On Track for Retirement in 12 Years? - Jill on Money with Jill Schlesinger

Summary

Episode Summary: "On Track for Retirement in 12 Years?"

In the June 18, 2025 episode of "Jill on Money with Jill Schlesinger", host Jill Schlesinger, CFP®, and co-host Mark Tularcio engage in a comprehensive discussion about retirement planning, focusing on real-life scenarios and actionable financial advice. This episode centers around a call from Max, a 45-year-old teacher from New York, who seeks guidance on whether he and his wife are on track to retire within the next 12 years.

Listener Call: Max's Retirement Planning

Max’s Current Financial Snapshot:

Age: Both Max and his wife are 45 years old.
Professions: Both are educators within the New York State pension system (Tier Four).
Pensions:
- Max: Anticipates a $113,000 annual pension.
- Wife: Expects a $70,000 annual pension.
- Combined Income: They can comfortably live on $200,000 per year, covering essential expenses and healthcare needs (04:09–05:49).

Savings and Investments:

Max’s 403B: $175,000 (traditional, now also contributing to Roth).
Wife’s Retirement Savings: $270,000 in a Roth account.
Education Savings: $102,000 in a 529 plan for their children.
Regular Savings: Approximately $30,000.
Real Estate:
- Home Value: $725,000–$750,000.
- Mortgage: $30,000 remaining, set to be paid off within the next year (06:34–07:22).

Detailed Discussion and Financial Advice

1. Evaluating Pension Benefits:

Mark’s Insight: Mark emphasizes the strength of the New York State Tier Four pension plan, highlighting its role in securing a substantial retirement income (04:55–05:42).
Max’s Confirmation: Max confirms their position in the pension system and projects entering retirement around age 57 with stable benefits (05:42–06:17).

2. Retirement Savings Strategy:

Max’s Contributions: Max has been maximizing his 403B contributions, currently contributing $23,500 annually (08:44–09:00).
Wife’s Approach: Although his wife has a substantial Roth account, she hasn't been as proactive with her 403B contributions (08:51–09:26).
Mark’s Recommendation:
- Continue maximizing retirement account contributions.
- Shift towards more Roth contributions to mitigate future tax liabilities (14:54–15:04).
- Potentially increase 529 plan contributions from $300 to $600 monthly once the mortgage is paid off (07:03–09:32).

3. Education Savings for Children:

Current Savings: $102,000 in a 529 plan, with plans to increase contributions (07:03–09:32).
Future Projections:
- If children attend SUNY schools, existing savings should suffice.
- Considering inflations and additional education costs, augmenting the 529 fund is advisable (09:42–10:30).

4. Managing Mortgage and Real Estate:

Mortgage Status: Nearly paid off, with only $30,000 remaining, expected within a year (07:06–07:14).
Real Estate Stability: Intends to remain in the same home to stay close to family, enhancing community and support systems (12:01–13:33).

5. Tax Considerations:

Pension and Taxes: Recognizing that pension income will be taxed, Mark advises increasing Roth 403B contributions to balance taxable income during retirement (14:54–15:04).

6. Estate Planning:

Current Status: Max and his wife have a will prepared through the school district but have yet to finalize it (13:13–13:55).
Mark’s Prompt: Emphasizes the importance of completing estate planning documents to secure their legacy and provide for dependents (13:13–13:55).

Key Insights and Takeaways

Robust Pension Plans: Being part of a strong pension system like New York’s Tier Four for teachers provides a significant safety net for retirement.
Aggressive Retirement Savings: Maximizing contributions to retirement accounts, especially Roth options, can optimize tax benefits and secure future financial stability.
Strategic Education Savings: Proactively managing 529 plans ensures funds are sufficient for children’s higher education, reducing future financial strain.
Debt Management: Accelerating mortgage payments frees up additional funds for investments and savings, enhancing overall financial health.
Comprehensive Estate Planning: Maintaining up-to-date estate documents is crucial for personal security and family protection.

Notable Quotes with Attribution and Timestamps

Jill Schlesinger:
"Sometimes we make the financial part work, but you've got to make the psychological part work."
(01:53)
Mark Tularcio:
"You have great benefits, and at the very least, the 200, it'll be taxed. You're going to have great health care. Not a problem."
(06:17)
Mark Tularcio:
"You're in great shape. I think your 12-year plan is a great one."
(14:43)
Mark Tularcio:
"If you over save for 14-year-old, like... that can pop into a Roth IRA for the kid, for the beneficiaries. You're in great shape."
(10:51)

Conclusion

Max’s retirement planning showcases a well-rounded approach, leveraging strong pension benefits, disciplined savings, and strategic investments. Jill and Mark’s advice underscores the importance of maximizing retirement contributions, managing debt, planning for education expenses, and preparing for tax implications. Listeners are encouraged to evaluate their financial positions, adopt similar disciplined strategies, and seek personalized advice to ensure a secure and fulfilling retirement.

For more personalized financial guidance, listeners are invited to visit jillonmoney.com and utilize the "Contact Us" feature to join future discussions or seek tailored advice.

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“Change your work, change your wealth, change your life.” – Jill Schlesinger

Transcript

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Mark Tularcio (1:53)

Welcome to the Jill on Money Show. It's Wednesday, June 18th and we are here trying to help you make better, perhaps more considered financial decisions. And that can mean something different from for each of you. You know, for some of you, we're getting a lot of calls about retirement or we're getting calls about I want to have better balance in my life. That seems to be a huge theme lately. I don't know. We got a lot of that during COVID Then it went away. Now, once again, Mark, you notice that we're seeing a bit of an uptick in the number of people who are saying like maybe it's that they have to go back to work five days a week. Maybe it's there's different demands by their bosses. Maybe it's fear of a recession this year, who knows? But we definitely are fielding more questions from people young and old, mid career, late career about finding more balance in their lives. And I know that that is very hard. We have A lot of type A listeners out there, I get it. But if you need some assistance or you need the permission structure to figure out a way to help your financial life, maybe give you some signals about how to find better balance, you know, sometimes we make the financial part work, but you've got to make the psychological part work. So if we can do our part, we're going to rely on you to do your part. So if you need some help, whatever is going on, maybe it's a big purchase, maybe you're ready to plunge into the housing market because 7% mortgage rates, that's about where we're going to be. And, and you just say you're gonna do it and you can afford it. If you need help, get in touch with us. Go to our website, jillonmoney.com, click the contact us button, write us that note. And if you would like to join us on the air, just check the box. Mark will do everything else while you are on the website.