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The new year is the perfect opportunity to reset your space and get back into an at home routine you love. Wayfair makes it easy to do just that. With everything you need for your home all in one place. From bedding and bath essentials to storage, decor and furniture, Wayfair has it covered. You know, I bought my little in home desk at Wayfair and it is amazing has served us so well. What makes Wayfair so convenient is the massive selection. With so many styles, price points and categories to choose from, it's easy to find exactly what works for your home. Upgrading a work from home or study setup or adding smart storage throughout the house, Wayfair makes shopping simple and stress free. Get organized, refreshed and back on track this new year. For way less, head to Wayfair.com right now to shop all things home. That's W a Y F A I R.com Wayfair Every style, every home. Oh, could this vintage store be any cuter? Right? And the best part? They accept Discover. Except Discover in a little place like this? I don't think so. Jennifer. Oh yeah, huh. Discover's accepted where I like to shop. Come on baby, get with the times. Right, so we shouldn't get the parachute pants. These are making a comeback I think. Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen. Welcome to the Jill on Money Show. It's Friday the 13th. Spooky. I'm never really spooked by Friday the 13th. I hope you're not either. We are here answering your financial questions. If you've got one. Just get in touch with us. Go to jillonmoney.com click the contact us button, which is always in the upper right hand corner. Wherever you navigate on the site. Write us a note. And if you would like to join us live, check the box. Mark will do everything else while you're on the website. Check out all the free content that lives there. We have another podcast that airs on the weekends. It's called Money Watch and it's a little bit longer. Each show is a little bit longer. We take a deeper dive into a topic. Yes, we take your questions on that show as well, but we try to kind of go in a little deeper. Go through some of the basics that you may need some help reminding, like what do I really know about asset allocation? How do I get there? Whatever that that journey is, it starts somewhere and we like to start it with Money Watch. Okay, so we start your financial journey or give you A little refresher with Money. Watch also on the website, you will see that we've got some free resources there. Mark has lots of interesting things you can link to. There are videos. We have a radio show. So much. And of course, the free weekly newsletter which comes out every Friday. When you subscribe to that, you'll also get the blog. So check that out. Today we are talking to Jersey Mike or Mike from New Jersey. So. Hello, Mike. Welcome to the program.
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Hello, Jill and Mark. How are you guys?
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We're great. What's going on?
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Just looking at some retirement timing, longevity, have a nice fixed income for both. My wife and I just wanted to see if everything's on track so I could finally let it go. And you. And live life to the fullest.
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A
Live your dream, baby. Live your dream. I feel like there's a pension benefit coming because you said income. So let's start with Mike. How old are you?
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I am 54.
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And your wife?
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51.
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Kids or no kids?
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Two wonderful, beautiful children.
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What? Yes. And how old are they?
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B
21 and 19.
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A
Okay. And they're still on the payroll?
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B
Oh, yes, very much so.
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Are they in college or are they working?
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B
Yes, both are in college. One is a senior graduating in May and the other is a freshman.
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A
Are you and your wife both working right now?
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I am still currently employed full time. The wife has retired.
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A
Does she receive a pension?
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B
Yes, she does.
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A
What is that amount, monthly or annual? Whatever is easy for you.
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Monthly, it's about 7,000 gross.
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Okay, great. And you intend to retire. And when you retire, what will your pension benefit be?
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My pension should be around 14,500 gross. Gross a month? Yes.
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How are you guys set to live on 21,500 gross? You think you can do it?
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I think so. I mean, the monthly budget is. Is under that.
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How much is. What do you have for your expenses right now? Again? And be. Be generous because obviously you're young, you're going to live long. So I bet that, you know, the money that you spend, you know, probably between age 55 and 75 is going to be more than 75 to 95. Right. So be generous with those expenses.
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Yeah. So soup to nuts, Joe, you're looking at between 13 to 15amonth.
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A
So 15amonth. So even at 21, if we said $21,500 a month and you pay taxes on it, you whittle it down to 15amonth. Okay, great. And what about the money you guys have saved beyond being part of a pension system? Tell us about that.
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B
Yes. So the joint account is at $1,700,000.
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A
This is when Mark says goodbye because we're about to get a lot of hate mail. Okay, keep going. Joint is at $1,700,000.
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B
$1,700,000. Rollover IRA is at $585,000.
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A
Okay.
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There is a six year annuity that's at $565,000.
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A
Has it been annuitized yet or not?
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No, looking forward to that. It's another two years. Which previous financial advisor. I'm not happy about that, but okay.
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All right, yeah, whatever. We'll get it out of there.
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Yeah. Locked me into something I really wasn't.
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Interested in, but yeah, I hear you, man. No one ever buys an annuity. Annuities are sold. So I get you. Okay. 565 in that annuity. What else?
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New York deferred compensation.
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Yep.
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That's at 1.575.
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Oh my God, Mark. Lucky kids. I know. All right then what else do we have? Is there any other, any other retirement assets?
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Yes. No, not retirement assets, no.
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A
What else? So what other assets?
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Checking and savings combination of around 90 to 95,000.
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Uh huh.
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You want Social Security numbers or no.
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Because you have so much money, I don't even know what to do with it all. How about your house? How much is your house house worth?
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The house is ranging between 1.2 to 1.3.
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And you're going to stay there?
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Unfortunately for the time being, yes.
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Why unfortunately? Because you ought to move and move south.
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Property taxes are not the greatest, very high.
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Oh, whatever. Stop complaining. I know live off the fat of the land. Do you have a mortgage outstanding on your house? I'm guessing no.
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Actually. It's a small $179,000.
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And no rental property, right?
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No.
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Okay, and so when you said that 15 grand a month for expenses, did that include the kids in college and all that?
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Yes and no. Basically cash flowing.
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That okay. And what about parents? You're young. What about you and your wife? You have parents that are alive that you have to take care of?
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Just my father in law. And that, that is okay at this time.
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Okay. Giving your druthers. Kids are all done. Let's like pretend, you know, you give your notice, you're hanging out, you're home, whatever. But given your druthers, if these kids, they graduate, they get out there. You would like to move, would you? Is this like a real thing? You want to maybe sell this house?
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A possibility of downsizing likelihood, yes.
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Okay. And downsizing in New Jersey or somewhere.
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Warm Contemplating either somewhere warm or possibly Pennsylvania. Much more tax friendlier.
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A
Very bad estate tax though. Okay, Mark, what do you want to say to Jersey Mike? Give your notice? I mean really, can you get help? First of all, can you help prevent us getting horrible hate mail for this conversation? Can you tell people like that you didn't, you didn't probably make tons and tons of money, did you start early? How did you acquire? How did you accumulate all of this money?
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Parents immigrated and I just, I've been working since I'm 20 years old and, and I was very, you know, frugal and, and saved and I did some, you know, moves on my own with my wife, with, with investments and, and here we are. You know, I'm really blessed, Jill, and it's really, I'm financially free and I'm, you know, I'm proud of what I'm starting, especially for my kids, you know, pass down a legacy for them.
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A
Yeah, yeah. It's incredible. And, and you know, listen, obviously you guys both have pensions, so you worked hard doing whatever you did. But as everyone is listening to this, you know, whenever we talk to people with pensions, I, I wonder if you understand, gang, if you don't have a pension, that usually that means you've made less money during your working years. That part of the, the trade off of being in a job that actually creates a pension possibilities you have a lower income. So I'm sure that if Mike and his wife were looking at themselves and they were 30 years old in these pension jobs, friends of theirs were making more money because they were in the private sector. But that more money didn't come with a pension. So there's always a trade off here. And I think that that's an important thing to say. The other thing that I want to point out, which is, you know, you are going to get slammed with required minimum distributions. You know that, right?
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Yes.
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So my question about the annuity, was the annuity a non qualified annuity or a qual qualified? Meaning does it say IRA on the top of it or is it just money you put in from that joint, from those joint assets?
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Yeah, it's non qualified.
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Okay, so it's non qualified. And so is the game plan when two years is up to annuitize it or to just pay the whatever tax is due and add the money to your joint account?
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I think I will separate myself from it and just add it to the joint account. Yes.
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A
Okay, so then I think there might be an interesting opportunity, you know, you know what happens with these annuities which is one of the reasons I hate annuities is that it's not a capital gain. The money that goes in there, that has earned money beyond what you put in. So if you let. I'll make it easy. Let's say you put 400 in or 450 in six years ago. Whatever the difference is between what you put in and what you take out is ordinary income. Okay? So that's taxable to you. When that transaction is done, it may be interesting for you to start converting some of your money. You have a ton of money that is in already been taxed. So the 585 and the one and a half million deferred comp. You know, that $2 million pot is going to create a tax liability for you. So the question is, how are you going to manage that tax liability and you'll have a lot of income. That's the thing that kind of is challenging. I mean, it's great, but it's challenging when it comes to conversion. So when I look at your, you know, married filing jointly, that the 24% bracket goes up to 400 grand. So maybe you start converting little by little, converting some money up to, like to stay in the 24% bracket. And then, you know, you'll see how things go. Obviously you are people who should not claim Social Security early, you know, 70, as long as you're in good health, because you'll have more time to convert. But that $2 million is going to be a real number when you guys turn 75. So I think converting would make a lot of sense for you. I mean, it's like. It's a curse. It's a curse and it's a blessing. Right?
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Right. Yeah. Well, I'm very ultra aggressive with my investments because of the fact of the fixed income that I have monthly with my wife and I. So.
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All right, well, go. Don't go too crazy. You don't need to go crazy.
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But if you.
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Okay, well, you don't have to be a bond guy. But you know what? When the blank hits the fan and you're in your later 50s and you want a little downside protection, you know, it's okay. It's not like a necessary thing. It's in a funny way, you are obviously investing for the kids, right? Because you're not going to use all this money. So if you said to me, oh, I'm investing very aggressively because I'm 55, it's not that you're investing very aggressively because you have 20 somethings who you're investing for. That's what I think is the difference. But, you know, you don't have to take as much risk. It's fine. And, you know, enjoy yourself, give your notice. What are you gonna do and what are you gonna do? You're so young.
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Oh, my God. So much to see. So much to do, though, Joe. We've been so engulfed in work because, you know, in the public sector, it's almost. It's called the golden handcuffs. You know, you know, you're here and have emergencies, you have weather related stuff. You have all kinds of craziness.
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Yeah, well, I mean, listen, you've earned it. So I want you to have a great time. Make sure those estate documents are done, think about conversions, and let us know when you give your notice and when you're bored and you want to come back to us and talk about like, I'm not really bored. Let me just tell you how great it is. So I invite you back anytime. All right.
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B
Thank you so much, guys. I appreciate it.
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Oh, good luck to you. Hey, listen, no hate mail. Thank you very much. I know. Good job. What an incredible story. I bet that he did not make a ton of money, like when he was like many, many years. Worked his ass off. Worked his butt off. Exactly right. So if you are in a position where it's looking like maybe you could do it, get in touch with us. I like being the wish granter, like your fairy godmother. If you'd like to get in touch with us, just 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 so much better when you come on the air live because I love it. Mark loves it. I know we have to answer emails for the shy people, but it's a much more buoyant conversation. You can subscribe to us on the Odysee app or wherever you find your favorite podcast. Please leave us a rating and review wherever you listen. And it's Friday, so let's do some business. Our music is composed by Joel Goodman. Mark Teo is our executive producer and king of all things web. We are distributed by the lovely folks at Odyssey. We ask that you lift someone up. Change your work, change your wealth, change your life. Thank you for listening. We'll talk to you on Monday. Hey, gang. I just made a first time ever purchase on behalf of the pod. I was so psyched because Mark and I don't do a lot of promotional materials, but I was able to create a branded sweatshirt. Yep, a Jill on Money branded sweatshirt with vistaprint. Now I'm not usually good at these things, but Vistaprint made it simple to bring this idea like, oh, wouldn't it be cool if Mark and I could create some sweatshirts that we'll try out? Maybe the listeners would want to get them as well. They've got these great design tools, they have fast shipping human support if you need a little guidance along the way. Because the sweatshirts were so easy to execute. Now I'm thinking about doing some other stuff. Maybe there's some baseball caps or, I don't know, other fun stuff that you guys would want. You'll let us know. There's a reason that over a million people trust Vistaprint for their small business print needs. Vistaprint print your possible right now new customers get 20% off with code new new20@vistaprint.com I'm Emma Greed, host of Aspire.
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With Emma Grade, a podcast where I sit down with people who don't just dream big, they build big. From culture shaping voices like Mel Robbins to leaders redefining success like Tracee Ellis Ross, to game changing entrepreneurs like Mark Cuban, Aspire is about mindset, ambition and doing the work that actually moves the needle. If you're ready to raise your standards and take charge about the life and career you're building, Aspire Aspire is where you start, follow and listen to Aspire with me, Emma Greed and Audacy podcast. Available wherever you get your podcasts.