Retirement and College Expenses

Summary

Podcast Summary: Jill on Money with Jill Schlesinger

Episode: Retirement and College Expenses
Date: November 14, 2025
Host: Jill Schlesinger, CFP®
Main Theme: Navigating Retirement and College Savings — Balancing 529 Plans, Retirement Accounts, and Cash Flow

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Overview

In this episode, Jill Schlesinger tackles the complex—and often stressful—financial scenario of balancing college funding for children with retirement security. A listener, Jen from the Mid-Atlantic, calls in for advice as she and her husband approach retirement and send twins to college. The discussion produces actionable strategies for handling 529 allocations, retirement withdrawals, pension considerations, budgeting, and the emotional complexity of large financial decisions. Jill and producer Mark break down solutions step-by-step, dissecting the math, timing, and feelings involved.

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Key Discussion Points and Insights

1. Listener Situation: Jen’s Background (04:10 – 09:45)

• Jen (57, retired) and her husband (55, working, earns $360k salary + $175k bonus) are parents to twins, juniors in high school.
• Substantial 529 savings ($175k–$180k per child) but anticipating higher total costs (private school: $80k–$90k/year; out-of-state public: $70k–$75k/year).
• Assets include significant retirement savings (Jen: $1.5M traditional, $40k Roth, $36k Rule-of-55 401k; Husband: $2M 401k, $330k Roth, $55k IRA, growing $457f, $60k/yr), $50k in cash, and a $2M home ($925k mortgage at 2.75%).
• No significant pensions except for husband’s small one ($33k/year, no COLA), both eligible for Social Security.

2. College Funding vs Retirement Security (12:00 – 20:53)

• Jill and Mark analyze whether dipping into retirement assets for college will endanger future lifestyle goals, especially as current spending is about $23k/month.
• Asset Allocation for 529s:
  Jill strongly recommends moving the first year’s tuition in each 529 into stable value or money market funds to guarantee liquidity and avoid last-minute market crashes.
  • Quote (Jill, 19:28):
    “I would take the first year of tuition... and have it in the money market or whatever fixed income fund they have. 18 months is a long time and a short time, but if the market craps out... you’re going to be pissed if you don’t have that cash on hand for year one.”
• Mark suggests adjusting the husband’s 401(k) contributions—lowering them to the required 6% match to boost cash flow for education costs, while still benefiting from the employer’s generous additional flat contributions.
• Jen wonders if she should start tapping retirement funds; Jill reassures her to avoid large, lump-sum withdrawals. Instead, pursue a methodical, as-needed approach.
  • Quote (Jill, 17:52):
    "You can pull down money as you need it, but you don’t make these big sweeping changes. You should be okay."

3. Calculating Retirement Feasibility (16:51 – 18:56)

• Mark analyzes if current and future assets can support projected lifestyle (including college expenses) assuming husband works to 62. With ongoing employer matches, a pension, and future Social Security, they're on track.
  • Quote (Mark, 17:28):
    “Based on their current assets... in seven years, that’s going to be able to generate almost $20,000 a year, plus he’s got that $3,000 a month pension plus Social Security down the line.”
• Moving out and downsizing later (age 75–80) could free up more options, but no need to factor that in now.

4. Practical Action Items (18:56 – 21:05)

• Move first-year 529 tuition to cash/stable value soon.
• Temporarily adjust husband’s retirement contribution strategy to maximize cash flow without forfeiting employer support.
• Build more up in basic savings (beyond $50k current), which may aid college or buffer the household.
• Keep evaluating cash flow, especially as kids go to college and spending patterns shift.
• Update estate documents and ensure life insurance coverage is sufficient, given household dependence on husband’s income.
  • Quote (Jill, 20:53):
    “With his extra cash flow, you should be able to do it.”

5. Emotional Realities and Listener Reassurance (21:13 – 22:11)

• Jill addresses the emotional aspect for high earners—making big decisions is stressful at any income; it’s not just about math.
  • Quote (Jill, 22:11):
    “We’re all emotional beings, okay? That’s why this show exists. If this was all just a math equation, nobody would need you and me to walk through it with them.”
• Reinforces that financial planning is about timing, psychology, and personal values as much as dollars and cents.

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Notable Quotes & Memorable Moments

• On the shock of college costs:
  Jill (06:35):
  “It is really incredible... I know that I’m being like an old stir when I say, like, wow, $350 grand for college—It’s a big number. It really is.”

• Advising incremental, not drastic, retirement withdrawals:
  Jill (17:52):
  “You can pull down money as you need it, but you don’t make these big sweeping changes. You should be okay.”

• On funding strategy and emotion:
  Jill (22:11):
  “We’re all emotional beings, okay? That’s why this show exists. If this was all just a math equation, nobody would need you and me to walk through it with them.”

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Timestamps for Important Segments

• [04:10-09:45] — Jen explains her financial background and college savings.
• [12:00-15:27] — Jill and Mark assess the risk and security of using retirement funds for education.
• [16:51-18:56] — 401(k) funding strategy and projecting retirement feasibility.
• [18:56-20:53] — Specific recommendations for 529 allocations and contribution adjustments.
• [21:05-22:11] — Estate planning and emotional factors in financial decision-making.

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Tone and Closing Thoughts

The episode is warm, practical, and supportive—Jill and Mark balance tough financial calculations with compassion and humor. Their guidance is methodical but adaptable to listener comfort. Jill emphasizes, for all income levels, that financial planning is both numbers and psychology, assuring listeners they’re not alone in the emotional weight of these decisions.

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For more episodes or to submit your own financial question, visit JillOnMoney.com.

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Transcript

[A]

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[B]

Welcome to the Jill on Money show. It's Friday, November 14th and we are here trying to help you make smart financial decisions. And you know, we've already talked about this in the last week or so. I just think it is going to be a very weird time when everybody goes to file their taxes next year realizing that they could have done so many wonderful things to do to take advantage of changes in the tax rules. And then you're going to be in April and you're going to be like, oh, why didn't I listen to Jill back in November? So listen up. There are a lot of things that have changed in the tax code and some of them actually apply to this year, some of them apply to next year. And so if you want to get a jump on your year end tax and financial planning, you should be a subscriber to Jill on Money Live. You know, that is the service where you have Access to corporate quarterly live webinars, the back catalog of those webinars, bonus audio and video content. And it costs you 45 bucks for the next 12 months. So our upcoming webinars next week, Wednesday, November 19th. And we are going to dive deep into year end tax and financial planning. Can I give you a tiny preview? One of the things that's changing is.

[A]

The way that charitable contributions are treated.

[B]

I don't think people get this. I know that I didn't really focus on this until we did an interview with a guy from Schwab from this organization called daft giving360. You know, if you're in the highest tax bracket, if you're in that 37% bracket, there's going to be a new cap on charitable deductions. That's next year. And anyone who is an itemizer is going to have to give away a little bit more money to get bang for their buck next year. So this is a year right now. 20, 25 could be a year where you really start to think about how am I going to take advantage of the changes in the tax code? 45 bucks will allow you to join us to find out. How about that? That's a good deal, I think. Anyway, so check it out, Jill on Money Live right on the front door of our website. Okay, let's get to you guys. Now that I've talked about us too much, let's talk to Jen, who joins us from the Mid Atlantic. Hello, Jen. How are you?

[C]

I'm great. How are you?

[B]

Fantastic. What's going on?

[C]

My husband and I are approaching retirement age. Actually, I already retired and our kids are approaching college age. And I wanted to get some advice on how to allocate the 529 money right now and maybe a few other.

[B]

So, Jen, how old are you?

[C]

57.

[B]

And your husband? He's 55 and he has not yet retired. He's still working. He's toiling away. Good. You should enjoy yourself. Okay. And how much does he earn salary?

[C]

360.

[B]

Okay. And bonus? Yeah.

[C]

175.

[B]

Wow. Is that consistent?

[C]

It should be.

[B]

I like that. I like the little hesitation. I. What you what? I thought I heard you say you. When you said it should be what I thought I heard you say between the, the words, was it better?

[C]

Okay.

[B]

So Jen, are you, you're retired. Are you entitled to a pension?

[C]

No.

[B]

Okay.

[A]

I'm sorry.

[B]

Sad girl. You got some kids in. In high school. One, two. What did you say?

[C]

I have twins in high school.

[B]

This is so weird. This Is the second call of somebody with twins in high school. Okay, so right now, what money have you socked away for them for college?

[C]

We have about 175, 180 per kid.

[B]

Oh, that's a lot each. Wow. Okay. In 5, 29.

[C]

In 5, 29.

[B]

Okay. And do you think they're headed to private, public, or what do you. What's your guess?

[C]

They are either headed to private or out of state public.

[B]

Are you feeling like you need a little bit more money? Because, like, when. I know there's a range here. So are we talking about the kind of schools that are like 80 grand a year or 50 grand a year?

[C]

From what I can see right now, the kid probably headed to private is somewhere between 80 and 90 and.

[B]

Good Lord, it's crazy, man.

[C]

I know. And the kid headed to a public is probably 70, 75.

[B]

It's. It is really incredible, like, the numbers. I know that I'm being like an old stir when I say, like, wow, 350 grand for colleges. Like, like, it's just. It's a big number. It really is.

[D]

I'm sorry, it's more than a lot of people pay for a house.

[B]

I know, it's crazy. Do you mind me asking, what year are they? Are they like juniors? Senior. Like, where are we in the process juniors?

[C]

Okay, so 18 months. We in.

[B]

Okay, so 18 months to go. All right, right now, in your. Besides the 529 plans, what other money do you have that you could access to help pay for college?

[C]

At some point, we decided that it was more advantageous for us to save in our retirement accounts. Since when I will be 59 and a half. They will be entering their, like, second college. Okay, so that. To, like, take advantage of tax.

[B]

So. So what do you have in your retirement account, Jen?

[C]

I have 1.5, and then I have 36,000 in 401k. That is rule of 55 eligible.

[B]

Okay, and so the 1.5 is all pre tax.

[C]

All pre tax.

[B]

Okay, so here we go. Traditional. Okay, now beyond those two chunks of money, right, Tell me about anything else. Like, what about your husband? I know we're not tapping his account because you married a young guy, but what does he have saved?

[C]

Okay, so for me, Also, I have 40,000 in a couple of Roths. Okay, so my husband, he has $2 million in a 401k pre tax, pre tax. Got it, 330,000. 330,000 in Roth. 401k.

[B]

Okay, great.

[C]

He has an IRA of 55,000 and he also has something called a 457f.

[B]

Yep.

[C]

That currently has 60,000 in it. But it. We should be getting like another $60,000 every year. Ish. Until.

[B]

Wow, look at your husband. He's not allowed. He is not allowed to retire. Half a million Dollar man at the very least, says Jen. He better be making that bonus, Mark. He better. So you got a ton of money socked away. This is great. How about like safe money, boring in the bank kind of money?

[C]

See, this is where we missed the boat. I think we didn't understand to really put any money away anywhere else. Okay, all right.

[B]

You didn't miss the boat. It's fine. Don't worry. You guys have saved a ton of money.

[C]

Yeah, we have like maybe $50,000.

[B]

Okay. I don't see how you can like say we missed the boat when you've got three and a half million bucks saved. Truly, you're doing great. You're doing great. Are you going to have any sort of income at all? Are you going to go back and do a little something something. You're young, you're, you know, rocking and rolling in your life. Or you're like, I got to deal with these damn kids until they get ready then. Or. What's your view on this?

[C]

Yeah, I'm dealing. I was working and it was a lot of stress, so, you know, just trying to get the kids launched into college.

[B]

Fair enough.

[C]

Then trying to enjoy life. Enjoy life.

[B]

There's nothing wrong with that. How about a house? You got one of those?

[C]

Yes.

[B]

How much is it worth?

[C]

2 million.

[B]

Wow. Holy moly. What about a mortgage?

[C]

I have a big one of those too. 925.

[B]

925. And what is the mortgage interest rate?

[C]

Two and three quarters.

[B]

Oh my God. Okay. Is your husband like a big time kind of worker? Be. Is he like, I'm in it for 10 years. Like, what is his view on his own retirement?

[C]

62 would be the earliest he took on a new role recently. And some days he comes home really energized. And some kind days he comes home saying, I'm not sure how much longer I can do. Not, not, not in the short term.

[B]

But yeah, yeah, like, I don't like 10.

[C]

Retirement sounds good.

[B]

Yeah. Like 10 seems like a long time. Many, many years. And he will not be entitled to a pension. Right.

[C]

He has a small pension. It's about $33,000 annually. Survivor benefit. No cola at 62.

[B]

All right. Like tonight that's not so small money. Yeah, exactly. 33 grand a month pre tax. Fine. And you'll both be able to claim Social Security. How's your health, both of you? Healthy, except for the fact that you know he's going to. You're going to work your poor husband to death.

[C]

Yes.

[B]

Okay. Okay, great. Any other people that you guys have to take care of besides the twins? Like, do you have parents who are aging? Or is anything we need to. Anything on your radar that we should be aware of?

[C]

I think we're pretty good.

[B]

Great. So now we're in this situation where, you know, you have all this money coming in. I know you decided to step back and retire, but how are you feeling if you just forgetting about the bonus for a second. That 360 base that he has, can you guys live on that?

[C]

We probably could.

[B]

If you had to, yeah.

[C]

Okay, so I'm project. Like right now we spend a lot of money.

[B]

Yeah, because these two kids are eating you out of house and home. Right. That's why.

[C]

But then also when we retire, I feel like I think we saved pretty well and I think we can live pretty well.

[B]

So what are you spending now? Like, if you look at your spending today, let's not presume you spend less, but your expenses are what right now?

[C]

I wrote down 23,000amonth, my girl.

[B]

Look at you spending like a champ.

[C]

Okay, Kids are expensive.

[B]

Yeah. But you live in a high cost of living area. Right. You know, like, I get all this. People listening to this are freaking out. I just want you to know, Mark, how much are people? Like 275 grand a year? Like.

[D]

Right, the hate mails. Trust me, the hate mail is coming.

[B]

Okay, but like, everybody calm. Calm thyselves. Okay? So everything just gets bigger. So. All right, in this analysis, if we have him work to 62. Right. I guess the question is like, what portion of your retirement accounts should be used for education and are you screwing yourself by doing so? Right? So like if it's 18 months from now, and I don't know, also I'm a little bit worried, like in the 175 to 180 grand each because they need it in 18 months. I presume this is invested rather gingerly, like it's not too crazy. Or is it like way out there.

[C]

Risk wise index funds to the year that they.

[B]

Okay, that's good. That's fine. So.

[C]

But I, I was not happy with the rate of return, so I put some money in a longer term, like another four years.

[B]

Okay, so. But you would. But you could always fund the difference, right. If, if the market tanked. Let's just pretend this in 18 months, all of a sudden we're in a bear market. And whatever money you've put in for the next 18 months, it doesn't matter. You've got like 150 grand each for these kids. So you know that you're going to basically be able to pay for two years, right? And then you're waiting for the markets to come back, right. And help you out on the other side of it. So the question is, should you take money out of the traditional, the one and a half million dollars? Let's just presume, let's do this. If we were to assume that the $1.5 million, it's in your traditional, that we are using 300 of it to pay for college, it's really going to be more like 350 because we got to pay tax on it, right? So let's say that we're going to use 350, leaving you with, you know, now you don't have one and a half million, now you got 1,1500,000. And so the question is, can you do that without messing up your retirement game plan? Right. And so Mark, I want to even be more conservative. Like let's presume that she's got $1,100,000 in her traditional after college, the 401k, the rule of 55, 401, you'll use whatever and so you'll have a little bit less money. Your husband stays the same with his 2 million of his traditional 330 of the Roth 55.

[C]

And he's still adding to his right.

[B]

And so we are going to assume he's going to add to it and he's going to max it out and all that stuff.

[C]

And his employer gives a very generous like 15% match.

[D]

That's where I'm like, I mean, as I read this and I'm thinking about it, the husband's contributing the max. So I'm assuming he's putting in also the catch up. I mean, why not for a couple of years, just if the employer is putting in 15%, why not just for a couple of years have him stop contributing and use that to fund the gap?

[B]

Does he have to put in 15% to get the 15% match?

[C]

He has to put in 6% to get a 6% match and then on top of that he gets a 9% flat.

[B]

So how would you feel if we pulled back on his contribution down to. I know you're like, you're, you're like super funding retirement. But what about in these years right now? What if you did pull back to 6%, what if your cash flow could increase a little bit and you could either help pay for college but also beef up your savings because wouldn't be a terrible thing to do that. And then my question, Mark, is that by the time he hubby gets to 62, are they going to be able to generate 23 grand a month to cover their expenses? And I mean I know that you're both going to get Social Security. So do you know what your Social Security looks like at 70?

[C]

My husband's would be about 4800, I think, and mine would be around 2800.

[B]

What do you think, Mark? Can we like jam into the kids accounts without. Without messing up a retirement at 23 grand a month, which is again, it's not a small amount of money. And I'm not saying you don't like you make a lot of money, but it is still a lot of money. And you would stay in your house right where we're absolutely sure about that.

[C]

I'm thinking that we will move out when 75, 80, but then we got to go somewhere.

[B]

You think they can do it?

[D]

I think if he pulls back right now to help fund the, the college gap, you know, based on their current assets that they have right now and you know, they, he's still going to contribute a little bit 6%. The employer's still going to be putting in 15% and they just let it grow in seven years. You know, that's going to be able to generate almost $20,000 a year plus he's got that $3,000 a month pension plus Social Security down the line. So that's the way I would do it.

[B]

I think I like that idea also because you also have this weird situation. I mean again, you can also pull that money out of your retirement account at 59 and a half. You can put, pull some of that money out and start paying tax on it. But you don't have to pull it all out at once. And you can help them with school and you can, you know, you can go through the process. It's almost like if you are more methodical about it, like you, you reduce his contribution, you pull down money as you need it, but you don't make these big sweeping changes. Right. You should be okay. And we also have to kind of see like, well, where are they going to land? Right? And I think that if this all works out the way we think, and again, you're going to test it all the time, it should be fine. It really should be Fine. And I'm not even like, I know there's, you know, there's a million dollars of equity in your house. Okay. I am not even going to presume you do anything with that. I'm going to presume that that million dollars is either going to be, you know, equity that just keeps building up and getting bigger, but I'm not even going to presume a downsize because you'll.

[A]

Go somewhere and you're going to spend money.

[B]

You live in a high and we don't know where the kids are going to end up. So this is all like, these are all questionable moves that you can make. But I think you guys have done a great job of saving and given your husband's employer's generosity, by the way, he better hug onto that job as much as possible. Right. Don't lose that job. But I think you guys can do this. I really do.

[C]

So I should just keep the money where it is in the 529s and.

[B]

Yep, I think, okay, the 529s. I would take the first year of tuition. I would have that in a, in a stable value fund. That's just me. Okay. Like, I would literally take 80 grand in each account and have it in the money market or whatever fixed income fund they have. I would want to know. 18 months is like a long time and it's a short time, but if the market craps out in the next, within the next 18 months, you're going to be pissed if you don't have that cash on hand for year one.

[C]

Yes, I will.

[B]

I think that tells me that it's time to like, let's take some money off the table. Did a great job. Let's not do more than that. I'm okay with that. And then, you know, if your husband reduces his 401k contribution and that money is available. Right. And you build up your savings, you could put it into the 529 because obviously it's more tax efficient to be in there. So let's see how your cash flow looks when you go down to a 6% contribution level for your husband's plan. And let's see where you land. Maybe, maybe you won't even have to put money, pull money out in a dramatic fashion from your million and a half dollar traditional.

[C]

Yeah, I was hoping that we could just, you know, shift the money we were using for their living expenses now to, to supplement the. For 529.

[B]

Yeah. And that would be great. And with his extra cash flow, you should be able to do It.

[C]

Okay.

[B]

Jen, do you have your estate documents done?

[C]

They could use an update, but yes.

[B]

Let'S do an updata. And then also how about life insurance on your husband? Does he have that?

[C]

He has employer life insurance. And then we have policy, I think 2 million on him.

[B]

By the way, Mark, this poor bastard, he doesn't get that bonus. She's knocking him off, you know, he. Oh, he better make that 175. I heard that. I heard that. You guys are in great shape. No hate mail, gang. Just reduce the numbers by one digit. No hate mail. We just go, we're going through these. It's so funny when people send hate mail. It's like, you know, if you chose to be a teacher, of course you're not going to have millions and millions of dollars building up in these accounts, but you're going to have a pension. And of course, if you've made different decisions in your life, you're not going to make as much money. It's okay. Not everybody is motivated just by having money. And they have lifestyles and they have their spending. I don't even want. Mark, I promise you, I will go to the grave never revealing on this show how much we spend per month.

[D]

People, people feel like just because people have money, there's. There's absolutely no need for them to call into us and have advice when they already know that they can do what they want to do. No, they don't.

[B]

They don't know.

[D]

And everybody doesn't mean you have, you know, insecurities.

[B]

That's right. I was just going to say we're all emotional beings, okay? That's why this show exists. If this was all just a math equation, nobody would need you and me to walk, walk through it with them. So we are sending you lots of love to the mid Atlantic gen. You are free to go in terms of making these moves, reducing your husband's retirement contribution. And for everyone listening haters, just keep on hating everyone else. If you have questions about how you're juggling your own retirement with your kids college education and what money to pull when. And all these things are. Sometimes they're timing issues, sometimes they're math equations, and sometimes they're just emotional things that are popping up. So get in touch with us. Go to jillonmoney.com, click the contact us button. Write us a note if you want to join us live. Check the box. Mark will do everything else. Don't forget to sign up for the free weekly newsletter while you're on the website. That is so great. It comes out every single Friday, you know. And that would mean that you indeed you would be getting your newsletter today. Okay gang, you can subscribe to us on the Odyssey app or wherever you find your favorite podcasts. Leave us a rating and review wherever you listen. It is Friday, so we like to thank all the people who make this show possible. Our music is composed by Joel Goodman, Mark Telassia, the guy who you heard talking. He is the executive producer, the king of all things web, the most important person in my work life. We are distributed by the fine folks at Odyssey. We ask that you do something nice for someone else today. Change your work, change your wealth, change your life. Thank you for listening. We'll talk to you on Monday.

[A]

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[B]

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[A]

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[E]

Miller, Super Bowl MVP, chicken farmer, and now host of Free Range. This is a show where I go off the field and off the script. We're talking what's hot in music, film, trending news and everything blowing up your your feet. If you love football, you'll feel at home. But if you're here for the vibes, the Internet, deep dives, the conversation. This is your podcast. Join me every Wednesday. Follow and listen to Free Range with me, Von Miller, everywhere you get your podcast.