Podcast Summary: Jill on Money with Jill Schlesinger

Episode: Reset After Military Career
Release Date: July 9, 2025
Host: Jill Schlesinger, CFP®
Guest: Sam from Washington D.C.

Introduction

In this episode of Jill on Money with Jill Schlesinger, host Jill Schlesinger engages with Sam, a military veteran approaching retirement after 30 years of service. The conversation centers around Sam's financial planning as he transitions from military life to civilian life, his upcoming move to North Carolina, and the financial strategies involved in purchasing his in-laws' house.

Sam's Background and Retirement Plans

Sam introduces himself as a 52-year-old military veteran from Washington D.C., preparing to retire in a year. He plans to relocate to North Carolina to buy his in-laws' house while his parents transition to independent living facilities.

Sam (03:26): "I'm going to retire in one year from the military after being in for 30 years... moving down to North Carolina and buy my in-laws' house."

Financial Overview

Sam outlines his pension and disability benefits, detailing two pension streams: one estimated at $128,000 annually with a cost-of-living adjustment (COLA) and another approximately $50,000 annually based on his disability rating due to his status as a cancer survivor.

Sam (04:54): "I have to wait until the final. I'll have two pensions. The one pension will be about 128 a year with a COLA and then there will be another one that I think will be about 50 a year based on my disability rating."

Jill commends Sam for his resilience and robust financial planning, emphasizing the importance of understanding pension details and disability benefits.

Retirement Savings and Investments

Sam shares his savings portfolio, including:

• CDs: $340,000 from a previous home sale.
• Thrift Savings Plan (TSP): Approximately $680,000, with a portion being non-taxable.
• Roth IRAs: His wife has $430,000, and he has $435,000.
• Traditional IRAs: Minimal balances of $9,000 and $8,000 respectively.
• I Bonds: $10,000.
• E*TRADE Stocks: Around $9,000 in long-held stocks like Apple, Intel, and Southwest Airlines.

Sam (11:26): "I have about nine grand. Maybe it was Intel and Southwest Airlines."

Jill highlights the strength of Sam's retirement accounts, recommending maintaining liquidity to avoid market volatility risks, especially for funds needed within the next year.

529 Plans and Education Funding

Sam discusses his 529 plans for his three children, totaling over $420,000. He strategically allocated funds to cover his daughter’s private school tuition and anticipates utilizing the remaining funds for his son's college education.

Sam (09:11): "I have 529 plans for all three kids, but I have a little over 420,000."

Jill underscores the importance of these plans in securing his children's education expenses, allowing Sam to allocate his savings effectively without dipping into retirement funds.

House Purchase and Financing Strategy

Sam plans to purchase his in-laws' house in North Carolina for approximately $870,000. His primary concern involves avoiding gift taxes by ensuring the purchase price remains below $1 million, considering his in-laws' original purchase price and the potential capital gains tax implications.

Sam (11:41): "The house will be empty for a handful of months there, then you can do the work."

Jill advises using Sam's CDs and inherited taxable brokerage account to fund the down payment while conserving some funds for home improvements, such as a new master bathroom estimated at $100,000.

Utilizing a VA Loan

Jill recommends leveraging a VA loan to minimize financing costs, given Sam's military background. She explains how VA loans can offer favorable terms, potentially reducing monthly payments and fees.

Jill (16:34): "You're going to end up with a very small VA loan. I don't think it's going to be a very big one at all."

Sam considers financing a portion of the house, estimating monthly mortgage payments around $2,147, complemented by property taxes and homeowners insurance to reach a comfortable $4,000 monthly housing expense—consistent with his current rent.

Sam (19:26): "A $400,000 30-year fixed-rate mortgage... would be about $2,147."

Cash Flow and Expense Management

Currently, Sam and his wife manage expenses totaling approximately $20,000 per month, including private school tuition, which they plan to eliminate once they move to North Carolina and transition their son to public school.

Sam (19:58): "We're pushing out about 20 a month."

Jill reassures that their combined annual income post-retirement—$160,000 from Sam's pensions and $120,000 from his wife's earnings—should comfortably cover their expenses.

Jill (20:01): "So let's just say the 20,000... you’re paying the 20,000 out of cash flow. How much are you making right now?"

Recommendations and Action Plan

Jill provides a comprehensive action plan:

1. Conserve Cash: Ensure sufficient liquidity for the home purchase and renovations.
2. Finance Appropriately: Utilize a VA loan to minimize out-of-pocket financing.
3. Manage Investments: Make the inherited brokerage account more liquid to avoid market risks.
4. Future Planning: Consider drawing from retirement accounts strategically as they approach slower income periods.

Jill (17:49): "This is what I think should happen. To do this transaction, you are going to conserve some of the cash... free up the T. Rowe Price inherited brokerage account a little bit more liquid so you don't have risk."

Health and Legal Preparedness

Sam touches on his health journey, highlighting the importance of having medical directives and legal documents in place, especially given his international medical treatments.

Sam (23:30): "I have all of my documents in place. Right. I have my will and my power of attorney and my healthcare proxy."

Jill emphasizes the significance of these preparations, reinforcing their role in comprehensive financial planning.

Closing Remarks

Jill encourages listeners undergoing significant life transitions, like retirement or relocation, to seek personalized financial advice. She reiterates the value of community and support in managing financial burdens.

Jill (24:05): "If you are looking at any kind of big transition like this, it doesn't have to be a retirement. At any transition. Get in touch with us. We can help think this through with you."

Key Takeaways

• Comprehensive Financial Planning: Diversifying income streams through pensions, disability benefits, and retirement accounts is crucial for a stable retirement.
• Strategic Use of Loans: Leveraging VA loans can significantly reduce financing costs for veterans.
• Educational Funding: Proper allocation of 529 plans ensures children’s education expenses are covered without jeopardizing retirement savings.
• Liquidity Management: Maintaining liquid assets for major transactions prevents financial strain and mitigates market risks.
• Health and Legal Preparations: Ensuring all medical and legal documents are in place is essential for safeguarding one's future and family’s well-being.

Notable Quotes

• Sam on Retirement Plans:

  "I have to wait until the final. I'll have two pensions. The one pension will be about 128 a year with a COLA and then there will be another one that I think will be about 50 a year based on my disability rating."
  [04:54]

• Jill on Financial Security:

  "Don't worry. This is what I think should happen. To do this transaction, you are going to conserve some of the cash to do your bathroom ahead of, like the actual consummation of the sale."
  [17:49]

• Sam on Health Journey:

  "I'm five years post stage 3A rectal cancer."
  [05:30]

Conclusion

This episode provides an insightful look into the financial considerations of retiring from a long-term military career, highlighting the importance of strategic planning, leveraging available benefits, and ensuring liquidity for major life transitions. Jill Schlesinger offers valuable guidance tailored to Sam's unique situation, serving as a beneficial resource for listeners facing similar life changes.