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- [00:01]
A
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B
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 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 Thursday, August 28th, and it is the end of August. You probably are looking ahead to what happens in September, October, November, December, the end of the year, the last four months. There's so many things to take care of. I know, but don't forget to put your needs up at the top of that list. Is there something going on in your financial life that you need some help with? Maybe a little coaching or mentoring on what to do with a particular situation? If that rings a bell, it's something that you think could be helpful for you. 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, just check the box mark. We'll do everything else while you're on the website. Don't forget, we've got all sorts of great stuff that lives there. All of our content is there. We've got the free weekly newsletter which comes out on Fridays. We've got resources. There's also a link to my books, including the most recent one called the Great Money Reset. That's a great way for you to think about making big changes in your life without blowing up your finances so you can check that out right now. Let's talk to Matthew. He joins us from the Mid Atlantic.
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C
Hello, Jill. Thank you for having me on.
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B
Of course. What's going on? How can we help you out today?
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C
Okay. I currently have a Target date fund inside my 401k and I was considering maybe getting rid of that and be a little bit more aggressive in my investments.
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B
Okay, that's cool. You're going to tell us a little bit about yourself before we get into the investment part. So how old are you, Matthew?
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C
I'm 58 years old.
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B
And are you single? Married partner?
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C
Single.
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B
Okay. And are you working full time right now?
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C
Yes, I am.
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B
How much do you earn?
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C
Approximately about $60,000.
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B
Okay, great. And Matthew, do you make a contribution into that 401 right now?
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C
Yes. 10%.
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B
Okay, great. And is it all traditional or is it Roth?
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C
It's all Roth.
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B
All right. How much is in there so far?
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C
Right Now I have $43,000.
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B
So that's all Roth right now or is that partially Roth and partially traditional?
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C
It's all Roth.
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B
Okay, great. And do you have any other retirement assets? Maybe an old retirement plan, an ira, Anything else floating around?
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C
I have a couple. I have a. A traditional 401k from my previous employer. That is about $146,000.
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B
Okay.
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C
And I have a savings plan through my union, which is almost $27,000.
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B
Okay. But that's all pre tax, Right?
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C
Right.
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B
Okay, gotcha. Are you going to be the type of person who is entitled to a pension?
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C
Yes, I am.
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B
All right, tell me about the pension. What's that look like for you?
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C
I'm estimating about at age 65 to be about 1400.
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B
That's great. Do you plan on working straight through to 65? Is that the hope, the game plan or what? Do you have something else in your mind?
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C
Well, I'm thinking about working till about 70.
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B
Oh, I love that. Do you have any idea about your Social Security estimate right now?
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C
Yes, a couple years ago I inquired about it. It's going to be about 2,000amonth. At age 67 and age 70, it's going to be about 2005.
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B
That's nice. And you're in good health, right?
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C
So far, so good.
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B
All right then knock some wood. Hurry up. How about money in boring savings account? Like, you know, we went through the Roth, we went through the traditional 401k, the union savings plan. Any money in the bank? Kind of boring stuff.
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C
Yes, I do have a. I have two types of savings. I have a savings account, borrowings, which is 4800.
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B
Okay.
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C
And I have a money market with Fidelity, which is about 8,600.
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B
Do you have a brokerage account also, that you. Because you mentioned Fidelity. I'm just wondering whether you have a brokerage account also.
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C
Yes, that's inside the brokerage account. I opened it up back in the summer.
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B
Okay, great. That's awesome. Do you own your own home or do you rent?
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C
I rent.
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B
What's the rent?
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C
Right now the total rent is 1600, but I pay half of it, so it's about 800amonth.
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B
That's a good deal, man. Do you have any other assets outside of this? Any, you know, investment with someone else or, you know, oh, I own a house with my sister. Anything like that?
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C
No, I don't.
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B
Okay. And what about the, you know, if you had to estimate your rent is so cheap right now, what do you suspect you spend on a monthly basis?
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C
About 1600.
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B
That's it. Oh, my gosh. I mean, that's amazing. The reason I was asking that not just to be nosy, because I am, is also to try to figure out, like, hey, you know, are you on track? And, you know, I was going to be more nervous about the Target Date Fund and maybe being more aggressive or not, but, you know, if you do everything you say you'd like to do, right? So if you were to work until 70, the coolest thing is that, you know, first of all, at 65, you'll start getting that pension. Then you get the Social Security on top of it. Those two pieces of income should cover your expenses, generally speaking. And so it makes me feel a little bit better about thinking about reallocating from the Target Date Fund. Now, the reason why I don't want to get all negative on Target Date Funds, however, I do think that they're awesome when you're starting out, but then you get some critical mass of actual investments and that you. You might be able to help yourself just by, you know, not necessarily picking 12 funds, but, you know, picking a couple, maybe three funds that you could use instead of the Target Date Fund. So is the Target Date Fund that you own, is it inside of both the current Roth account and the traditional 401k? Do you have them in both?
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C
No, it's just in my current 401k.
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B
What are my other choices? What is the investment company that we're talking about here?
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C
Both my current and my former employer. They're both with Fidelity.
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B
Again, I don't want people to hear this and think that I'm all negative on Fidelity and they're a negative on their target date funds. But, you know, honestly, the Fidelity target date fund, based on your age, is probably. You know, it probably doesn't look the way you think. Have you dug into it at all or not?
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C
Well, the actual. The fund itself, it's BlackRock.
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B
Okay, and what year is it, like, where usually there's a year where they say, yes, 2035. 2035 fund. I just want to look at what's in here for a second. So give me a sec. Let me just take a little look. See? Okay. Okay. So in this fund, it's funny. So there's all these different funds inside of this fund. Okay. And the reason why I think that's funny is that, like, it sort of gives you this, like, sense of, like, how. How to manage your own money. So they have money that is in. Let's call it just general stocks. They have a Russell Index 1000 fund. Then they have an international, like, 20% in international. And then they've got a bunch in bonds. It's not as much. You know, it's funny. It's like they have all different kinds of bonds. They have 1, 2, 3, 4, 5. Five different bond funds totaling about 35%. So it's essentially looks to me like it's a 60, 40 kind of fund. We could just take the money from this and put it into a couple of different mutual funds that are index funds inside of your account. I mean, you're not paying a ton. And it says the expense ratio is 0.19%. If we were to just pick, say, three different fidelity index funds, you know, it would be a tiny reduction in fees. I mean, a tiny. It's like a 10. Maybe it would be 10 basis, right? That would be 10 basis points, probably, but you'd have a little more control over it. If this seems like too much trouble. The target date fund is not terrible. That one that you have is not a terrible fund. And it might be easier for you. So the question is, how much do you want to be involved in moving things around or do you like the idea for just a few bucks? It's not a lot of money having someone else do it for you. So what do you prefer, Matthew?
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C
Well, I was thinking about. Probably be a little bit more like, towards having more stock, like 80% stocks and 20% bonds.
- [10:33]
B
If you wanted to do that, though. I mean, of course, it's always easy to be a hero when, like, the market has been going up for a couple years. If you're willing to just hang in there and do that, I'm fine with that. It's just you have got to be willing to be on the ride. Do you know what I mean?
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C
Yes.
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B
You feel okay about that?
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C
Yes. My previous employer, I had opened that up 25 years ago, and that is basically 90 stock. And I have not never touched the allocation, never, never touched, never changed anything around. I'm basing on the rate of return. Last year that had a rate of return of 20%, and my current 401k the is at 11% rate of return.
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B
Yeah, I mean, listen, this is the issue, right? The issue is that, you know, when you have big bull markets like we've had in the last two years, you're going to underperform with the target date fund. So if you want to pull out and you're okay with that and your job is secure and you want to go 80, 20, maybe do 70, 30, just in case I'm like, we're wrong, fine. But you know, you really. If the market fell by 40% this year, I mean, I don't even know how that would happen, but it could, right? Something bad happens. If you don't feel like you'd be reactive to that and you could just hang in there. Not. You're not relying on it right now, you're not going to touch it till you're 65 or 70, then I'm okay with it. It's like this is one of those weird situations where if you wish to take that risk, there is really nothing wrong with it. If you think you're going to get spooked by a drop in the market, then we try to protect you from yourself. In other words, if, if you said to me, jill, I'm not touching this money for 30 years, I don't care it's going to do what it's going to do or 20 years, because it's kind of true. Like in Fit, you're 58, you don't have to touch it till you're 675 to start pulling money out if you didn't want to. If you're willing to sit with a market that moves against you over that period of time, it's fine. But if you think you don't trust yourself and you feel like, oh my God, as I get older, maybe I won't do that, that's when you start to say, let me ease up on my aggressive nature. As long as you know the risk and you're willing to do it, yeah, why not? I Mean, I think that that's, that's not a problem. And no one else is relying on you. No one's leaning over your shoulder saying, oh, my God, how dare you take this much risk? You know, you're, you are, you're, you're self sufficient and so it doesn't seem like a terrible thing. And you got very low expenses. You know, frankly, your Social Security payment is probably going to cover your expenses, not to mention the pension. So you're in, you're in good shape, man.
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C
Thank you. But I was thinking when I opened up the brokerage account last summer, I was thinking about investing in some like, you know, like.
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B
No, don't do that because you don't have that much money in savings. You've got your 4800, your 8600. Keep that mellow. You never know, you might need something, you know, you need some, you've got to have some money that's safe. So I think that's fine. I would not invest that right now. If all of a sudden you're piling money up there and that, you know, all of a sudden Instead of having $13,000 or $14,000 saved, you got like 25,000 and then you want to start to invest a little bit. Okay, but you're doing plenty of investing. You've got the money in the Roth, in the traditional, the Union Savings. I think you're going to be okay.
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C
Well, thank you.
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B
You don't have to kill it with that brokerage account. All right?
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C
Not yet.
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B
No, not yet. When you start again, when you start really making a ton. Oh, moolah in that account, and all of a sudden it's piling up, piling up. Then just give us a holler, okay?
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C
Okay.
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B
If you are like Matthew and just need a little bit of guidance on your financial journey, get in touch with us. Mark and I are like your financial sherpas. We'll help you along, we'll lift that load on your behalf, and then you can get down to what's important to you. Just go to jillonmoney.com, click the contact us button, write us a note, and we'll do everything else. You can subscribe to us on the Odysee app or wherever you find your favorite podcasts. Don't forget to put your hands, metaphorically, on someone's back. Someone needs a little bit of a boost, okay? So give it to them. Change your work, change your wealth, change your life. Thank you for listening. We'll talk to you tomorrow.
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D
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 at Robert Half. They know talent. Visit roberthalf.com talent today In 2013, two.
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Brutal murders left the city of Davis, California paralyzed in fear.
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The victims were an elderly couple. It was up close and personal.
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E
I'm 48 Hours correspondent Aaron Moriarty. I thought I had seen it all until I encountered the mastermind behind those murders.
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He's.
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I think the word is psychotic.
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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.