Podcast Summary: Peace of Mind With Allocations Heading Into Retirement

Podcast: Jill on Money with Jill Schlesinger
Host: Jill Schlesinger, CFP®
Episode Date: September 25, 2025

Overview

This episode centers on how to approach asset allocation and investment strategy leading into retirement, especially when pensions and other reliable income streams are present. Jill takes a listener call from Mary in Ohio, who, along with her husband, is nearing retirement and wants to understand how, when, and whether to adjust their investments for the years ahead. The conversation is a blend of practical advice, reassurance, and big-picture strategy—ideal for anyone nearing retirement or managing a pension and significant savings.

Key Discussion Points & Insights

1. Mary’s Retirement Situation and Goals

• Timeline: Mary is one year from retirement (age 55), her husband is three years away (age 58).
• Income: Both have pensions; Mary’s is $73,000/year (no COLA), husband’s is $52,000/year (2% COLA).
• Expenses: The couple spends about $70,000/year, including travel.
• Social Security: Only her husband is eligible—projected at ~$900/month at 62, higher if delayed.

Quote:

“I'm sitting here. Wait, what? Holy. So this is more than enough.” — Jill (05:11)

2. Their Savings and Allocations

• Roth IRAs: ~$300,000, mostly in target date funds (2030, 2035, 2040).
• 457 Plans (Roth): ~$240,000, all in large cap stock index.
• Traditional & Rollover IRAs: $35,000 and $19,000.
• Brokerage Account: $74,000 in VTSX (Vanguard Total Stock Market Index).
• Cash Reserves: $20,000 in high-yield savings, $65,000 in laddered CDs, $45,000 in I Bonds.
• Home Ownership: House worth $330,000, recently paid off.

Quote:

“We have laddered these target dates. I don't know if that's a thing, but I started doing that.” — Mary (07:13)
“You got plenty of cash on hand. That's great.” — Jill (08:01)

3. Current Investment Approach

• DIY Management: Mary handles all investments, having moved on from an advisor 25 years ago.
• Comfort with Risk: Mary feels comfortable with her current risk level, especially given guaranteed pension income.

4. Jill’s Core Guidance for Retirement Allocations

• Emphasizing Flexibility: No rush for drastic changes; focus on comfort and simplicity.
• Transition Out of Target Date Funds: Suggests considering direct investments in low-cost index funds (US stocks, international stocks, and bonds) rather than target date funds for more control and lower fees.

Quote:

“If you wanted to look at 10 years from now and say that's really when I think I'm going to need most of some of this money...I would just be owning a large cap stock index like the S&P 500...I'd own a bond index, I'd own an international index, and I don't think I would own a target date.” — Jill (10:23)

• Suggested Allocation:
  • Now: ~70% stocks / 30% bonds
  • In 5 years: Move to 65/35
  • As retirement nears: Possibly 60/40 (“just to smooth out the variations”)
• Handling Existing Accounts:
  • Liquidate pre-tax IRA balances after retirement but before Social Security to “dribble them out” at lower tax brackets.
  • No urgent change to brokerage account; continue adding to it or consider new CDs as rates allow.
• Decision Timing: No urgent or wholesale changes necessary; adjustments can be gradual.

Quote:

“There is no urgency here at all. You're in great shape.” — Jill (16:56)

5. Emotional Side of Retirement & Investing

• Financial Decisions are Emotional: Jill underscores that financial choices are rarely just math—they’re influenced by feelings and comfort.
• Communicating with Spouses: Jill checks in to ensure Mary’s husband knows enough to take over if needed.

Quote:

“Can we just make sure he under, like if you, God forbid, drop dead tomorrow, that he would understand what to do?” — Jill (13:59)

6. Advice for Younger Listeners

Mary offers encouragement to young teachers (or anyone starting out):

Quote:

“Do whatever you can. Start with $25 a month and start investing. That's what I did. And I'm just shocked at how much we have and how lucky we are.” — Mary (16:51)

Notable Quotes & Memorable Moments

• On the Power of Forced Savings:

  “The fact that you're forced to put that money away is really different...when we force you to do it, you see, it pays off in the end.” — Jill (03:38)

• On Not Needing Major Changes:

  “If you like your target date funds, then fine...I'm not sure you're going to make a big mistake either way.” — Jill (11:33)

• On Risk Comfort:

  “You do have risk on the table, but you’ve weathered a lot of storms. So how do you feel about it?” — Jill (13:29)

Timestamps for Key Segments

• [02:31] Mary introduces her retirement scenario
• [04:27] Age, pension, and health benefits information
• [06:16] Deep dive into savings and investment account balances
• [07:38] Home ownership, emergency fund, and cash reserves
• [09:09] Income, health, and Social Security eligibility discussion
• [10:23] Jill’s detailed advice on allocations and managing target date funds
• [13:29] Discussion on risk tolerance and involvement of Mary’s husband
• [14:30] Practical steps for reallocating away from target date funds
• [16:51] Mary’s advice to young teachers and summary affirmations

Tone and Closing

Jill’s conversation is consistently reassuring, practical, and friendly. She balances sounding protective of Mary’s interests (“I don’t want to complicate your life”) with empowering her to take as much or as little action as feels comfortable. The episode ends with positive encouragement for all near-retirees: think ahead about allocations, but don’t feel pressure to overhaul everything—especially if unique advantages like pensions are on your side.

For more insightful listener questions and evidence-based financial advice, visit jillonmoney.com.