Possible Health Issues, Can I Retire?

Summary

Episode Summary: "Possible Health Issues, Can I Retire?" – Jill on Money with Jill Schlesinger

In the August 8, 2025 episode of Jill on Money with Jill Schlesinger, host Jill Schlesinger engages in a heartfelt and insightful conversation with Kim from Pennsylvania. Addressing pressing concerns about retirement amidst potential health issues, Kim seeks guidance on navigating her financial landscape to ensure a secure and enjoyable retirement. Co-host Mark Tulaeur also contributes valuable perspectives, making this episode a comprehensive guide for listeners contemplating similar life transitions.

Listener Call: Kim’s Retirement Concerns [02:08 - 16:05]

Introduction to Kim’s Situation [02:08 - 03:14]

Kim initiates the conversation by expressing her and her husband’s plans to retire—she at 61 and him at 59 years old. A significant factor influencing their decision is their familial experience with dementia, as both Kim’s parents are in memory care, highlighting their desire to enjoy life fully should they face similar health challenges.

Kim: "We want to make sure we're able to enjoy life in case one or both of us has dementia in our future." [02:40]

Financial Overview [03:14 - 07:02]

Jill delves into Kim’s financial details, uncovering a robust portfolio comprising various retirement accounts:

• Kim's Accounts:

  • Rollover IRA: $1.7 million
  • Roth IRA: $27,000
  • Self-Employed 401(k): $30,000
  • Previous Employer’s 401(k): $120,000
  • 403(b): $9,700
  • HSA: $7,000

• Husband’s Accounts:

  • SEP IRA: $600,000

Additionally, Kim shares significant liquid assets:

• Safe Money: $355,000
• Stock Account & CDs: $203,000

Jill: "You've done a lot of different things in your life, haven't you?" [03:38]

Kim and her husband also own three rental properties generating a net income of approximately $65,000 to $70,000 annually. Their primary residence is valued at $1.1 million, with plans to downsize in the next five to six years.

Monthly Expenditures and Social Security Planning [07:02 - 12:34]

Kim outlines her monthly expenses at around $11,000, which Jill helps break down to include both fixed bills and variable costs like credit card payments.

Kim: "It's probably closer to like 9 to 10,000. Sorry. That was a big difference. Yeah, let's do 11." [07:35]

Jill and Mark explore the optimal timing for claiming Social Security benefits, suggesting that waiting until age 67 maximizes her monthly benefits.

Jill: "That's really much better to wait until your full retirement age." [08:28]

Bridging the Gap to Social Security [12:34 - 15:35]

Jill assesses the feasibility of Kim’s retirement plan, emphasizing the substantial income generated from rental properties and Social Security. She reassures Kim that her financial setup is robust, particularly highlighting the rental income as a significant contributor toward her monthly expenses.

Jill: "Social Security is really going to get you a lot of the way towards your goal." [10:42]

The discussion shifts to strategies for managing expenses before Social Security kicks in, including the potential use of retirement account withdrawals.

Jill: "What we're really trying to figure out is how do we make it up until you get to your Social Security benefit?" [09:11]

Roth Conversion Considerations [12:49 - 15:02]

Kim inquires about the possibility of Roth conversions, weighing the benefits against the immediate need for funds.

Kim: "I guess Roth Conversion. Should I think about doing any more conversions or just really think about pulling the money out?" [12:49]

Jill and Mark advise against immediate conversions, recommending instead to utilize withdrawals from pre-tax accounts to cover living expenses, thereby preserving safe money and minimizing tax burdens.

Mark: "I think you're better off just getting money out of that IRA that hasn't been taxed yet." [12:55]

Professional Guidance and Final Thoughts [14:32 - 15:35]

Kim shares her past experience with financial advisors, noting a misstep with a previous wealth manager and satisfaction with her current services at Fidelity.

Kim: "We moved over to Fidelity and they've been really good." [14:32]

Jill reinforces the importance of proactive health insurance planning, especially given Kim’s family history with dementia, and commends her for her diligent financial management.

Jill: "From my perspective at least, there is no reason to delay this... Real game changer for you guys." [15:02]

Key Takeaways and Insights

1. Comprehensive Financial Planning is Crucial: Kim’s diverse portfolio, including IRAs, 401(k)s, HSAs, and rental properties, underscores the importance of a multi-faceted approach to retirement savings.

2. Rental Income as a Financial Pillar: The substantial income from rental properties plays a pivotal role in bridging the gap between retirement onset and Social Security benefits, highlighting real estate as a valuable asset class in retirement planning.

3. Strategic Social Security Claiming: Waiting until full retirement age (67) to claim Social Security benefits can significantly enhance monthly income, providing greater financial stability in retirement.

4. Health Insurance Planning: Proactively addressing health insurance needs, especially when anticipating potential cognitive health issues, is essential. Options like COBRA and the Affordable Care Act should be carefully evaluated to manage costs effectively.

5. Cautious Approach to Roth Conversions: In scenarios where immediate funds are required, it may be more beneficial to withdraw from pre-tax accounts rather than pursuing Roth conversions, thereby managing taxable income efficiently.

6. Value of Professional Financial Advice: Leveraging trustworthy financial advisors ensures that retirement plans remain on track and can adapt to changing circumstances or past missteps.

Notable Quotes

• Jill Schlesinger: "Social Security is really going to get you a lot of the way towards your goal." [10:42]

• Mark Tulaeur: "I think you're better off just getting money out of that IRA that hasn't been taxed yet." [12:55]

• Kim: "We moved over to Fidelity and they've been really good." [14:32]

Conclusion

Kim’s comprehensive review of her financial situation, guided by Jill and Mark’s expert advice, exemplifies effective retirement planning amidst potential health uncertainties. By leveraging diverse income streams, optimizing Social Security benefits, and carefully managing withdrawals from retirement accounts, Kim and her husband are well-positioned to enjoy a secure and fulfilling retirement. This episode serves as a valuable resource for listeners facing similar retirement dilemmas, emphasizing the importance of proactive financial management and the benefits of seeking professional guidance.

For more personalized advice or to share your own retirement concerns, visit jillonmoney.com and click the "Contact Us" button to connect with Jill and her team.

Transcript

[Jill Schlesinger]

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[Kim]

That's correct.

[Jill Schlesinger]

All right, what's going on, girl? What can we do for you?

[Kim]

Yeah, so my husband and I have been talking about when we want to retire. I'm currently 61. I'm thinking of retiring next year. My husband, who's currently 59, would retire two years after that. When he turns 62. And I guess one of the things behind that is we both have parents with dementia. And I guess we. Yeah, we just. Thank you. We guess we want to make sure we're able to enjoy life in case one or both of us has dementia in our future.

[Jill Schlesinger]

Oh, my God. Isn't that just the worst? I'm sorry, it does kind of bring to the fore your actual, like, what I want to do. And all of a sudden piling up money may not be the most important thing to do. Are your parents both being taken care of or do you need to help support them?

[Kim]

We help, I guess we manage their finances and we're both poas.

[Jill Schlesinger]

Okay.

[Kim]

Yeah. But they're both in memory care units.

[Jill Schlesinger]

Okay. And it's just one. Is the other parent in each couple deceased?

[Kim]

Both. Yeah, both. Both of the spouses are deceased. Yeah.

[Jill Schlesinger]

Okay. Well, that's a lot. I'm sorry. Gosh. So, all right, let's take a deep breath then and tell us a little bit about what's going on for you. Gu. How much money have you saved to try to get out of Dodge by next year for you and two years for your husband?

[Kim]

Sure. So in our. My brokerage account, I have a rollover IRA of about 1.7 million.

[Jill Schlesinger]

Okay.

[Kim]

I have a Roth of about 27,000. I have a self employed 401k of 30,000. I have a 401k I need to roll over from a prior employer. That's 90,000.

[Jill Schlesinger]

Okay. So 120,000 of old 401k money.

[Kim]

Yes. And I have a 403B of 9700.

[Jill Schlesinger]

Okay. You've done a lot of different things in your life, haven't you?

[Kim]

Yep. And I have a HSA of 7,000.

[Jill Schlesinger]

Okay.

[Kim]

And then my husband has a SEP IRA of 600 5,000 and just one account for him.

[Jill Schlesinger]

He's the easy one.

[Kim]

Yes.

[Jill Schlesinger]

So he's self employed.

[Kim]

Yes, he is.

[Jill Schlesinger]

And in terms of the like, when you say he's going to be done in two years, like done done or will he scale back? A lot of people I know who are self employed kind of ease out of it.

[Kim]

Yes, that's probably the plan. He'll probably maybe do a couple jobs a month. So. Yep.

[Jill Schlesinger]

So from let's say the time that he is 62 to 65, what would be the game plan for health insurance for you guys?

[Kim]

So that was one of the questions. So I could probably do COBRA for at least the 18 months, I guess, through my current employer, and then I guess have to get Private insurance. I guess that was the other question. Just because I know things are getting more expensive with all the changes for the current administration and just worried if that's going to eat into our bucket. I also have some other money, like in savings. I don't know if you want that as well.

[Jill Schlesinger]

Yeah, sure. How much do you have? Safe money.

[Kim]

So. Safe money. 355,000.

[Jill Schlesinger]

Wow.

[Kim]

And then we have a stock account which has some money in CDs and cash management. That's 203,000.

[Jill Schlesinger]

Oh, boy. This is a lot of money. You're like, oh, safe money. This is like a big chunk of. I don't know if you want to know that. Wow.

[Kim]

And then we also have rental properties that bring in rent as well.

[Jill Schlesinger]

Oh. How much do the rental property? We'll go through the valuation of them.

[Kim]

Sure.

[Jill Schlesinger]

If you look at not what you're claiming on your tax return, but real cash flow to you, how much do you think those rental properties deliver to you in income?

[Kim]

So probably after like paying the HOA and the insurance, all that. Probably about six months. 65 to 70 a year.

[Jill Schlesinger]

That's great.

[Kim]

Yeah.

[Jill Schlesinger]

Wow.

[Kim]

Yeah. We had a plan when they're all paid off.

[Jill Schlesinger]

Okay. So net of 65 to 70 grand a year. Do you guys have any kids? Are they grown or anyone you have to help?

[Kim]

No, no kids.

[Jill Schlesinger]

Oh. That's why they have so much money. Mark, see that? I don't have children, but I have rental properties. How many rental properties are there?

[Kim]

We have three.

[Jill Schlesinger]

Okay. How much would you say those are worth currently?

[Kim]

Because the valuation keeps changing roughly about 1.2.

[Jill Schlesinger]

Okay. But you want to hang on to them, or would that be something you would sell to get liquid?

[Kim]

We'll probably hold onto those at least for another nine to 10 years.

[Jill Schlesinger]

And you own a primary residence as well?

[Kim]

Yes.

[Jill Schlesinger]

What's that worth?

[Kim]

That's 1.1.

[Jill Schlesinger]

Do you want to stay where you are? Is it nice to hang out in.

[Kim]

Probably for the next five or six years, and then we'll downsize. It's probably more house than we need.

[Jill Schlesinger]

Okay. I'm not even going to count on that. Let's just say you'll have something that's 1,100,000. Maybe you'll downsize. We'll see. Let's just see. You don't have no mortgages left, right?

[Kim]

That's correct.

[Jill Schlesinger]

So no kids, three rental properties, one primary. Any vacation homes?

[Kim]

No.

[Jill Schlesinger]

Okay, so we've covered all the assets, right?

[Kim]

Correct.

[Jill Schlesinger]

Okay. You ready for your big hard question?

[Kim]

Yes.

[Jill Schlesinger]

Kim from Pennsylvania. How much do you guys spend?

[Kim]

So I was looking at our numbers. If I pull out like the cost for the rentals and everything, all that insurance, probably 11 to 12amonth.

[Jill Schlesinger]

Okay.

[Kim]

And I probably padded that because I. I would have my Excel tracker and I was tracking the credit card expenses, but then I was also tracking bills that a lot of those auto pay. So it's probably closer to like 9 to 10,000. Sorry. That was a big difference. Yeah, let's do 11.

[Jill Schlesinger]

Let's just do 11 for fun. Okay.

[Kim]

Okay.

[Jill Schlesinger]

And that would be like you get to do what to do, right?

[Kim]

Yes.

[Jill Schlesinger]

Okay, great. When you look at that number and you know, we know that you have these properties that are generating a good chunk of that, like half of that. What was your game plan going to be around your. Around Social Security claiming? Would you wait till you're 67, do you think? About 70? What's your own health in situation?

[Kim]

So luckily we're both pretty healthy. We were debating about doing the 65 versus a 67. I have the numbers for what our collection is.

[Jill Schlesinger]

Give me 67 first, because that's really going to be my preference.

[Kim]

Okay. So 67 would be 3889 for me. 3426.

[Jill Schlesinger]

Wait, 3089, you mean 3000, like 3100amonth.

[Kim]

So just say it gets rounded up to 3,900.

[Jill Schlesinger]

3,900.

[Kim]

And my husband would be about 3,400.

[Jill Schlesinger]

Okay. And that's it. Both of your ages, 67, right?

[Kim]

Correct.

[Jill Schlesinger]

Okay, fantastic. Isn't that good? That's. I mean, that's pretty darn good. It's really much better to wait until your full retirement age. For real. In your $11,000 a month, have you included health insurance or not?

[Kim]

No, I have not.

[Jill Schlesinger]

All right, so let's do this. Let's say 13 grand a month. Because just to give you nice. Like I'm gonna breathe. Because by the way, COBRA is expensive. So. Yeah, you could do cobra, but it's gonna cost a lot when your employer is not pitching in and helping you out, you know?

[Kim]

Yeah, I've been through the COBRA route. I think of a prior employer. I think I was paying 1,800amonth. It's very expensive.

[Jill Schlesinger]

Yeah, yeah. So I mean, it's fine if you want to do that, you know, to kind of settle in, but you can go right to the Affordable Care act and, you know, that's. That's really what it is there for. Okay, so we know that you've got this 150 grand a year. Right. That you have to pay 13 grand a month. Okay. So in that 150 grand a year, we also know that a good chunk of it now is covered by the rental properties. You also have some money in stocks and safe money that can bridge the gap. And you have this rollover IRA that you have as a chunk of money. And your husband's got his SEP ira. And so what we're really trying to figure out is how do we make it up until you get to your Social Security benefit? Because your Social Security benefit is really going to get you a lot of the way towards your goal. Right. And I think that that's important to remember because, you know, we sort of. I think people just sort of push aside. Yeah. Oh, yeah. Get Social Security and It's, you know, seven grand a month is real money. 7,300amonth. I think that, you know, when you look at that, you'll have like 87 grand coming from Social Security and then 65 or 70 from your rental properties. I'll just use 65 because you seem to like the lower numbers. And look, all of a sudden we're pretty close to your 150 grand that you need. And it's amazing, right?

[Kim]

Mm.

[Jill Schlesinger]

Okay. So let's take a deep breath. I think this is really doable. The question is what we do, how we bridge the gap before Social Security. Right. So you've got five or six years here where you need money. I am inclined. And let me ask you if you're okay with this, to start pulling money out of these retirement accounts. So the pre tax account, the rollover IRA and. Or the SEP ira. So you're a little bit older than your husband, right?

[Kim]

Yeah, two years.

[Jill Schlesinger]

But it's not really. It won't matter because from life expectancy wise, that's like, you know, you're basically the same. So what I would do is when you give the heave ho to your boss, you're going to consolidate the 401k, the Uni, 401k, the one for yourself, and it's all going to go into this rollover ira. Right. It's going to have. So then you're going to have like $1.8 million in that account. Your husband's going to have 600 grand, 600, 600,000,000 thousand from his SEP IRA. You're going to pull out the money you need and you're going to be able to be fine. Mark, do you agree with that? I almost feel like she shouldn't even spend their safe money. I Think you might be better off just getting money out of that IRA that hasn't been taxed yet, those two IRAs and the 401ks, because once you're collecting Social Security with the rental property income, you know, you're in a tax bracket that's a real tax bracket. I think maybe just start pulling money out of that pre tax accounts. Mark, do you agree with that? I do. I mean the rental property income makes this doable. Absolutely, absolutely. And listen, honestly, you know, the rental income, you know, if everything is together 1.2 million and it's generating 65 grand a year after the expenses, that's pretty good. That's a good rate of return.

[Kim]

Yeah, very happy with it. I think we bought at the right time and we really try to power, power, pay it down. So we paid most of them off in like seven years. And so it was good, a good plan for us. I think I had a question though. Sorry to interrupt.

[Jill Schlesinger]

Yeah, go on.

[Kim]

I guess Roth Conversion. Should I think about doing any more conversions or just really think about pulling the money out?

[Jill Schlesinger]

I mean, since you need the money to live on, I'm almost inclined to just pull it out and pay the tax for the next five years. I, I mean, you've got this, you could do it. I'm not sure exactly why. I don't know. Mark, what do you think? Convert, because they do have that $355,000. Should they convert or should we just pull the money out? No, I mean, I think my gut reaction says to just pull it out. Like you said, they need money to live on. You know, let's kind of start to diffuse the ticket and tax time bomb, right? Yeah, exactly. I'm sort of thinking that like you don't want to, you wouldn't be converting a whole lot every year anyway. You're going to just. I think that what's going to happen is you're going to pull out $10,000 a month. Maybe it's going to be, you do a quarterly, however you guys want to do it, you're going to pull $10,000 a month out of this account. And you know the reason why I'm saying 10 and not the 7 or 8, because we know you have to pay tax on it. So you're going to pull ten grand a month out and you're going to save some money. You're going to be able to pay your taxes. And I would do that for the next five years at least. And then once you get to, you know, if you're, if we're looking at this and you really like, all of a sudden these accounts are ballooning up because the market's on fire. Maybe we would make a conversion decision. But you know, alternatively, if all of a sudden the money is going down in value because we're in some bear market, I think you'll be happy to have that safe cash account by your side like a warm blanket. So I think that that would be. I think that that's really pretty good. What's interesting to me about all of this, you're doing this all on your own. Like, is someone helping you with this or are you?

[Kim]

We do have a wealth manager. Years ago, we had gone with another financial person and long story short, I think he really screwed us and our money stayed flat. We'd probably actually have more if we hadn't gone with this guy. So when we left him, we moved over to Fidelity and they've been really good. And since we're at a higher amount of funds are, I think it's less than 1% what we're paying.

[Jill Schlesinger]

Oh, that's great.

[Kim]

Yeah.

[Jill Schlesinger]

Okay. I mean, I presume that they have similar reaction that we have, which is. You're fine.

[Kim]

Yes.

[Jill Schlesinger]

Okay. From my perspective at least, there is no reason to delay this, especially because you both have this experience with two different parents, you know, from two families that both have dementia. I think it is really worth your while to just get your arms around the health insurance question. You'll go to the marketplace, you'll find out, you'll talk to folks. But this seems to me a real no brainer because you've done a great job. And as Mark said, those rental properties, real game changer. Real game changer for you guys.

[Kim]

Great. You know, I thought we were okay, but I definitely just wanted to run it by you and Mark because I really trust your advice. You, your podcasts are great and I listen to you every day and I tell my friends to listen to you.

[Jill Schlesinger]

So I think you're in such good shape, I hope you can enjoy it. And don't second guess yourself. Just get on getting on. Live your life. And if you run into any questions in the next year, you get some questions about COVID something, get back in touch with us.

[Kim]

Okay, Will do. Thanks again. I appreciate you taking my call.

[Jill Schlesinger]

Of course, if you are like Kim and her husband, you're a little spooked. Maybe it's your family history, maybe you've gone through something with a friend of yours. You want to know whether you can really make something happen for you. And for some it may be about the actual retirement for others. It may be that you want to simply take a whole different direction in your career. You it doesn't matter when you're making these big decisions, it's nice to have some guardrails in place. And Mark and I are good at that. Because we've heard from enough of you, we get to kind of experience the process with you. So get in touch with us. Go to jillonmoney.com, click the contact Us button and write us a note. And if you'd like to join us on the air, all you have to do is check the little box. Mark does everything else. He's so good like that. Really amazing. And of course, if you come on the air with us, don't worry, we can change your name. You don't have to be embarrassed. We can change where you live. It's very easy to do. You can subscribe to us on the Odyssey app or wherever you find your favorite podcast. Please leave us a rating and review wherever you listen. Hey, it's Friday. Let's thank all the most important people. Our music is composed by Joel Lippman. The most important person in my life professionally is Mark Tulaeur. So he is my executive producer. He is the king of all things web. We are distributed by the fine folks at Odyssey. We ask that you lift someone up. Someone needs a little boost, gang. Just trust me, it'll make you feel better. It's going to make that person feel better. Change your work, Change your wealth, change your life. Thank you for listening. We'll talk to you on Monday.

[Mark Tulaeur]

Starting your own business can be intimidating. Suddenly you're wearing all the hats. Designer, marketer, customer support, shipping expert. It's a lot. That's where Shopify comes in. Shopify is the global commerce platform powering millions of businesses around the world and 10% of all e commerce in the US Shopify has your back. With hundreds of ready to use templates, you can launch a beautiful professional online store that looks and feels like you need content. Shopify's AI tools can help you write product descriptions, headlines, even enhance your product photos. Want to grow your reach easily? Create email and social media campaigns to meet your audience wherever they're scrolling. And with Shopify's world class support, you'll have expert help for everything. Turn your big business idea into With Shopify on your side, sign up for your $1 per month trial and start selling [e-mail] Odyssey podcast, go to shopify.com Odyssey podcast shopify.com Odysseypodcast hello, it's Lena Dunham.

[Jill Schlesinger]

I host a podcast called the C Word with my dearest friend and historian of bad behavior, Alyssa Bennett. What is up? It's a chat show about women whose society is called Crazy. We're going to be rediscovering the stories.

[Kim]

Of women's society dismissed by calling them.

[Jill Schlesinger]

Mad, sad, or just plain bad. Listen to and follow the C Word with Lena Dunham and Alyssa Bennett. Available now wherever you get your podcasts.