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

1. 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.
2. Aggressive Retirement Savings: Maximizing contributions to retirement accounts, especially Roth options, can optimize tax benefits and secure future financial stability.
3. Strategic Education Savings: Proactively managing 529 plans ensures funds are sufficient for children’s higher education, reducing future financial strain.
4. Debt Management: Accelerating mortgage payments frees up additional funds for investments and savings, enhancing overall financial health.
5. 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