On Track for Retirement in Seven Years?

Summary

Podcast Summary: "On Track for Retirement in Seven Years?" – Jill on Money with Jill Schlesinger

Introduction In the April 23, 2025 episode of "Jill on Money with Jill Schlesinger," hosts Jill Schlesinger and Mark Tularsia delve into the intricacies of retirement planning through a real-life listener call. The episode, titled "On Track for Retirement in Seven Years?", offers valuable insights into managing investments, debt, and preparing for a secure retirement.

Listener Call: Therese's Retirement Plan

Initial Overview (00:00 - 03:05)

The episode begins with Jill addressing common concerns about buying a home in California, emphasizing the importance of working with a Realtor to navigate the complex real estate market. Shortly after, the hosts introduce Therese from New Jersey, who calls in to discuss her plans to retire in seven years.

Therese's Financial Situation (03:05 - 09:33)

Therese, a 60-year-old full-time employee at a nonprofit organization, outlines her financial landscape:

• Debt: She has two mortgages—one on an $800,000 home with an outstanding balance of approximately $200,000 at a 2.3% interest rate, and a second mortgage on a $400,000 rental property with a $180,000 balance at a 7.6% interest rate.

• Investments: Therese has heavily invested in her 403B, contributing around $200,000, and maintains Vanguard brokerage accounts totaling approximately $400,000, which includes a significant position in Nvidia stock valued at $275,000.

• Retirement Assets: Inherited Roth IRAs amounting to $200,000 and additional 401(k) accounts totaling around $60,000.

• Income: Her current earnings are about $72,000 annually. Upon retirement, she anticipates receiving over $2,000 monthly from Social Security and $1,200 monthly from her ex-husband's pension. Additionally, her rental property covers one mortgage, while her personal mortgage requires a $1,600 monthly payment.

Managing Investment Risk (09:33 - 14:52)

Mark engages Therese in a discussion about her heavy concentration in individual stocks, particularly her substantial investment in Nvidia. He highlights the risks of having a large portion of her portfolio tied to a single stock, especially as she approaches retirement. Mark advises Therese to consider diversifying her investments to mitigate potential losses and stabilize her portfolio.

Key Insights:

• Diversification: Mark suggests reallocating a portion of Therese's investments from Nvidia to broader index funds to reduce risk.

• Professional Guidance: He recommends using Vanguard's Personal Service Advisor to assist with rebalancing her portfolio, emphasizing the importance of professional help in managing investments.

• Tax Implications: While acknowledging the tax impact of selling appreciated stocks, Mark reassures Therese that the benefits of diversification outweigh the costs, noting that it can lead to a more secure financial future.

Estate Planning and Trusts (14:52 - 15:48)

Therese shares her proactive approach to estate planning, mentioning a special needs trust for her disabled son and an ability account that provides ongoing support. She also considers transferring her condominium into the trust, pending approval from the condo association. Mark affirms that this strategy can effectively protect her assets and ensure they are managed according to her wishes.

Conclusion and Takeaways

The episode culminates with Mark summarizing Therese's situation, reaffirming that with strategic adjustments to her investment portfolio and continued diligent planning, she is well-positioned to retire comfortably in seven years. He encourages listeners with similar financial concentrations or retirement concerns to reach out for professional advice to secure their financial future.

Notable Quotes

• Mark Tularsia (04:03): "Holy smokes. In one stock."

• Therese (07:20): "I have a disabled trust fund and he is enrolled in an ability account."

• Mark Tularsia (09:53): "I could convince myself that, you know, you've got a 1.7 million dollar portfolio."

• Mark Tularsia (11:12): "Rebalancing over time... that's the prudent way to invest."

Key Insights and Actions for Listeners

1. Diversify Investments: Avoid over-concentration in a single stock or asset type. Diversification can protect your portfolio from significant losses due to market volatility.

2. Seek Professional Advice: Utilize financial advisors and services like Vanguard's Personal Service Advisor to help manage and rebalance your investments effectively.

3. Estate Planning: Ensure that your estate documents, including trusts, are up-to-date and reflect your current financial situation and family needs.

4. Proactive Retirement Planning: Regularly review and adjust your retirement plan to align with your financial goals and market conditions, ensuring a secure and comfortable retirement.

Final Thoughts

"On Track for Retirement in Seven Years?" provides a comprehensive look into the challenges and strategies involved in preparing for retirement. Through Therese's story, listeners gain practical advice on managing investments, reducing debt, and planning for a stable financial future. Jill Schlesinger and Mark Tularsia adeptly guide the conversation, making complex financial topics accessible and actionable for their audience.

Transcript

[Jill Schlesinger]

Buying a home in California can certainly feel intimidating. We hear from listeners all the time throughout the state, and they want to know, where can they even start? Many of them find that turning to a Realtor changed everything. Realtors can help buyers understand what they can afford. They can explain all of the steps that are involved in purchasing a home, and they can walk you through every detail, from making an offer to closing the deal. Working with a Realtor can help help you feel less alone or unsure about the process and that peace of mind that is the power of having a Realtor by your side. Whether you're ready to move or just starting to dream, don't go it alone. Don't let what you don't know stop you from starting your next chapter. Find your [e-mail] that's championsofhome.com hey Fidelity.

[Mark Tularsia]

Can I get a second opinion on stocks in the Fidelity app?

[Jill Schlesinger]

With Fidelity, it's easy to get an outside opinion from independent experts in a single score. And then when you're ready, trade US stocks and ETFs with no commissions.

[Mark Tularsia]

That's right.

[Jill Schlesinger]

I am always right.

[Mark Tularsia]

Investing involves risk, including risk of loss, online US equity trades and ETFs and retail fidelity account sell order, assessment fee not included, some account types and securities excluded. [e-mail] commissions Fidelity Brokerage Services, LLC member NYSE SIPC welcome to the Jill on Money Show. It's Wednesday, April 23rd, and we are here answering your financial questions. We is me and my cohort, Mark Tularsia. We're both certified financial planners. We love chatting with you about whatever is going on in your life that happens to impact your money. So that's pretty much everything. We're voyeurs and we're also trained as certified financial planners. So it's like a perfect match here. And if you're going through something, maybe markets have been driving you crazy. Maybe there's a big decision to make. Maybe you're weighing different alternatives. Maybe you're trying to buy your first house. Whatever it is that's going on, get in touch with us. I can tell you pretty much guarantee this, that we'll at least help guide you to get to a different place or at least to consider different pathways to get you where you want to go. Go to jillonmoney.com and in the upper right hand corner there's a Contact Us button. Click it and write us a note. And if you'd like to join us live on the show, check the box. Mark does everything else. And while you're on the website. Just bookmark it. We've got all sorts of great stuff there, including our Jill on Money Live service, which gives you access to quarterly live webinars, bonus audio and video content, the entire back catalog, all for the bargain basement price of 45 bucks for the next 12 months. So check that out. That's Jill on Money Live. Okay. Today we are joined by Therese, who's on the line from New Jersey, the Garden State. Hello, Therese. How are you? What can we do for you?

[Therese]

I am retiring in seven years.

[Mark Tularsia]

Congratulations. But wait a second. Seven years? I thought you were about to say seven months.

[Therese]

No, seven years. So I have a seven year plan. I'm just trying to retire with, you know, as much money as possible to live a simple life, but a full and simple life.

[Mark Tularsia]

How about that?

[Therese]

Exactly. Yes. So I have zero debt other than two mortgages. I have been investing pretty heavily in my 403B. I work for a nonprofit. However, I do have some Vanguard accounts. And one of my tech stocks has been doing very, very well. So it has declined about 80 grand in the, I don't know, few months. With a more simpler type of AI that came out, it kind of.

[Mark Tularsia]

So maybe you own Nvidia in this account?

[Therese]

Yes.

[Mark Tularsia]

Okay, so how much is the position worth right now?

[Therese]

275,000.

[Mark Tularsia]

Holy smokes. In one stock. Okay, wait, let's go back. Let me. Before we do that, let me go back in time. How old are you, Therese?

[Therese]

I am 60.

[Mark Tularsia]

You're working right now full time, right?

[Therese]

Correct.

[Mark Tularsia]

Are you married? Single partner?

[Therese]

Single.

[Mark Tularsia]

Okay. And how much do you earn?

[Therese]

About 72.

[Mark Tularsia]

Okay. And will you be entitled to a pension when you retire?

[Therese]

No, but I have my ex husband's pension.

[Mark Tularsia]

Oh. I mean, that's. That's one case where I. Like the ex husband.

[Therese]

Yeah.

[Mark Tularsia]

Just kidding. When will you get that?

[Therese]

I'm already receiving some of it now. He's much older than I am. I have full benefit if he passes before me. And also I am entitled to his life insurance then as well, still, as part of the divorce agreement.

[Mark Tularsia]

Okay. How much is the pension amount monthly?

[Therese]

I'm getting about 1200amonth.

[Mark Tularsia]

Okay. That's a nice amount of money. Okay, so how much money have you squirreled away into that 403B?

[Therese]

Probably about 200.

[Mark Tularsia]

And then you've got the Vanguard accounts. What's in those accounts?

[Therese]

Oh, I would say a total of about 400, which with the in video being 275 of that. And I'm looking to see if maybe My question is, maybe I should be moving it around or take cashing some out, putting some in cd, putting it in a safer market, because I've seen it decline. Just that stock alone, about 80,000.

[Mark Tularsia]

Yeah, well, I mean, listen, it was on some wild ride. It's crazy. How did you know to buy that stock? I mean, I'm not asking you to, like, share every secret, but, like, what about that? What drew you in?

[Therese]

Well, I was looking for it. Investment. And that was recommended to me.

[Jill Schlesinger]

Really?

[Mark Tularsia]

It's impressive. Okay, you own your home.

[Therese]

Yes.

[Mark Tularsia]

And what's it worth?

[Therese]

One is worth about 800,000 and the other about 400,000.

[Mark Tularsia]

And you said there's two mortgages, so on the 800, what's left on that mortgage?

[Therese]

You know what? I don't. I don't have that total amount now. I would have to say it's probably under 200,000 because we bought it.

[Mark Tularsia]

How about. I'll say 200.

[Therese]

What the hell?

[Mark Tularsia]

Yeah, what? Do you know the interest rate?

[Therese]

Oh, yes. 2.3.

[Mark Tularsia]

The second home, is that a vacation home or is that a rental property?

[Therese]

It's a rental property.

[Mark Tularsia]

And there's a mortgage on that also?

[Therese]

Yes.

[Mark Tularsia]

You know how much that is approximately? Just give a guess.

[Therese]

I would say about 180.

[Mark Tularsia]

Okay. Also low rate.

[Therese]

No. 7.6.

[Mark Tularsia]

Ew. Did you just buy this?

[Therese]

Yes, I did. It was. I have a disabled son who needed housing, and so I bought it as investment property. He lives there with a roommate and they pay everything.

[Mark Tularsia]

Okay, and is that your only child? Do you have others?

[Therese]

I have another as well.

[Mark Tularsia]

And how old?

[Therese]

My children are 30 and 35.

[Mark Tularsia]

Okay, got it. And do you need to. Besides this house, which is obviously a real investment, do you need to provide ongoing help for your son for who is disabled?

[Therese]

I do not. He has a community based waiver in Pennsylvania, so that provides supports. I have a disabled trust fund and he is enrolled in an ability account.

[Mark Tularsia]

Okay, great. Oh, that's awesome. Okay, so you've got the special needs trust, he's got the ability account. So that's very good. And the other one's okay. On. On there on their own?

[Therese]

Yes, yes, yes.

[Mark Tularsia]

All right, so is there any other money that I'm not. That we have not Talked about besides 403B, the brokerage account, are there any old retirement account floating around or Roth accounts somewhere?

[Therese]

Yes, there's. There's a couple of. Of inherited Roth IRAs from when my mother passed that I am having sent to me monthly over a period of time. I'm Hoping to still continue to receive some of that after I retire in seven years, that'll go about another two years. So I would say total of those two accounts would, would be close to about 200,000 as well. And then I have a couple of other 401ks that are probably along the lines of like 60, 60,000 right now.

[Mark Tularsia]

How much money do you spend?

[Therese]

About 3,200amonth.

[Mark Tularsia]

That's it? That's it.

[Therese]

Well, well that's not counting the mortgages, but yeah. So that's like I don't have a car payment. I'm. We're talking my insurance. You know, I put everything on one credit card, a cash back credit card, I charge everything. And then I pay that off every month. And then so there's about 32 to 35 do 500amonth. And then on top of that are the two mortgages. One is paid for with my tenants and the other is 1600amonth.

[Mark Tularsia]

Any. Oh wait, you know what I wanted to ask you, you mentioned that insurance policy. How much is that worth, do you think?

[Therese]

It's a million dollar policy.

[Mark Tularsia]

How old is the ex?

[Therese]

He's 71.

[Mark Tularsia]

I mean that is a huge chunk of money in the future, obviously.

[Therese]

So. Yes, that was part of my divorce agreement.

[Mark Tularsia]

Okay, in seven years when you do retire, what will your Social Security benefit be?

[Therese]

I was self employed for 13 years, so the last I checked it is going to be just over 2000.

[Mark Tularsia]

I mean you're in very good shape because so you've got your ex's pension, your Social Security and then all these assets.

[Therese]

Yes.

[Mark Tularsia]

So you're going to be fine. It's weird to me because. Tell me about the allocation of the money that's in the 403B and the inherited IRAs. I want to know like are you 100% in stocks? Is that why this is like you're asking me about should I go to cash after being this big risky investor in this one stock?

[Therese]

Oh well, with my Vanguard I am. Yeah. So I just see the big number and I'm just afraid that that is that I'm missing an opportunity to maybe take that Nvidia and do something with it.

[Mark Tularsia]

Well, let's look at this right now you've got 200 in your 403B, two seven, 400 in. Oh wait, I forgot to ask you the rest of the Vanguard account, the other 125, what's that invested in? Also stocks, individuals. Yes.

[Therese]

Yes.

[Mark Tularsia]

Okay, so it's 400 is all stocks. And in your 403B, how much of that is stock versus bond?

[Therese]

It's conservative, so it's more bonds. It's not as risky.

[Mark Tularsia]

Of the 400 of the. So we have the 400,000 of Vanguard is all stocks. And you said the conservative part of the 403. B. How much of that, how conservative is it? Like, do you know the allocation of that?

[Therese]

I didn't bring that to the table. And do you have a sense like.

[Mark Tularsia]

Half and half, half stocks, half bonds.

[Therese]

Or I would say maybe 40% bonds.

[Mark Tularsia]

Okay.

[Therese]

And then the Vanguard is not 400, it's more like 380.

[Mark Tularsia]

Okay, don't wor. That's fine. That's fine, that's fine. Okay. I have an idea.

[Therese]

Okay.

[Mark Tularsia]

There's two ways to think about this. One is to say you got way too much in the stock market because of your age and when you're going to need your money. And. But I do know you're going to get that million dollars.

[Therese]

You don't know when.

[Mark Tularsia]

I don't know when. I know, but I know. And she also has the inherited Roth iras.

[Therese]

Yes.

[Mark Tularsia]

I think if you wanted to be prudent, I know you probably didn't want to sell the Nvidia when it was like sky high because you're like, I don't want to pay taxes, but I'd pay some taxes. You know, it's, it's a funny thing. Like, if I add everything up, like the million, the Roths, and then, you know, you're 385,000 and then you're 200,000. Like, I could convince myself that, you know, you've got a 1.7 million dollar portfolio. You could keep, you know, 100 grand in Nvidia, but you don't really have that million yet. And it's just such a massive exposure. Why not take half the money and reallocate it? And you're at Vanguard. Are you comfortable buying index funds on your own?

[Therese]

No, I would need some assistance in that.

[Mark Tularsia]

That's so funny. It's like I can buy individual stocks and, like, go out there on a limb. I do that on my own, but I need actually help with the index funds. What about if you did? Have you looked into the Vanguard personal service advisor?

[Therese]

I have not.

[Mark Tularsia]

So usually at Vanguard, they have a plan where if you have a certain amount of money, you can avail yourself to an advisor. It has a minimum dollar amount of $50,000. I think it used to be. It might be more. Now what happens is it's like you get to work with an advisor for cheap. But what you could do is you could talk to them and say, I would pay 0.3% of your Vanguard account and say I really need some help selling a chunk of my Nvidia stock and spreading it out over a few, not 10 funds, but a few different funds. So I might want a U.S. stock market index fund, an international index fund and a intermediate term bond fund and call it a day. I mean, yeah, you're gonna have to pay capital gains. So what? You know you're gonna end up paying 15% of what your gain is. It's not that bad.

[Therese]

Okay.

[Mark Tularsia]

It really isn't. And that way you can be clear eyed and say, I'm happy to let some of this money stay, you know, at risk. It's fine. But you don't have to worry about the ups and downs every day anymore. And then your seven years is going to be, I do think as you approach 67, you know, there's going to be many times, I just think you should be rebalancing over time. Like every time you're looking at this accounts, let's say once a year, twice a year, you start to say, you know, are there any gains? Are there any losses? Should I take some money? Should I reallocate? And you ask yourself these questions. That's the prudent way to invest. To just leave it all there forever is not really going to serve you. And then you, then you're subject to these huge ups and downs. I think you'd be better off taking some of the money off the table, saying, I may not have sold the top, but boy, what did you put into it?

[Therese]

Oh, I can't even remember.

[Mark Tularsia]

Like it's going to be, I'm sure you have, you're going to pay this big chunky tax and you're going to say, I'm lucky I paid the tax. That means I made money.

[Therese]

Right, Right.

[Mark Tularsia]

So not so bad. Right?

[Therese]

Not so bad. And then I could also going with the Vanguard personal service advisor. I could check in and do that every year.

[Mark Tularsia]

Yep.

[Therese]

Rebalance every time.

[Mark Tularsia]

Yep. And then just in the loss. Exactly. And then, and say like I want to work through some of my numbers with you do like just what you're doing with us.

[Therese]

Yeah, yeah. Because I want to get to that point in seven years where I'm comfortable and can continue my modest, comfortable lifestyle here at the Jersey shore.

[Mark Tularsia]

I love it. That's good for you. And, and the only other thing I know you said you had your, your, you had your estate documents done because you have that special needs trust. Is everything up to date now?

[Therese]

Yes, absolutely. I just updated and I was thinking about putting the condominium in to that special needs trust.

[Mark Tularsia]

Oh, the condo can go in there.

[Therese]

Yeah. So I just have to check with the condo association.

[Mark Tularsia]

Yeah.

[Therese]

Allow that. But sometimes my attorney said that, you know, they would, you know, could do.

[Mark Tularsia]

Right. So that he could have that house shielded.

[Therese]

Correct.

[Mark Tularsia]

I get it. Okay. That makes sense. I don't think it's that hard to do if. As long as they allow it. Sometimes they have a fee to retitle it, but whatever.

[Therese]

Like a $600 fee. It wasn't a big deal.

[Mark Tularsia]

Exactly. I think that makes sense for you. I really do. Okay. All right. Therese in New Jersey, I think we're done with you. Keep us up to date. Seven years is a long time. God willing, we'll still be here and you can tell us all about what happens next. So if you are like Therese and you have this high concentration in one holding, one stock, one bond, one mutual fund, and, you know you need to do something with it, but you need some help to try to wind it down. Get in touch with us. Go to our website, jillonmoney.com, click the contact us button, write us the note, and let us know if you'd be willing to come on the air live by checking the box while you're on the website. Sign up for the free weekly newsletter. Check out my books, the Great Money Reset, and of course, the dumb things smart people do with their money. And we ask that if you know somebody who wants to kind of get a little bit more of a start in their investing and financial literacy journey, turn them onto our sister podcast that's called Money Watch, and we drop it on Saturdays and Sundays, so check that out. You can subscribe to this show and Money Watch on the Odyssey app or wherever you find your favorite podcasts. Try to lift someone up. Change your work, change your wealth, change your life. Thank you for listening, and we'll talk to you tomorrow. Hey, gang.

[Jill Schlesinger]

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[Mark Tularsia]

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[Unknown]

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