Pension Options and Roth Conversions

Summary

Podcast Summary: Jill on Money with Jill Schlesinger
Episode: Pension Options and Roth Conversions
Date: July 6, 2026

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Episode Overview

In this episode, Jill Schlesinger and producer Mark tackle a listener’s complex retirement planning scenario, focusing on pension options and the strategy of Roth conversions. The episode, structured as a live consultation with a caller named Steve from the Northeast, walks through detailed financial data, explores the nuances of maximizing pension benefits, and clarifies Roth conversion timing and tactics in the context of large pensions and family support needs.

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Key Discussion Points & Insights

1. Retirement Planning Scenario (07:02 – 26:54)

Caller Profile:

• Steve (58) and wife (60), both public employees with strong pensions.
• Three grown kids: Two out of college (one possibly needing continued support due to health), one rising senior in college.
• Pensions: $105,000 each per year (no inflation adjustment).
• Assets: $2.2 million in deferred compensation (98% pre-tax), $525K in taxable brokerage (mostly cash from recent home downsize), $65K in Roth, $150K in cash.
• No mortgage; recently downsized to $700K home.

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2. Pension Payout Options (14:11–17:04)

• Steve and his wife need to decide between pension payout options:
  • Straight Life: Highest payout, but no survivor benefit.
  • Joint and Survivor (100%, 75%, 50%): Reduced monthly payout, continuing for survivor.

Discussion and Recommendation:

• Jill and Mark recommend considering the 100% joint and survivor option for peace of mind and protection, particularly with children who may need support and because the reduction in payout versus single life is not dramatic.

  • Mark: “For an extra $5,000, sure. Go 100%.” (15:06)
  • Jill: “Why not do the hundred percent? …It gives the survivor the same amount of money and also can help with the kids.” (15:17)

• Jill emphasizes how survivor options mitigate risk, especially for couples with children who aren’t fully independent.

Notable Quote:

• Jill: “I just don’t think having just a straight life, especially if you have three kids, two of whom aren’t really on their feet yet and might need help, I think that you’re going to want to preserve that.” (15:58)

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3. Sustainable Withdrawal, Spending, and Family Support (08:19–13:28)

• Current spending around $10,000/month; possibly $12,000–14,000/month factoring in continued support for kids and increased travel or ‘wants’.
• Steve raised the possibility of buying a second home and increased travel in retirement. Jill suggests planning with these ‘wants’ in mind, while remaining flexible given ongoing family needs.

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4. Roth Conversions: Opportunities and Limits (17:04 – 24:11)

• Discussion about using Roth conversions to mitigate future Required Minimum Distributions (RMDs) and potential tax increases.

Challenges:

• High base income due to substantial pensions will keep them in a higher tax bracket (20–24%) regardless.
• Primarily, conversions should be considered for flexibility, not as a primary goal given income floor.

Tactical Insight:

• If most money in brokerage account is cash (from downsizing), converting some pre-tax savings to Roth while using the cash for the tax bill can be a reasonable strategy, especially if any inheritance to kids is contemplated.

  • Mark: “If you have the cash sitting there to pay the conversion, then that’s fine.” (24:03)

• Ultimately, Jill and Mark recommend consulting with their CPA annually to manage conversions up to the top of the 24% bracket, but not stressing if not all funds can be converted.

  • Jill: “Maybe converting is not actually that important. Maybe what we’ll do is we’ll take a little bit of the money out every year. We’ll stay inside of that 24% bracket.” (18:54)

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5. Second Home Considerations (24:11 – 26:25)

• Steve’s interest in a southern second home (potentially $900K–$1M) during retirement—Jill urges renting first to experiment with location and community fit.
• Jill cautions against making a large, illiquid purchase before ensuring the family support situation is stable: “I don’t think a million dollar second home is in your future… you would have to feel like my kids are totally taken care of.” (25:45)
• Mark is less definitive but agrees this should depend on evolving family and spending needs.

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Memorable Moments & Notable Quotes

• On Choosing Survivor Options:
  • Jill (on selecting 100% joint and survivor):
    “I always look at, like, well, what happens if somebody dies five years from now? Which is, you know, it’s not like an unlikely scenario. It’s not likely, but it’s not like a zero percent probability.” (15:58)
• On the Value of Large Pensions:
  • Mark:
    “These two pensions are basically the equivalent of almost having like $6 million.” (17:29)
• On Roth Conversions and Flexibility:
  • Jill:
    “You can just pull the money out, pay the tax, it’s due and move forward. [Ed Slott] just wants the money not to be accumulating in the pre tax account.” (22:54)
• On Second Homes:
  • Jill:
    “I would much rather you not have them. You just did the thing that was so smart, which is you downsize. Now we’re going to compound the problem by creating another illiquid asset.” (24:51)
• On Continuing to Work ‘One More Year’:
  • Jill:
    “I don’t think you need to. If she wants to, maybe she’s not emotionally ready… But for the financial aspect. Absolutely not.” (26:38)

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Important Timestamps

• Mailbag/Cameras and Money Moves Show Intro: 02:50 – 06:47
• Caller Steve Joins, Family/Pensions Overview: 07:02 – 10:10
• Homeownership and Assets Discussion: 10:13 – 11:33
• Spending Levels and Retirement Wants: 12:06 – 13:28
• Pension Options Breakdown: 14:11 – 17:04
• Roth Conversions and Tax Strategy: 17:04 – 24:11
• Brokerage Account, Cash, and Conversion Mechanics: 23:36 – 24:11
• Second Home Debate: 24:11 – 26:25
• Final Advice on Work/Retirement Timing: 26:30 – 26:54

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Summary Takeaways

• The caller’s strong pension foundation provides great financial flexibility and security.
• Survivor options on pensions (particularly 100% or 75%) are worthwhile for peace of mind, especially with children in transition.
• Roth conversions can add flexibility for future estate planning and withdrawals, but aren’t a critical priority due to the high, stable pension income.
• Major new purchases (like a second home) should be deferred until family support needs stabilize.
• Listen to emotional/psychological as well as financial comfort in big retirement decisions.

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For more in-depth listener questions and financial advice, or to appear on the show, visit JillonMoney.com and click the “Contact Us” button.

Transcript

[A]

Hey gang. You know, over the years I've realized one of the biggest limitations in business isn't a lack of an idea, it's the manual follow up the legacy systems that demand your constant attention. Way back when, I remember the frustration of having to take a morning off just to drive to a physical branch to sign a piece of paper, which felt incredibly outdated in a world of digital first companies. Banking on Mercury eliminates that frustration entirely. It's a best in class software experience that feels intuitive and reliable. From day one, you can apply online in minutes minutes and immediately start using smart features like bill pay where you can just scan an invoice and the system handles the rest. You can even set up recurring payments and automated transfers to keep your accounts balanced perfectly. It's a smart all in one home for your finances that scales with you, allowing you to focus on the big picture while the software handles the details. Visit mercury.com to learn more and apply online in minutes. Mercury is a fintech company, not an FDIC insured bank. Banking services provided through Choice Financial Group and Col Column N A Members FDIC hey gang, Summer is here and I know all you want to do is focus on booking flights and find the perfect beach rental. You don't want to sit under an umbrella wondering if you've actually budgeted enough for those sunset dinners. So if you want to get your financial house in order now so you can actually relax when you're off the clock, you've got to know that the math is already done. Monarch is the personal finance app that tracks everything accounts, investments, savings goals and spending. Get your first year of Monarch Core for half off just 50 bucks with promo code JILLONMONEY. It's like having a financial advisor in your pocket. They've got beautiful visual flows of money and it can give you total clarity. You might realize that your lifestyle expenses are quietly creeping up and maybe your monthly savings rate had just fallen short of where you want it to be. Most apps just tell you what you've already spent, but Monarch helps you map out big purchases to see if if you're on track before it's too late. Use code [e-mail] to get your first year of Monarch Core Half off at just $50. That's 50% off your first year at monarch.com with code Jill on Money welcome to the Jill on Money Show. It's Monday, July 6th. Hope you had a great Independence Day weekend and that you are ready to go with your summer plans, whatever they may be. Mark and I are here all summer long. Not really, but you'll hear us every single day, Monday through Friday. We don't miss shows. In fact, Mark, someone just said to me, oh, is there someone you want to be your. Your guest host while you're away? I said, no, I don't think so. We're fine.

[B]

Fifteen years, that has never happened.

[A]

Never. But we. We certainly have guests who come on the show. Makes my life a lot easier. But, you know, listen, I love doing this, Mark, and I love. Sometimes I think in the summertime, we'll do a few more mailbags because we want to make sure that the folks get their questions answered and it's easy for us to do. Mark, I think we should start doing. I think we're going to start experimenting now that we're on camera for our new other show, which is called Money Moves with me and Mark. And now that we're doing camera, Mark and I were talking about how we think we want to put the camera on when we do mailbag episodes for this show. Are you game for that, Mark? I will definitely be wearing baseball caps when I do that.

[B]

No, the question is, are you game? I'm willing to put the camera on anytime you want.

[A]

I feel like they gave me this gorgeous new camera and so I should use it. I feel like it's a shame. A gosh darn shame.

[B]

Well, you can use it for other things. You don't have to use it for this.

[A]

Well, what am I going to use it for?

[B]

I don't know. Around the house, vacations, you know, doing it.

[A]

No, I'm not. No. So I think I'm game. It'll be a different baseball cap every time, and it'll be a lot of fun. So, gang, we did start that brand new other show called Money Moves. And if you guys want to check it out, all you need to do is wherever you get your podcast, you search for Money Moves with Jill Schlesinger and you click subscribe. On some podcast platforms, the artwork has been updated. On some, it hasn't. I got a couple of questions from people. I'm like, they're like, is this the right place? Yes, it is. Sometimes it looks like the old money watch. Don't worry, it's all going to be in the right place. We are also on YouTube, Mark. If they go to our YouTube page, which is the Jill on Money page, right?

[B]

Yeah. Jill on Money YouTube channel.

[A]

That channel, they'll be able to see the show, right?

[B]

Yeah. Once you're on the Jill on Money YouTube channel, there. There's a, you know, there's all these playlists. Every, all these YouTube channels have various playlists, but on your channel there's a Money Moves playlist. And from there, you know, you can go to the Money Moves channel and subscribe so you get alerted when there's a new episode.

[A]

Oh, right. All right. So Money Moves does have its own channel. I mean, I have its own page. Right.

[B]

Channel. You were right the first time channel.

[A]

All right, good. All right, so that's good. I'm just making notes for myself and you know, but you know what the. If you just like listening, we love listening. So you can check it out anyway. It's a lot of fun. So far so good. You know, a little clunky in the beginning. Mark and I were just talking about this like we're getting there. It's not perfect, it's not this show, but we have a 10 year head start, so it is a little different. And we are using video and hopefully. Mark, did you like my comment about I want different chairs because we're slumping? Well, it's like Jackie said to me, why are you guys slouching? I'm like, it's the chair. It's like you sink back into it. It's weird. And when she said it, I couldn't unsee it. So anyway, this is a program that is for you here, the Jill on Money folks. And if you've got a question, all you need to do is 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, check the box. It can be audio, it could be video, and we would love to hear from you. If you are running across financial advice or your kids are showing you social media stuff that seems kind of curious or you're wondering if it's legit, can you please upload that for us? Because that is part of our other show. We are definitely trying to demystify some of these social media folks. I'm just waiting for the time where I kind of attack one of these folks, Mark, and you do too. And then we start getting a cavalcade of, of hate from their, their listeners. That's going to happen.

[B]

My first thought is, is it's just a matter of time before there's some sort of lawsuit.

[A]

What kind of lawsuit?

[B]

I don't know, but somebody will do something.

[A]

Well, I, I guess that we're being mean.

[B]

Slander.

[A]

Oh, well, I don't think you can do slander if you're in the public domain. But okay, good luck with that. Anyway, so. All right, gang, let's get started. Today we have Steve, who from the Northeast. Hello, Steve. How are you?

[C]

Hey, Jill. Hey, Mark, how are you? By the way, another vote for camera on during mailbag.

[A]

You like that?

[C]

Yes.

[A]

Okay. I have a lot of baseball caps so that there will not be makeup. It would only be makeup by accident. But, like, if I happen to be on TV that morning, it's a lot of. I just, I, I. My mother has great joy in the fact that I have a job that requires me to have my hair and makeup done. I am not that person. Okay, Steve, what is going on? How can we help you out?

[C]

Okay, thanks. So my wife and I looking at a year from now for retirement. We're pretty much set for retirement. We know we can retire. Just some questions about optimization, maybe. So we are public employees working for the government. We have pensions, fairly strong pensions. About 105,000 each. So. Each. Each.

[A]

So, so 210 for life.

[C]

Yes.

[A]

Inflation adjustment.

[C]

Nope. No inflation adjustment. And I do realize, you know, the power of that, so I understand that. I guess one of the things we're looking at is taking joint survivor option. And if it's worth it, I mean, could we survive without the other pension? Sure. But it's more kind of maybe longevity play, maybe leaving something to the family and the kids afterwards and maybe what makes sense.

[A]

Okay, how old are each of you?

[C]

I'm 58. My wife's going to be 60.

[A]

How's your health?

[C]

Statistically good. No issues for either of us, really. That would change anything as far as that's concerned.

[A]

Okay. And let's just do a little bit more of the bio. The bio. Here you've got grown kids.

[C]

So two kids out of college, trying to find their way. One in college and wait, three kids.

[A]

So two out of college and one in.

[C]

Correct. And one of them we may have to support a little while, possibly due to some health issues. So that could be the only unknown as far as just getting things established. But the hopes are that, you know, all goes well with that for you

[A]

guys, if you were to continue to support that kid or even half of a kid for a while. Like, do you factor that into your spending right now? Like, how much right now are you guys spending?

[C]

I would say right now we'd probably do 10,000amonth. And maybe, I'm guessing, even if it's just renting that for a while, 12, you know, add another two on to that.

[A]

Okay, gotcha. So 12 grand a month for the early days let's just say for like, let's say five more years.

[C]

Yeah.

[A]

Are they living with you? The two out of college?

[C]

One is out on their own, you know, making it, and the other one kind of, you know, coming back for a little bit.

[A]

Okay. And then obviously the one in college, what year of college did they just finish?

[C]

Finished junior, so going to be senior and then come back for a little while.

[A]

Okay. And how's college being paid for?

[C]

Okay. We did invest in 529s and I let it go fully aggressive for all those years. So we've actually paid for each of the schools and they ended up, you know, being total of all four years, 200,000 each. But those are taken care of. Wow.

[A]

It's a lot. You guys own your home, right?

[C]

Yes. In fact, recently sold the home, downsized, which created some money in a cash account. So we never really were like cash flush, but now we are a little bit because we downsized.

[A]

Oh, that's great. How much is the house worth, the new one?

[C]

About 700.

[A]

And is there a mortgage on it?

[C]

No.

[A]

Okay. And no other real estate?

[C]

No.

[A]

Okay. So in addition to the pensions, and we'll go through what the survivor numbers look like, but have you guys saved money in deferred compensation?

[C]

Yes, we have. So combined it's about 2.2 million in.

[A]

Wow. Yeah, wow. Wow. All right. And that's. Is it all pre tax?

[C]

Let's say 98%? It's.

[A]

Yeah.

[B]

Okay.

[C]

My wife, me and the government all share that account.

[A]

Okay, that's nice. How about anything outside of that? 2.2.

[C]

So there's Roth about 65, taxable brokerage about 525.

[A]

Okay, that's great.

[C]

Cash 150.

[A]

Right. Because you just had the house, the downsize, and that helped kind of fill the coffers. Are you guys done right now or is it. Is this it or you have. You said it's a year, right? In other words, did you give your. Do you have to give your notice a year and advance or how does it work?

[C]

No, we can decide pretty much what we want, but it's looking like next year we are considering, you know, the work one more year, especially if there's, you know, something going on with one of the kids. But I don't think in our. I'm trying to say to my wife, there's really not going to move the needle either way. If we do one more year, the pension goes up a point a percent and a half.

[A]

Okay. But. Okay, that's. That's good. And besides the kids, you know what I mean? Like the general needs there. Is there anything big coming up for you guys?

[C]

No, not in the sense of needs. Wants. Sure.

[A]

Yeah, let's do. What's a want? Give us a want.

[C]

All right, look, we saved this money. We started out in our career making $30,000 a year. We make 155. We never made a lot, but we, we put it away and it saved and it worked and, you know, investing and kind of letting it ride. So now we have this money. I'd like to look at using it somehow.

[A]

Yeah, why not?

[C]

So the question is then pulling it out, paying tax, converting, you know, that sort of stuff. We'd like to travel. There could be a second home, possibly somewhere.

[A]

Really is. Okay, Is that a high want? Because that's not happening, obviously, with like the three kids or two of the three that are in flux right now.

[C]

But the second home, you're saying?

[A]

Yeah, no.

[C]

In fact, we probably spend a year or two renting somewhere to see if it's worthwhile. Okay, but that is.

[A]

So that's a maybe. But when you gave me the 10,000amonth for today, 12,000, helping the kids out. Right. Did you include that extra travel or like a splurge every year of some sort?

[C]

Not necessarily.

[A]

So in other words, what you really want to be your spend is this. This is what it is now. But ideally, like, would it be fair to say that we could do like 12 grand a month and then we'll do 14 with the kid? Wouldn't that be better to plan on that to see how you guys look doing that rather than.

[C]

Yes, going back? Okay, and just to give you an idea too, even that 10 is kind of high when we have no mortgage on the. On this house. So we moved in a year. Redecorating, buying furniture. That's included in that 10. That's not going to go on forever. So there's some play in that as well. Okay.

[A]

Yeah, but let's just see. Okay, so you guys each make 155,000, is that right?

[C]

Yeah.

[A]

Okay, so let's look at the pension haircuts that you're. You're facing. So the number that you gave me when you said 105,000, that's your life only, right? Straight life.

[C]

Yep.

[A]

Okay, then what does it look like for what do you have like a two thirds and then a one half?

[C]

Any option. We want 100%. 75, 50. And I have those.

[A]

What do you want, Mark? What do you want to look at? 75 or 50? Since. Since we know that both have $105,000 straight lives.

[B]

Well, yeah. Give me 75.

[A]

Okay, so let's do the. Yours is 105 straight life. So everyone listening. Straight life means that if Steve drops dead the third day after he claims his pension, no one else gets the money. It's done. Okay. I don't love that. Always. Right. So what's the 75% joint and life for?

[C]

For years, I kind of have the figures here. It's 7,400 for one of us and 5,500 for the other. Probably statistically, I'm the one that's going to cost more. So from my wife, you know, 7,400

[A]

and what'd you say? 5,500.

[C]

Right. For a total of 12. Nine. If. Because we're going to do this, we're going to do it for both.

[B]

What's the 100%?

[C]

I'm just curious, you know, of course, 9,700 and 7,300 individually, for a total of 17.

[B]

Ding, ding, ding. For an extra $5,000, sure. Go.

[A]

I would do. I'm doing the 75. Aren't you, Mark?

[B]

I'm doing 100.

[A]

You're doing, oh, 100%.

[B]

Yeah. For an extra thousand dollars.

[A]

Oh, yeah, yeah, yeah, yeah, yeah.

[C]

And the 50, by the way, 50 is 8, 900 for both of us, you know, combined. So it's 17.

[A]

I mean, why not do the hundred percent? I mean, you won't max it out. But what this does is it gives you the. It gives the survivor the same amount of money and also can help with the kids. It really just protects you of, like, the first 10 years more than anything else. I think that you won't spend as freely if you don't have it. Right.

[C]

I mean, 17,000 sounds like a real number. Right. Spending, not getting in the income each year. But then again, if I look at the portfolio and if I had to take that out of the portfolio, it's not going to move the needle that much.

[A]

Right. I look at it the other way around, I guess. I always look at, like, well, what happens if somebody dies five years from now? Which is, you know, it's not like an unlikely scenario. It's not likely, but it's not like a zero percent probability. And if that happens, I think that the survivor wants a little bit more assurance. That's just me. I mean, you could. Listen, I would never do a straight life because the numbers don't look great to me. Like, I just don't think having just a straight life, especially if you have three kids, two of whom aren't really on their feet yet and might need help. I think that you're going to want to preserve that.

[B]

Okay.

[A]

The differential isn't that much, as Mark said.

[B]

No, they're still very big pensions.

[A]

So these. Right. These are big numbers. Okay. So let's just pretend. And if you wanted to split the difference, I personally don't think you could. I don't think you'd go wrong if you did 100% or 75%.

[C]

Okay.

[A]

I really don't.

[C]

Right.

[A]

Okay. Now because either way you're like protected. Which one sound? How should we presume going forward, you want to look at this with 75%? The 12. Nine.

[C]

No, let's go. That's a 17.

[A]

Okay, okay, 100%. Okay, so 100%. So now what you want to know is 17 grand, would you want to then take money out of this portfolio from the pre tax and start paying some tax? The problem is market, they're just going to be in a high tax bracket no matter what, aren't they? Because of all the income.

[B]

I mean even, even with 100% survivorship, these two pensions are basically the equivalent of almost having like $6 million.

[A]

Yeah, well, yes, that's just to make him feel good about it. But what I'm saying.

[C]

So yeah, they're going to be in a high tax bracket.

[A]

Yes, you're going to be in a 20 to 24% bracket. Somewhere around there. First of all, I also think you should talk to your wife about this because I really think you should just look at the numbers and I think you should present like, here's what happens if we do 100% survivorship for each of us. Here's what it is. 75%. Sometimes when there's not a big enough differential, what I do think is helpful is to have someone just say, this feels better. Okay. And I really want you to just think about that. Right. So you say, okay, if it's 100% joint and Survivor, here's the amount of money we have. If it's 75%, here's the money we will have. And if it's just based on our lives, just so. Because that's the, that's where you maximize. Right? So if it's just our lives, here's what the numbers. You show those three numbers to your wife and you want to get a sense, like how do you feel about that? You know that sounds weird, right? This is a financial kind of program. But sometimes how you feel matters to me. And so if, and I'm going to look at the 75%, just so you guys are clear, which is if you had $12,900 coming in monthly, that pretty much covers your expenses, doesn't it?

[C]

Yes, yes.

[A]

Right. Okay. So that's to me like the most important thing. That's like, okay, that covers it. Great, perfect. Everything else is gravy. We have $2.2 million we need to get out of those accounts before the age of 75. Which probably works really well for you, Steve. Because in that case, I think the way to consider this is to say to yourself, you know what, maybe converting is not actually that important. Maybe what we'll do is we'll take a little bit of the money out every year. We'll stay inside of that 24% bracket. And you know, you're going to kind of get hooked when it comes to Medicare because you guys are going to, you are absolutely going to be stuck on the, the IRMAA train, meaning the, you're going to have that income related monthly adjustment amount.

[C]

You know, just to let you know, I believe as of now, and this could change with our employer, there is a reimbursement. Oh, there is for Medicare Part B. Yeah. So that's, we're lucky.

[A]

Okay, so that's great. Okay, so you, so all of these things suggest to me if, okay. To be the most conservative, you would be like, let me take, you know, the, the amount of money that I know I can, I'll need pre tax. Right. Because you're, these are, these are going to be taxed. Right. Let me take the amount of money, pay the tax, pay our bills. Boom, done. Everything else comes out of the pre tax account. Slowly but surely you pay the tax that's due. And again, you do work with an accountant or a cpa.

[C]

Yes. Yeah.

[A]

Okay, so you want to talk to the CPA and say, let me show you what we're thinking about. And you say we're hoping that we take, you know, we're going to basically take enough money out of our pre tax account to get to the top of the 24% bracket. You don't have a ton of deductions, by the way.

[C]

Right.

[A]

But you know, you get to the top, tell us the amount of money, maybe it's 100, 150. You take it out, you pay the tax it's due. You're going to have to pay quarterly taxes. You may not be used to that and you just add it to the brokerage account at that point. Also, that is money that excess Money that you'll have that you're taking out, not only will it build up your brokerage account, but it could be used to help the kids. It could be that you put the kids on, you know, at least one or two of the kids, you could say, until you get on your feet. We're going to make sure we send you, you know, $1,000 a month or whatever you feel like is the right amount.

[C]

Okay, Can I ask you a question on that?

[A]

Yeah, yeah.

[C]

So let's say we take the haircut and the 210 income drops to 193 because we're taking the full 100%. So now the difference is the 193 to the top of the 24 at 403,000.

[A]

Correct.

[C]

Argument's sake, let's say that's 200,000. Instead of taking it out and putting the brokerage, why wouldn't I take that out and put it in the Roth? Because then I could always pull from it. We'll be above 59 and a half.

[A]

Because you would then have to liquidate money from your brokerage account and pay the tax that's due.

[C]

Okay, but then I'd be growing tax free in that Roth.

[A]

Totally. I'd say I didn't need it. But what's potentially. But I still, I mean, you could do that. I think that my concern is you're kind of flip flopped the way we'd want you. In other words, when you convert, you're going to lose the money that is accessible in the brokerage account. It's in the Roth, it's fine. But I, I don't see the big poll to make it a Roth.

[B]

The only for, the only pull for me is if, is if it's ultimately the plan is for it to go to the kids.

[A]

Well, I don't know if it is. Like, I mean, I mean I know that you would like it to be. If you want this money to be for the kids, then you're going to prepay all the taxes, right? You're going to do that today for them.

[C]

That's not 100, it's not 100% goal. Let's say leftover money. There'll be leftover money.

[A]

Yeah, there's going to be plenty of money. I don't know, like, I think when we talk to Ed Slott and he gives like we give him these scenarios, he's like, eh, you know, once you're 60, it's great to convert. But you know what, you can just pull the money out, pay the tax, it's due and move forward. He just wants the money not to be accumulating in the pre tax account.

[C]

I get that. I understand that and I understand.

[A]

And you can do it. You can choose to take like in your brokerage account. I don't know how long you've been investing, but just remember you're then going to have to sell something in that account, pay a capital gains. And maybe what you do is for a couple of years you just pull money out. Maybe you do it like this year. You might, or let's pretend, let's say it's a year from now. And you might say, okay, first thing we're going to do is we're going to pull out up to the 400 something thousand. We take the money, we pay the tax, we put in the brokerage account and let's say that you know, six months later then you might want to convert when you're in a new calendar year because you have the cash to pay it. I'd hate for you to sell something in that brokerage account, pay capital gains. I mean, I think you can do a little bit of both what I

[C]

guess I'm saying and part of this, maybe I wasn't descriptive enough when we sold that house. In the quote brokerage account, I have cash that's not all invested. So in other words, there was cash that was in there that I.

[A]

So in addition to the 150 in cash.

[C]

Right. So in other words of that 525 have majority of it is in cash. It just happens to be sitting in a brokerage. I should have re clarified.

[A]

Oh, okay. So now, okay, well Mark, then how do you feel about that? That we don't have to sell anything in the brokerage. I think that's fine, Case.

[B]

I'm fine. Yeah, I mean look, there's no better ultimate asset than a Roth asset. So if you have the cash sitting there to pay the conversion, then that's fine.

[C]

Yeah, go for it.

[B]

Yeah, sure.

[A]

Yeah, that's fine. Listen, the brokerage account cash is only going to last so long, but like fine, that, that works for me now. Okay, so let's just, can we just do a second house moment here for. Because I want it before you, I let you go. You know, I think renting is great. If you come back to us and you say, well here's a good news, we rented, that's fine, we're just gonna keep renting whenever we want. If you come back to us and say we want to buy a million dollar condo someplace warm because you Live in the northeast. That's going to be a big change for you and that's going to change these numbers pretty dramatically. I want to be clear about that. I mean I would not take a million dollars out of your pre tax account to pay for that. By the way, I do think that like you have plenty of money. I would much rather you not have them. You just did the thing that was so smart, which is you downsize. Now we're going to compound the problem by creating another illiquid asset.

[C]

Well, the purpose always was to maybe take that and split it into a north and a south and snowbird.

[A]

If you were a snowbird, where would you go?

[C]

Well, it would be somewhere south where January, February, March is going to be warm and you know, we'll see southern Florida, if that works. Oh God. I know.

[A]

Well, good luck.

[C]

It's the lifestyle too. Look, it's a social aspect. We want to try the renting. I don't know if you make the same connection renting somewhere as you do buying and becoming part of a community.

[A]

That's what perhaps, I mean Mark, what do you, do you think I'm wrong about the buying versus, I mean how much do you think you'd have to pay to be in like a rental? I mean in a community that you'd want to be in?

[C]

Yeah, probably. If we're buying a home it's going to be 900.

[A]

See how I guess that million I got you right there. I know exactly where you're going. I don't think a million dollar second home is in your future. Mark, do you agree with me?

[B]

I don't know. I'm not so quick to rule it out. They do. Just because those pensions are so large they have a lot of money.

[A]

I think it a hundred.

[C]

I could cash flow a mortgage.

[A]

I think with that you probably could. But then I think you would only do that if you felt like my kids are totally taken care of. That's what I think. I think that you would have to feel like comfortable enough. We know we threw two grand in there as a placeholder. If all of a sudden the money that you're putting out to the kids is four grand, it's a whole different story.

[C]

Yeah, I hear.

[A]

So I think it depends mostly on the kids. Don't work at beyond one more year, I'll tell you that much.

[C]

Okay, that's the other thing.

[A]

Absolutely.

[C]

Because she's thinking like oh, I get the same salary and I help the kids out and I'm like, I don't know if it's gonna, you know, move the needle.

[A]

I don't think you need to. If she wants to, maybe she's not emotionally ready to do it. That's a different thing. You know, if that's the case, then. All right, well, then she's not ready. That's a different question. But for the financial aspect. Absolutely not. You do not need to do that at all.

[C]

Okay, good.

[A]

All right. Go to Florida. I hate when people leave New York. I'll tell you what, I cannot stand this. This is like a pet peeve of mine because I have friends who've done this. They make their money in New York, and then they leave New York and they. They're like, oh, it's for taxes. Well, you made the big money here because you were here anyway. You do what you want. You didn't make big money, but you saved a lot. And you know what, Steve? We wish you all the best. I think that probably the best thing we could wish you is for your kids to land on their feet so that you don't have to keep helping them out. But it sounds like they're on their way, so that's good. And. All right, listen, thanks so much for coming on with us. I'm sure you have your estate documents. Yes, yes. Oh, thank God. All right, good. All right, gang. Are you juggling a choice on a retirement time and also how to factor in continuing to help your kids out? This is a pension question. Also, just get in touch with us. Go to jillonmoney.com. click the contact us button if you'd like to join us on the air. Check the box. Mark will do everything else. Forget to sign up for the free weekly newsletter comes out on Fridays, and that will entitle you to our blog as well. Lift someone up. Change your work, change your wealth, change your life. Thank you for listening. We'll talk to you tomorrow. Hey there. It's Jill Schlesinger. I'm launching a new show. It's called Money Moves, and your money is going to move. We're going to help you make better financial decisions. We're going to call out the B.S. you're finding all over social media. We're going to give you actionable guidance to make your financial life clearer, less stressful. We're going to answer your financial questions and take the mystery out of your financial life. Follow and listen to Money Moves with Jill Schlesinger. Wherever you get your podcasts.