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- [00:00]
A
Are you the kind of person friends turn to when they need help planning a trip? I know I am. That means you got to dig into the hotel options, figure out the best neighborhoods, track down that one hard to get dinner reservation. There's something really satisfying about turning a loose idea into a trip that feels unforgettable. And that's why Fora stands out. Fora is a modern travel agency built for people who already love planning their travel and and want to take that skill a step further. You get training, booking tools, and a community of experienced advisors who share real insights and support as you build your own travel business. Fora also provides flexibility. You're working for yourself on your own terms alongside whatever else life looks like for you. And with access to thousands of preferred partners, clients can get perks like upgrades and resort credits that make a real difference in their trips. With when you book travel, you earn commissions, and getting started can be as simple as helping people you already know. Now's the time to turn that passion into something more with Fora. Become a Fora advisor today@foratravel.com jillonmoney that's f o r a travel.com jillonmoney and make sure you tell them we sent you foratravel.com Jill Jill on Money hey gang. You know I've changed my tune on Bitcoin, meaning I know that a lot of you are bitcoin curious and that's okay. I know you're not putting all of your money into this if you've been curious about bitcoin but haven't made the jump yet. Cash App makes it easy. You can set up automatic purchases with zero fees or buy larger amounts also with zero fees. Start small or go bigger. It's designed to be simple either way, so whether you're just learning or ready to try it out, it's built to meet you where you are for a limited time. New customers can get $10 added to their balance. Just use code CASHAPP10 when you sign up. And don't forget this part. Send at least $5 to a friend in the first two weeks. Terms apply. Cash App is a financial services platform, not a bank. Banking services provided by Cash App's bank partners Bitcoin services provided by Block Inc. Brand for See the Bitcoin disclosures at Cash App Legal Podcast welcome to the Jill on Money Show. It's Monday, May 18th and we are here answering your financial questions. If you have one, just go to our website jillonmoney.com click the Contact Us button, write us a note. And if you would like to join us live on the air, all you need to do is click that Contact us button in that upper right hand corner and. And write us a note. And if you want to join us live, check the box. It's all so easy right there for you. I would love to point out a couple of things on the website. First of all, things are going to be changing, changing, changing, changing. Because we are launching a new show and there's going to be a video component to it, which is exciting. Mark, are we allowed to promote this yet or what do you think? Should I say it or not? Yeah, sure, why not?
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B
I think you already have.
- [03:14]
A
Yeah, I don't know. Okay. The name of the show is called Money Moves. It's going to be video and audio, and you'll be able to enjoy it anywhere, any way you would like. And we are supposedly launching it, I think in the beginning of June. But the way you'll get access to it, we're going to run it on the same feed. So just make sure you subscribe to the Money Watch podcast, which is at the bottom of our website. You'll see. Mark, we have to redo the whole website. So exciting. So much work for you. So sorry. And you'll just subscribe to it and then when it gets going, you'll get it. You know, it' is that you will actually know exactly what's going on if you subscribe to the free weekly newsletter, which comes out Fridays, and I encourage you to do that. So lots of things happening here. Not even at the midpoint of the year yet, but we are rocking and rolling here at Jill on Money. So. And we want you to join us. We want you to be along for the ride. So much fun. Okay, so let's get back to you guys. Let's talk to Matt. He joins us from the south. And you're going to see exactly how far deep in the south he is. So, Matt, welcome to the program. Tell the folks what they need to know about the South.
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B
It's lovely. I enjoy the weather here. We're not too far from anything like beach, mountains. We have a lot of variety with things to do and I love it.
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A
All right, then, if you love it. I love it. I like when people are happy where they live. So, Matt, what brings you to us today?
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B
Well, Jill, there's a lot of upheaval sort of going on in my industry and my job right now. There are industries that are worse, but I just see a lot of things happening and a lot of things going on. And I want to make sure that I'm prepared if I need to retire early. And there's a potential maybe in the next one to three years of a package at my employer. Nothing concrete. I just see that there's a increasing possibility that, you know, that could occur.
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A
I mean, I think it's smart to project ahead, to be honest with you, because no one wants to be caught flat footed. Right? That's. That to me, is the big issue. So we want to make sure that you have all the information at your fingertips, and we also want to make sure that you feel confident that if the hammer comes down, that you are ready to go. So first let's, let's see how prepared you are for this. How old are you, Matt?
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B
Okay, I'm 54 now. I turned 55 in just a couple months.
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A
Is this a job that has a pension associated with it?
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B
It is, Jill.
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A
Oh, see how everyone's like, yes, it does. So, okay, wait, before we get to the pension, are you married, single, partnered?
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B
Single.
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A
Okay. Kids or no kids?
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B
No kids.
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A
Okay, so let's say you have the job. You make it through the next couple of months, you're 55. What would your pension benefit look like?
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B
And Jill, I'm sorry I messed that up. I'm about to turn 54 in 14 months, I'll be 55. So sorry.
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A
Okay, got it. It's all right. Some people just don't know you. You lose track of time. Do you have to make it? Well, let's just say they came in in a couple of weeks and just said, okay, Matt, here are your walking papers. What would your pension benefit look like before 55?
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B
Jill? It's a mixed bag because there's a formula in the pension that increases a lot of when I turn 55. So if something happened in the next couple of months, I would be more apt not to take it because the value of staying till at least 55 changes the picture dramatically.
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A
So let's pretend it's 14 months from now and you get a hammer and then what would it be at 55?
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B
So at 55, there's several different scenarios. If I started drawing it immediately at 55, it would be about $27,000 a year.
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A
Okay.
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B
And I'm, I see a scenario where around age 57, it sort of makes sense. If I leave it 55, 57, it would be 30,000 a year.
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A
And how much do you earn right now, Matt?
- [07:19]
B
So I'm right around 70,000 a year.
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A
And how's your, how do you exist on that. Is that tight? Do you, you know, do you have a lot good cash flow? What's your situation?
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B
It's pretty good, Jill. I monitor most of my expenses very well. I have no DEB is paid for and I really live within my means. So, you know, I have some things that I enjoy here and there, but it's pretty good.
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A
Okay. How much is the house worth?
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B
About $260,000 and free and clear.
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A
You own that? And in addition to the pension, have you been saving for retirement?
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B
I have, I've been, I think, pretty diligent. So I've been doing pretty well.
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A
Tell us about that.
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B
Okay, I'll give you the retirement asset breakdown. So 401k is at 298,000. 8,000 of that is Roth. They just started that semi recently.
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A
Yep.
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B
Roth IRAs are at 205,000.
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A
Great.
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B
I have an annuity that's separate from my pension. It is a non qualified annuity. It's sitting at 220,000.
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A
Okay. Non qualified. Okay. So those are those three main chunks of retirement coded assets. Any other money that you've set aside, either in a brokerage account or a savings and checking account, something like that?
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B
Yes. And so I've got about 415,000 between CD and savings. And there's sort of a reason for that in my head.
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A
I'm listening. That's Mark giggling. That is not Jill giggling.
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B
I. I've always had my eye on if something should happen and I need to change jobs or industries or I'm somewhat conservative. So that's my pot of money if I need to make things happen. And it's just sort of, you know, grown and grown and grown.
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A
Yeah.
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B
But I will say I'm very careful managing that because I realize that it's sitting in something safer. But the majority of that Jill's in CDs earning about 5%. Yeah, I lock things in a few years ago and it's got about two more years earning that I'd say about 90% of that is earning 5%.
- [09:44]
A
Great, that's good. Okay. And maybe it was wise for you to do that, even though, you know, I don't love having all that cash and you're pretty young. But on the other hand, maybe it won't matter for you really. So it sounds like there is something that could be bubbling up in the near term with work that, you know, you would want that. Just a question about some of this stuff. So when you claim your pension, you could do it at, you said 55, 57 do you have a number at 60 or not?
- [10:15]
B
I do. I have that right here. It'll be about 37,000 annually if I took it monthly.
- [10:22]
A
How much do you spend right now? I mean, you've accumulated a lot of assets on. Not a humongous salary on a, you know, so I'm just wondering, what do you think your, your monthly spending looks like now?
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B
Sure. And, and I've, I've looked at that, and monthly comes to about. Right. At about eighteen hundred dollars a month. That's.
- [10:43]
A
How about if I do a raise and what if I said 2k a month?
- [10:46]
B
Like, that's fine. Yes. The retiree budget. I'm budgeting a little bit more than that because I would probably have Affordable Care act premiums or if a retiree health insurance plan is offered, that would have premiums and some extra deductibles. So I'm kind of. Yeah, I'm, I'm looking at about 2k a month. So. You're right on, Joe.
- [11:06]
A
Okay, so under. I know it's a little bit weird since you haven't like, been made. No offer has been made yet. So. I get that. So I just want to say, in your industry, in the past, when people have had, when they've retired and they collect their pension benefit, has there been a healthcare component for them?
- [11:24]
B
Yes. So right now, Jill, my company offers a component, but I have to be 62 and be working there until 62 until it kicks in. So we're a long ways off with all the, I mean, my job is changing a little bit, which I, you know, I generally enjoy working it and, but, you know, just lots of things are changing with my role and with the company. So that's somewhat of an unknown as far as, you know, if I make it to that point. But it is there and it is available at the moment if I make it to 62.
- [11:54]
A
So if you're looking ahead and, you know, even if we said your expenses are maybe more going to be like, let's say 2,500amonth, just, you know, for the heck of it.
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B
Okay.
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A
You know, there's no problem. Right. You know, this, like. Can, can I just run the math quickly with you?
- [12:10]
B
Sure. Please.
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A
Okay. I, I don't.
- [12:13]
B
You.
- [12:13]
A
Mark, stop laughing.
- [12:15]
B
Is he laughing because my expenses are so low?
- [12:18]
A
Yes, he's giggling because. Well, I mean, also because you're so, you're so earnest about this. So. And, and you've done an incredible job. So. Okay, let's just say today that your boss likes, like, oh, can you Come into my office and we're letting you go. So sorry. Okay, now you like hang your head down and we say, well, forget it. Maybe you don't get any package. Just like, right, let's pretend no package. Right. So we have to make sure that you can survive for at least three years until that age 57. Right. And maybe until 60. How's your health? I mean, because you're a single guy and you're not, it's just you. So there is, there's some interesting planning parts of this. So are you in good life expectancy? So, so what's going on for you?
- [13:07]
B
So just to kind of give a summary, I. I do have two medical conditions. Without breaking it down further base, basically I look at everything and there could be a small ding to my longevity, maybe a couple of years. You know, I've talked to my doctor extensively about it and he, he basically is just kind of like meh and doesn't want to get too deep into it. But you know, there's a scenario where it doesn't ding my lifespan, but there's also another scenario, maybe a couple of years. So I'm kind of, that's part of, kind of why I'm trying to prepare is I want to make sure I have a retirement I can enjoy and not sort of get to the, the end of the working years and then not have much left, you know.
- [13:49]
A
Okay, I understand. But in other words, if, if you said to me like, oh, well, you know, I have a, you know, like I have a diagnosis that is like, has very low, like I'm gonna die by the time I'm 70 or something, then we would say, all right, well then let's not just like crank on the pension as quickly as possible. Even if we did the pension at age 57 and it's a lower amount, I think I probably want to wait till 60, Mark, do you think 60? Remember the difference between 57 and 60 is 30 grand a year versus $37,000 a year at. And he has all this cash because basically, gang, we're looking at Matt's situation and saying there's a ton of cash that's here. We can live off that cash for a while. You get the pension, the pension starts, and it's really all the money he needs. So Mark, 57 or 60, do you think? I mean, that's a complete no brainer. I see no reason to take that pension early. I mean, a lot of this money's gonna have to come out eventually one day, so you might as well Just do that in the meantime. Okay, so Mark, what you're suggesting is wait till 60 and then in the interim, instead of using his cash on hand, eventually you'll want to take the money out of the 401k. Actually, I'm wondering about the annuity also, because there's probably some tax liability built.
- [15:02]
B
Yeah, I checked on that, Jill. And I mean, there would be some issues with the tax liability or penalty. I pretty much have to wait till 59 and a half to start drawing it to avoid that so that that could be turned on at 60 for sure. Bearing in mind we have to get
- [15:19]
A
two chunks of money out, right? We have to get out the 401k money, the pre tax, the 290, and we have to get the annuity money out just because it'll be easier to do that before you start having income. This is what I think you should do. Again, you lost your job, right? Now you've got your CDs and you've got some savings. I would live off that money if you spent down $30,000 a year from those CDs, right, for four years. And instead of having 4:15, we spent down 120, maybe 150. You're still having. You still have a ton of safe money available. And we haven't even touched the annuity or the 401k.
- [16:01]
B
Right.
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A
Wait, can you give yourself permission to do that?
- [16:04]
B
Yes.
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A
Really?
- [16:07]
B
I've been working in my head, Jill. So, yes, I'm going to have to spend more. Like when this happens, it's strange that I might go into retirement and start spending a little bit more, even on a low budget. So a couple of things to bear in mind. The last time my company offered a package was around the recession time, and it was about a year of base salary, roughly. And it included the retiree health insurance. So that's no guarantee that if a package comes that will include that or not include that. My alternate is, if I have to go say at 55 or 56 and there's not a package, then I would be looking at the Affordable Care Act. And that's part of the beauty of having that, that money there, that pot of money, safe money, is I can pull out of that and keep my income low. That determines my premiums.
- [17:02]
A
All right, but even if you. I know. Even if all you had, you know, if you spent money for the next five years, right. Let's say you spent 50 grand a year, you would be. In fact, in a weird way, like you get out of CDs, your taxable income might go down because you have got less interest. Right. You're just spending money you have, they don't care about it. So your interest will go down. The 401k is not going to be a thing. And we're really just trying to kind of inch our way to get you to a place where you can get to Medicare but you have so much money that none of this is going to matter, none of it. But I think that it's good to look like if you could get the, you know, if we could start to get some of the money out of the 401k after 59 and a half, that's fine. I don't even think you have to do it. So it's not like there's so much money in there, but we have to be methodical about it. That annuity, how much money did you put into that non qualified annuity? Do you know your cost basis of that?
- [18:00]
B
I, I ask at one point and the last number that I remember getting may have been a year ago it was somewhere around 150 or 160. So there is a good part of that that won't be taxable.
- [18:13]
A
So that's right. Right. So I mean it is, some of it is taxable as you know, but the lion's share is not and you know you'll have to pay or that, so that does count as ordinary income with the Affordable Care Act. Okay, right. So, so right. So if, if you took a dollar out, right. The portion that is attributed to interest would be or accumulation would be taxed above your cost basis. But just to be crystal clear, please don't buy another annuity because someone will say, oh well, just don't roll it into something else. You get the money.
- [18:43]
B
Yes, if, if it helps any, it is, it is a, there's not a lot of bells and whistles and for the past three years I've been earning close to the same 5% and that continues for two more years and then, then the rate resets. But it's a, basically the company is a non profit company and it's not a lot of bells and whistles. So I kept it very simple.
- [19:05]
A
But you know, you are absolutely, you know, you are on track. There's nothing bad that can happen. I wouldn't even worry like if you are offered a, some sort of benefit and buyout then let's talk. But if you're offered that buyout and they again, if they're going to do one whole year, if you got this slug of money it doesn't really do much to you. It just, it might impact your, your Affordable Care act premium, but it's not going to be a lot and you can afford it. So don't work too hard to try to monkey around with the income. You know, if you, the way you can limit the income is to wait to take the 401k. Wait, you're going to wait anyway with the annuity. But the CDs, again, if you spend that money down and you have less interest coming in, then your taxable income will be lower. So anyway, they gave you one like a year in advance. Right. You know, you'd be in your 22% bracket. You probably don't have a ton of. Are you claiming the standard deduction? You probably don't have a lot of items. Yeah. Okay. So I mean you're, you're no worse off than you would have been except you get this big chunk of money and you probably would rather keep working. I, it sounds like you like what you do, but it's not. It's. There's nothing that you have to worry about. Anytime the hammer comes down, you're good, you are good. You got plenty of money. Mark even giggled to make sure that that was the case. Is there now? The only other thing is you have your, this 400 grand, 415 in CDs and savings. If something happened to you, where does that money go? Do you have a will? Are those transfer on death accounts?
- [20:42]
B
So I've basically done a beneficiary or transfer on death on all of the accounts that I've mentioned. So I do have a will in place for anything additional which is basically like my house or my car. But yeah, all those, all those beneficiaries are in place. So that would pass directly for the accounts.
- [20:59]
A
Perfect. Perfect. Then you're in great shape and I applaud you. I hope that you don't get let go and you can spend a little more money now. Don't worry about it. I feel like you are in really good shape.
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B
Right. And in the big picture. One more thing I would add is I like, you know, I hope, you know, when I retire I'm in a position I can stay a little more active and more healthy and be outside a little bit more. But none of this prevents me from, you know, working a little bit. I don't want to work full time when I retire, but you know, two days a week or something, 20 hours a week, 15 hours a week. You know, that could be a little bit of thing, you know, I'd have to put that in the balance of, you know, if I'm having my income.
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A
That's if you want to.
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B
If you want.
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A
You do not have to. That's a want, not a have to. Okay.
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B
It would be more for my mental health.
- [21:51]
A
I like that. That's good. I agree. I think it's a great idea. So we look forward to hearing more from you. Matt. Let us know if you get the notification, if something else changes. So if you're like Matt, you're working in an industry where there's downsizing, where there's things that are happening, or your company specifically, something's happening and you want to prepare for that. The idea of doing this went before something, some news comes down is really smart. So be like Matt, get in touch with us. Go to jillonmoney.com, click the contact us button. Write us a note if you'd like to come on the air. Check the box. Mark will do everything else. And while you are on the website, you can just check out all the content that lives there. Mark does a great job of refreshing everything. You can subscribe to us on the Odyssey app and you can also subscribe to Money Watch on the Odyssey app. So do both. Wherever you find, find your favorite podcasts. Please leave us a rating and review. Wherever you listen, of course. Lift someone up. Change your work, change your wealth, change your life. Thanks for listening. We'll talk to you tomorrow. Ever feel like you need one app for sales, another for inventory, another for accounting? And the list never ends. Managing a business shouldn't feel like a full time job just to keep your software in check. That's why Odoo exists. Odoo is the only business software you'll ever need. It's an all in one, fully integrated platform that handles everything. CRM, accounting, inventory, E commerce, HR and more. No more app overload, no more juggling logins. Everything works together seamlessly so your team can focus on what really matters, growing your business and serving your customers. Beyond simplifying your workflow, Odoo also saves you money. And instead of paying for multiple expensive platforms, you get one system for a fraction of the cost. And whether you're just starting out or managing a large company, Odoo scales with you. It's easy to use and fully customizable. It streamlines every process, giving you more time and freedom to focus on the parts of your business that matter most. Thousands of businesses have already made the switch. Why not you try Odoo for free@odoo.com that's o d o o.com on my
- [24:05]
C
new podcast, On Par with Maury Povich, we're getting down to the truth behind the names that you know and love. Unfiltered conversations with legends like Leanne Morgan, Kathy Griffin, Ricki Lake to find out when they feel the most on par. We're breaking it down with Don Lemon, Aaron Parnas, Lamani Jones, laughing it up with Josh Johnson, Dan Soder, many more. You know the results are in. Great conversations are always on par. So follow and listen to On Par wherever you get your podcasts.