Episode Overview

Podcast: Jill on Money with Jill Schlesinger
Episode Title: Tap TSP for Renovations?
Date: November 12, 2025
Main Theme:
Jill Schlesinger fields a deeply practical listener question about tapping retirement savings—the federal Thrift Savings Plan (TSP)—to pay for much-needed home renovations. The episode focuses on balancing prudent financial planning, college savings for children, and giving yourself permission to enjoy your hard-earned money. The show features a live call with Ann, a federal employee, and explores the emotional as well as technical considerations of spending retirement funds before retirement.

Key Discussion Points & Insights

1. Listener Background and Situation (01:38 – 09:13)

• Ann, 61, federal employee from Upstate NY, is currently working without pay due to a government furlough.
• She plans to work until age 68 or 70 but is eligible to retire now.
• Married to a 62-year-old husband, who works part-time ($10k/year) and just started a small monthly pension ($1,000 after tax).
• Has twins, age 15, both college-bound.
• Assets & Income:
  • 529 college account: $40,000
  • Husband’s Roth IRA: $120,000 (intended for college use)
  • Ann’s TSP: $1,025,000 (mostly traditional; $20k Roth)
  • Savings: $25k in high-yield, $12k in regular savings
  • No brokerage/taxable investment account
  • Expected pension at 70: $5,200/month (with 50% survivor benefit); Social Security for both: ~$6,000/month at 70

2. Managing Cash Flow Under Uncertainty (09:13 – 10:28)

• Ann’s current annual salary: $162,000 + fluctuating bonus (est. $30,000).
• Side hustle provides ~$30,000/year, which is funneled to college savings.
• Comfortable cash flow in normal times, but currently dipping into savings due to furlough and using credit cards (intending to pay them off soon).

3. Expense Picture and Future Concerns (09:30 – 12:07)

• Monthly spending: ~$9,000 ("bare bones" ~$6,000).
• Main focus for the next few years is college funding for twins; wants to avoid saddling kids with debt.
• Sufficient inflow during working years, but not expecting meaningful financial aid due to current income.

4. The Big Question: Using TSP for Renovations (11:07 – 17:46)

• Ann would like to use her TSP to pay for home upgrades (target: $50k–$100k). Prefers not to take on debt.
• Jill addresses the emotional hurdle of spending after a career of strict saving:

  "We lived our whole work lives, like, sock away, sock away, sock away. But then it's hard to come back... It's hard to spend it. I get it." (12:07, Jill)

• Home value: ~$350k, mortgage: $130k left at 3.5% interest.
• Jill validates Ann’s plan: not a problem to use retirement savings for these costs given her pension, Social Security, and intent to keep working.

5. Tax Planning and FAFSA Considerations (14:41 – 17:46)

• Advises possible split of TSP withdrawal over 2 years (to lower each year’s taxable income and possibly maximize aid eligibility).
• Ann is concerned about inflated income on FAFSA applications; Jill agrees this is a valid consideration but notes their high income may already preclude significant aid.
• Reminder: Withholding taxes from the withdrawal means Ann must gross up the amount she takes to end up with her target renovation budget.

6. Investment Allocation for the TSP (19:57 – 21:34)

• Ann’s TSP is currently 80/20 stocks to bonds; she feels she's “a wimp.”
• Jill suggests moving toward 70/30, especially since she’ll be withdrawing soon:

  “Because you're close to needing the money, I really think it's worth you battening down a little bit of the risk.” (21:05, Jill)

• Mark (producer) notes the pension's present value acts like fixed income, making Ann’s high equity allocation less risky than it seems.

7. Permission to Enjoy Savings (16:38 – 18:51; 21:34 – 22:24)

• Jill repeatedly grants Ann “permission” to spend her savings for quality-of-life improvements:

  “Give yourself permission. I'm going to give you permission.” (16:38, Jill)
  “This is what it's all about... you got to use it. Mark's like on a one man banging the drum for spending your money. Right Mark?” (21:37, Jill)

• Mark: “That's what it's there for. That's why you saved all those years.” (22:21, Mark)

Notable Quotes & Memorable Moments

• On the pain of spending after a lifetime of saving:

  “We lived our whole lives, our work lives, like, sock away, sock away, sock away. But then it's hard to come back to the other side of that...” (12:07, Jill)

• On giving herself permission for home upgrades:

  “I don't really have any problem with you pulling money out of the retirement account to do the stuff you want to do because you got that big pension... you should do this and enjoy yourself.” (15:50, Jill)

• On the need for emotional flexibility:

  “So much of it is emotional, but because you're close to needing the money, I really think it's worth you battening down a little bit of the risk.” (21:05, Jill)

• Mark on the purpose of saving:

  “That's what it's there for. That's why you saved all those years.” (22:21, Mark)

Important Timestamps

• 01:38 – Introduction; Ann calls in with her scenario
• 03:23–04:02 – Ann’s job/furlough and family income situation
• 05:26–06:00 – Ann’s savings vehicles and retirement assets detailed
• 07:07–08:59 – Social Security/pension plans, husband’s income, and Ann’s side hustle for 529 funding
• 09:30 – Monthly expenses outlined; strategy during furlough
• 11:07 – Core question introduced: Using TSP for renovations
• 12:07 – Discussion of emotional challenges in spending saved money
• 14:41 – Tax strategy and FAFSA impacts of retirement withdrawals
• 19:57 – Asset allocation debate for TSP (80/20 vs 70/30)
• 21:34–22:24 – Explicit encouragement to enjoy fruits of saving

Episode Takeaways

• If you have a strong pension, Social Security, and significant retirement savings, it’s reasonable to access retirement funds for major expenses like home renovations, especially if you’re continuing to work.
• Tax planning and timing of withdrawals can smooth income bumps and mitigate financial aid issues, but with high income, aid may be limited anyway.
• Portfolio risk should be adjusted as you approach consumption of those assets.
• It’s emotionally challenging for lifelong savers to transition into spenders, but that's ultimately the point of saving. Give yourself permission to enjoy what you’ve earned.

For anyone who’s navigating the tension between disciplined saving and enjoying your wealth, this episode is an encouraging, practical guide—filled with warmth, realism, and permission to start living the rewards you’ve earned.