Summary of "Retirement Soon, Are We Ready?"

Podcast: Jill on Money with Jill Schlesinger
Host: Jill Schlesinger, CFP®
Guest Speakers: Bob and Kat from New York City
Release Date: May 28, 2025

Introduction

In the May 28, 2025 episode of "Jill on Money with Jill Schlesinger," host Jill Schlesinger and co-host Mark engage with listeners' financial questions, focusing this episode on the theme "Retirement Soon, Are We Ready?" The episode features a call from Bob and Kat, a couple nearing retirement, seeking advice on their financial readiness and contemplating major life decisions.

Listener Profile: Bob and Kat

[02:58] Bob: "Thank you for having me. Jill and Mark, I really appreciate you taking my call."

[03:04] Bob: "I'm closer to retirement now. I'm about a year and a half away. So I want to kind of let you know, show you what I have so far and let's see what you think."

Age and Employment:

• Bob is 51 years old, planning to retire in 1.5 years.
• Kat, his wife, is 48 years old and currently employed full-time, earning approximately $65,000 annually.

[03:25] Bob: "So, as I'm getting older, I'm seeing different things. I lost my mother last year at the end of last year and I'm just want to see, try to see how I can, I guess just enjoy life a little more, you know. That changed my mind a little about things a little bit."

Impact of Personal Events: Bob’s decision to retire early was influenced by the passing of his mother, prompting him to reassess his priorities and seek greater life enjoyment.

Financial Overview

Pension and Income:

[04:35] Bob: "Yes, I do have a pension."

• Pension Amount: Estimated $9,500 to $10,000 per month starting in 1.5 years.
• Health Insurance: Included with the pension.

Retirement Savings:

[05:22] Bob: "So far we have about 1.7 in a Roth."

[05:44] Bob: "About 900,000. Among our 457 traditional IRA and 401K."

Additional Savings:

• Roth IRA: $1.7 million
• Traditional IRA and 401(k): $900,000
• 529 Plan: $125,000 for children’s education
• Taxable Brokerage Accounts: $600,000
• Cash Reserves: $50,000

[05:27] Jill: "Just in a Roth way to go."

Assets Against Expenses:

[07:52] Bob: "I estimate them around 8,000 a month."

Budgeting: The couple maintains a monthly expenditure of approximately $8,000, highlighting a frugal lifestyle that supports their financial readiness for retirement.

Real Estate Considerations

Primary Residence:

[06:37] Bob: "No, that's pretty much it. New York City is expensive, so pretty much we can only deal with this right now."

Home Value and Mortgage:

[06:46] Jill: "How much is your primary worth?"

[06:49] Bob: "It's worth like in the mid-800, I think."

[06:53] Jill: "Do you have a mortgage that remains on this house?"

[06:56] Bob: "I actually do have a mortgage. I'm paying it off. By the time I retire it should be all paid off."

Ownership Strategy: Bob plans to maintain ownership of their New York City residence until their youngest child completes high school, ensuring stability for his family.

Tax Considerations and Relocation

Contemplating Relocation:

[08:28] Bob: "So there's another reason why I'm also trying to get more advice from you guys. I'm thinking about possibly relocating to... Texas or maybe even a Florida."

[09:08] Jill: "If you did not have any tax, let's say all things being equal, tax rates were the same every single state in the Union. Where would you live?"

[10:50] Bob: "I actually was just thinking of the mindset of like a snowbird, maybe I keep, like, we still have the place here and maybe considering either renting or maybe purchasing a new home in another state like Texas and Florida, and then maybe go back and forth and travel and stuff."

[11:13] Jill: "Exactly. So not. So doing that, you'd have to spend more than six months in that place and you have the expense of carrying the second place, which is going to more than eat up any savings you'll have in taxes."

Advice on Relocation: Jill advises against relocating solely for tax benefits due to the high costs associated with maintaining a second residence. She emphasizes the importance of living where one is happiest rather than being driven by tax considerations, especially given Bob and Kat's strong financial position.

Estate Planning and Life Insurance

Estate Planning Status:

[12:20] Bob: "Yeah, more or less. Just need to update it."

Life Insurance:

[12:26] Bob: "I do have. We do have two term life. One should end by the time I leave my job... I have a second one that's going to be until, like myself, I'll be like 71 years old."

[12:55] Jill: "Do you have life insurance that's floating around, anything like that?"

Considerations:

• Term Life Insurance: Two policies; one expiring upon retirement, another lasting until age 71.
• Survivor Benefits: Bob has considered whether to opt for a joint and survivor pension benefit, which would reduce his monthly pension but ensure Kat receives payments if he passes away.

[13:32] Jill: "Why don't you find out what the haircut would be to take a joint and survivor because if it's not too much, it might be worth it for you just because you guys are so young and she's so young."

[13:44] Bob: "So the number to that, I believe it should be around 7,500. If I decide to take the joint."

Mark's Input:

[13:50] Mark: "I would certainly... give it real consideration."

Conclusion on Insurance: Jill and Mark suggest that opting for survivor benefits could be beneficial for Bob and Kat, considering their youth and the security it would provide to Kat in the event of Bob's untimely passing.

Final Recommendations

Holistic Financial Health:

Jill emphasizes the importance of comprehensive financial planning beyond immediate retirement readiness. She advises Bob to:

1. Evaluate Survivor Pension Options: Determine the feasibility and benefits of a joint and survivor pension to secure Kat's financial future.
2. Assess Life Insurance Needs: Review the costs and benefits of maintaining life insurance policies, especially in light of their substantial retirement savings.
3. Avoid Relocating for Taxes Alone: Focus on personal and family happiness rather than tax incentives when considering relocation.

[15:31] Jill: "Because the one term life insurance expires... but you're so young, Bob, that the one term life insurance expires."

[15:30] Bob: "Okay."

Jill advises Bob and Kat to prioritize their quality of life and personal preferences over purely financial incentives, given their robust financial situation.

Conclusion

The episode "Retirement Soon, Are We Ready?" offers a comprehensive look into early retirement planning through the lens of Bob and Kat's financial journey. Jill and Mark provide tailored advice, emphasizing the importance of survivor benefits, careful assessment of life insurance needs, and ensuring that life decisions, such as relocation, align with personal happiness rather than solely financial gains. The discussion underscores the value of holistic financial planning in achieving a secure and fulfilling retirement.

Notable Quotes:

• Jill Schlesinger [05:27]: "Just in a Roth way to go."
• Bob [09:23]: "Well, you. You and Mark will understand is the tax rate. Everything is very high."
• Jill Schlesinger [13:32]: "Why don't you find out what the haircut would be to take a joint and survivor because if it's not too much, it might be worth it for you..."

Additional Resources

For listeners seeking personalized financial advice or wishing to join the conversation, Jill encourages reaching out via jillonmoney.com, where they can submit questions or participate in live discussions. The website also offers a wealth of resources, including blogs, podcasts, and video content to support various stages of the financial journey.

This summary aims to encapsulate the key discussions and advice provided in the episode, offering valuable insights for anyone contemplating retirement decisions.