Podcast Title: Jill on Money with Jill Schlesinger
Host/Author: Audacy
Episode: New Job, New Retirement Plan Options
Release Date: June 12, 2025

Introduction

In this episode of "Jill on Money with Jill Schlesinger," host Jill Schlesinger and co-host Mark delve into the intricacies of retirement planning amidst changing career landscapes. The focus is on navigating retirement plan options when transitioning to a new job, specifically addressing whether to opt for traditional pension plans or modern 401(k)/403(b) contributions. The episode features a detailed conversation with Jen, a 51-year-old academic professional contemplating her retirement strategy as she moves to a new institution.

Caller Introduction: Meet Jen [02:08 - 03:37]

The episode begins with Jill and Mark welcoming Jen from the Pacific Northwest. Jen shares her upcoming career move from one academic institution to another, highlighting her lack of prior pension benefits and her uncertainty about initiating one at her current age.

Jen: "I am changing jobs. I'm in academia and I'm switching institutions... I've never had that option, but at this new institution they do."

Mark: "Okay, well, this is exciting. First of all, congratulations on your new job." [04:16]

Financial Overview: Assessing Jen’s Situation [03:37 - 10:01]

Jen provides a comprehensive overview of her financial status:

• Age & Family: 51 years old, single, with two children in college and high school.
• Income: Transitioning to a new role with a base salary of $160,000 for nine months and a summer salary of $52,000, totaling $212,000 annually.
• Savings & Investments:
  • Retirement Accounts: Two 403(b) plans, a SEP IRA, and a small individual IRA totaling approximately $1.3 million.
  • After-Tax Accounts: Beneficiary IRAs and other after-tax investments amounting to $200,000.
  • Cash Reserves: A substantial $1.1 million in cash, including CDs and high-yield savings.
• Real Estate Holdings:
  • Current Home: Valued at $800,000 with no outstanding mortgage.
  • Rental Properties: Two rentals worth approximately $800,000 combined, with a $300,000 mortgage at a favorable 3% rate.

Jill: "That's great. Amazing." [06:14]

Mark: "So that's... you have an old retirement plan from the previous job?" [05:57]

Retirement Plan Options: Pension vs. 401(k)/403(b) [10:01 - 16:33]

The crux of the discussion centers on Jen's choice between accepting a traditional pension plan or contributing to a 401(k)/403(b) plan at her new job.

Jen: "From what I can gather, it's like a mandatory 12% contribution." [12:32]

Mark: "So you get a choice coming in. Is that... a 403(b) or 401K that they'll match up to 7% and then they have a state pension plan." [12:32]

Key Considerations Discussed:

1. Vesting Period: Jen needs to remain in her new position for at least 10 years to vest in the pension plan.

2. Flexibility vs. Security:

   • Pension Advantages: Provides a consistent income stream post-retirement.
   • 401(k)/403(b) Advantages: Greater flexibility in investments and access to funds, especially beneficial given Jen’s substantial existing assets.

3. Age Factor: At 51, starting a pension late in her career may not provide as substantial benefits compared to earlier commencement.

Notable Quote:

Mark: "This may be one of the few times... where I'm going to say I'm not sure I want the pension because I want more flexibility for Jen." [15:33]

Hosts' Advice: Strategic Financial Planning [16:33 - 19:41]

Jill and Mark offer tailored advice to Jen, emphasizing the importance of flexibility and caution in making significant financial commitments, especially concerning real estate investments tied to her new job.

Key Recommendations:

1. Evaluate Housing Needs:

   • Consider renting for a year to acclimate to the new location before committing to purchasing a home.
   • "I think it's a much better idea to explore the area and decide where you'd want to be." [16:58]

2. Asset Allocation:

   • Given her robust cash reserves, Jen should optimize her existing funds, possibly transitioning some savings into brokerage accounts to maximize growth.
   • "If you don't need this money, then I think it's fine. If you've got CDs and high yield savings and you've got a bunch of money that's tied up in that stuff, I would keep that." [18:28]

3. Retirement Flexibility:

   • Advise against locking into a pension if it restricts financial flexibility, especially since Jen already possesses significant assets and real estate investments.
   • "You have all of this money which gives you this incredible opportunity to do whatever makes you feel good." [15:50]

Notable Quote:

Mark: "I think you're in great shape... you have an incredible amount of opportunity. This may be one of the few cases where we are saying you don't need to choose the pension, have some more flexibility and go and live your fabulous life." [19:11]

Conclusions: Empowering Jen’s Decision-Making [19:41 - 21:15]

Jill and Mark conclude by reinforcing their role in alleviating financial stress and providing customized advice. They encourage listeners to reach out with their financial questions and highlight the resources available on their website, including newsletters and live webinars.

Final Advice:

• Maintain Flexibility: Prioritize investment flexibility over the security of a pension given Jen's substantial savings and diverse asset base.
• Explore Before Committing: Opt to rent initially in the new location to make an informed decision about purchasing property.
• Leverage Existing Assets: Utilize Jen's significant cash reserves strategically to enhance her financial portfolio without being constrained by traditional pension plans.

Final Notable Quote:

Mark: "You have piles of cash you're wondering about buying, should you rent. All these questions, these are question questions that we can help you wrestle with." [19:47]

Key Takeaways

• Personalized Financial Planning: Decisions about retirement plans should consider individual asset bases, career stability, and lifestyle preferences.
• Flexibility vs. Security: Balancing the security of traditional pensions with the flexibility of 401(k)/403(b) contributions is crucial, especially for those entering retirement planning later in their careers.
• Strategic Asset Management: Optimal allocation of existing savings and investments can provide greater financial freedom and security in retirement.

This episode offers valuable insights for professionals nearing retirement age who are evaluating their retirement plan options amidst career transitions. By sharing Jen’s scenario, Jill and Mark illustrate the importance of personalized financial strategies that align with one’s unique circumstances and long-term goals.