you'd like to join us live. Check the box. Mark does everything else. He is the best executive producer in the whole wide world. It's also his birthday month, so you have to be really nice to him. All of July will be celebrated for Mark. Okay, today we are talking to John who is somewhere on the Pennsylvania Turnpike and he is not driving. You're in a rest area, is that right, John?

[John]

That's correct.

[Jill Schlesinger]

Thank goodness. Okay, so the pressure's off. What is going on? How can we help you out?

[John]

Well, my wife and I are in our early 60s and we're really starting to debate whether it's time to go, whether it's not time to go, and whether or not we need a CFP to help us make some of the decisions. We've been pretty good savers. We've Got a low mortgage, but we're just not sure what the right time is. Everybody in our peer group seems to say we wait till 70, but we don't wanna wait. We're both cancer survivors, and so we're not expecting to live as long as our peers might.

[Jill Schlesinger]

You know, first of all, I think it's great that we have this peer group where we're all talking to each other about whatever's going on. But I also think it's important to take a step back and be like, okay, that's good for them. May not be so good for us. So, first of all, how old are you, John, right now? You said you're in your early 60s, so let's do the precise ages. How old are you?

[John]

Sure, I'm 63. Turning 64 in a couple of months.

[Jill Schlesinger]

Okay, and your wife?

[John]

62.

[Jill Schlesinger]

Okay, you're both working full time.

[John]

Correct.

[Jill Schlesinger]

How much do you guys earn together?

[John]

Together it's 304,000. And that's not adjusted. Gross. That's gross.

[Jill Schlesinger]

Okay, I gotcha. And you guys have been putting money away for retirement for a long time. So do you tell us about the amount of money you have saved for retirement so far?

[John]

Sure. Three different groups. The 401. 403 is 900,000.

[Jill Schlesinger]

Okay. Not been taxed yet, right?

[John]

Not been taxed.

[Jill Schlesinger]

Okay.

[John]

And IRAs? Also not been taxed. And rollover IRAs? 713.

[Jill Schlesinger]

Okay, great.

[John]

We just started doing Roth. Cause I only learned about it last year. And that is only 66,000.

[Jill Schlesinger]

Yeah. By the way, only last year and you have 66,000. That's amazing. God, that's great. It's really terrific. So those are your three big chunks of money. Are either of you going to be entitled to a pension?

[John]

No.

[Jill Schlesinger]

Well, sorry. I mean, there was a little sadness. I saw that sad face. How about money that's not earmarked specifically for retirement, other money that you guys have saved?

[John]

We have about $4,000, $5,000 in the checking and our savings account, which is our overflow. Like, what do you call that? Balance protection? Yeah, that nothing bounces. And then I have an Ali account of 25,000, which is, you know, ready to go whenever we need it. And then because I was concerned we didn't have a big rainy day fund, I took out $100,000 HELOC, which we haven't had to touch except for, you know, know, significant, like the roof had to be repaired. So we.

[Jill Schlesinger]

Is there anything else? Is there anything outstanding on the HELOC right now? Is it that 18,000 or did you paid it off already?

[John]

I paid it off already.

[Jill Schlesinger]

Okay. How much is your house worth?

[John]

About 750. But of course we would only wind up getting 700 by the time, you know, fees and all that stuff.

[Jill Schlesinger]

Sure. Do you like it? Do you want to stay there?

[John]

We really do. It's too big. It costs too much every month, but it's like our little paradise.

[Jill Schlesinger]

All right, well, let's try to. Let's try to keep you in paradise. Okay. Do you have a mortgage that's outstanding?

[John]

Yes. 124,000 at 3.25%. Because I know you always ask that.

[Jill Schlesinger]

Love that. Any other assets? Rental property, vacation property? Something else, you know, a drawer full of crypto. Anything out there?

[John]

No, I have some collector quarters and half dollars, but that's about it.

[Jill Schlesinger]

That might be worth more melting down for whatever the metal is worth soon. Okay.

[John]

I'm afraid so.

[Jill Schlesinger]

Now, here's an interesting thing to consider. If you guys were to call it quits, what are you thinking in terms of health insurance? Like, if you said, I want to be done at the end of this year, obviously neither of you is 65, so what would you. What would the game plan be for that?

[John]

We don't have a plan for that. That's why we thought we might be stuck waiting until 65.

[Jill Schlesinger]

Okay. If you were to look at it, seems to me like you're saving a lot of money and you make, you know, 300 grand. But do you have an idea of what you actually need to live on? Like, not. Not like the basics, everything. Like, what are the expenses, do you think?

[John]

Yeah, I've got everything in our monthly household budget, including $250 for co pays, et cetera. But I don't have a, quote, medical plan in there, and that comes just under $11,000 a month because of.

[Jill Schlesinger]

I'm going to ask you a hard question that is always feels weird to ask, but I'm going to do it anyway because you said you're cancer survivors. Do each of you have a different life expectancy than if you had. You never had cancer. Do you have an actual or. Or is this like, hey, I had thyroid cancer, they got it, I'm done. There's no change to my life expectancy. How do you look at that?

[John]

Well, that's the way I look at it, but my wife is actually an oncology nurse.

[Jill Schlesinger]

Oh, gosh, that's bad. Too much information. Very bad. Very. She's looking at, like, statistically, we're screwed, right?

[John]

Five years less.

[Jill Schlesinger]

Five Years less. Okay. For each of you or for one or the other.

[John]

That's the stuff she throws out when we start talking about retirement.

[Jill Schlesinger]

Okay, so she's. So does that mean that you would. Wait, let me think about this for a second. So if that's the case, then, then if you worked, say to you were can you. Do you hate work right now? I just need to understand like where you are in the life cycle.

[John]

No, I. Two things. I love my job, I love what I do. It's very hectic, it's 50 hour weeks. But I really enjoy it because I've been doing the same thing for a long time. And most of my CL are really friends. I go to their graduation parties. I, you know, see them for happy hour and at Christmas and things like that. However, my wife is. She's getting some burnout in the nursing profession and oncology and she's been dealing with the metastatic breast cancer patients who have limited life expectancy. So it's been hard.

[Jill Schlesinger]

And that will certainly cloud your own experience, right? I mean she's a professional and she's also a human being.

[John]

Okay, that's right.

[Jill Schlesinger]

So is it fair to say that if you could, is it possible that you could stick around till you're 65? So let's. You said that you're going to turn 64 in a few months, that in next year you're 65, you can actually qualify for Medicare. She'll be 63. So we need to get two years of health insurance for her, right?

[John]

Yep.

[Jill Schlesinger]

And we just go on the exchange to do that. So instead of $11,000 a month, let's presume it's more like $12,000 a month. So. Okay, so now what is the Social Security benefit that you're entitled to at your age 67, your full retirement age.

[John]

$3,867 before any deductions for Medicare and Part B's and all that stuff.

[Jill Schlesinger]

Okay, and what about your wife at 67?

[John]

That I didn't check. But I'm presuming that it's probably 8% times 2 less so maybe 16% less than 38 because she makes good living as well.

[Jill Schlesinger]

Okay. So I mean it is possible that you, you know, between the two of you, let's say that you have a couple of years where you need to pull money out of the pre tax retirement stuff. Right? The 401, the 403B, the IRAs, that 1.6 that hasn't been taxed yet, we're going to have to pull money out of that to live on. That's okay. But then we do that few years. Then when you are 67, we take a little bit. We don't have to take as much out when she turns 67, even less. The question is, is there really enough money saved to float you? Because I think that you'll probably have about half of what you need. You'll have, you know, say, net 6,000amonth. We're talking in today's dollars. Like. Okay, so I'm just going to boil it out that like, if you need a 12, you'll have six.

[John]

I do have one. Oh, you have one other thing. There's a. There's like a golden parachute if I stick around for three years.

[Jill Schlesinger]

Well, tell me more.

[John]

It's. It's about 250 now. Yes. Pre tax.

[Jill Schlesinger]

Hold on a second. Hold on a second. How could you forget about that?

[John]

Well, I didn't know how to mention it.

[Jill Schlesinger]

That's a good. That's a beautiful. Okay, so you're saying if you stayed from. Right now, you're age 63, almost 64, for three more years.

[John]

Yes. Really? To my full retirement age, which is, I think, the kind of trail that you're moving down.

[Jill Schlesinger]

Yes. And now I have. How does that get paid out that 250?

[John]

Unknown yet. We're still hashing back and forth the narrative and the letter that goes with it.

[Jill Schlesinger]

I love this. Okay, so the reason why that's so fabulous is that your wife will be carried on your insurance for three years. That solves a lot of problems for me. Right? She gets to call it quit. She's fried. All right? We do not ask oncology nurses to keep going when they say they're fried. She's fried. Okay, so you sign this deal. You now are working till you're 67. She is on your insurance when she turns 65, she'll register for her Medicare, but she's going to be carried on your insurance until her for your age 67. Fantastic. This now brings us back to our $11,000 a month. And also you're saving money along the way for the next few years. Can you live on just your salary, do you think? What would your. If you sign this, you know, three more years. Sign up for three more years. How much are you earning just on your own salary?

[John]

My take home brings home only about 6200, but that's because I'm maxing out the 401k contribution to about 30, 31,000. So what's that do? That's another.

[Jill Schlesinger]

So that would Be like. So that would be more like eight grand a month is what you would really take home. If we don't have a 3.

[John]

Right. A 3,000 deficit that we'd have to pull out of a particular retirement fund.

[Jill Schlesinger]

I think that this works really well because what you could do is, again, you're still working, you could pull some money. We just. Because we're going to have to pay tax on this stuff anyway. So you keep working, you pull what you need out of, let's say, the IRAs, for all intents and purposes or whatever. Her, we can pull it out of hers, yours does not matter. You fund the gap, does not matter. And then when you get to be 67, you're going to claim Social Security, and then you're going to pull more money out of these accounts that haven't been taxed so that you can pay your bills. Then she comes along, she claims her Social Security, same thing, and now we're basically done. And I think that it also relieves me of that little pang that I have, which is, I wanna make sure you guys are covered because your health is very important and you wanna make sure you've got good coverage and the doctors that you like to see. So if you can just stick to your own, retire to your own healthcare and keep doing that, I think that this makes a lot of sense. Your bigger question of, do you need a certified financial planner? How much do you and your wife like doing this stuff? You're investing on your own, but do you like managing this? Or is this something you find interesting or intriguing?

[John]

I. I enjoy it. She does not pay attention when we're doing it. And so I have begun doing some arm twisting and have met with a CFP about having them do that. You know, the snapshot where they.

[Jill Schlesinger]

Yes.

[John]

Give them all the numbers and all that stuff. And it's a few thousand dollars. I want to get her involved in there so she has a resource. If she doesn't have an answer if.

[Jill Schlesinger]

I'm not there, I love that idea. And also because she is used to being involved in relationships where you need both people like listening, but only, you know. You know that only one person is going to grasp the information. You need two sets of ears on this and two sets of eyes. You need her to say. You need to say, babe, I know, like, when you're talking to patients that either the patient or the spouse is just freaking out or maybe there's even another person in the room. But, like, we need both of us here to just be on top of it and make sure that we're hearing the same thing and understanding what comes next.

[John]

I'm not sure she's very familiar with that.

[Jill Schlesinger]

Yeah, I think that that to me is, is really one of the great benefits of starting a relationship and having both people involved that you just both are on. Oh, okay. Yes, this does make sense. Also I think she'll feel, I don't know her, but I think that when you're contemplating these big changes, it's really is nice to know that there's another person, a professional involved that is giving you the information you need in the way that you can hear it. If you're working with someone good, that's what they do. They meet you where you are. And so I think it's, it's all doable, John. So yeah, breathe. But I love the three year game plan. When you get the details on the three year like, hey, please stay, John, we love you so much. Here's your three year game plan. It will be interesting to hear from them how that would be payable. So if you want to get back in touch with us about that and just have us weigh in or see how that factors in. But if you're going to be working with a CFP who's going to, you know, grind out some numbers that they will do that as well. Of course I would be remiss if I didn't ask you this. You know, I ask everybody. So it's not just, I know you got those documents in place or not.

[John]

We have life insurance, but we do not have our wills in place.

[Jill Schlesinger]

Oh my God, you're the worst. You're the worst. Come on.

[John]

I knew it was coming.

[Jill Schlesinger]

Mark. Two cancer survivors, no docs. Well, I guess your wife thinks she is going to live forever. Good for her.

[John]

You go, that's good to know.

[Jill Schlesinger]

It's nice. It's. Tell her that there's like, it's not like, oh, you magically are put into the, oh, your estate documents are all done. Just because you've done this good work of being an oncologist, living will doesn't count, right? No, no. I mean I'm sure she's very good at having the document that says pull my plug but everything else. Do you have adult children?

[John]

Yes, they're adults 30 and 27. And we will wind up helping them at some point because we, we can't understand how a young person supposed to get a toehold in the housing market with the way things are currently.

[Jill Schlesinger]

Well, they probably won't. Are they, are they on their own right now. Are they, you know, working 1.

[John]

1. 1 is out on his own. Just kind of, I don't know what you call treading water.

[Jill Schlesinger]

Yeah.

[John]

And then the other, the other one is at home. His office is upstairs in the guest bedroom and he's a mad saver.

[Jill Schlesinger]

Oh, that's nice for him. Tell him he is not going to find a partner in life if he lives with his parents for a lot much longer. That's a big negative on the swiping sites. Lives with mom and dad. I mean, you may be the nicest people in the world, but really not going to happen. So we got to get them out of there.

[John]

I told them there's no cute girls with a good personality rolling through our basement.

[Jill Schlesinger]

That is awesome. All right, so let us know if we can help you out with that other stuff, John. Good luck. And now it looks like you've got a three year game plan. It's exciting. And now your wife can retire, which is great for her. If you are like John and his wife and you're thinking about making a big change, you're really not sure. Get in touch with us. Go to jillonmoney.com, click the contact us button and let us know if you would be willing to come on the air live so we can have a conversation. It's a lot more fun that way. You can subscribe to us on the Odyssey app or wherever you find your favorite podcast. Please leave us a rating and review wherever you listen. And it is Friday, so let's do some business. Our music is composed by Joel Goodman. Mark Talercio is our executive producer and king of all things web. We are distributed by Odyssey. Please try to lift someone up. Change your work, change your wealth, change your life. Thank you for listening and we'll talk to you on Monday.

[Kristen Press]

I'm Kristen Press. And I'm Tobin Heath. We're World cup winners, Olympians and the hosts of the recap show. Every week we sit down with the icons, disruptors and game changers on the field and beyond it to talk victories, heartbreaks and everything in between. We've built a space where athletes change makers and people creating the future of women's sports can show up and show off as their full, unapologetic selves. Follow and listen to the recap show wherever you get your podcasts.