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A
Today's episode is brought to you by alma. You know, gang, I've talked about how helpful therapy has been for me. But finding the right therapist, it's never easy. Often you just don't know where to start. And when you do look, it feels overwhelming trying to figure out who takes insurance, who you might connect with. It's just a lot. That's why ALMA really stands out. ALMA is on a mission to simplify access to high quality, affordable mental health care. And and they've built a network of over 26,000 therapists nationwide. You can browse their directory without even making an account and filter for exactly what matters to you, like insurance, specialty, background, and more. And since May is Mental health awareness month, it's a great time to take that step. Clients with insurance pay $20 on average. And 98% of Alma therapists accept insurance plus. Plus, you can see your costs up front with their free estimator. Most people actually find their match on the first try. And 95% connect with a therapist within a week. Over 80% of people report feeling better within six months. Get started now@helloalma.com money. That's helloalma.com money. Hey, gang. When summertime rolls around, there's probably a lot of exciting plans. Maybe there's a big trip or you're doing something really fun. And if you're like, sometimes this brings a heightened awareness of what you need to do to protect everyone in your life. Maybe you're wondering, if something happened unexpectedly, how would that impact my family? Well, now you can stop putting off life insurance and check it off your list with policygenius. It's an online marketplace where you can compare quotes from top insurers side by side for free. And their licensed team walks you through everything, coverage, pricing, all of it. So there's no guesswork. So instead of a summary summertime worry, it's a summertime win. You'll get that peace of mind knowing you've got the solid safety net in place. With Policygenius, you can see if you can find 20 year life insurance policy starting at just $276 a year for a million dollars in coverage. Head to policygenius.com to compare life insurance quotes from top companies and see how much you could save. That's policygenius.com welcome to the Jill on Money Show. It's Tuesday, May. It's the Cinco de Mayo. So hello Feliz Cinco de Mayo. Go have some tequila and some chips and celebrate at large tonight. Meanwhile, we will be here answering your questions. And that's what we do every single day. So all day long, while you are just enjoying the day, Mark is making sure that we keep track of all the inbound questions that you send us. And you can do that by going to our website, jillonmoney.com clicking the contact us button. A form pops up. When you get that form, it's the email that we receive. And just write us a nice note when you get that email, pop up. If you'd like to join us live on the program, check the box. Mark will follow up with you and we'll bring you on the air. And I love it when you come on the air because then we can ask you all sorts of follow up nosy questions. It's great. Hey, while you're on the website, I encourage you to check out Jill on Money Live. Hey Mark, get on the microphone. How are subscriptions going for our upcoming webinar with the queen of Social Security, Heather Schreiber? That's on Wednesday, June 17th.
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B
Well, first of all, we still continue to get the one off buys for the Ed Slot webinar which happened earlier in the year. The Heather Schreiber individual webinar is now available for, you know, pre order if you want to get ahead of the game and go on there now and order it.
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A
And 15 bucks, what a bargain. I mean, you're going to make this huge, you're going to make a huge investment into the Social Security system. You're going to hang out with Heather. She's going to give you the best advice around how to make your claiming decisions. She'll help with questions. I mean, we get so many questions. Mark and I are not experts in Social Security, but Heather is. And we get these esoteric questions sometimes and then Mark just has to go ask Heather. So we thought let's bring her in for a webinar. So again, it's on Wednesday, June 17th. You can actually pre order that. It's a single webinar for 15 bucks. Or if you want to make a smarter financial decision, you will subscribe to Jill on Money Live for the next 12 months. It'll only cost you 45 bucks. So you'll get the Heather webinar and then three more after that, the back catalog of those webinars, bonus audio and video content. Again, it's all for $45 for the next 12 months. So I encourage you to take advantage of that. Okay, Mark, we ready to do our business at hand? Let's go and talk to James who joins us from the southern part of the United States. Hello, James.
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C
Hi. Good morning.
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A
How are you?
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C
I'm doing well. How are y' all doing?
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A
Y' all see that mark? Got that? Y'? All. I hate when people who are actually from the northeast say, y', all. That's just a little pet peeve of mine. It's sort of.
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B
Well, then, you know, they're not really from the northeast.
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A
Exactly. Well, or they are taking that on when he's. Y' all stop it. You're from New York. Okay. Now, James, what's going on? How can we help you?
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C
Yeah, thank you. Been an avid listener for the last, you know, five or six years. Got really into the show during COVID and we actually chatted around that time, so about five years ago when we had. I think right after we had our first daughter. Since then, you know, things have changed. I think we've largely. My wife and I stayed, you know, on track to kind of what we talked about five years ago, but we've had another kid since then. She's now about. About a year and a half old and two girls.
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A
So we have a. Two girls, a five year old and a one and a half year old.
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C
That's right.
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A
Okay, got it.
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C
That's right. And I think we made some, you know, good progress on our. On our financial objectives. But I thought it'd be really good to, you know, as I've gotten a little bit older, to kind of check in and see if we're still on track maybe towards a retirement in the, you know, the next. Let's call it 15 to 20 years.
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A
Okay. 15 to 20 is a time horizon I can deal with. James, how old are you today?
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C
I'm 41.
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A
And your wife?
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C
She's 36.
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A
So are you guys both working?
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C
We are.
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A
And how much do you guys earn? Together or separately? Whatever's easier to tell me.
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C
Well, let's see. Separately. You know, hers is more straightforward. I would say base plus bonus. She's at, like, 170.
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A
Okay.
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C
And my base plus, you know, the bonus for me is a little more. Has a little more upside, a little more variable, But I would say anywhere between 325 to 375 total. Whoa.
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A
You guys are killing it. Wow. You're so young. Are you in sales that. Because that variability was.
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C
No, neither of us are, but I.
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B
Okay.
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C
Yeah.
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A
Huh. Interesting. Interesting. Okay, so. So when you look at your spending and your cash flow, has it changed a lot in the last five years? Has it gotten bigger?
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C
It always does, doesn't it, well, not always.
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A
Only if you're lucky. Yes, it does, but not always. Right.
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C
Spending has definitely gone up, I guess, since we last spoke. Not only, you know, do we have a second kid, so that's increased our spending, but also we've moved and also, you know, moved up, I guess you would say.
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A
Okay, so right now, how much is your house worth?
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C
$1,200,000.
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A
Do you have a mortgage still about 600. And what's the interest rate?
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C
Six and a quarter.
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A
Oh, that's a real number. Okay. But you can manage it because you got the big income, right?
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C
Yeah, yeah, yeah, it works.
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B
Yep.
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A
Okay. For your retirement savings, you're both contributing to workplace plans.
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C
Yes.
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A
Okay, so tell us, are you maxing them?
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C
Yes, we are.
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A
Okay, how much have you saved?
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C
So let's see, I've got the spreadsheet here. So yes, let's start with mine. For mine in the 401k combined is 850 and then that's split up. 550 is traditional, 300 is Roth.
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A
Okay.
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C
Then I have a Roth IRA at about 140, brokerage about 120, HSA at about 50.
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Great.
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C
And then cash, is it about in this? For us, cash is like emergency, like vacation. You know, we, we have two new cars that are paid for how? We also pay for cars in the future, but all in about 160 in cash.
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A
Okay. And the brokerage is a joint account with you and your wife?
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C
It is. She has her own too, but that one is joint. Yes.
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A
Okay, so tell us about what's in your wife's retirement.
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C
She has a 403B. Okay. She has in. In that 250 is, is traditional and about 110 is Roth. And then Roth IRA about 65. And then so when we spoke five years ago, she was about five or six years away from public student loan forgiveness, like a seventy or eighty thousand dollar balance. And we kind of talked through, you and I did about like our options. Option one was pay that down aggressively and try to pay it off. Just like not kind of trusting that we would ever get it.
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A
Yeah.
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C
Or option B was use that money instead and fund a brokerage account that says, okay, well if we don't get it, then we'll have it in brokerage. So she got half of it forgiven last year and she's set to get the other half forgiven.
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Yes.
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C
So that brokerage is ours and hers is at about 85.
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A
Did you start saving for your kids college?
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C
We do. The oldest has about 60,000 and the youngest about 15,000.
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A
And this is in a 529.
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C
Both of them, yes.
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A
Okay, got it. So your wife, is she, I mean only because she said 403B. Is she in a pension kind of job or not?
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C
No, don't.
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A
Gotcha. All right. And you say 15 to 20 years. Just age wise. But ideally is there like, is it more like 55 or 60? Like what do you, what do you think you want to shoot for?
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C
55 would be, would be nice for me. You know, she'd be at about 50. There is, I would say maybe we can get to it, you know, sort of upside on the income side that would be coming in a few years as well.
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A
Meaning like, like a. You work at a company that has stock or like somebody's wealthy who is. You might be able to have an inheritance.
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C
So I work for a private equity backed company with pretty sizable non qualified shares that you know, there's depending on how well the company does, obviously affects what that looks like. But yeah, sort of ranges that we've applied would land a net after tax to me somewhere around 1 to 1.2.
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A
It's the way to say it. It's PE back. So either I'll get an extra million or I'll get beyond my ass in five years.
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C
Yeah, thankfully. Yeah, entirely thankfully. These guys have done it before, so they kind of know what they're doing.
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A
Okay.
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C
Yes, I know what you mean.
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A
Oh my gosh. Okay, so let's not conclude that though we're not going to have that in there. Is there any other real estate besides your primary residence?
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C
No.
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A
How much are you spending right now? I know you said it's picked up. Obviously we call that lifestyle drift. How much are you spending now, monthly or annually?
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C
I mean on a monthly basis, about 12,000. But then when you add in like vacations and just kind of doing things. Yeah, you know, we probably spend close to 200 a year.
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A
Okay. You say it sort of sheepishly. It's okay. There's no judgment.
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C
I don't know, it feels weird saying a number like that.
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A
So here's what I have to say about that. One of the things I kind of value very much about this show is that nobody needs to judge anybody. And I find that you, all you listeners, y' all the audience, you judge yourselves much more harshly than anybody should. So don't. Let's not worry about that. So 16 grand a month is about what you're spending right now. All in. Okay. And you're maxing out your retirement account. Are you guys doing Backdoor Roths or are you using any other kind of supercharged way to put money away through work?
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C
Yeah, I wish. We used to my old companies, we used to have the mega backdoor which I did. Now we do each do just the regular backdoors. Plus with company match she gets a little more than I do about 7%. I get 4%. I estimate like with maxing out the 401ks and then we each do money into each of those brokerage accounts every month and we also get the employer matches all in. We're saving about 100 a year.
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A
Wow, that's awesome. Do you guys have insurance policies because you have little kids?
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C
We have the, maybe not the great, the greatest ones through work.
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Just work. In other words, you have no extra insurance coverage beyond some. Do you have a multiple of your salary? Is that what you have or is it one times?
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I think mine's a three times.
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A
All right. You have three times salary and she
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has, I think hers is also three times.
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Okay. For life insurance. Okay. And is she in a place where you think she'll stick around there for a while?
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C
She says no, but I think she'll retire there.
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A
Okay. So something in between. I kind of wish you had a. Can you buy more than three times your salary?
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C
I don't think I can through work, but I can obviously buy term.
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A
Yeah. Mark, don't you think they could use a little bit more just because of where they are in the cycle of their careers and you know, saving is going to be, you know they're going to be continue to save but you know this is 16 grand a month is a real number. So don't you think they could benefit from a little private insurance?
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B
100%. I mean they're young, they got two very young kids. Yeah, absolutely.
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A
So how much do you think, Mark?
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B
Well, I would just look at a million dollar policy for each of you. It's not going to be more than like you know, 60, $70 a month.
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A
Yeah, I think it's safer just to have it and I hope you don't need it, of course. And just get like a you know, 20 year term policy. That that's probably all you need.
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C
Okay.
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A
You know, so we got that. What about your estate documents?
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C
We did those after our first child was born and we're probably due for a refresh.
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A
Probably. I'm sure there's written in a way many of these estate documents are written in a way that says like our, our child and then any child to come. But let's kind of put Put that out there. Also because of guardianship and things like that, I think a refresh would be very good. So if you're asking me do I think in the next 15 years, putting away 100 grand a year, plus the fact that you already have, I don't know, one and a half million bucks saved, are you on track to be able to produce $16,000 a month? That's the, that's really what our question is, right? How much are you putting into the 529? I forgot to ask, I'm sorry.
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C
They each get 5,000 a year.
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A
Mark, what do you think about the, the James and spouse game plan right now?
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B
Oh, I like it. I mean if they're saving $100,000 a year, they want to work for another 10. 15 years. 15 years. 15.
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A
20. He said, I said, he said 15 or 20 and I made it 15.
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B
Yeah, I ran it at 15. I mean, you know, conservatively, they're going to have $6 million.
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A
Yeah, I mean 6. But of course the Remember gang, when we say that, oh, $6 million, remember, it means also that we have to inflate the money they're spending today, right? Which is, you know, in 15 years, yes, it's 6 million. But in 15 years, how much is that 16 grand going to be? Is it going to be 30 grand a month? Probably right? At least. So how do you feel about 30 grand a month on 6 million, Mark?
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C
Let's hope not.
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A
Because a lot you think, you think not?
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C
Well, some of that is also daycares and things. I know people find ways, you know, it'll be down the line, I'm sure sports. And we'll find some way to replace that.
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B
Yeah, you will, baby. Summer camp. Wait till summer camp rolls around.
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A
Oh man, you're gonna kill it. You're gonna hate us. I think you're gonna be okay also because I even, I mean look, $6 million, that's kind of. What did you run it at, Mark? What? Percent growth?
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B
I always use 6%.
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A
Okay, so it's probably too low, but let's say it's 6% growth and let's say we grew. Mark, can you grow $16,000 a month at the same 6%? Just for the. Let's grow it at 4, 3%. Grow it at 3%. 16 grand a month.
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B
Not quite 30.
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A
How much?
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B
Mid twenties.
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A
Uh huh. Call me a liar. Okay? But it's good. Even if it's mid 20s. I'm feeling good about that because that, you know, you still be able to do it. Okay. Because we're not including the fact that you're gonna have, we're not even put. I just put that number out there. Just. I want people to hear that because I, I think it's a good exercise for us to say, yeah, you'll have 6 million, maybe more. Fine, but. And that'll produce, I don't know, 240, 200. That'll produce 250 grand a year in, in and of itself. Okay. And then you're also going to have Social Security of some amount. I don't know what it will be, but you'll have something and, you know, you'll be good and, you know, certain expenses will go down. I think that 15 years looks like a. And we're not including, by the way, we are certainly not including the fact that, that the loan is necessarily going to be forgiven, but I bet it will be at this point. And we are not including the fact that you might get a payout from the company and that, you know, I think it's a reasonable expectation that you are on track for 15 years from now. I mean, whether that happens or not, when you have a teenager and you're going to like, retire in the middle of that, I think a teenage girl, you might be like, you know what, going to keep working. James, I think you're in very good shape. I really do. And you, you have done an incredible job of, you know, it's funny, when you make more money, it is true, you spend more money, but you're also saving a lot of money. And I think you should be very proud of yourselves for what you've done. And I think that that's, that's the greatest news that I think you're in really good shape. I think you're on track. And if things change, call us in five years, man, you know, I will, I will.
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C
Do you mind if I ask you on the go, payout sort of happens. Like, yeah, conservatively is scheduled. It would be about three years from now. Yeah, conservatively net to me, after tax, let's say 1.2. My thought was pay off the house and then split it up between 529s and, and savings.
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A
Yeah, that, that's a very. I, I like that idea. I like that front. I like to, you know, kind of push more money into the 529 at that point. And I also like the idea at a six and a quarter percent note, like, again, all things being equal, who knows what time what, you know, maybe there'll be 400 left, but like, I think some portion of that would be fine. It just depends kind of what the liquidity is right now at that point. Because maybe in that you'll have the. A lot of people don't have that choice. They're like, oh my God, I couldn't pay off that mortgage because I need the money. I need to have it accessible. But also it's possible that between now and then you've refinanced the house. It is also possible. So let's see. Yes, I think, yes, that could be a potential outcome. I'm not 100% sure that's where you're going to find yourself.
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C
Okay, got it. Thank you.
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A
Sound good?
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C
Sounds great. Thank you, Jill and Mark.
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A
All right, gang, if you want to join us on the air, just go to jillonmoney.com, click the contact Us button and of course write us a note. But if you'd like to join us on the air, check that box. Mark will do everything else. Don't forget to check out all the content that lives on the website, including our free weekly newsletter, which comes out on Fridays. You can subscribe to us on the Odyssey app or wherever you find your favorite podcast. We always ask that you put your hands, metaphorically on someone's back. Give someone a big hug, either through the electronic waves out there or in person. Of course, get permission. Change your work, change your wealth, change your life. Thank you for listening. We'll talk to you tomorrow.
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D
Today's episode is sponsored by NerdWallet's Smart Money podcast. Ever Google a money question and end up 12 tabs deep with 12 different answers? This podcast is your shortcut back to clarity. NerdWallet's Smart Money podcast breaks down financial decisions with a team of trusted choices journalists. They explain the why behind decisions like investing, home buying and choosing credit cards with clear research backed insights. No jargon, no misinformation. Make your next financial move with confidence. Follow NerdWallet's Smart Money podcast on your favorite podcast app. Hi, my name is Lloyd Lockridge and I'm the host of a new podcast from Odyssey called Family Lore. In this podcast, I'm going to have people on to tell unusual and sometimes far fetched stories about their families.
- [21:19]
A
I've heard my whole life life that she invented the margarita.
- [21:22]
D
And then we're going to investigate those stories and find out how much of it is true. He gets a patent one month before the Wright Brothers. Oh my God. Please follow and listen to Family Lore, an Odyssey podcast available now on Apple Podcasts, Spotify or wherever you get your shows.