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- [00:00]
A
Hey gang. I've recently been thinking about how to make my home feel more functional, especially my work area. So I have turned to Wayfair and let me tell you, it was a game changer. I found lighting for my desk that really has helped me when I wake up early and you know how early I wake up, gang. And shopping was a breeze. I filtered by exactly what I wanted. Style, checked out the reviews. I even used the Wayfair Verified to make sure everything was top quality. What sets Wayfair apart is how fast and simple everything comes together, from furniture to home accents. Everything feels thoughtfully curated and actually fits my style. And now Wayday is the sale to shop the best deals in home. We're talking up to 80% off with fast and free shipping on everything you need. Head to Wayfair.com April 25th through the 27th to shop Wayday. That's W a Y F A I R.com Wayfair Every style, every home Nerds
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B
Today's episode is sponsored by NerdWallet's Smart Money podcast. Ever Google a money question and end up 12 tabs deep with 12 different answers? This podcast is your shortcut back to clarity. NerdWallet's Smart Money podcast breaks down financial decisions with a team of trusted journalists. They explain the why behind decisions like investing, home buying and choosing credit cards with clear research backed insights. No jargon, no misinformation. Make your next financial move with confidence. Follow NerdWallet's Smart Money podcast on your favorite podcast app.
- [01:34]
A
Welcome to the Jill on Money show. It's Wednesday, April 1st, and it really is. Mark. Are you a fan of April Fool's Day or not?
- [01:41]
C
No, not at all.
- [01:42]
A
We are not those kinds of people. I am not the kind of person who's like, ha ha, I pulled one over on you. I don't get that. I'm not into that at all. In fact, it probably goes right into our curmudgeon category that we don't like Halloween Either.
- [01:58]
C
Or St. Patrick's Day. Or New Year's Eve.
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A
Yeah, what else? Boy, we're bad. That's not good. Also, tonight is the sundown, the first night of Passover. So that's good. Mark, you're not celebrating. I got to get you guys to a Seder. One of these days we'll be part of Theo's Jewish education. And as his non godparent, I will still be responsible for teaching him about Judaism. Any days off for Passover, for school or not?
- [02:25]
C
Yeah, this is we're talking on Wednesday. He's off. He's off tomorrow, he's off Friday, and he's off all next week.
- [02:31]
A
Yeah, baby. Those Jewish kids helping you out in the New York City school system, you know, you gotta love it. All right, Mark, today is a day where we are going to continue answering financial questions. If anyone out there has got one, or you're making a big decision or you're worried about something going on in the world and you want to better understand it, go to our website, jillonmoney.com in the upper right hand corner, click the contact us button. Write us a note. And if you would like to come on the air live with us, all you need to do is check the box. Mark does everything else. You know, we've got a sister broadcast, it's called Money Watch that drops on the weekends. We've got a blog, we have a radio show which is under the radio tab.
- [03:14]
C
For how much longer?
- [03:15]
A
Well, I don't know. We'll talk about that at another time. When I have resolution, I will tell you about that. We have videos, we've got resources, all on the website. Don't forget to subscribe to the weekly newsletter. We love that newsletter because Mark does a great job of compiling the stories you may have missed during the week. Okay, let's do some emails from Alex who says, I'm 65 and I'm retired. My wife is 62 and would like to retire in a year. Our house has paid off and it's valued at $200,000. Mark, we've got $700,000 in retirement accounts. We spend between five and six thousand dollars a month. Closer to six until my wife hits Medicare age. Affordable Care act for her is around $800 a month. No kids, just a cat. Social Security, 25 grand a year. Wife's would be 22 grand a year. We invest in a balanced portfolio. We're planning on taking 4 to 5% out each year. Yowza. 4 to 5% is a lot. I wouldn't do 4 or 5%. I mean, I would only do 4 to 5%. If you are willing to do something that's a little bit more work on your part, which is you can take 4 to 5% in a year where the market's up, but if it's flat or down, you can't. I would do more like three and a half or 4%. So Mark, do you think they have enough to last them? 5 or 6, let's say $6,000 a month just for the heck of it. They need 72. They're going to have $47,000 in Social Security and they have 700 grand in retirement accounts. Can they make it? He thinks they can. What do you think?
- [04:50]
C
I think they can make it. There's not a lot of wiggle room.
- [04:54]
A
No, there isn't. Because even if we just say, okay, you're going to pull 4%, not 5%, you're just making it. It's not an easy make it. It works better at 3.5% because if you live a long time, that 700 grand needs to last you. So if your wife would be willing to. I don't know if she really could do this, but her working just a couple of more years, even just to get her to Medicare or closer to Medicare age, that would be a lot better. Like if you were five grand a month, I'd feel a lot better than six grand a month. And if she put a little bit more money away, then that would make the numbers work. Okay. Sharon says my three adult children have just lost their dad, my ex husband. They've asked me to help them figure out what to do with their money. My ex had a brokerage account and cash accounts equaling $400,000 and an annuity of about $500,000. It's all to be divided equally among the three kids. The insurance company that has the annuity is giving options that we need guidance on. First of all, take a deep breath before you take advice from an insurance company if you're the beneficiary, okay? Because my guess is they're going to try to sell you something. So Sharon says, what kind of financial expert should we go to for advice? A certified financial planner. We need investment advice and tax advice. The kids live in two different states and one lives in France. Just to complicate matters, I act as my French son's stateside financial advisor. But this is above my amateur status. Can you please point us in the right direction? What kind of professional should we consult? What fees should we expect for the advice and assistance in going through the process of taking possession of the inheritance? I think you could use a cfp. I also think it might not be a bad idea for you guys to have a fee only CFP where you just pay a flat fee for the advice for the estate part of it, and then they're set up and maybe they don't need help after that. But each of these three kids has a different situation. It is good to get help when there are these kinds of issues. Okay. The tax liability is not an inheritance tax. It is an Income tax. Because those annuities when they, when they spill out to the kids are going to be taxed at the kids tax bracket at the time. Okay? So just know that anyway. What a rotten situation, boy. All right. Bob says, wants to run some numbers and he wants to know, can I retire in three months? Married, adult, children, no mortgage, house is worth around 425 grand. No car payment. Pay my credit card in full each month. My wife is 63 and I'll be 63 in June. We have an IRA that we rolled over to Vanguard when our company was purchased. We've got $1.7 million in that rollover. They contribute to a 401k, 5% and they've got 401k money of around 120. And she's got 105, so 225. Um, they've got a cash reserve account of 65 grand. Social Security looks to be about $2,800 or so at 67 for me. Not sure of my wife's number, but at least two. So they'll have about 4800 bucks a month. At 67ish. Health care is an issue because obviously if he retires in three months, they'll need a bunch of money to go out to health care. Cobra for 18 months is about $1,700. We do each have an HSA. He's got 15 grand, she's got 12 grand. But listen to. This is it. Okay, guys, this is the, the, as we like to say in the biz, this is the nut graph. This is the most important thing. Bob says my job is just so stressful and with parents who died early, my mom at 50, my dad five years later at 57, I just don't think I'm going to live long enough. So why should I keep doing this job that I just don't like anymore? Wanted to get someone else's view and insight. What do you think about Bob retiring in three months, Mark? Based on all of the money that they have, I mean, they're going to get Social Security. I wonder if.
- [09:06]
C
Did he say what they spend?
- [09:07]
A
I don't think he said what they spend. I'm trying to look, trying to go backwards here. No. House 1.7. I'm going to guess they spend eight grand a month. What do you think of that? Just interpreting how much money they have. What do you think, more or less?
- [09:21]
C
I don't think it's more.
- [09:22]
A
So if it's eight grand, let's pretend it's eight grand a month. Could they do eight grand a month. Half of the need is met with Social Security. And then they've got a bunch of assets. I think they probably can do it. I really need to know that spending number.
- [09:36]
C
Yeah, if it's 8 or less, then this is probably good. Like he said, they got to cover healthcare for two years here.
- [09:43]
A
That's going to be rough. It would be nice if one of them were not him. Maybe she could work a little bit more.
- [09:48]
C
This is twice now you've made the wife keep working.
- [09:50]
A
I'm sorry. So Donna writes after I appeared on TV talking about what to keep and what to shred. She's like, I have investment accounts and I'm not contributing towards them, but how long do I keep them? Six months. How long? Just trying to clean things up. Investment statements. I think you can basically shred anything that is over one year old. Now, once you get into the six, the one to 12 months, you can go through those statements and see, is there anything on those statements that I would need for any tax purposes? Doesn't sound like it, but just in case. And then I would shred them, you know. Mark, how long do you keep your investment statements? You can get 12 months online. So I would basically shred it after 45 days if I didn't need anything.
- [10:36]
C
I don't get any paper statements in the mail.
- [10:38]
A
Everything's just, everything's online. So I think that it's your fair. It's good to shred. If you want a couple months worth, fine. But after that, no. Michelle says, my husband and I have about a half a million dollars in no interest checking accounts or low interest savings accounts. Oh, my gosh. He's 78. Oh, he's permanently disabled. Veteran. He brings in $5200 a month in disability and they get $2300 from Social Security. House is paid off. Free health care because of his disability, 100% tax relief for property tax. So that's also because of the disability, mark. They spend $2,100 a month. And so that means they should probably do something with this money. But Michelle's like, am I too old to invest? You're not too old to invest.
- [11:29]
C
They also don't have to do something with his money.
- [11:30]
A
Yeah, you don't have to do anything. But if you'd like to just maybe put some of the money in instead of low interest accounts, maybe just buy some CDs if you feel like maybe, you know, you want to just take a little bit of the money and say, well, I'll put you know, 50 grand in a index stock index fund and 50 grand in a bond index fund and buy some CDs with the rest. That's fine. You don't have to go too crazy with this. Like, the problem is when it's sitting in cash, you know, that the interest plus inflation means you're losing money every year. But, you know, listen, for all I know, that you could live for 20 more years. So I wouldn't mind getting some of the money invested. Emma says I had a FICO score of 825. We paid off our mortgage and immediately dropped 33 points. My husband's score went up 2 points to 826. Now, he was the one with a terribly low score. When we married, we got our mortgage and car loans based on my credit. After all the hard work, I'm the one being punished for owning our home free and clear. It doesn't make sense. I also have a credit card. I've had it for 18 years. I never missed a payment. I use it frequently. I pay it off each month. It hurts my heart. I feel that I'm being punished for doing the right thing. Mark, how would you like to respond to this?
- [12:43]
C
Some people get so bent out of shape over these credit scores if they. If they move a little bit in the wrong direction. I mean, it's easy for me to say. Don't worry about it. It's not a big deal.
- [12:52]
A
It really isn't a big deal. And you're probably not getting credit. You don't need to get credit, and it won't matter. Okay.
- [12:58]
C
Even with the drop, you still have a very, very good credit score. Yeah, it's a great weird thing when counts close, it causes.
- [13:05]
A
It causes a real problem. That's the issue, you know, so. All right, well, listen, gang, if you've got questions, we got answers. We can just, you know, hold your heart, your heavy heart in our hands and say, it will be okay. Don't worry. And if you feel like there's been some error and you want to look@your annualcreditreport.com you can do that as well. Maybe there's something else on there that you didn't realize, but chances are, it's a little quirk of just getting rid of that mortgage. And it's based on a formulation. And aren't you nice for helping your spouse get a better credit score? See? It all worked out okay. Okay, gang, if you've got a question, just go to jillonmoney.com, click the contact Us button, write us a note. If you would like to come on the air live with us, just check the box. And don't forget to check out everything that lives on our website. All the content is there. 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 do listen, try to put your hands metaphorically on someone's back. Or if you have permission, don't forget, just say, I want to hug you. Can I? Great. Usually it works better if you know somebody. Mark knows I'm a big hugger, so this is a problem for people like me. But I'm careful. Some people don't want to be touched. I get it. Change your work, change your wealth, change your life. Thank you for listening. We'll talk to you tomorrow.
- [14:31]
D
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