Loading summary
Transcript19 lines
- [00:00]
Jill
Need contract help for those workload peaks and backlog projects. You're not alone. Robert half found that 67% of companies surveyed said they will increase their use of contract talent. That's why their recruiters leverage their experience and use award winning AI to quickly find the skilled candidates you want. Learn about their specialized talent in finance, accounting, technology, marketing, legal and administrative support. And at Robert Half, they know talent. Visit roberthal.com talent today. Hey gang. You know, it's one thing when I'm at work and there are professionals doing my makeup, but when I'm home, I want something different. I want simplicity. Merit is a minimalist beauty brand created to streamline your routine with clean, high performing products that are impossible to mess up. Merit is designed for people who want to look polished or without spending hours in front of the mirror. Merit makes beauty feel effortless. Merit's products are clean, vegan, cruelty free and made with skin care ingredients that support your skin long after your makeup comes off. In fact, Merit makes it easy to get ready in five minutes or less. That's right up my alley. There are curated sets and essentials that fit seamlessly into any lifestyle. Are you ready to simplify your routine? Head to meritbeauty.com and get their signature makeup bag free with your first order. That's meritbeauty.com welcome to the Jill on Money Show. It's Tuesday, August 26th and we are here trying to help you make better, at least, maybe more informed financial decisions. So if you've got a question, something that's been percolating a little bit, maybe during the dog days of summer, get in touch with us. Go to our website jillonmoney.com, click the contact Us button, write us a note. And if you'd like to join us live, all you need to do is check that box. Mark will do everything else. Hey, while you're on the website, why don't you check out our subscription service? It's called Jill on Money Live. That's where for 45 bucks for the next 12 months, you have access to quarterly live webinars, the back catalog of those webinars, and bonus audio and video content, all for 45 bucks for the next 12 months. Jill on Money Live. Okay, right now, here is an email. It's from Time Thomas, who writes that he has two 401k investment accounts. One is with a current employer, it's worth a million dollars, and the second is worth about $300,000. I have a pension that is currently valued at $70,000. When I retire in 13 months. I'll be 66 years old. Should I then combine my two 401k accounts? Yes, Thomas, I love consolidation and Mark and I are big fans. So I think when possible combining is great. I know the names of the two firms that you mentioned, so I'm just going to say you should combine the smaller one into the larger one because that larger firm has index funds that you can choose from. And so gang, when you hear us talk about combining funds and sometimes we'll just say oh, just go to an investment firm. The firms are really talking about are those places where you can self direct the account and buy cheap index funds. So that might include T. Rowe Price, might include Vanguard, Charles Schwab, Fidelity E. Trade and at some of those firms you can get some advice as well as part of their robo, their automatic investment platform. Some of them also give advice so you may want to check that out. But if you are getting a pitch from an investment advisor to combine everything and you're comfortable doing it yourself, you say no thank you all, do it myself. But if you really need longer term financial planning, which it doesn't sound like because you have a pension, yeah, just do it yourself and do it with one of those firms that can offer you cheap index funds. Next question is from Bill. Hi Jill and Mark. I'm a longtime fan of your program. I'm turning 65 this year. My wife is turning 64 and we would like to retire within the next few months. Our numbers are $1.2 million in a 401k, $180,000 in a high yield savings account, $7,000 in a Roth, $15,000 in a health savings account and $560,000 in a single dividend bearing stock. Wow. One position. That's a lot man. Our house is worth $550,000. It's paid for. So are our cars. My plan is for both of us to work part time for the next four or five years. My wife can go part time at her current job and I would find something while waiting to claim Social Security at age 70. Our Social Security will be approximately $6,500 a month when we draw it to fund those gap years where we have to produce $6,000 a month to cover our expenses. My thought is to sell some of the stock each year since it wouldn't be taxed as it is long term capital gains. Oh, before you do that Mr. I'm going to come back to you for a second. The High Yield Savings Account is a fallback for funds and for minimal drawdown. And my thinking is by reducing the stock position to roughly half of what it was, it would allow the 401k to grow. My question is, do you think this is a feasible plan? So I have a different view on this. I mean, I think you should just sell this and pay the tax and move on. You can do what you want, obviously, but I think what's more important is for you to start pulling the money out of the 401k. I'd rather use that money and just take that out little by little, whatever you need and use that as your taxable income. You're going to have to pay taxable income and you're going to have taxable income from the current jobs, your part time jobs, and you're going to have a taxable income when you have your Social Security. So I personally think you might want to consult a CPA or a tax preparer to come up with a strategy for you. But I think I would prefer to get the money out of the 401k. That's the ticking time bomb where you're going to have to start pulling it out the stock. You can kind of make a decision, by the way. You should not. You should make sure those dividends go into cash and you should start to diversify. But I would be diversifying a little bit anyway from that account and maybe a lot of bit. To be honest with you, I don't really see the wisdom of waiting around for that stock to fall. So that's me. You know me. I love to pay taxes, by the.
- [06:42]
Mark
Way, unless they want to. I mean, certainly both of them. They don't have to work part time unless they want to.
- [06:47]
Jill
Yeah, maybe they want to. You know, it sounds like he's really ready to, you know, make sure he's going to maximize his or optimize his life. All right. Jack wants to know. I'm 41. My wife is 40. We've got two kids who are 15 and 10. Oh my God, they had kids so young. Over the last few years, my income has steadily risen. Nice. And I have more financial bandwidth.
- [07:14]
Mark
Wait a second. What are you going to say when I'm 50 and Theo's like 10?
- [07:18]
Jill
You're going to say you're old is what I'm going to say. That's what I'm going to say. You waited too long, dum dum. Over the last few years, my income has steadily risen and I have more financial bandwidth now to do things that I'm probably late at doing. All right. No. Stop judging this gang. You are where you are. I hate that. Then you're not late. Okay, so Jack's ready to open a brokerage account and invest. And he said I wasn't making as much money in my 20s and 30s. So I prioritized my 401k 529s and then building an emergency fund. So what are you late about? Sounds like you're right on target. He said the brokerage account wasn't on their radar. Today they're 401ks. This makes me laugh. This guy says I'm late. He's got 401 s that are valued at $625,000. He's 41 years old. Come on. Oh, my gosh. $57,000. That is earmarked for the older kids education. 33 for the younger ones. So these are in 529 plans. 75 grand in emergency savings, another 10 or 15 in cash. Recent $10,000 bonus. I've opened a taxable fidelity brokerage account and I plan on adding another 10 or 15 grand over the course of the year by dollar cost averaging. This account and my older child's.529s are the savings priorities since the kid is three and a half years from college. In addition to maxing out our 401k, which we are doing half pre tax, half roth. Okay. My 401k is split 80, 20 between stocks and bonds. So with my brokerage account, I have so far invested in three funds. One is an S&P 500 fund, one is a NASDAQ fund, one is a dividend fund, which, depending on what day it is, I'm telling myself I'm getting a head start at a discount. My question is, how aggressive should I be? Did I identify the right funds? Should I make up for lost time? And I'm looking at my brokerage account, my 401k. Is that the right way to look at things together? I've got 20% in bonds held in the 401k. Should I add something less volatile to the brokerage lineup as well? Should I look into a backdoor Roth, given my situation where high income earners. 335 grand. Your show is my go to every morning on my commute. Thank you. Isn't that nice? Okay, Jack, take a deep breath. Mark, don't you think he's in good shape? Why? Is he all judgy?
- [09:31]
Mark
No, he's in great shape. As far as the brokerage account, I wouldn't use those three funds. I would Just probably. I would stick with the voo. And yes, I would probably mix in some bonds in the brokerage account as well.
- [09:42]
Jill
Me too. And I would maybe what I would do is especially if you feel like you've got bought something at a loss and it's showing a loss now take your loss. Go for it, man. It's great. Take that loss. Reallocate. I would like a bond position and I wouldn't mind an international stock position. I think it's good to have 80, 20. You asked about a backdoor Roth, but you said that you're doing half pre tax, half Roth in your retirement account. So why don't you just shift it and go more Roth? I don't know about the older kid. I don't know if that kid is going to go to private or public school. But you need more money in there. What I would definitely start to do is find favor if that's a priority. Put a little more money for the older kid in that 529 and a little bit less money in the brokerage account. Otherwise sounds like you're doing good. Doing goodly. All right. I hate these questions. This is the question that often people will ask and I just don't like to get into it. But I'm going to answer it because I'm a good girl. The question is, are we spending too much? And I like the message. Hello, little marvels. I'm a little marvel. Someone. Mark recently said that I was cute. Cute. And I turned around and I said, let me be clear. That is a word never used to describe me. I'm not cute. I'm really not. I'm funny, I'm sarcastic, I'm caring. But I'm not cute. Okay. Hello, little marvels. My husband and I are in our mid to late 70s. We've been retired for more than 10 years. In the current environment, I'm suddenly panicked that having been convinced to spend money, we're now spending too much. Okay, here's the particulars. Annual Social Security is about $92,000. I'm worried about how reducing Social Security payments should one of us die. What might impact our picture? Well, you'll lose one of them. IRAs $710,000. Roth 200. No brokerage cash CDs, 100, $120,000 year spend. That's ambitious. Our home is valued at $750,000 $125,000. Mortgage at two and a half percent. We each expect to live well into our 90s. We have no one who is counting on our Support. Should we start belt tightening or can we keep our current rate of spending? Thank you both for your kind, generous and insightful support of this community. Jane. Mark, I think they're spending too much.
- [12:10]
Mark
I mean, if they're getting yes and no. If they're getting 90 from Social Security and then they're only taking another 30 out of their nest egg, which is doable, it's about a million dollars. You know, it's not the worst thing in the world.
- [12:23]
Jill
It's not the worst. But if one drop dead, then there would be a real problem.
- [12:26]
Mark
Oh, then they'd have to reevaluate.
- [12:28]
Jill
So here's the question. This is the question you and your husband should ask yourself. Big Marvel from Little Marvels. Would we rather pull back right now to give a little bit of room for the surviving spouse or are we ready to just basically say we're in our mid to late 70s, we're not going to be spending that much more over the next five or eight years? And the big spending, you know, once, once something happens in the future, whoever the survivor is will basically be able to cut back. That's the question. To me, it's not about the today. It is about the survivor. I don't think you're going to get a lower Social Security payment because of cuts to the system. You're going to get a Social Security reduction because one of you passes away. Then maybe you're not going to spend as much anyway. So why don't you have that conversation with each other? Should we like build in a little less fun and have a little more little baseline of having a bigger base? I would say, and I presume they're taking their minimum required distributions and they have to keep doing that, but I don't know. I would. You have to tell me how you're spending and what's actually happening there. Okay, Mark, here comes a big shout out for you. Ready? It's from Amy. Hi, Jill and Mark. Love your podcast and newsletter. That's you, Mark. The newsletter everyone sign up for. That newsletter comes out every Friday. Okay. Amy's husband has two 403Bs at TIAA and they are from previous employers. He can't contribute to them. The combined portfolios, though, have averaged a strong return. Last year they had an annual rate of return of almost 13%. We're in our mid.
- [14:06]
Mark
I would say that's weak compared to last year.
- [14:08]
Jill
Well, wait a minute. Last year, what was the return of markets last year? Over 2023.
- [14:12]
Mark
Yeah.
- [14:12]
Jill
Is that the S&P 500. Okay. So. But maybe they were. Maybe they were balanced investors. We don't know. They're in their mid-40s. They're not going to retire for 20 years. Should we leave them or roll them into a traditional ira? Thank you for your help. Well, listen, I would leave them. Will you do me a favor, Amy, and check out the allocation? Is it. It sounds like you're in a balanced allocation, which is fine, but you are in your 40s, so you might even think about going a little more since you are in your 40s. But I wouldn't move them. I like Tia. I think it's a good company. Well run. Okay. Mary is writing about planning for her grandchildren. My husband And I are 62 and 60. We are fortunate financially. We've got $8,000 of monthly income. Our expenses are $3,000. Oh, my God. He's a disabled veteran. I am retired. We have a trust for our three kids and a financial planner who has earmarked an account to be divided amongst the grandchildren when we pass away. I have also purchased $25,000 life insurance policies on my three children when they were infants. And there is an option for them to purchase another $25,000 when they are adults and take over the payments at the current rate. In addition, I've purchased a few I bonds for them. I don't really want to do a 529 plan because who knows if they're going to choose college when the time comes. What do you suggest as the best investment in my grandkids futures? Hmm. Well, I mean, you can do custodial accounts and just, you know, I don't know how old the grandkids are, but you could just, you know, make it pretty easy and put some money in an index fund, a stock index fund, a bond index fund, and go to bed at night. I would not necessarily suggest that your kids purchase an additional $25,000 of life insurance because it sounds like these are whole life insurance policies and they probably can do better with term, but I'd have to know more about each of their situations. So just open a brokerage account and call it a call today. All right, this is. Oh, I love your mark. You make me feel so good. Okay, this is from Teresa subject, Diane Swunk. What a fantastic podcast boy. I really appreciate and enjoy a good podcast. Yes, I understand you have to do the one on one with folks. Yes, I understand there are very wealthy folks, meaning listeners who don't know how to handle their funds, which is flipping amazing. But I really enjoyed the swonk discussion please. More so, Mark, is this a consistent conversation? Is this a consistent message? Should we have more guests? We used to have only guests, then we went to only calls. What do you think?
- [16:48]
Mark
Depends on the guest. We can't like. We, we don't like to do them just to do them.
- [16:52]
Jill
I know. That's the problem when we have a great one. Yeah, we're good. So. All right, that's it. That's the show. Thank you so much. And if you've got suggestions for the kind of guests you like, you like economists? Do you want to have someone fun? You want someone talking about the markets? You want to have something else, you let us know. Just go to jillonmoney.com, click the contact us button, send us your thoughts. If you'd like to talk about your own suggestion situation amazing. If you want to come on the air, check the box. Don't forget to sign up for the free weekly newsletter 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, lift someone up. Change your work, change your wealth, change your life. Thank you for listening and we'll talk to you tomorrow.
- [17:42]
Shopify Advertiser
Starting your own business can be intimidating. Suddenly you're wearing all the hats. Designer marketer, customer support, shipping expert. It's a lot. That's where Shopify comes in. Shopify is the global commerce platform powering millions of businesses around the world and 10% of all e commerce in the US Shopify has your back. With hundreds of ready to use templates, you can launch a beautiful professional online store that looks and feels like you need content. Shopify's AI tools can help you write product descriptions, headlines, even enhance your product photos. Want to grow your reach easily? Create email and social media campaigns to meet your audience wherever they're scrolling. And with Shopify's world class support, you'll have expert help for everything. Turn your big business idea into With Shopify on your side. Sign up for your $1 per month trial and start selling today at shopify.com OdysseyPodcast Go to shopify.com Odyssey Podcast shopify.com.
- [18:39]
Jill
OdysseyPodcast In 2013, two brutal murders left the city of Davis, California paralyzed in fear. The victims were an elderly couple. It was up close and personal. I'm 48 Hours correspondent Aaron Moriarty. I thought I had seen it all until I encountered the mastermind behind those murders. He's. I think the word is psychotic. This is 15 Inside the Daniel Marsh Murders. Follow and listen to 15 Inside the Daniel Marsh murders on the Free Odyssey app or wherever you get your podcasts.