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This message comes from Jill on Money sponsor Charles Schwab. Independent Financial Advisors focus on building a relationship with you that goes beyond your portfolio. As fiduciaries, they must act in your best interest always. The relationship they have with you will be based on transparency and trust, and they're committed to bringing you advice that fits your values. That's why Schwab is proud to support them. Visit findyourindependentadvisor.com whether you're hosting the whole family or keeping it cozy with friends, Whole Foods Market has everything you need to make Thanksgiving feel effortless and delicious. You'll find great prices on all your seasonal favorites. And the 365 by Whole Foods Market brand brings the trusted quality you love at prices that make every dish a little brighter. Start with a turkey, no antibiotic ever. Birds are just $1.49 a pound with prime or upgrade to organic for $2.99 a pound. Terms apply. Then stock up on pantry staples like condensed soups, instant mashed potatoes and organic baking spices to make your favorite recipe shine. And for easy entertaining, something I love, grab three 65 brand frozen appetizers like the Quiche Trio, Butterfly Shrimp or breaded Calamari, ready to serve in minutes so you can spend less time in the kitchen and more time at the table. Enjoy. So many ways to save on your Thanksgiving spread at Whole Foods Market. Welcome to the Jill on Money Show. It is Monday, November 17th and we are here trying to help you make better, better and sometimes just less bad financial decisions. And the way we do that is we actually ask you to do a tiny bit of work. Go to our website jillonmoney.com, click the contact Us button. Write us a note if you don't think you want to join us live. Give us a lot of detail and one piece of information that we always ask about that I think sometimes people forget to put in their question. If it's some sort of planning question. Don't forget to tell us how much money you're spending every month. That's a biggie. Only you can tell us that one. So give us a lot of detail if you don't want to come on live with us. If you do want to come on live, you can go a little bit lighter on the detail. Just give us the general sense of what's going on and you check the box and Mark does everything else because he's just that way. He's the best. All right. Now today we are joined by Eric in New Jersey, the Garden State Eric of course, being very close friends with Bruce Springsteen and able to communicate everything important about the Garden State. So how are you, Eric?
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I am very well, Jill. Thank you for having me today.
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A
Of course. What's going on? How can we help you?
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B
So, for me, I have a couple of questions, and they're a little disparate. The first is I want to complete a home renovation. That renovation is going to cost between 2, 240,000 and 300,000.
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A
Let's just. Let's be. Let's agree that it's going to cost 300,000. Right? I mean, come on. Right. It's like anyone who's ever done a project knows whatever your range is, go high. Okay, renovation of 300,000. Now just give us a little bit more detail about the house. So what's the house worth right now?
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B
So the house is worth 850,000, and it's a condominium.
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A
Oh, okay. And is there a mortgage on it?
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B
There isn't. Oh, okay.
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A
Oh, I see. Multiple houses. So this is. We're gonna. We're gonna spend 8, 300 on our 850 grand condo. That's the number one first part of your question. What's number two?
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B
So number two is, is that I am eligible for a pension from an institution that I worked at about 15 years ago. No, actually 20 years ago. And it's with the Pension Benefit Guarantee Corporation. And so my question is about when I should take it. If I take it at age, I'm 65 years old, and if I take it at 66, it's worth $1356. But if I wait until I'm 76, it's worth $4592 a month.
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A
Wait, but it's with Pension Benefit because the company was underfunded and it was taken over.
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B
Yes, it was a hospital, and it was.
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A
Okay, but you're guaranteed that if you wait until 76, you get this extra three grand a month.
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B
Yes. And it rose. It grows starting this year 10.7% and then a half a percent each year thereafter.
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Wow. So everyone listening. Pension Benefit Guarantee Corporation means that the company, the hospital, the institution cannot pay its obligations. And this other organization kind of comes in. And sometimes, I mean, it's so weird because this is an old employer for you, but sometimes this really does mean that people get much less money than they had been promised. And in Eric's case, it probably is a lower amount at age 66, but if you defer those 10 years, there's a big difference. So, okay, so I got the Pension numbers. Okay, what's next on our hit list of Eric's financial questions?
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B
So I want to be able to do the renovations and all of that without needing to go back to work.
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A
All right, And. And you will not. You will not. Damn it, Eric, you're retired already, right? So this is your. You're going to tell us a little bit of a rundown on, like, what you've saved, please.
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Absolutely. So my Pre tax retirement 403B is 2.15 million.
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Woo, baby. Okay.
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I have Roth assets of 830.
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Okay, Roth, great.
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B
I have an HSA of 110.
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A
Mm. Okay.
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B
I have a inherited IRA of 93.
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A
When did you inherit that? Are you subject to getting it out within 10 years?
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B
Yes, I inherited it in 2024.
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A
Okay. Okay, got it.
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B
I have a brokerage account of 275, and in cash I have 70.
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A
I didn't ask you an important question. Are you married, partnered, single? Where are you in the spectrum of relationship?
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B
In the spectrum? I'm single.
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A
Okay. Do you have other property?
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B
Yes, I do. I have an inherited property that is worth 550,000.
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A
Okay.
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And. But there's a mortgage of 100,000.
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A
Is that being rented now? Are you going to sell it or what's happening?
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B
I have a family member living in it, and they pay rent, and it's about 2,000amonth.
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A
2,000 after the expenses, or does the 2,000 cover the mortgage, the property taxes, and the homeowners?
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B
No, no, the 2000 is just the contribution. And so I apply it toward the mortgage. The mortgage with taxes is 2,300amonth.
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A
All right, so you're a little bit out of pocket on this, but somebody's living there. It's being taken care of. You're doing a good thing. And what do you think's going to happen? Do you want that family member to be able to buy that house from you, or do you. What do you think?
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B
I mean, if it's possible, but I'd rather sort of keep it in the family. My mother passed away two years ago, and I. No, I'm sorry. Last year. And I decided, along with my brothers and I have two siblings, that we would keep it for at least two years and then make a decision about what we're going to do. But it's a convenient place for us since that's where we grew up. It's good to go back. And I have nieces and nephews there and great nephews as well. Well.
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A
Oh, that's good. I mean, that sounds Like a good. That sounds like a. And maybe as they kind of like are a little more secure in their lives, they can start paying more like market based rent to cover. So at least you're not out of pocket on it, right?
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B
Absolutely.
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A
Okay. So Eric, what is the source of your income right now?
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So my income, I receive a monthly payment of after taxes, so about $7,800.
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Wow.
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From my pre tax retirement.
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Okay, meaning you've set that up or did you buy an annuity or what is that just, you're taking that yourself?
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Correct. I set it up so that they send me a check every month.
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Okay.
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Pre tax, it's about 10,500.
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Okay. And this covers your need?
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Yes, well, my need is about 8,000amonth.
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Okay.
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Yeah. So that along with the rent that I receive, sort of covers my monthly net.
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Okay, that's great. And so what about Social Security? When do you think you'll claim?
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B
You know, I was thinking about waiting until I'm, I'm 70 to claim that and try to, you know, take out some of the pre tax retirement so that my RMDs aren't as great as they could be when I'm 75. At 67, I would receive a monthly payment of $3,700 rounded. And at 70, about 4,600.
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A
Wow. I mean, you're in such great shape. I love this game plan, by the way. I love it, love it, love it, love it. I think it's really, is very smart. I get it. You have to like pay the taxes, right? I mean, there's no way around it. You're going to have to pay the taxes one way or the other. But at this point, you know, you're sort of sitting there in the 24ish, 2224ish tax bracket. Right. The question I guess is when we think about doing this renovation, like give me the time horizon where the money would have to. Let's say you had plans in place. You want to do the work. First of all, are you living in a big huge project that's going to cost $300,000? You have to move into the inherited house.
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I'm going to move into the inherited house.
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Okay, so you're going to move out. And so this would be for next year, right?
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Yes.
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Are you thinking that maybe you would take some brokerage? Are you going to pull it all out from the retirement account? Like where do you think you want to kind of take the money from?
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I thought about this for a couple of years. So last year I took out probably $150,000 to sort of. I thought I'd take out 100,000 a year and then bank the cash, but I took some of that and I put it into the brokerage account. So that 100,000 that I took out last year is in the brokerage. And then my thinking was, how much can I take out this year? Yeah, maybe another hundred thousand.
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Yes.
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And then split it between this year and next year.
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Correct. That's ex. Yes, that's what I'm thinking of, what I need. Yeah, that's exactly what I'm thinking. That we want to spread it out, that, you know, we kind of get this done in the next couple of months. Then you have your 300 grand that's sitting there. And, you know, obviously you have to spend the money. So you don't want to have it like invested in high risk stuff. If you have. If the money in the brokerage account is like all stocks, like, I hit it big. I did my brokerage. But like, now we gotta settle down, right? And don't forget, you also have, you know, we also have that inherited ira. We gotta get that money out within. Before you start claiming Social Security. We want that money out also because there's more of a. There's a clock on that one. Right. So I think that's a great game plan. And I don't think you have to go back to work. Mark, does Eric have to go back to work? He does not want to go back to work. Almost certainly. No. I mean, the other question. I'm not so crazy about taking the money out of the. 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. But the other thing is the timing of the pension, right? Yeah. How long does it wait? So the pension, is there any risk? I mean, there's. Once the Pension Benefit Guarantee Corporation comes into the picture, there's no further risk. The risk has already happened, Right. That the company went or the hospital went broke. Is that right?
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That's my thought, yeah.
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Yeah. So, I mean, I'd wait if I could. And you have longevity. Do your parents both live long lives?
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Yes. Yeah. My mother passed away at 88. Yeah. And my father at 78, so. And I'm in fairly good health. So I think, you know, I'll just sort of see what happens.
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I'll tell you what I would say. I would wait and see. I would also be like, maybe when you're 70, right? And you're claiming Social Security, maybe, maybe that's the moment where you're like, hey, what's my pension right now? Let's say it's, you know, we know it's more than 1,300. We know it's not as much as 4,500. But you know, if it were 3,500 and you had 4,600 from your Social Security and life was good, you might like pull the trigger and just do it and make your cash flow much easier on yourself. That could be a possibility as well. But like, I think that we'll have more information at that time. Waiting is always great. But also if you're just like, because you have so much money, because you're in such good shape, if you just say, I really would like the convenience of having some cash flow right now, that's fine too. I mean, one of the other things that you can start to do is, you know, again, once you get to be 70 and a half, if you're charitable at all, you could use qualified charitable distributions and start whittling down that pre tax money. So there are a lot of things that are available to you. You don't have to go back to work. You can do the renovation and I think the pension. I would certainly wait till 70 and kind of see where things stand and see if you're comfortable. And I feel like this could be almost like an emotional decision where you could say, it would make me feel better to not have to take, you know, these monthly distributions from the retirement account instead, you know, putting money from that retirement account and sending it off to charity. So all these things can, I think, play a role. But you're in such good shape. I mean, it's really amazing. What are you doing with, like, it feels like you've got kind of a rich life. Are you doing something fun as you've in. In retirement? I feel like we're kind of often confronted with people who are like, I just don't know what to do with myself. How are you doing with that?
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I'm still trying to figure that out, really trying to figure out on a day to day basis exactly what I'm going to do in the future. I think about traveling, I collect art, you know, I think about, you know, visiting museums and sort of enriching my eye and continue to collect art. And I think about volunteering as well. So I'm trying to figure that out right now.
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A
All right, well, when did you actually retire?
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So I didn't actually retire. I was sort of Rifting out of a job. Yeah, two years ago.
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Yeah.
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And I was ripped out of a job. I was decided to live out the severance. And then my mother took ill and she was diagnosed with the terminal disease. And then I stayed with her for the six months that she lived and decided that I wouldn't go back to work immediately. So I had this sort of ease my way into this retirement because I never expected to retire. I expected to work as long as my mother worked.
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Yeah, of course.
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83, you know, so I just. I didn't expect it, so. But it was a blessing in the sense that I could spend full time with her after.
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Oh, that's good.
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Production and force.
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So, yeah, I never feel like happy when it's someone else's decision. On the other hand, you're right. What a gift. So, Eric, I think you're in really great shape. You have your estate documents done yourself. Like, you have a lot of money. Someone's going to like, you know, certainly be very happy that you've taken care of this. So have you.
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Yes. So I've been listening to you and I've engaged an attorney, a trusted estates attorney. So we're in the middle of getting those documents done.
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A
Great. Perfect. All right, Eric from New Jersey, we encourage you to continue your journey and figure out how you're gonna be a docent or something. Fabulous. And keep collecting art and just stay engaged. I think that's the thing that's we're learning that we, as we talk to people about, like, their glide path and what their next chapter is. It is about, you know, being around enough people so that you feel engaged and you're, you know, you sound like a very curious man. So I think that you will probably continue to be so. So I think that'll serve you well. So thank you so giving us a holler. And if you have been downsized, Rift, etc, it wasn't your choice, but maybe something good will come of it. And maybe 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. If you have any questions about something going on in your own life, get in touch with us. Go to Jill on money dot com. Click the contact us button. Write us a note. If you would like to come on the air live, check the box. Mark will do everything else. Hey, don't forget to sign up for the free weekly newsletter, which comes out on Fridays and also entitles you to get our blog. So it's just all so fabulous. You can subscribe to us on the Odysee app or wherever you find your favorite podcasts. Please leave us a rating and review wherever you listen. And of course we ask that you do something nice for someone else today. Change your work, change your wealth, change your life. Thank you for listening. We'll talk to you you tomorrow. Your business identity is everything that shows what your business is about, from what customers see to what they don't see, like operating agreements, meeting minutes and compliance paperwork. Get more for your business, more privacy, more guidance and more free resources with Northwest Registered Agent Northwest Registered Agent has been helping small business owners and entrepreneurs launch and grow businesses for nearly 30 years. They're the largest registered agent and LLC service in the us. Build your business identity fast with Northwest Registered Agent and get access to thousands of free resources, forms and step by step guides without even creating an account. Don't wait, protect your privacy, build your brand and get your complete business Identity in just 10 clicks and 10 minutes. Visit www.northwestregisteredagent.com Jill Free and start building something amazing. Get more with Northwest registered agent@www.northwestregisteredagent.com Jillfree what's up world? It's Vaughn Miller, Super Bowl MVP, chicken farmer and now host of Free Range. This is a show where I go off the field and off the script. We're talking what's hot in music, film, trending news and everything blowing up your feed. If you love football, you are feeling home. But if you're here for the the vibes, the Internet, deep dives, the conversation, this is your podcast. Join me every Wednesday. Follow and listen to Free Range with me, Von Miller everywhere you get your podcast.