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[00:00]
A
Many of you have grown up in a household where money was a stressful topic, and that may leave you anxious about your own finances as an adult. But your money story may change completely when you start using Monarch. Monarch can give you the clearest picture of your finances by tracking all of your accounts, investments and savings goals in one place. It's like having a little financial advisor right in your pocket. Monarch provides an AI weekly recap which flags sudd spending spikes or net worth shifts before they become problems completely taking the mental load off your plate. Unlike other apps that only show you what you've already spent, Monarch helps you look forward. You can even ask the AI assistant direct questions like can I afford this vacation without touching my savings? Write your own money story with Monarch Use code Jill onmoney@monarch.com to get your first year of Monarch Corner Core Half off at just 50 bucks. That's 50% off your first year at monarch.com with code JILLONMONEY hey gang, you know over the years I've realized one of the biggest limitations in business isn't a lack of an idea, it's the manual follow up the legacy systems that demand your constant attention. Way back when, I remember the frustration of having to take a morning off just to drive to a physical branch to sign a piece of paper, which felt incredibly outdated in a world of digital first companies. Banking on Mercury eliminates that frustration entirely. It's a best in class software experience that feels intuitive and reliable. From day one you can apply online in minutes and immediately start using smart features like bill pay where you can just scan an invoice and the system handles the rest. You can even set up recurring payments and automated transfers to keep your accounts balanced perfectly. It's a smart all in one home for your finances that scales with you, allowing you to focus on the big picture of while the software handles the details. Visit mercury.com to learn more and apply online in minutes. Mercury is a fintech company, not an FDIC insured bank. Banking services provided through Choice Financial Group and Column NA Members FDIC. Welcome to the Jill on Money Show. It's Wednesday, August 5th and we are here trying to help you make billions better and sometimes it's just less bad financial decisions. If you have a question, anything that's going on, we want you to get in touch with us. All you need to do is go to our website jillonmoney.com jillonmoney.com Click the Contact Us button, write us a note and if you would like to join us on the air Live, you check the box, there's an audio box, there's a video box. The video is for our other program called Money Moves. That's where we have our YouTube show. And by the way, you can subscribe to that on YouTube or you can just do it through our website. But Money Moves has a video component and it's geared a little bit more towards people starting out. So we like to say, you know, people who are under the age of 45 or 50 and we'll get, get you on the air with us either on that show or on this show, whatever it is. We'd love to chat with you. Jillonmoney.com, contact us and of course, don't forget to check out all the other content that lives there. We have a newsletter and we have a blog and we have resources. I have books. All that stuff lives on our website. Today we are talking to Kim, who joins us from New York. Hello, Kim. What can we do for you?
[03:33]
B
Hi, Jill. Hi, Mark. Thanks for speaking with me today.
[03:36]
A
Sure.
[03:36]
B
Well, I just kind of want to touch base. I am retired from public safety, as is my wife. However, retirement's not her thing and she's going back to work. So I guess I just want to get your opinions on what would be a good path going forward for her future retirement investment.
[03:55]
A
Wait a minute, wait a minute. Are you telling me that that whole togetherness thing in retirement kind of was a very quick event and she's like, I'm out of here, I'm going back to work. What happened? Give us the real deal.
[04:06]
B
Well, she enjoys the social aspect of working. Okay. Whereas I'm much more of an introvert. I had enough of that. And I could get, you know, my social interactions for my activities. I don't need to spend 40, 45 hours a week working and then a three hour commute.
[04:22]
A
I love that. I love this. I think that it's actually really smart because it's good to say, hey, we all need something different in that next phase. And this, I was just talking to somebody about this recently where we were talking about like having what's your off ramp? Like, where are you going? You can't go a hundred miles an hour and then just dead stop. And for a lot of people, they do like something or they've contemplated this and they've figured out how to fill their time. And the social aspect is huge. So because you were both in public safety, do each of you have a pen pension?
[04:54]
B
Yes, ma'. Am.
[04:56]
A
Okay, so first of all, how old are you?
[04:58]
B
Kim, I am going to be 51 in a week. So we'll just round up and say I'm 51. And she is. She's 49.
[05:05]
A
Okay. And what are the pension amounts?
[05:08]
B
All right, hers is 8,600amonth.
[05:11]
A
Oh, my gosh.
[05:12]
B
Mine is 8,000amonth.
[05:14]
A
Huh. This also comes with lifetime or until Medicare health insurance.
[05:21]
B
Yes, it does.
[05:22]
A
Great for you guys on $16,600 a month. Gross. I know it's gross. Is that enough to support you or
[05:32]
B
is that actually, that's net. That's after tax.
[05:35]
A
Okay. So is this enough for you guys? Sixteen, six a month. You. No sweat. Are you net savers?
[05:41]
B
Yes.
[05:42]
A
Amazing. Do you have kids?
[05:44]
B
No kids.
[05:45]
A
Oh, you're just living large. This is great. Fantastic. Okay.
[05:48]
B
We've always lived within our means.
[05:50]
A
That's great. I mean, amazing to do that. You live in New York, so that's a high cost of living area. You own your home.
[05:57]
B
Yes.
[05:58]
A
And tell me what the house is worth approximately.
[06:02]
B
According to Zillow, it is 725,000.
[06:06]
A
Okay. And is there a mortgage remaining?
[06:08]
B
No mortgage remaining.
[06:09]
A
Okay. Any other real estate, rental or vacation, anything like that?
[06:14]
B
No.
[06:14]
A
Any desire for that?
[06:18]
B
That'd be nice. But I don't know if we would ever bite the bullet and buy a second property.
[06:23]
A
Yeah, it's like, more to take care of, right?
[06:25]
B
Exactly.
[06:27]
A
I kind of get in. How you roll, Kim? So she's gonna go back to work. What will she earn? How much do you think it is going?
[06:36]
B
Well, we have the offer letter, and it's 140,000 base.
[06:41]
A
Okay.
[06:42]
B
And there is a bonus, a yearly bonus of about 12,000 tacked onto that.
[06:49]
A
Oh, my God. This comes with all the benefits. She. But does she not need the benefits? Like, in terms of the. She will not need their health care because she has her own, right?
[06:58]
B
That's correct.
[06:59]
A
Okay. So she'll have a retirement contribution available for her. A plan that's available.
[07:05]
B
Yeah, they offer a 401k. They offer a Roth version of that as well. And if she puts in 8%, the company will match it. 6%.
[07:16]
A
My gosh. Okay, so 8% is 6% match. Got it. Okay. Now, you've got other money that you guys have saved. I mean, you really don't even need a lot of money because you can live on your pensions. And those pensions are cost of living adjusted, right?
[07:31]
B
They are, but it's a really small amount. It goes up, you know, a little bit every year. It's. It's not going to make meet the inflation Level, in my opinion.
[07:41]
A
Okay, no problem. And then, so what. Tell us about this, the money you guys have saved in addition to that pension.
[07:47]
B
Okay. I have a rollover IRA of 459,000. I have a 457 of 784.
[07:59]
A
Okay.
[08:00]
B
401k, 48,000. And that is all traditional.
[08:07]
A
We got to get this money out. Okay.
[08:09]
B
And then I have a brokerage account of 247,000. I have a union sponsored annuity, which is 63,000. And for her retirement savings, extra investment, she has a 457 traditional, which is 576,000. She has a brokerage of 224,000. Mm. And her annuity is 51,000.
[08:38]
A
I mean, you got piles of money. So what are we gonna do with all this money? Tell us a little bit about what your thoughts are around all of this money that you have accumulated. Like, you live within your means. You're amazing. You're young, but I mean, you could live 40 years, but honestly, you're never gonna run out of money. So what is it that you would like to do with this money? Do you want to give it away? Do you want to just spend more money? Like what do you. You say you spend less than 16, 6. What is your spend right now?
[09:06]
B
Our spend right now is around $9,000 a month.
[09:09]
A
So even if I said, oh, go take more vacations, we're only going to get you to like 12 grand?
[09:15]
B
Yeah, pretty much.
[09:16]
A
So do you have to take care of anybody?
[09:19]
B
Well, that's another issue right now. We don't have to take care of anybody. But I did want to ask you. My father in law does have dementia and we just went through the process of moving him into assisted living. It's out of state. It's not in this state. It's in a much cheaper cost of living state. So that's a good thing because right now his level of care is only about 5,500amonth, whereas if he was in the northeast, it'd be around probably 13 grand to start off with. So we just sold his house. We did want to get your and Mark's opinion on what to do with the proceeds to kind of maybe stretch that and make it go a little bit further.
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A
Mm. How much did you sell the house for?
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B
Well, the house was sold for 525. But after all the fees and paying off the mortgage, it will bring 391. That's the net proceeds.
[10:11]
A
Okay. 3 91. And he gets Social Security right now?
[10:16]
B
Yes, he does.
[10:17]
A
And no pension. Though. Just Social Security?
[10:20]
B
No, just Social Security. His income between investments in Social Security is 4400amonth.
[10:27]
A
Okay. So for now. And when you say investments, what's the, what does he have invested?
[10:34]
B
They had these weird random annuities that really don't have any sort of cash value. If we cash them out now, it would be next to nothing. It's more beneficial that we stretch it out over, you know, the five to ten years.
[10:50]
A
Okay.
[10:51]
B
That he might need it. So that's what we're doing. So Those annuities, there's four or five different ones and they will pay about $2,000 a month and the rest is his Social Security.
[11:01]
A
Okay, so that's fine. So that's just creating the income. And how old is his father in law?
[11:06]
B
He's 75.
[11:07]
A
Oh my God. He's young, poor thing.
[11:10]
B
Yeah, but he's had vascular dementia for a while and the life expectancy is not that long with it.
[11:17]
A
I'm sorry. That stinks.
[11:19]
B
Okay.
[11:20]
A
Okay, so. So here's what I'm thinking. And Mark, you can come on the air and give your view of this. 390 grand is really all the money he has. Obviously these annuities are going to pop in, but you got the income. You're running shy by $1,100 a month. But if you think about it, we probably shouldn't do much with this 390. You should keep, let's say the next year of that differential. You probably should keep 50 grand in just like a high yield savings account. And then I might just ladder some CDs. Mark, do you have a different view on the 390? No, I wouldn't do anything with it. And given what I just heard about, about his condition and the long term outlook and just how fluid everything is. No, keep the money as safe as possible. Safe and boring. You know, just ladder up some CDs, you know, deposit accounts, dot com or bankrate dot com. You'll find good rates. Or, you know. And is your wife the only child or is your wife the only child of means? Like it's. Is this falling to you guys alone or, or are there other people involved?
[12:26]
B
Well, she's the power of attorney. There are other people involved. I don't think anybody else would be ever in a position to assist him financially.
[12:35]
A
Okay.
[12:35]
B
Should it come to that, I don't
[12:37]
A
think that he's gonna run out of money. It doesn't sound like that. He's not, it's not that much. In excess of, in other words, like you Said if you were 13, 14, 15 grand a month, then we'd, you know, blow through this in a couple years. But it does not sound like that's gonna happen. If it were to happen and you did need to help, guys have plenty of money to help him out. But I think for now, laddered CDs, I don't even go, I mean, what do you think his life expectancy is for real?
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B
I would say probably no more than another five years.
[13:08]
A
Do not go longer than a five year term on a CD and ladder them up and just go, you know, six months, one year, 18 months, two years, three years, four years, five years and divvy up the money. Very boring. Very boring. Now I want to turn back to you guys. You're awash in cash, you got so much money. How do you feel about burning up some of your brokerage account money by converting some of your assets just to start? I mean, right now it seems to me that if you do nothing, you're going to have a comp. You're going to have a huge. Not a huge. It's a good problem to have. But, you know, if we think about 10 years from now, this money is going to just keep going, increasing, and then 10 years after that, it's going to keep increasing. So it wouldn't be a bad idea to at least start thinking about getting some of the money and converting it. It doesn't. Again, it does not have to be everything at once. You guys are going to be in a high tax bracket for a while because you've got those huge pensions. Right. So there's no way really around it. And since your wife's gone back to work, you know, you're, see, you're going to be in the 16, so you're probably going to be in the 32% bracket. Okay. Yeah, so the 32. The top of the 32% bracket is a half a million, like 512,000. Okay. So maybe I would just start at least converting up to that amount. How are you feeling about, like using some of. I mean, I guess the other thing you could do is you could, you know, start being more charitable. Do you have nieces and nephews? Do you need to help anyone else out? Like, what are we talking about here?
[14:47]
B
Well, we do have nieces and nephews and anything that's left, they will get. We are charitable. So I do think that later on in life we'll definitely give more than we do now. You know, I'm always very cautious, so I'd hate to give it all away now. And not that I would give all of it away, but to, you know, part with it and then need it later down the road, you know.
[15:10]
A
Okay, fair enough.
[15:12]
B
But back to the 32% bracket. If she's only going to work for like another five to 10 years, would it behoove us to hold off on the conversions or we should really start doing that now?
[15:24]
A
I don't know. I mean, it's so hard because the dollars are so big in, in these accounts already, right? So I just did like, you know, quick math. You have almost $2 million that hasn't been taxed yet. So if you said to me she's going back for two years, that's it, okay, maybe I would not. You know what I mean? But because you're. Now if you say 10 years, I don't know, man, like that's. This money's gonna grow, probably gonna double every seven years or so, you know, statistically. So I think at least a little bit. And as soon as she pulls back, then really getting some of this money converted will be helpful now. So just if you are charitable things to think about, you don't have to do it right now. So at any time you could use your brokerage account money and fund something called a donor advised fund. A daf. A donor advised fund allows you to take a low cost basis asset. So I presume in these two different brokerage accounts, you know, the 247 or the 224, that you have some money that's been invested for a while and there's a big capital gains. What you can do is you can take something. I'm just going to make it up. Let's say you had an S&P 500 fund. You could gift it into a donor advised fund. You'd get the tax deduction for the full amount that goes into the fund this year. While you guys are both, while you're where you're in a high tax bracket, but you don't have to give it away immediately. It kind of, I think solves your problem of like, I could put, like, I'll give you an example. I could put 50 grand in there right now, but I don't have to give it away all at once. I take the tax deduction this year because we're in a high tax bracket, right. And I can take that all this year and then I could spread out my giving in the future. So that's something. Where do you guys keep your brokerage accounts?
[17:18]
B
We're at Charles Schwab. We Use a Robo Advisor platform.
[17:22]
A
Okay, so Schwab has a. Has DAF giving 360. I know that's like a mouthful, but they were on our show, but they have a. And they spun it out as a separate entity. So DAF giving 360, you can check it out. They have the donor advice, and you could set it up right through them. And so if you wanted to do that, you could do that. Another thing you could think about is like, you could take these annuities, which there's a way to basically make that a charitable contribution where you're saying, okay, I'm going to give my annuity away. I can give it away at my death, I can give it away during my life, but that's also a nice asset to give away. And then when you're seventy and a half, presuming, I mean, this is so long for you guys 20 years from now. But, you know, there's something called a qualified charitable distribution that allows you to take money out, like, you know, 110 grand or so out of your retirement account directly sending it to a charity. So these are all great ways to give your money away. You're so young. I totally get it. But I think for, for her, I would, even though it seems like small potatoes right now, have her do her 8% into a Roth and get the 6% match. Don't look back. Make sure you have all of your I's dotted and t's crossed. Your estate planning is done. Great. And then just keep the father in law's money in. Very low risk. Right. High yield savings, CDs, nothing more. And don't let anyone convince you to do anything else with it. Okay, good.
[19:02]
B
Great.
[19:03]
A
I think you're ready to go. Very excited for both of you. I'm sure you've earned this money, but wow, it's a great story and I wish your wife the best of luck. Mark, when you retire in two years at age 49, will you go back to work? I'll be right alongside you. Okay, great. We're gonna go. We're going together. Hand in hand. Stepping into the abyss. Kim, thank you so much for getting in touch with us. Hey, I love to hear these stories about people going back into the workforce. You know, when we talk to Teresa Gillard Duchy, who's a labor economist, she talked a lot about how there are some people who are working longer or going back into the labor force because they have to. These are really interesting conversations because I feel like the Jill on Money crowd is sort of like well, I'm going back in cuz I want to. I'd love to hear more stories. What are you doing? How did you find that next thing? What was that next endeavor? Did it kind of pop up? Did you work hard to figure it out, what it would be? Get in touch with us. I want to hear about those stories. Go to jillonmoney.com, click the contact Us button, write us a note. And if you want to come on the air with us and chat about it, love to have you check the box. Mark will do everything else. Hey, don't forget we've got our subscription service. It's called Jill on Money Live. That's where you have access to quarterly live webinars, the back catalog of those webinars, bonus audio and video content. It's all for just 45 bucks for the next 12 months. You can always purchase a single webinar for 15 bucks. We just had a webinar a couple months ago with a Social Security expert, Heather Schreiber. She was incredible. So if you want to just buy that one webinar, feel free to do so. You can subscribe to us on the Odyssey app or wherever you find your favorite podcast. You know, you can also subscribe to our sister program. It's called Money Moves. And you can also just subscribe to that wherever you get your podcast or go to YouTube and check it out and see how handsome Mark is. Okay, put your hands, metaphorically on someone's back. Change your work, Change your wealth, change your life. Thank you for listening and we'll talk to you tomorrow. When a child faces a serious medical challenge, a children's hospital quickly becomes a family's entire world. Whether they're helping a child recover from a sudden injury or helping them manage a long term condition, these hospitals provide an irreplaceable community resource. Children's Miracle Network is dedicated to supporting this specialized care by securing the crucial funds these medical centers depend on daily. Children's Miracle Network is a leading charity impacting the health of all kids. They raise funds for 170 children's hospitals across the United States and Canada, protecting health care access for millions of families. Their fundraising network brings together corporate partners, local grassroots programs, and everyday donors like you and me. Your donation directly empowers your hometown hospital to use those resources exactly where they are needed most. Wherever you see the Children's Miracle Network balloon, you're helping a local child receive care. Visit cmn.org today to learn more and make a donation to your local children's hospital.
[22:13]
B
Sometimes it feels like the news is full of things that have never happened before. And that is not exactly true. In fact, it may have happened this very week, hundreds or thousands of years ago. I'm Sally Helm, host of the podcast History this Week from the History Channel. Trade embargoes. Thomas Jefferson tried them. Rent too high. We've been arguing about that for a while. Each episode is proof the past isn't that far away. Listen to History this Week, available now on Apple, Spotify, or wherever you get your podcasts.

Summary4 min read

Podcast Summary: Jill on Money with Jill Schlesinger

Episode: Retirement Plan Options at New Job
Date: August 5, 2026
Host: Jill Schlesinger

Overview

In this episode, Jill Schlesinger takes a listener call from Kim in New York, exploring strategies for smart retirement investing and financial management after a career in public safety. The discussion focuses on Kim and his wife’s transition into retirement, with Kim’s wife re-entering the workforce. The episode covers the couple’s impressive financial situation, options for new retirement contributions, management of family assets for an aging parent, and charitable giving possibilities.

Key Discussion Points & Insights

1. Retirement & Working in Retirement (03:33–04:22)

Kim and his wife, both retired from public safety, face a common post-retirement crossroads: while Kim enjoys retirement, his wife is returning to work for social engagement rather than financial necessity.
Jill praises the approach, stressing the importance of having a “retirement off-ramp” rather than stopping work abruptly.

"It’s actually really smart because it’s good to say, hey, we all need something different in that next phase."
— Jill (04:22)

2. Financial Snapshot (04:54–08:38)

Both receive substantial pensions:
- Kim: $8,000/month
- Wife: $8,600/month
All income is net (after-tax), totaling $16,600/month.
No children and a fully paid-off $725,000 home in New York.
Additional savings include IRAs, Roths, 457s, brokerage accounts, and union annuities totaling several million dollars.
Living expenses are around $9,000/month, resulting in significant surplus.

“You're just living large. This is great. Fantastic... You live within your means. You're amazing.”
— Jill (04:44, 08:38)

3. New Employment & Retirement Contributions (06:26–07:15)

Kim’s wife’s new job offers:
- $140,000 base salary, ~$12,000 annual bonus.
- 401(k) with both traditional and Roth options.
- Company matches 6% if she contributes 8%.
Jill’s Guidance:
- Favor Roth 401(k) contributions, especially given their already secured income.
- Maximize company match.
“Have her do her 8% into a Roth and get the 6% match. Don’t look back.”
— Jill (18:40)

4. Evaluating Future Spending and Purpose for Wealth (09:05–15:10)

With such a high surplus, Kim and his wife ponder future uses for their wealth: more travel, charitable giving, or helping family.
Current monthly spending is well below income. No dependent children, but potential responsibility for an aging parent exists.

5. Caring for an Aging Parent (09:18–13:08)

Kim’s father-in-law has dementia, recently moved to assisted living in a lower-cost state (~$5,500/month).
Income sources: Social Security and small annuities, totaling $4,400/month.
Proceeds from selling his house: $391,000 net.
Jill and Mark (producer) advise keeping these funds ultra-safe: high-yield savings and laddered CDs for easy access and preservation due to uncertain life expectancy (estimated <5 years).

“No, keep the money as safe as possible. Safe and boring... ladder up some CDs, depositaccounts.com or bankrate.com, you’ll find good rates.”
— Mark (11:25)

6. Wealth Planning: Roth Conversions & Charitable Giving (13:08–19:02)

With nearly $2 million in pre-tax retirement accounts, future tax planning is critical.
- Consider starting Roth conversions to manage required minimum distributions (RMDs) and future tax exposure.
- Jill emphasizes beginning conversions up to the top of the 32% tax bracket, but being mindful if wife’s employment is only a short stint.
“If you do nothing, you’re going to have a huge—not a huge…it’s a good problem to have! But…ten years from now, this money’s going to just keep going, increasing...”
— Jill (13:10)
Charitable Giving:
- Donor-Advised Funds (DAFs) are recommended, especially when in a high-tax bracket.
- Example: Donate appreciated shares from a brokerage account to a DAF at Schwab for an immediate tax break, then give to charity over time.
- Future options: Qualified Charitable Distributions (QCDs) from IRAs after age 70½.
“A donor advised fund allows you to take a low cost basis asset...gift it into a fund...take the tax deduction for the full amount.”
— Jill (15:39)

7. Action Steps for Kim and Spouse (18:40–19:02)

Continue disciplined saving and spending.
Begin Roth 401(k) contributions and Roth conversions as appropriate.
Keep father-in-law’s money in secure, liquid vehicles.
Ensure estate plan and documents are up to date.
Explore donor-advised fund options if charitable giving is a medium-term goal.

Notable Quotes & Memorable Moments

On Retirement Differences:
“She enjoys the social aspect of working...I had enough of that.” — Kim (04:06)
On Abundance and Planning:
“You got piles of money. So what are we gonna do with all this money?” — Jill (08:38)
On Risk and Family Money:
“Very boring. Very boring...ladder them up and just go...very low risk. Right. High yield savings, CDs, nothing more.” — Jill (13:08, 18:38)

Timestamps for Important Segments

(03:33) Kim introduces question about wife’s return to workforce and retirement investments
(04:54) Details on pensions, income, home, and debt-free situation
(06:26) Job offer details and 401(k)/Roth options
(09:18) Family care: assisted living expenses for father-in-law
(10:11) Proceeds from father-in-law’s house and investment choices
(13:08) Discussion on laddering CDs and safe investing for the father-in-law
(13:46) Roth conversions, tax brackets, and long-term planning
(15:39) Donor advised funds as a charitable giving vehicle
(18:40) Recommended next steps: Roth 401(k) and Roth conversions

Final Thoughts

Jill’s advice is affirming and personal, tailored to Kim and his wife’s unusually secure financial situation. The episode is full of actionable insights on maximizing retirement saving, managing large sums prudently, making the most of windfalls from family, and planning for both giving and eventual drawdown. Throughout, Jill encourages listeners to embrace their unique paths in retirement and working life, emphasizing prudent, intentional choices while supporting loved ones along the way.

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Transcript90 lines

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[03:33]
B
Hi, Jill. Hi, Mark. Thanks for speaking with me today.
[03:36]
A
Sure.
[03:36]
B
Well, I just kind of want to touch base. I am retired from public safety, as is my wife. However, retirement's not her thing and she's going back to work. So I guess I just want to get your opinions on what would be a good path going forward for her future retirement investment.
[03:55]
A
Wait a minute, wait a minute. Are you telling me that that whole togetherness thing in retirement kind of was a very quick event and she's like, I'm out of here, I'm going back to work. What happened? Give us the real deal.
[04:06]
B
Well, she enjoys the social aspect of working. Okay. Whereas I'm much more of an introvert. I had enough of that. And I could get, you know, my social interactions for my activities. I don't need to spend 40, 45 hours a week working and then a three hour commute.
[04:22]
A
I love that. I love this. I think that it's actually really smart because it's good to say, hey, we all need something different in that next phase. And this, I was just talking to somebody about this recently where we were talking about like having what's your off ramp? Like, where are you going? You can't go a hundred miles an hour and then just dead stop. And for a lot of people, they do like something or they've contemplated this and they've figured out how to fill their time. And the social aspect is huge. So because you were both in public safety, do each of you have a pen pension?
[04:54]
B
Yes, ma'. Am.
[04:56]
A
Okay, so first of all, how old are you?
[04:58]
B
Kim, I am going to be 51 in a week. So we'll just round up and say I'm 51. And she is. She's 49.
[05:05]
A
Okay. And what are the pension amounts?
[05:08]
B
All right, hers is 8,600amonth.
[05:11]
A
Oh, my gosh.
[05:12]
B
Mine is 8,000amonth.
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A
Huh. This also comes with lifetime or until Medicare health insurance.
[05:21]
B
Yes, it does.
[05:22]
A
Great for you guys on $16,600 a month. Gross. I know it's gross. Is that enough to support you or
[05:32]
B
is that actually, that's net. That's after tax.
[05:35]
A
Okay. So is this enough for you guys? Sixteen, six a month. You. No sweat. Are you net savers?
[05:41]
B
Yes.
[05:42]
A
Amazing. Do you have kids?
[05:44]
B
No kids.
[05:45]
A
Oh, you're just living large. This is great. Fantastic. Okay.
[05:48]
B
We've always lived within our means.
[05:50]
A
That's great. I mean, amazing to do that. You live in New York, so that's a high cost of living area. You own your home.
[05:57]
B
Yes.
[05:58]
A
And tell me what the house is worth approximately.
[06:02]
B
According to Zillow, it is 725,000.
[06:06]
A
Okay. And is there a mortgage remaining?
[06:08]
B
No mortgage remaining.
[06:09]
A
Okay. Any other real estate, rental or vacation, anything like that?
[06:14]
B
No.
[06:14]
A
Any desire for that?
[06:18]
B
That'd be nice. But I don't know if we would ever bite the bullet and buy a second property.
[06:23]
A
Yeah, it's like, more to take care of, right?
[06:25]
B
Exactly.
[06:27]
A
I kind of get in. How you roll, Kim? So she's gonna go back to work. What will she earn? How much do you think it is going?
[06:36]
B
Well, we have the offer letter, and it's 140,000 base.
[06:41]
A
Okay.
[06:42]
B
And there is a bonus, a yearly bonus of about 12,000 tacked onto that.
[06:49]
A
Oh, my God. This comes with all the benefits. She. But does she not need the benefits? Like, in terms of the. She will not need their health care because she has her own, right?
[06:58]
B
That's correct.
[06:59]
A
Okay. So she'll have a retirement contribution available for her. A plan that's available.
[07:05]
B
Yeah, they offer a 401k. They offer a Roth version of that as well. And if she puts in 8%, the company will match it. 6%.
[07:16]
A
My gosh. Okay, so 8% is 6% match. Got it. Okay. Now, you've got other money that you guys have saved. I mean, you really don't even need a lot of money because you can live on your pensions. And those pensions are cost of living adjusted, right?
[07:31]
B
They are, but it's a really small amount. It goes up, you know, a little bit every year. It's. It's not going to make meet the inflation Level, in my opinion.
[07:41]
A
Okay, no problem. And then, so what. Tell us about this, the money you guys have saved in addition to that pension.
[07:47]
B
Okay. I have a rollover IRA of 459,000. I have a 457 of 784.
[07:59]
A
Okay.
[08:00]
B
401k, 48,000. And that is all traditional.
[08:07]
A
We got to get this money out. Okay.
[08:09]
B
And then I have a brokerage account of 247,000. I have a union sponsored annuity, which is 63,000. And for her retirement savings, extra investment, she has a 457 traditional, which is 576,000. She has a brokerage of 224,000. Mm. And her annuity is 51,000.
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A
I mean, you got piles of money. So what are we gonna do with all this money? Tell us a little bit about what your thoughts are around all of this money that you have accumulated. Like, you live within your means. You're amazing. You're young, but I mean, you could live 40 years, but honestly, you're never gonna run out of money. So what is it that you would like to do with this money? Do you want to give it away? Do you want to just spend more money? Like what do you. You say you spend less than 16, 6. What is your spend right now?
[09:06]
B
Our spend right now is around $9,000 a month.
[09:09]
A
So even if I said, oh, go take more vacations, we're only going to get you to like 12 grand?
[09:15]
B
Yeah, pretty much.
[09:16]
A
So do you have to take care of anybody?
[09:19]
B
Well, that's another issue right now. We don't have to take care of anybody. But I did want to ask you. My father in law does have dementia and we just went through the process of moving him into assisted living. It's out of state. It's not in this state. It's in a much cheaper cost of living state. So that's a good thing because right now his level of care is only about 5,500amonth, whereas if he was in the northeast, it'd be around probably 13 grand to start off with. So we just sold his house. We did want to get your and Mark's opinion on what to do with the proceeds to kind of maybe stretch that and make it go a little bit further.
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A
Mm. How much did you sell the house for?
[10:03]
B
Well, the house was sold for 525. But after all the fees and paying off the mortgage, it will bring 391. That's the net proceeds.
[10:11]
A
Okay. 3 91. And he gets Social Security right now?
[10:16]
B
Yes, he does.
[10:17]
A
And no pension. Though. Just Social Security?
[10:20]
B
No, just Social Security. His income between investments in Social Security is 4400amonth.
[10:27]
A
Okay. So for now. And when you say investments, what's the, what does he have invested?
[10:34]
B
They had these weird random annuities that really don't have any sort of cash value. If we cash them out now, it would be next to nothing. It's more beneficial that we stretch it out over, you know, the five to ten years.
[10:50]
A
Okay.
[10:51]
B
That he might need it. So that's what we're doing. So Those annuities, there's four or five different ones and they will pay about $2,000 a month and the rest is his Social Security.
[11:01]
A
Okay, so that's fine. So that's just creating the income. And how old is his father in law?
[11:06]
B
He's 75.
[11:07]
A
Oh my God. He's young, poor thing.
[11:10]
B
Yeah, but he's had vascular dementia for a while and the life expectancy is not that long with it.
[11:17]
A
I'm sorry. That stinks.
[11:19]
B
Okay.
[11:20]
A
Okay, so. So here's what I'm thinking. And Mark, you can come on the air and give your view of this. 390 grand is really all the money he has. Obviously these annuities are going to pop in, but you got the income. You're running shy by $1,100 a month. But if you think about it, we probably shouldn't do much with this 390. You should keep, let's say the next year of that differential. You probably should keep 50 grand in just like a high yield savings account. And then I might just ladder some CDs. Mark, do you have a different view on the 390? No, I wouldn't do anything with it. And given what I just heard about, about his condition and the long term outlook and just how fluid everything is. No, keep the money as safe as possible. Safe and boring. You know, just ladder up some CDs, you know, deposit accounts, dot com or bankrate dot com. You'll find good rates. Or, you know. And is your wife the only child or is your wife the only child of means? Like it's. Is this falling to you guys alone or, or are there other people involved?
[12:26]
B
Well, she's the power of attorney. There are other people involved. I don't think anybody else would be ever in a position to assist him financially.
[12:35]
A
Okay.
[12:35]
B
Should it come to that, I don't
[12:37]
A
think that he's gonna run out of money. It doesn't sound like that. He's not, it's not that much. In excess of, in other words, like you Said if you were 13, 14, 15 grand a month, then we'd, you know, blow through this in a couple years. But it does not sound like that's gonna happen. If it were to happen and you did need to help, guys have plenty of money to help him out. But I think for now, laddered CDs, I don't even go, I mean, what do you think his life expectancy is for real?
[13:05]
B
I would say probably no more than another five years.
[13:08]
A
Do not go longer than a five year term on a CD and ladder them up and just go, you know, six months, one year, 18 months, two years, three years, four years, five years and divvy up the money. Very boring. Very boring. Now I want to turn back to you guys. You're awash in cash, you got so much money. How do you feel about burning up some of your brokerage account money by converting some of your assets just to start? I mean, right now it seems to me that if you do nothing, you're going to have a comp. You're going to have a huge. Not a huge. It's a good problem to have. But, you know, if we think about 10 years from now, this money is going to just keep going, increasing, and then 10 years after that, it's going to keep increasing. So it wouldn't be a bad idea to at least start thinking about getting some of the money and converting it. It doesn't. Again, it does not have to be everything at once. You guys are going to be in a high tax bracket for a while because you've got those huge pensions. Right. So there's no way really around it. And since your wife's gone back to work, you know, you're, see, you're going to be in the 16, so you're probably going to be in the 32% bracket. Okay. Yeah, so the 32. The top of the 32% bracket is a half a million, like 512,000. Okay. So maybe I would just start at least converting up to that amount. How are you feeling about, like using some of. I mean, I guess the other thing you could do is you could, you know, start being more charitable. Do you have nieces and nephews? Do you need to help anyone else out? Like, what are we talking about here?
[14:47]
B
Well, we do have nieces and nephews and anything that's left, they will get. We are charitable. So I do think that later on in life we'll definitely give more than we do now. You know, I'm always very cautious, so I'd hate to give it all away now. And not that I would give all of it away, but to, you know, part with it and then need it later down the road, you know.
[15:10]
A
Okay, fair enough.
[15:12]
B
But back to the 32% bracket. If she's only going to work for like another five to 10 years, would it behoove us to hold off on the conversions or we should really start doing that now?
[15:24]
A
I don't know. I mean, it's so hard because the dollars are so big in, in these accounts already, right? So I just did like, you know, quick math. You have almost $2 million that hasn't been taxed yet. So if you said to me she's going back for two years, that's it, okay, maybe I would not. You know what I mean? But because you're. Now if you say 10 years, I don't know, man, like that's. This money's gonna grow, probably gonna double every seven years or so, you know, statistically. So I think at least a little bit. And as soon as she pulls back, then really getting some of this money converted will be helpful now. So just if you are charitable things to think about, you don't have to do it right now. So at any time you could use your brokerage account money and fund something called a donor advised fund. A daf. A donor advised fund allows you to take a low cost basis asset. So I presume in these two different brokerage accounts, you know, the 247 or the 224, that you have some money that's been invested for a while and there's a big capital gains. What you can do is you can take something. I'm just going to make it up. Let's say you had an S&P 500 fund. You could gift it into a donor advised fund. You'd get the tax deduction for the full amount that goes into the fund this year. While you guys are both, while you're where you're in a high tax bracket, but you don't have to give it away immediately. It kind of, I think solves your problem of like, I could put, like, I'll give you an example. I could put 50 grand in there right now, but I don't have to give it away all at once. I take the tax deduction this year because we're in a high tax bracket, right. And I can take that all this year and then I could spread out my giving in the future. So that's something. Where do you guys keep your brokerage accounts?
[17:18]
B
We're at Charles Schwab. We Use a Robo Advisor platform.
[17:22]
A
Okay, so Schwab has a. Has DAF giving 360. I know that's like a mouthful, but they were on our show, but they have a. And they spun it out as a separate entity. So DAF giving 360, you can check it out. They have the donor advice, and you could set it up right through them. And so if you wanted to do that, you could do that. Another thing you could think about is like, you could take these annuities, which there's a way to basically make that a charitable contribution where you're saying, okay, I'm going to give my annuity away. I can give it away at my death, I can give it away during my life, but that's also a nice asset to give away. And then when you're seventy and a half, presuming, I mean, this is so long for you guys 20 years from now. But, you know, there's something called a qualified charitable distribution that allows you to take money out, like, you know, 110 grand or so out of your retirement account directly sending it to a charity. So these are all great ways to give your money away. You're so young. I totally get it. But I think for, for her, I would, even though it seems like small potatoes right now, have her do her 8% into a Roth and get the 6% match. Don't look back. Make sure you have all of your I's dotted and t's crossed. Your estate planning is done. Great. And then just keep the father in law's money in. Very low risk. Right. High yield savings, CDs, nothing more. And don't let anyone convince you to do anything else with it. Okay, good.
[19:02]
B
Great.
[19:03]
A
I think you're ready to go. Very excited for both of you. I'm sure you've earned this money, but wow, it's a great story and I wish your wife the best of luck. Mark, when you retire in two years at age 49, will you go back to work? I'll be right alongside you. Okay, great. We're gonna go. We're going together. Hand in hand. Stepping into the abyss. Kim, thank you so much for getting in touch with us. Hey, I love to hear these stories about people going back into the workforce. You know, when we talk to Teresa Gillard Duchy, who's a labor economist, she talked a lot about how there are some people who are working longer or going back into the labor force because they have to. These are really interesting conversations because I feel like the Jill on Money crowd is sort of like well, I'm going back in cuz I want to. I'd love to hear more stories. What are you doing? How did you find that next thing? What was that next endeavor? Did it kind of pop up? Did you work hard to figure it out, what it would be? Get in touch with us. I want to hear about those stories. Go to jillonmoney.com, click the contact Us button, write us a note. And if you want to come on the air with us and chat about it, love to have you check the box. Mark will do everything else. Hey, don't forget we've got our subscription service. It's called Jill on Money Live. That's where you have access to quarterly live webinars, the back catalog of those webinars, bonus audio and video content. It's all for just 45 bucks for the next 12 months. You can always purchase a single webinar for 15 bucks. We just had a webinar a couple months ago with a Social Security expert, Heather Schreiber. She was incredible. So if you want to just buy that one webinar, feel free to do so. You can subscribe to us on the Odyssey app or wherever you find your favorite podcast. You know, you can also subscribe to our sister program. It's called Money Moves. And you can also just subscribe to that wherever you get your podcast or go to YouTube and check it out and see how handsome Mark is. Okay, put your hands, metaphorically on someone's back. Change your work, Change your wealth, change your life. Thank you for listening and we'll talk to you tomorrow. When a child faces a serious medical challenge, a children's hospital quickly becomes a family's entire world. Whether they're helping a child recover from a sudden injury or helping them manage a long term condition, these hospitals provide an irreplaceable community resource. Children's Miracle Network is dedicated to supporting this specialized care by securing the crucial funds these medical centers depend on daily. Children's Miracle Network is a leading charity impacting the health of all kids. They raise funds for 170 children's hospitals across the United States and Canada, protecting health care access for millions of families. Their fundraising network brings together corporate partners, local grassroots programs, and everyday donors like you and me. Your donation directly empowers your hometown hospital to use those resources exactly where they are needed most. Wherever you see the Children's Miracle Network balloon, you're helping a local child receive care. Visit cmn.org today to learn more and make a donation to your local children's hospital.
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Sometimes it feels like the news is full of things that have never happened before. And that is not exactly true. In fact, it may have happened this very week, hundreds or thousands of years ago. I'm Sally Helm, host of the podcast History this Week from the History Channel. Trade embargoes. Thomas Jefferson tried them. Rent too high. We've been arguing about that for a while. Each episode is proof the past isn't that far away. Listen to History this Week, available now on Apple, Spotify, or wherever you get your podcasts.