Retired With Various Streams of Income

Summary

**Podcast Summary: "Retired With Various Streams of Income"
Podcast: Jill on Money with Jill Schlesinger
Host/Author: Audacy
Release Date: June 10, 2025

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Introduction

In this episode of "Jill on Money with Jill Schlesinger," host Jill Schlesinger welcomes Marie from Connecticut to discuss her transition into retirement. The episode delves into Marie's multifaceted income streams, real estate investments, and strategic financial planning to ensure a comfortable and secure retirement.

Guest Background

Marie and her husband recently retired as of January 1st, 2025, after successfully running and selling their business to two key employees. With Marie turning 63 and her husband 65 this summer, the couple is navigating the complexities of retirement while managing various income sources and real estate holdings.

Financial Overview

Income Streams

Marie and her husband generate income from several sources:

• Business Sale Note: They hold a five-year note on the business sale, yielding a gross income of $92,004 annually ([04:14]).
• Rental Properties:
  • Commercial Building: Valued at approximately $800,000, this property grosses $80,000 yearly with a net income of $48,000 after expenses ([05:53]).
  • Vacation Rental: Worth around $1 million, this property brings in $75,000 gross and nets about $36,000 annually, though this can vary based on maintenance and repairs ([06:41]).

Additionally, the couple rents out their primary residence, which now includes an accessory dwelling unit (ADU). This property is valued at $1.2 million with a mortgage of $305,300, generating a gross income of $52,000 and a net income of $36,000 ([07:55]).

Retirement Assets

Their retirement portfolio includes:

• IRAs: Combined value of $1.1 million.
• Roth IRAs: Approximately $200,000.
• Health Savings Accounts (HSAs): $100,000.
• Brokerage Account: $170,000 in cash CDs and $45,000 invested ([09:38]).

Retirement Planning

Social Security

Marie and her husband plan to claim Social Security benefits at ages 67 and 70 respectively:

• Husband's Social Security: Approximately $4,100 monthly at age 70 ([12:09]).
• Marie’s Social Security: Around $2,800 monthly at age 67 ([12:18]).

This arrangement is expected to provide a total of about $7,000 monthly from Social Security upon full retirement ([12:21]).

IRA Conversions

Marie considered performing IRA conversions but was advised against it by Jill:

• Jill’s Advice: “Absolutely not.” ([17:21])

Jill recommended deferring IRA conversions until they have a clearer financial picture in a few years, emphasizing the importance of liquidity and flexibility in their current financial status ([17:24]-[18:00]).

Real Estate Strategy

Selling Properties

Marie is contemplating selling her rental properties to fund future investments:

• Primary Residence: Valued at $1.2 million with a mortgage. Selling this property could potentially free up significant capital, although it would incur tax liabilities due to the property's appreciation ([08:10]-[14:10]).
• Commercial and Vacation Rentals: Plans to sell the commercial building within the next year and possibly the vacation rental are in place to generate additional funds ([14:05]-[15:18]).

Purchasing a California Duplex

The couple is interested in purchasing a duplex on the West Coast to share with their daughter. They aim to avoid taking on a mortgage by using proceeds from sold properties or holding a note for their daughter's portion:

• Estimated Cost: Between $800,000 to $1 million ([15:20]-[15:25]).

Jill emphasized the importance of strategic asset liquidation to fund this purchase without compromising their retirement security ([14:49]-[15:25]).

Investment Strategy

Jill provided insights into managing their investment portfolio to sustain their desired lifestyle:

• Current Portfolio: With an estimated $2 million, Jill suggested that their portfolio could comfortably generate the additional income needed beyond Social Security.
• Caution on Spending: While acknowledging their flexible spending goals, Jill advised caution to ensure that their withdrawal rates remain sustainable over the long term ([17:39]-[19:54]).

Advice and Insights from Jill

Jill commended Marie and her husband for their meticulous planning and diverse income streams:

• Estate Planning: Emphasized the importance of having comprehensive estate documents, especially during the transition of their business ([20:20]).
• Future Financial Flexibility: Encouraged them to delay major financial decisions like IRA conversions until they have a more stable financial picture in the next few years ([17:24]-[18:00]).

Conclusion

Marie and her husband are well-positioned for a secure retirement through diversified income streams and strategic asset management. Jill Schlesinger’s guidance helped them navigate the complexities of retiring from a business, managing real estate investments, and planning for long-term financial stability. The episode underscores the importance of flexibility, strategic planning, and professional advice in achieving a comfortable and enjoyable retirement.

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Notable Quotes:

• Jill Schlesinger: "Absolutely not." ([17:21]) — Advising against immediate IRA conversions.
• Marie: "It's a lot of work to be a property manager and just take care of the properties." ([19:54]) — Highlighting the challenges of managing rental properties in retirement.
• Jill Schlesinger: "Change your work, change your wealth, change your life." ([21:00]) — Encouraging listeners to take proactive steps in their financial journeys.

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This episode offers valuable insights for retirees managing multiple income streams and real estate investments, illustrating how strategic planning and expert advice can lead to a fulfilling and financially secure retirement.

Transcript

[Jill Schlesinger]

When you're with Amex Business Platinum, you have the card that helps businesses dream bigger, get a flexible spending limit that adapts with your business, and earn 1.5 times Membership Rewards points on select business purchases so you can stock up on what you need to take your business further and get rewarded for growing bigger. That's the powerful backing of American Express. Not all purchases will be approved. Terms apply. Learn [e-mail] AmExBusiness buying a home in California can certainly feel intimidating. We hear from listeners all the time throughout the state and they want to know, where can they even start? Many of them find that turning to a Realtor changed everything. Realtors can help buyers understand what they can afford, they can explain all of the steps that are involved in purchasing a home, and they can walk you through every detail, from making an offer to closing the deal. Working with a Realtor Realtor can help you feel less alone or unsure about the process and that peace of mind that is the power of having a Realtor by your side. Whether you're ready to move or just starting to dream, don't go it alone. Don't let what you don't know stop you from starting your next chapter. Find your [e-mail] that's championsofhome.com welcome to the Jill on Money Show. It's Tuesday, June 10th and we are here trying to help you navigate your financial journey. There are so many different paths to take and by the way, there is not one single path that will get you where you want to go. There are many. What we are trying to do, what Mark and I are trying to do is lay out the different options and maybe you can figure out which one is most appealing to you because we usually can't do everything. So it might be we say to you, hey, if you worked a little longer in this job, you might be able to retire with a little bit more money or might be that you say, I really hate my job. How could I change jobs and how much money would I need to make to get where I want to go? So these are all different things that you can put out there as your goals. And what Mark and I are trying to do is again, listen to what you are saying, lay out what some of the options are and hopefully work through it with you. If you would like our little counsel or our mentoring or our coaching, just go to the website jillonmoney.com click the contact us button, write us a note. And if you'd like to join us on the air. Check the box. Mark will do everything else. While you're on the website, don't forget to sign up for the free weekly newsletter and also check out all the other content that lives there. We've got another podcast which is on the weekends and it is called Money Watch. A little bit more of a back to basics, you know, shooting those foul shots, taking those slap shots, you know, back to basics, doing the things you should be doing or someone, you know, who might want to be starting out. We try to give a little bit more of the how to in that podcast. That's the Money Watch podcast that is on Saturdays and Sundays. We also have a blog, we also have videos, and we have resources all there for you. Check it out. Okay, now today we are talking to Ms. Marie who joins us from Connecticut, also known as the Nutmeg State. Marie, I apologize to you because I went to the New York Liberty game, the WNBA game, and the New York Liberty really beat up on the Connecticut sun last weekend. So I apologize in advance if you're, if you're smarting over that or maybe you don't care, but welcome to the program either way.

[Marie]

Hi. Thank you so much for having me.

[Jill Schlesinger]

Pleasure. So what's going on? How can we help you out?

[Marie]

Well, I listen to you all the time with my husband, and over the years you've given us some great advice. I love your straightforward clarity on helping people with their finances. And I'm hoping you can help myself and my husband with that because it's a little complicated. I need a little help seeing the forest for the trees.

[Jill Schlesinger]

All right, we can do that. We have great vision. We have night vision goggles in case it's dark out there. Okay.

[Marie]

Okay.

[Jill Schlesinger]

So what's going on for you guys?

[Marie]

So we retired as of January 1st of this year. We had a business that we sold to two of our key employees. We're holding the note on that business and we have some rental properties and we're living off of the proceeds from all of that right now.

[Jill Schlesinger]

Okay, one of my.

[Marie]

Yeah, we worked really hard to get to this point and now we're trying to enjoy our retirement with traveling. We have two grown adult children launched that live on the west coast and we'd like to spend more time with them.

[Jill Schlesinger]

First of all, how old are you guys?

[Marie]

My husband, he'll be 65 and I'll be 63 this summer.

[Jill Schlesinger]

Okay, and the note that you're holding from the sale of the business, what is that amount?

[Marie]

So it's a five year note with interest Principal and interest. The gross income from that is 92,004.

[Jill Schlesinger]

60 a year for five years.

[Marie]

A year for five years.

[Jill Schlesinger]

Okay, great. Now, does that cover a lot of your needs?

[Marie]

Yes.

[Jill Schlesinger]

Would you say it covers all or most of. How do you. What do you think it covers?

[Marie]

Most of it, but I figure we need a little bit more.

[Jill Schlesinger]

Okay, so you said you have some rental properties. Tell us about those rental properties. Let's do rental property number one.

[Marie]

Okay, the rental property, what's it worth? It's a commercial building worth about 800,000.

[Jill Schlesinger]

Is that something that you want to hold on to or would you sell that to the folks that bought your business?

[Marie]

They want to buy it. We would like them to pay off the note first.

[Jill Schlesinger]

The five years.

[Marie]

They have a five year lease, so the goal is for them to buy that building. And if not, we do want to.

[Jill Schlesinger]

Sell it no matter what. Okay. Okay, got it. All right. And is there a mortgage on it?

[Marie]

No.

[Jill Schlesinger]

Okay, so that income is about how much?

[Marie]

So the gross income is 80,000 and we net about 48,000.

[Jill Schlesinger]

Rental property number two. What's that?

[Marie]

Okay, that's a vacation rental. That's worth about a million.

[Jill Schlesinger]

Oh, hello.

[Marie]

We gross about 75,000 a year, and we net a little bit on the conservative side, about 36,000. Depends what repairs and things we do with it.

[Jill Schlesinger]

But you guys use it also?

[Marie]

Yes, I'm actually here right now.

[Jill Schlesinger]

Yay. Okay, so it's a rental, but this is something. Ideally, what would you want to happen to that? That, like. Okay, when five years comes around and you've got this money from the commercial building, do you want to just say, I never want to rent it again. Is this something you want to keep unencumbered? Like, what would you like to happen to that?

[Marie]

We're considering moving to the west coast or at least possibly buying a duplex there, sharing it with our daughter. So we all love this vacation rental home. My kids come home every year and we use it. But if we could perhaps recreate it out on the west coast, that would be cool.

[Jill Schlesinger]

Yeah, yeah, yeah, that's cool. I like that. Okay, so the million dollars is that there's no mortgage on that?

[Marie]

No.

[Jill Schlesinger]

Okay. And you said you had a third rental property, is that right?

[Marie]

Yeah, it's our primary residence. And a few years ago we built an accessory dwelling unit, an adu, and my husband and I moved into a nice apartment, and now we rent the house out.

[Jill Schlesinger]

Oh, my God, you guys are totally awesome. So the house is worth. So the house with the ADU is worth how much?

[Marie]

Right now we think about 1.2.

[Jill Schlesinger]

Okay. And again, no mortgage that.

[Marie]

We have a mortgage of 305,300. And that was based on one of your recommendations. Five years ago, we got the mortgage at 2.75%.

[Jill Schlesinger]

I was pretty smart then. I mean, if only I had taken my own advice. Gosh. Okay, so 2.75%. And what is the income from the primary?

[Marie]

So that's about 52,000 and we net about 36,000 on that one.

[Jill Schlesinger]

You got a lot of income. What are you doing with all this money? Are you spending it and have like. I mean, I know you just retired a few months back, whatever, five months ago, but are you living large? What's happening to all that money?

[Marie]

A little bit. We've been doing some traveling. A lot of pent up traveling, because we were running our own business, we couldn't take off.

[Jill Schlesinger]

Okay.

[Marie]

So, yeah, we're kind of having our gap year in our 60s.

[Jill Schlesinger]

Most people have it, Mark, I want a gap year. Let's get a gap year. Okay, well, you also mentioned that you'd have done some savings beyond the business itself and all these real estate properties. What about retirement assets? What do you have?

[Marie]

So we have IRAs combined. That's about 1.1 million.

[Jill Schlesinger]

Okay, that's great. And did you also have Roths?

[Marie]

We have roths. That's about 200,000 combined. And. And we have HSAs.

[Jill Schlesinger]

HSAs. Do you have a brokerage account?

[Marie]

We have a brokerage account. We use that for our emergency savings. That's about $170,000.

[Jill Schlesinger]

So not invested. That's cash.

[Marie]

It's cash CDs. And about 45,000 of it is invested.

[Jill Schlesinger]

Okay, and how much in the HSAs?

[Marie]

100,000.

[Jill Schlesinger]

And your husband has Medicare. What are you doing for your health insurance?

[Marie]

I'm on the marketplace.

[Jill Schlesinger]

Okay.

[Marie]

And I have been for years. So I'll continue that right through till I go on Medicare.

[Jill Schlesinger]

Okay. All right, so now that you've had your five months of like revenge travel or whatever, your gap five months, what do you really. So we said when I asked you that question about, like, oh, is that 90,000 from the proceeds a year? Does that cover it? Do you have a better sense of really what your costs of living are? And I mean, I want you to include the fun stuff too. So, like, if I, if we had to create income for you, if we were looking at everything you had, what is the amount of income that you think would satisfy your real needs going forward? Not, not like, don't skimp, like for real, I'd say.

[Marie]

I mean, 150 would be the low. 150,000, you know, 200,000 would be dice.

[Jill Schlesinger]

So just so I understand, the money we have to think about is for the next five years, we don't have to really think about much because you're going to have, I mean, presuming they don't blow the. The business up. But they probably won't. Right. Because you know them and they worked for you.

[Marie]

So far, so good. We've trained them for years. So.

[Jill Schlesinger]

Okay.

[Marie]

I think so. Good shape there.

[Jill Schlesinger]

So then what we know is that for five years you have this 92 grand. Do either of you. When do you plan to claim Social Security?

[Marie]

We're thinking we're in good health. We did have scare with my husband. He had prostate cancer, but his prognosis is good. It was caught early. So we're thinking he'll claim at 70. You know, if all looks good, I'd probably claim at 70 or maybe it's 67.

[Jill Schlesinger]

Okay, sure. So at age 70, what would his Social Security amount be?

[Marie]

It's about 4,100.

[Jill Schlesinger]

Okay. And yours at 67 would be about. What do you think?

[Marie]

Mine is 2,800 at 67.

[Jill Schlesinger]

Okay, so that's great. So we know that you have around seven grand of income a month coming from Social Security eventually, but that's pretty soon. Right. It's five years from now. So what we know is that the 92,460 a year rolls off in five years. Right. But then you hopefully have this $800,000 influx into the brokerage account. Right. So, I mean, you'll have to recapture some of it. There'll be taxes that are due, but, you know, you'll have, I don't know, let's say you have 700. Did you buy really cheap? You probably did. It's probably going to be.

[Marie]

We did.

[Jill Schlesinger]

You're going to have some. You have some real taxes to pay, but you have an accountant who can help you with that.

[Marie]

Yes.

[Jill Schlesinger]

Okay, so let's say, you know, you get. Maybe I'll be conservative. I'll say you'll have, after all taxes and all the. Everything is done. You have another 600,000 in today's dollars that you add to the brokerage account, which would mean that again in five years, your IRA, which is now worth 1.1, your Roth IRA, which is to your brokerage account, which is 1. 7. Not growing too fast, but, you know, you'll have a bunch of money that flows into that Brokerage account, which, you know, I guess is going to get you close to 2 million bucks, maybe more than $2 million in five years. Right. Okay. And then we know that you'll have Social Security to come in on the back end of that. So then the question is, what are we really doing with these two other properties? What are we doing with the primary? What are we doing with the vacation? You're saying that you would think about selling the vacation. That's the one, not the primary residence like you're going to want to have. Do you want to keep some house in the Northeast so that you guys can hang out here? Is that what the game plan is?

[Marie]

Yes, I think we probably would sell the primary before the vacation.

[Jill Schlesinger]

You would? Okay, yes. So that's the one that has 1.2. Really? But I, but I love that, that 2.75. Okay, forget. I'm gonna let it go. So then you would. Yeah, you would sell the primary and you'd have some tax liability because again, you bought it a while ago and you'll be excluding half a million of that. Whatever you paid some. You. You put some money into it. But it looks like to me that you would have again, 7, $800,000 of proceeds. But that's not money that's available for us to think about using for your retirement. That is money that you would need to purchase your California duplex, right?

[Marie]

Yes.

[Jill Schlesinger]

Okay. How do you think that would work, that the California. Would you do it, you said, with your child, your daughter, I think, right?

[Marie]

Yes. We were thinking if we could buy it, we'd prefer not to have a mortgage. If we could either sell the commercial property or the primary residence, buy the property out in, especially in Oregon. And we could hold a note for our daughter for her portion of the duplex.

[Jill Schlesinger]

How much would it cost you?

[Marie]

We've been looking and it's anywhere between 800,000 to a million.

[Jill Schlesinger]

But again, whatever real estate you guys have, just so I am clear, some portion of the commercial building plus your primary would go into the brokerage account and another portion would go to build out this dream of Oregon. Right. And so what we're really trying to figure out, or what I'm trying to figure out in my quick math kind of way, is that I look at your. You're today, right. You're at 65, you have five years from now, you have Social Security, plus you're going to still have maybe the. Some of that rental income from the vacation home if you wish. I don't know if you will. But let's say you did. That'll give you your ten grand a month out of like, your need. You said 150,000 and the rest would come from your portfolio. So I think it's sort of doable. Here are the. Here are my. I'm going to poke some holes right now. I think 200 is too much money to spend based on your assets right now. If you told me you were not doing this California duplex, but you were just going to sell either your primary or your vacation home, and that was going to go into the kiddie, you'd be okay. Because to get beyond that $7,000 a month of Social Security, we need like 6 grand a month from your portfolio, which is not impossible. It's totally doable. If I have $2 million that's in that portfolio around ish, you should be fine. But if you're saying that, oh yeah, we're really spending more like 15 grand a month, I don't know. That makes me a tiny bit nervous and maybe I'm a nervous Nelly. Maybe it's fine. I want to see how things proceed. You'll have a lot more information. So is your question right now like your core question? Are we okay or is it, what should we think about selling?

[Marie]

I was thinking about doing IRA conversions.

[Jill Schlesinger]

No. Absolutely not. Absolutely not.

[Marie]

Okay.

[Jill Schlesinger]

No way. I need your cash because we'll be.

[Marie]

Adding to that cash over the next five years. We're really probably spending only on the lower side, depending on build up that cash.

[Jill Schlesinger]

Because I'll tell you what, we'll have time. I don't want you to do a conversion in five years. You're going to have a lot more information. Right, to be clear. Okay, are you thinking about right now doing the Oregon, like, would you sell your primary or your vacation? Let's say, let's stay on the primary. Would you sell the primary now and do the Oregon transaction? Are you going to wait on that?

[Marie]

We might sell it now. It's currently rented. Our. Our tenant re upped his lease until next year and he might go one more year from there. I think we might decide to sell it.

[Jill Schlesinger]

Okay, let's say you sell that in a year and you get the money out. And then let's say that you need some cash to. To really consummate the Oregon transaction, then you got to pull money out of your brokerage, right. Or whatever money you've built up in this next couple of years. And so I don't want to use that money to convert and pay for the conversion. See, I Feel like there's too much in flux right now. We need your cash to make these. You might. In other words, I think everything's going to be fine once you get liquid, but you're not liquid yet. If you're going to say, I'm selling my primary, we're buying Oregon, we'll move into our vacation home. Whatever we have to do, we'll go back and forth. Fine. But we haven't sold the rental property yet, so we don't have that cash infusion. I think that in five years you're going to have a lot more information. Maybe in three years, maybe if everything is great and all the money is pouring in and you're like, oh, my God, Joe, we're not spending 150 to 200, we're really spending 120 a year. And I overestimated that. And we can't even travel as much as we thought we were going to travel. Like, if all that is happening, maybe, maybe we would do a conversion, but more likely I would just say pull the money out of the IRAs, start to pay the taxes when your tax liability is lower. And you know, when you, you might have this interesting moment like those years between 70 and 75, that may be where you start to do more of the pull the money out or do the conversion because you'll. All that money you're receiving from the note and the rental and all that stuff, it's going to change. Right. In five years. So I think you might have a different choice in five years. But for now, I don't do the conversion. Okay. Are you going to be happy to not be a landlord anymore?

[Marie]

Yeah, more than be. It's a lot of work to be a property manager and just take care of the properties. The landlord part is not terrible because we have people that re up all the time. So it's not the people, it's just the properties we just put into new boilers. So that's why our cash emergency fund is a little bit lower than amazing, it would be.

[Jill Schlesinger]

All right, well, this, I mean, look, it sounds great. I think the game plan is a good one and I think that if you need more help and more information is emerging, get back in touch with us. But you're on track. And so congratulations, small business owner who somehow manages to finish out a career with her nerves and her head and her heart intact. So well done to both of you. Make sure you've got all those estate docs done, especially as the business is in transition. And get back in touch with us if you need anything, because it really does sound like you're in great shape. You're, you're on track. Okay, great.

[Marie]

Thank you so much.

[Jill Schlesinger]

All right.

[Marie]

We appreciate all your advice.

[Jill Schlesinger]

A pleasure, Ms. Marie from the Nutmeg State. I impressed somebody by knowing that recently. Okay. If you are a small business owner and you're thinking about maybe selling or maybe you're the person who would buy the small business, maybe you're in your 40s and your boss is like, hey, you want to buy my business? Let's talk. This is such a great story because it really gives people hope that if you're working in a small business and a closely held business, maybe there's a chance for you to emerge with a business. It's incredible. Anyway, give us a Holler. Go to jillonmoney.com, click the contact us button. Write us a note if you want to come on the air, check the box. We'll do everything else. Don't forget to sign up for the free weekly newsletter comes out every single Friday. You can subscribe. Subscribe to us on the Odyssey app or wherever you find your favorite podcasts. Please leave us a rating and review wherever you listen. And of course, 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 tomorrow. I'm CBS News chief Washington correspondent Major Garrett, and you're invited to the takeout. No reservations required. Every weeknight, our podcast serves up a balanced menu of politics, policy and pop culture, the day's happenings with curiosity, informality and humor. Serious discussion. But we don't take ourselves too seriously. Follow and listen to the takeout with me, Major Garrett, on the free Odyssey app or wherever you get your podcasts.