Save for Retirement or a House?

Summary

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Jill on Money - "Save for Retirement or a House?"

Date: January 23, 2026
Host: Jill Schlesinger, CFP®
Guest/Caller: Manny from Washington, D.C.

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Episode Overview

Jill Schlesinger dives into a classic financial dilemma: Should you prioritize saving for retirement or for a house? Listener Manny, a diligent saver and long-time renter, calls in with a detailed rundown of his finances—seeking guidance on where to focus his efforts given a new windfall, his savings habits, and thoughts about possibly buying a home. Throughout, Jill (with input from executive producer Mark Telerso) offers practical, jargon-free advice, highlighting the importance of financial freedom, self-knowledge, and making choices in line with personal values—rather than societal pressure.

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Key Discussion Points & Insights

1. Manny’s Financial Picture

[03:43 – 07:37]

• Salary & Status:
  • 45 years old, single, no kids
  • Salary: $136,000/year
  • No debts or credit card balances
• Retirement Savings:
  • 401(k) Traditional: ~$176,000
  • 401(k) Roth: ~$39,000
  • Roth IRA: ~$20,000
  • Contributions: $2,000/month into Roth 401(k), Roth IRA as well
• Spending:
  • Barebones monthly expenses: ~$3,700
  • Estimated realistic spend with discretionary: ~$5,000
• Cash Reserves & Investments:
  • Emergency fund: $52,000
  • High-yield savings: $54,000 (pandemic savings)
  • House down payment fund: $6,500
  • Brokerage account: $34,000
• Windfall:
  • Received $36,000 from a student loan class action settlement (Sweet v. Cardona)

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2. Housing Decision: Should Manny Buy?

[09:31 – 13:00]

• Current rent: $2,400/month; satisfied with area, wants bigger space eventually.

• Cost for a larger rental: Around $3,000/month.

• Homebuying in DC Area:

  • Would likely need $100,000 (from his cash/windfall) for a down payment on a $500,000 property.
  • Mortgage estimated: $2,400/month (principal & interest on $400,000 at 6%), plus taxes and maintenance.
  • Jill expresses skepticism: “Oh God, you’re crazy. Don’t buy anything. That’s insanity.” [11:11]
  • Mark and Jill highlight the “liquidity loss”—how much flexibility Manny would give up to buy.

• Jill’s Insight:

  • “Buying means that all this money…goes to this down payment. And [you'd] be locked down a little bit. I don’t know if you want to be locked down.” [12:20]
  • Emphasizes that personal peace and low-stress living are valid goals: “You can say that I value my peace. Put it that way.” — Manny [13:00]

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3. Strategic Advice: Retirement, Saving, and Flexibility

[13:00 – 16:24]

• Recommendation:

  • If Manny doesn’t feel a strong desire to buy, don’t force it.
  • Take the $100,000 (from high-yield savings, house fund, and class-action money) and move it to his brokerage account for supplemental retirement investing.
  • Continue maximizing retirement account contributions, especially into Roth vehicles.

• Retirement Outlook:

  • “You will soon have $134,000 in your brokerage account. You’ve got your cash on hand. You’re doing an incredible job, man.” — Jill [14:50]
  • Mark reassures: “Let’s just say you retire at the age of 60… fifteen years from now, you’re going to have over a million and a half dollars.” [15:12]

• Emphasis on Self-Acceptance:

  • “Sometimes you put more pressure on yourself than you should…there may be different things out there and maybe you’re feeling the pressure of doing something that’s...the American Dream. Who cares? We don’t necessarily need that.” — Jill [17:34]

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4. Notable Quotes & Memorable Moments

• Jill on renting vs. buying:

  “I would not put the pressure on myself to buy if you didn’t really feel the pull. It doesn’t seem like you do.” [15:23]

• Mark’s reassurance:

  “I know he feels like he’s behind and he feels like he got a late start, but…as far as I’m concerned, that’s all nonsense.” [15:12]

• Jill’s overall endorsement:

  “Unless you find something that really rocks your world, Manny, I would just keep on doing exactly what you’re doing.” [17:05]

• Key emotional moment:

  “Aunt Jill giving you a big thumbs up.” [17:26]

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Timestamps for Key Segments

• [03:43] — Manny’s financial background & savings habits
• [07:37] — Review of cash, assets, and recent windfall
• [09:31] — Discussion about homebuying, rent, and lifestyle
• [12:03] — Breakdown of home affordability in DC
• [13:00] — Discussion about comfort with renting, personal preferences
• [14:47] — Strategy for investing windfall and maximizing retirement
• [15:12] — Long-term retirement outlook and encouragement
• [16:24] — Affirmation of strategy and closing thoughts

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Host Takeaways & Closing Thoughts

• Prioritize what gives you peace of mind over societal pressures about homeownership.
• Retirement savings—especially through Roth accounts—offer flexibility and long-term growth.
• A large windfall can be a powerful tool for supplementing retirement, especially if you don’t need to put it toward a down payment.
• “You’re doing a great job. You don’t spend that much money... You kicked butt during the pandemic. You saved money. You got a little side hustle. Like, it’s all really good news.” — Jill [15:23]
• Don’t mistake “the American Dream” (homeownership) for a necessity—personal peace and stability are paramount.

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Final advice to Manny: Keep renting if it brings you peace, invest windfalls for the future, keep maxing out Roth contributions, and don’t let outside pressures dictate your financial path. “Keep on doing exactly what you’re doing.”

Transcript

[Jill Schlesinger]

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[Jill Schlesinger]

Welcome to the Jill on Money Show. It's Friday, January 23rd and we're here to help you answer financial questions both big and small. Sometimes you contact us and you think it's just not that big a deal, but then we uncover something else going on. So if you'd like a little bit of help from two folks who are certified financial planners. But no, we don't work for a financial service company. We're media people who just happen to love talking to you. All you need to do is go to our website jillonmoney.com when you're there, in the upper right hand corner there is a Contact Us button. Click that button, a form will pop up. That is the email we receive. If you would be willing to come on the air. Check the box. Mark will do everything else because Mark is not just a certified financial planner, he is also the very best executive producer in the entire world. While you are on the website, check out all of the free content that is there like our free weekly newsletter which you should definitely subscribe to. Also We've got another podcast. It's called Money Watch. You should subscribe to that as well. We've got a blog, we've got a radio show. Videos, resources, so much there. All of that is free. But if you want to spend a few bucks, check out Jill on Money Live. That is where you pay 45 bucks for the next 12 months. You get to join us live for quarterly webinars. So much fun, you get to have access to the back catalog of those webinars. There's bonus audio and video content. 45 bucks for 12 months. And if you actually sign up right now and subscribe, you'll note that our next webinar is with the Amazing Ed slotted. IRA help.com Ed slott, the guy who basically showed me and Mark the beauty of the Roth. Thursday, February 26th is that next webinar. And if you just want that webinar and you don't want to spring for 45 bucks, no problem. Just pay for that one webinar. $15. Very easy to do. Okay, enough of that self promotion, Jill. Let's talk to Manny, who joins us from Washington, D.C. hello, Manny, how are you? What can we do for you?

[Manny (Caller)]

Good morning, Jill. Calling to see if you can help me decide how to invest some of my income and some money that I have saved over the last few years. I currently have a 401k from my employer. I have been contributing over the last eight years or so. And I started with traditional. After listening to your show, I decided to start putting into Roth.

[Jill Schlesinger]

Amazing. Manny, how much do you earn right now?

[Manny (Caller)]

Right now, 136,000.

[Jill Schlesinger]

That's great. And how old are you?

[Manny (Caller)]

I'm 45.

[Jill Schlesinger]

Married, single, partnered, single, no kids. Okay, so it's just you we're just saving for. Okay. And how is the cash flow based on, you know, you got 136 grand coming in. You're putting money into the Roth now. How are you doing paying your bills? Do you feel tight? Is it good? Where are you?

[Manny (Caller)]

I can pay all my bills of any. Any credit card debt or debt in general.

[Jill Schlesinger]

Great. That's awesome. How much have you saved? In the traditional, 401k in the pre tax.

[Manny (Caller)]

So in Traditional, currently I have around 176,000.

[Jill Schlesinger]

And how about the Roth?

[Manny (Caller)]

In Roth, I have 39. Around $39,000.

[Jill Schlesinger]

Do you have any old IRA accounts or anything else floating around that we should know about for retirement?

[Manny (Caller)]

I do have a Roth IRA and there's around 20,000.

[Jill Schlesinger]

So how much are you putting into the Roth? 401k.

[Manny (Caller)]

Right now I put in about $2,000 a month.

[Jill Schlesinger]

Wow. You don't spend a lot of money. How much do you spend? Just in general? I mean, you're saving $2,000 a month in the Roth and also putting money into the Roth ira.

[Manny (Caller)]

Yes.

[Jill Schlesinger]

So you're. You're doing really well. How much do you think you spend on a monthly basis?

[Manny (Caller)]

The last time I did these numbers with rent, utilities, and food, it's around 3,700.

[Jill Schlesinger]

And is that any fun or is that just, like, the basics?

[Manny (Caller)]

That's just the basics.

[Jill Schlesinger]

All right, so maybe if we think about, you know, rent, utilities, food, and then you have some fun and maybe you go away a couple times, maybe it's five grand a month. Let's. Let's think. I think that sounds probably more realistic. How much money do you have, like, in a bank account? Just like a safe cash account.

[Manny (Caller)]

So for in an emergency fund? 52,000.

[Jill Schlesinger]

Great.

[Manny (Caller)]

I started saving for a house, and then in that bucket, I have 6,500.

[Jill Schlesinger]

So you got $52,000 in cash, but then another account is like the house down payment fund.

[Manny (Caller)]

Yes.

[Jill Schlesinger]

Okay, and that's 6,500.

[Manny (Caller)]

Yes.

[Jill Schlesinger]

Got it. Okay.

[Manny (Caller)]

And then I have 54,000 also in a high yield savings account. And this was money that I saved during the pandemic.

[Jill Schlesinger]

Wait a minute. Hold on a second. So 52 is just, you know, in the bank, then 54 in a high yield savings account, and then 6,500 in your house down payment fund?

[Manny (Caller)]

Yes.

[Jill Schlesinger]

Wow, that's incredible. So amazing. Is that it for cash?

[Manny (Caller)]

That's all cash.

[Jill Schlesinger]

Do you have any other assets? Like, do you have brokerage account or crypto or anything? You're a young guy, so I'm going to ask you about crypto, but do you have any other money invested?

[Manny (Caller)]

I do have a brokerage account, and there's about 34,000.

[Jill Schlesinger]

Great. That's amazing. Wow. Okay. You said no debt, so.

[Manny (Caller)]

Yes, but no.

[Jill Schlesinger]

Oh, my God, that scares me. Okay, let's go.

[Manny (Caller)]

So recently I found out that. Well, let me give you the backstory.

[Jill Schlesinger]

Okay.

[Manny (Caller)]

Make it short. The student loans that I took to go to school were taken for a school that was on the list of schools that were part of the Swede versus Cardona now. Sweet.

[Jill Schlesinger]

Oh, you mean, like, it was a. It was like one of these, like, schools that they came back and they said, oh, you got a crap degree and you should get your money back.

[Manny (Caller)]

Yes, some.

[Jill Schlesinger]

Okay.

[Manny (Caller)]

Like that.

[Jill Schlesinger]

Okay.

[Manny (Caller)]

So I applied for a borrower difference to repayment under that class action lawsuit. I was informed in late December that. That my application was approved.

[Jill Schlesinger]

Oh, how much money are you getting?

[Manny (Caller)]

They're saying that I'm going to get $36,000 back.

[Jill Schlesinger]

Wow. Holy moly. And that is not taxable. That is just $36,000 net to you?

[Manny (Caller)]

Yes.

[Jill Schlesinger]

That's incredible.

[Manny (Caller)]

When I applied, it was in 2022. I wasn't sure if. If this was gonna go through because it's. It just sounded too good to be true. So I had an opportunity to go on a side hustle. 2022. I did that for. For a few months. And then I saved just in case the department of education denied my application. So if that was the case, I was gonna say, well, you know, that's too bad. Here's the money and we're square.

[Jill Schlesinger]

This is amazing. So now you're gonna get $36,000 and you've got all this cash. Let me ask you a question, Manny. You rent. How much is your rent right now?

[Manny (Caller)]

So right now it's around 2400.

[Jill Schlesinger]

Do you like where you live?

[Manny (Caller)]

Yeah, I do.

[Jill Schlesinger]

It's like big enough. You're good. No, like, do you don't feel like, oh, I hate where I live. I want to spend my money differently. Like, it's good where you are.

[Manny (Caller)]

So the area, I like the area where I live. It's a small apartment. Eventually I would like to have a bigger space.

[Jill Schlesinger]

Let's say I said I'm your fairy godmother. Let's just say I have a little wand. And I say, okay, if you could get the bigger apartment that you'd like, what would the rent be for that?

[Manny (Caller)]

It'll probably be just under $3,000.

[Jill Schlesinger]

I'm going to say $3,000. Do you feel like moving anytime soon or not?

[Manny (Caller)]

No. No.

[Jill Schlesinger]

Okay. Now you have all this money and you're thinking about a house down payment. But are you sure you want to buy? Because your rent is pretty reasonable. And buying means that all this money that you have, when you've done an incredible job. Manny. Incredible. Goes to this down payment. And you'd be owning something that is, you know, could you buy a two bedroom place, an apartment that you'd be happy in? I'm sure you could, but I'm sure it would cost real money. You're in the Washington, D.C. area. Have you looked at buying and what. What it would cost you to move into something you'd want to move into for real easily.

[Manny (Caller)]

Here we're talking about half a million.

[Jill Schlesinger]

Oh, God, you're Crazy. Don't buy anything. That's insanity. I mean, look, I shouldn't say that. I think you've done an incredible job. If you like stumbled onto something and you're like, oh my God, it's great, I will take my hundred thousand dollars that I have because you're going to. Okay, I'm not including the cash on hand like your emergency fund. I'm looking at your high yield savings, the house down payment fund, plus your windfall of 36,000. You will have 100 grand for a down payment. Okay. Mark, can you do me a favor? Can you tell me what a $400,000 mortgage for our man Manny would be? What's the payment on a $400,000 note? Just do it at 6% for the heck of it. Let's just look at that. A 30 year fixed. What would that be, Mark?

[Mark Telerso]

$2,400.

[Jill Schlesinger]

Okay, so if you wanted to go look to buy something, just principal and interest will be $2,400 a month. Then on top of that, of course you'll pay taxes and there'll be maintenance and you know, it'll be about what you would get for your two bedroom. You would own. However you'd be locked down a little bit. And I don't know if you want to be locked down or not. So how does it sound to buy a half a million dollar property with your hundred thousand, lose that liquidity but own the home? How do you feel about that?

[Manny (Caller)]

I have been renting for a very, very long time and maintaining a house at my age.

[Jill Schlesinger]

My age?

[Mark Telerso]

What are you talking about?

[Jill Schlesinger]

Yeah, you're Mark's age. But let me, you're younger. I know, but you know what, he knows himself. Maybe you're feeling like, ah, I like the ease of renting, which is okay.

[Manny (Caller)]

You can say that I value my piece. Okay, put it that way.

[Jill Schlesinger]

I mean, listen, it's probably you're not saying you want to buy a million dollar house. I think that it's probably pretty close. You know, rents in the D.C. area will always be, you know, they'll be expensive. You're not moving, you know, to a place where you're going to spend $1,000 a month, but so too will the cost of housing. And so maybe renting is good for you. In which case then we have to say maybe what you do with, if you really decide and I'm not going to push you one way or the other. I feel like if you're like I desperately want to buy a house or if you have like I Don't know. If you have parents who are like, you should buy a house and that's going to make whatever. You're single, you have no kids, there's no obligations. Right. It's kind of nice to have the freedom of renting, which I get. But since you don't feel the pull of owning that much, I'm inclined to say, let's take this $100,000 and now you can put it into your brokerage account. You have the high yield savings. Right now you can take that house. That again, high yield savings plus the down payment fund, as well as the class action lawsuit proceeds of 36,000 gives you about $100,000. I would pop that right into my brokerage account and make that my supplemental retirement savings. I mean, that's great because for someone who doesn't make a ton of money and you do live in a high cost of living area, you've done a very good job of accumulating assets. You really have. I want to just like, make sure. So you're putting, right now, are you putting all of your retirement contributions, your 401k into Roth, or is there. Are you still putting money in the traditional?

[Manny (Caller)]

It's only the employer match that goes into traditional.

[Jill Schlesinger]

Great, perfect. So you're putting this two grand a month into your Roth. You're putting money into a Roth IRA. You will soon have $134,000 in your brokerage account. You've got your cash on hand. You're doing an incredible job, man. You have nothing else to pay for. You are doing a great job. Mark, is there anything that you. Any holes in this?

[Mark Telerso]

No. I know he feels like he's behind and he feels like he got a late start, but why? As far as I'm concerned, that's all nonsense. Let's just say you retire at the age of 60. Fifteen years from now, you're going to have over a million and a half dollars.

[Jill Schlesinger]

I really think you are in very good shape, man. I really do. And I know that there are people who you hear on this show and you're like, they have millions of dollars. You're doing a great job. You don't spend that much money. And I forgot to ask you, are you going to be entitled to any pension benefit or not? No. Fine. It doesn't matter. You're doing a great job. Yeah, this nice $36,000 windfall is great. You kicked butt during the pandemic. You saved money. You got a little side hustle. Like, it's all really good news. I don't think that someone in your situation, again, if you felt like, I really, really want to buy, or if something changed, if you said to me, jill, I found this place, it fell into my lap. I do want to buy. Fine. So what? You'll have brokerage account money. We'll sell what's in the brokerage account and you'll buy. But I would not put the pressure on myself to buy if you didn't really feel the pull. It doesn't seem like you do. Do you have any other questions for us? Do we take you off the hook.

[Manny (Caller)]

On everything for contributions to the 401? Should I continue contributing 100% to Roth?

[Jill Schlesinger]

Yes. Absolutely. Absolutely.

[Manny (Caller)]

Okay.

[Jill Schlesinger]

Absolutely. And, you know, you feel stable in your job. Is that, has it been good for you?

[Manny (Caller)]

It's. It's been great.

[Jill Schlesinger]

Great. So, so much. So. So I can't believe about this class action suit. That's incredible. It's so fascinating. Like some of these things that, you know, you work so hard, you. You apply, whatever. You don't know how it's going to turn out. This one worked out really well for you. I'm sorry you had a degree that didn't pay off, but meanwhile, it didn't hurt you so much. Stay out of trouble. Use your index funds. Keep piling money into your Roth 401K, Roth IRA. If you have extra cash on hand and you want to add it to your brokerage, great, that's it. That's what you're doing. And unless you find something that really rocks your world, Manny, I would just keep on doing exactly what you're doing. I really think you're in good shape. Aunt Jill giving you a big thumbs up.

[Manny (Caller)]

Okay, thank you. Thank you so much.

[Jill Schlesinger]

Sound good?

[Manny (Caller)]

Yes.

[Jill Schlesinger]

All right, Mark, another happy customer. He's not our customer, but, you know, another happy caller, another happy listener. And we are so grateful when you guys come on the air with us. So, you know, sometimes you put more pressure on yourself than you should. All we want to do is just listen to what's going on and we try to parse out what we think is available to you. There may be different things that are out there, and maybe you're feeling the pressure of doing something that's, oh, this is the American dream. Who cares? We don't necessarily need that. All we want to do is hear from you and hear your story. So go to jillonmoney.com, click the contact us button, write us a note, and if you want to come on the air, check the box. Mark will do everything else and you can subscribe to us on the Odyssey app or wherever you find your favorite podcast. Please leave us a rating and review wherever you listen. It is Friday, so let's do our thank yous. The first is to tell you that our music is composed by Joel Goodman. Mark Telerso is the executive producer and the king of all Things web. At jillonmoney.com we are distributed by the fine folks at Odyssey. We ask that you try to put your hands metaphorically on someone's back. We used to say that during the pandemic. I still want you to to do that. Give somebody a little boost because it's going to make that person feel better. I know it's going to make you feel better. Change your work, change your wealth, change your life. Thanks for listening. We'll talk to you on Monday. This year, give a gift that goes far beyond the moment. An Invest529 account. Whether it's a child, grandchild or someone just starting out, you're helping them save for education that can open doors for a lifetime. Invest 529 is a tax advantaged way to save for college, trade school, or even apprenticeship programs. It's flexible, easy to start, and you can contribute any amount, big or small. And because the money can grow tax free, it's a gift that really builds value over time. So instead of giving something that gets used up or set aside, give the gift that can change a Life. Start an Invest529 account today. Go to invest529.com to get started.

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