Jill on Money: “Pension and Renovation Decisions”

Date: November 17, 2025
Host: Jill Schlesinger (A)
Guest/Caller: Eric from New Jersey (B)

Episode Overview

In this episode, Jill Schlesinger answers listener Eric’s questions about two big financial crossroads: executing a major home renovation and deciding when to claim a pension from the Pension Benefit Guaranty Corporation (PBGC). Jill guides Eric through cash flow planning, maximizing tax efficiency, legacy property management, and how these choices support his retirement. The discussion is filled with real-world financial wisdom, humor, and a thoughtful exploration of living a fulfilling retirement.

Key Discussion Points & Insights

1. Renovation Planning and Budgeting

[03:00–04:00]

• Eric is planning a substantial renovation ($240,000–$300,000) on his primary residence, which is a mortgage-free condominium worth $850,000.
• Jill immediately suggests budgeting for the upper end:

  “Let’s just agree it’s going to cost $300,000. Anyone who’s ever done a project knows... go high.” (Jill, 03:17)

• They clarify that the condo is one of Eric’s properties and that he will move out during renovations, possibly into an inherited family home.

2. Pension Benefit and Claiming Strategy

[04:01–05:50 & 13:06–14:40]

• Eric has a pension with PBGC from employment 20 years ago (hospital system taken over due to insolvency).
• At 66, pension pays $1,356/month. If he waits until 76, it grows to $4,592/month, growing at 10.7% starting this year and then 0.5% annually.
• Jill explains PBGC basics and the tradeoffs of deferring:

  “This really does mean people get much less than promised... but deferring those 10 years makes a big difference [for you].” (Jill, 05:08)

• They ponder when to claim, noting longevity risks and Eric’s good health, concluding waiting until 70 makes sense unless life needs change:

  “Waiting is always great. But if you just want the convenience of cash flow now... that’s fine too.” (Jill, 14:25)

3. Financial Snapshot and Distribution Strategies

[06:07–07:01 | 08:58–10:25]

• Eric provides a thorough review of his holdings:
  • 403(b): $2.15M
  • Roth IRA: $830K
  • HSA: $110K
  • Inherited IRA: $93K (inherited in 2024; must empty within 10 years)
  • Brokerage: $275K
  • Cash: $70K
• Monthly after-tax income: $7,800, drawn from pre-tax accounts, with Social Security plans to defer until 70 for higher benefit ($4,600/month at 70).
• Monthly need is about $8,000, comfortably met by current distributions and rent on inherited family house.
• Renovation funding: Eric has already started pre-planning, spreading withdrawals across years and using the brokerage account, aiming to manage tax hits.

  “I thought about this for a couple of years... take $100K a year and then bank the cash.” (Eric, 11:15)

4. Inherited Family Property and Rental Management

[07:06–08:52]

• Inherited home valued at $550,000 with $100,000 mortgage, currently rented to a family member for $2,000/month. Mortgage and taxes total $2,300/month.
• Family has agreed to keep the house for at least two years post inheritance. The arrangement is flexible and driven by family connection:

  “It’s convenient... that’s where we grew up. Good to go back, nieces and nephews use it. I’d rather keep it in the family.” (Eric, 08:07)

5. Tax Planning and Withdrawal Sequencing

[09:47–11:52]

• Jill emphasizes drawing from pre-tax retirement funds now to moderate future Required Minimum Distributions (RMDs), especially as Social Security and potential pension would significantly raise taxable income in later years.

  “At this point, you’re sort of sitting there in the 22–24% tax bracket. The question is when we think about doing the renovation... we want to spread it out.” (Jill, 10:15)

• Jill cautions Eric not to move money unnecessarily between tax-deferred and brokerage accounts (to avoid “paying tax twice”), and to prioritize cash for near-term needs.

6. Retirement Lifestyle and Emotional Transitions

[15:21–16:42]

• Eric reflects on the unexpected transition into retirement after a layoff, spending time caregiving for his mother, and now considering travel, art collecting, and volunteering:

  “Really trying to figure out on a day to day basis what I’m going to do in the future. I collect art... I think about volunteering as well.” (Eric, 15:21)

  • Jill highlights the emotional side of retirement and encourages Eric to seek engagement and community.

7. Estate Planning

[17:03]

• Eric confirms he’s working with a trusts and estates attorney to update his documents, following Jill’s frequent advice to her listeners.

Notable Quotes & Memorable Moments

• Jill’s humor about renovation budgets:

  “Let’s just agree it’s gonna cost $300,000. Right? Anyone who’s ever done a project knows...” (03:17)

• On PBGC pension strategy:

  “It’s so weird because... sometimes this means people get much less than promised. In Eric’s case, it probably is lower, but if you defer those 10 years, there’s a big difference.” (05:08)

• On tax-efficient withdrawals:

  “I’m not so crazy about taking the money out of the retirement account, then putting it in a brokerage. I feel like you’re kind of paying tax twice that way. I would maybe just let it sit in cash.” (Jill, 12:52)

• On life after involuntary retirement:

  “I never feel happy when it’s someone else’s decision. On the other hand, you’re right. What a gift.” (Jill, 16:42)

• On legacy and family:

  “If you’ve got a chunk of money that you’ve set aside, you don’t have to go back to work to do a renovation.” (Jill, 17:00)

Key Timestamps

• [03:00] – Eric introduces home reno and pension questions
• [04:42] – PBGC pension decision details
• [06:07] – Eric reveals complete financial snapshot
• [08:07] – Family home and rental dynamics
• [09:47] – Social Security and RMD planning
• [11:06] – Renovation funding strategy
• [13:12] – Jill’s summary advice on timing and sequence
• [15:21] – Eric’s reflections on post-career and future plans
• [17:03] – Eric confirms estate planning underway

Conclusion: Jill’s Closing Thoughts

Jill reassures Eric that he is in solid financial health, can proceed with his renovation without going back to work, and commends his forward-thinking strategies in tax planning and family stewardship. She encourages him to stay engaged in retirement and applauds his care for his family and community.

“You’re in such good shape. It’s really amazing... continue your journey and figure out how you’re gonna be a docent or something fabulous. Keep collecting art and just stay engaged.” (Jill, 17:13)

This episode is ideal for listeners interested in complex retirement planning, pension optimization, tax strategies, and meaning-making in the next chapter of life.