Episode Overview

Episode Title: Too Much in Pre-Tax Retirement?
Podcast: Jill on Money with Jill Schlesinger (Audacy)
Date: December 16, 2025
Host: Jill Schlesinger, CFP®
Caller: Bill from the Twin Cities

Theme:
Jill Schlesinger fields a listener’s question about balancing pre-tax and post-tax retirement savings. Bill, nearing retirement with a substantial nest egg primarily in pre-tax accounts, seeks advice on whether to continue contributing to traditional (pre-tax) accounts, switch new savings to Roth or brokerage, or rebalance given accessibility and future tax implications.

Key Discussion Points & Insights

1. Bill's Financial Profile (03:22–07:04)

• Age & Timeline: Bill is 58, plans to work "another two years or less."
• Marital Status: Partnered, living together, but maintains separate retirement savings.
• Monthly Expenses: $5,000 (Bill's share).
• Current Assets:
  • Traditional 401(k): $2 million
  • Traditional IRA: $500,000
  • Roth IRA: $220,000
  • HSA: $41,000
  • Brokerage Account: $60,000
  • High-Yield Savings: $53,000
• Income: $150,000/year
• Debt: None
• Home Ownership: Lives in partner’s house (she owns it).
• Social Security Estimates (07:57):
  • Age 67: ~$4,000/month
  • Age 70: ~$4,900/month
• Family: No children. Mother is self-sufficient. No plans for elder care.
• Health & Longevity: Good health; family has decent longevity.

2. The Core Question: Where Should New Savings Go? (03:47–05:07; 08:46–14:21)

Bill asks if he should:

• Continue contributing to his traditional 401(k) (pre-tax)?
• Switch to Roth 401(k)?
• Skip extra retirement savings in favor of a brokerage (taxable) account for liquidity?
• Clarifies his employer offers a generous "7% dollar-for-dollar" 401(k) match.

Jill’s Initial Analysis

• Bill has "so much money that hasn't been taxed yet"—over $2.5 million in pre-tax accounts.
• Jill recommends:
  • Always contribute enough to get the full employer match.
  • If the match is only on traditional contributions, continue with pre-tax for the match only (08:59).
  • For additional savings, strongly considers putting into brokerage or Roth rather than adding to pre-tax.

Quote:
"You have so much money that hasn't been taxed yet...I would put. If they say, 'Oh, we'll only do the match in the traditional,' then I would do that match. And then...I would be happy with you just putting adding money to the brokerage account."
— Jill Schlesinger (09:05)

3. Retirement Withdrawal and Tax Considerations (09:05–11:29)

• Jill’s Strategy:
  • After retiring at 60, Bill should start drawing down his pre-tax accounts to minimize future Required Minimum Distributions (RMDs) and spread out the tax hit.
  • Suggests withdrawing $100,000/year (adjust as needed) from retirement to cover expenses, remaining in the 22% tax bracket as long as possible before Social Security starts.
  • Once Social Security begins, taxable income will likely jump Bill into the 24% bracket, which is fine, since future taxation is inevitable given the size of accounts.
  • Emphasizes Bill has "more money than you will probably ever spend"—the problem is a "good one" (10:30).

Quote:
"You need to pull money out of that account, otherwise you’re going to have some walloping required minimum distributions...But I think you’ll be taking money out at your lower tax bracket actually..."
— Jill Schlesinger (09:42)

4. Debating Roth vs. Brokerage for New Contributions (12:14–13:32)

• Mark’s Take: Mark prefers Roth contributions (after getting the match), arguing for the tax-free growth and withdrawal benefits, especially since Bill will be able to access funds at 59½.
• Jill’s View: Jill leans toward brokerage for liquidity, flexibility, and opportunities for tax loss harvesting or gifting. She admits she’s "agnostic," acknowledging both are valid and ultimately Bill can't go wrong.
• Agreement: Strong consensus to not add significantly more to pre-tax; Roth or brokerage are both smart.
• Notable Quote:
  • Mark: "No pre tax. That’s the message." (13:30)

5. Advanced Strategies: Mega Backdoor Roth (13:34–14:21)

• Bill mentions he already utilizes the Mega Backdoor Roth, contributing 9% of after-tax dollars, converted monthly.
• Mark favors the Roth even more, given this structure.
• Jill: Reiterates that Bill is "doing it anyway" and is impressed with his proactive planning.

6. Non-Financial/Planning Considerations (14:21–15:01)

• Estate Planning: Jill reminds Bill, since he isn’t married but lives in his partner's house, to ensure plans are in place so he’s not at risk if his partner passes.
  • Bill confirms that’s covered.
• Final Thoughts: Bill is in "amazing shape." Jill praises his frugal spending and steady saving habits. Bill reflects on his own surprise at having accumulated so much wealth over his career.

Quote:
"You have almost $3 million bucks. It’s incredible, isn’t it?"
— Jill Schlesinger (15:34)

Bill (15:34):
"It is...30 years ago, I never would have imagined that at 58, I’d be in the situation I am. So I am fortunate for sure."

Memorable Moments & Quotes

• Jill (about Bill’s savings):
  "You have so much money, it’s incredible. You’ve done an amazing job. You don’t spend a lot of money. Only spend five grand a month. Completely ridiculous, you know, like what’s the match that you receive?" (08:30)
• Mark (on Roth preference):
  "Just because he’s at the magic age of 59 and a half and he can access the money which he needs to start doing to kind of defuse that bomb. I would put anything else into a Roth. There’s no better tax treatment than zero tax." (12:26)
• Jill (re: estate planning for unmarried couples):
  "Since you’re living in your partner’s house. Have you guys done some estate planning whereby, like, if she were to pass away, does she have kids or some...would you be able to stay in that house or would you get kicked out?" (14:45)

Timestamps for Key Segments

| Timestamp | Topic | |-----------|-----------------------------------------| | 03:22 | Bill introduces his retirement question | | 05:07 | Beginning of Bill’s detailed situation | | 08:46 | Employer match and account split | | 09:05 | Jill on too much in pre-tax accounts | | 11:29 | Conversation turns to liquidity needs | | 12:14 | Roth vs brokerage debate with Mark | | 13:30 | Consensus on no new pre-tax | | 14:21 | Mega backdoor Roth strategy | | 14:56 | Estate planning for unmarried partners | | 15:34 | Bill reflects on his financial journey |

Conclusion

Summary:
Bill exemplifies diligent long-term saving, modest spending, and prudent asset allocation. Nearing retirement, he faces a classic dilemma: how to balance tax-deferral with flexibility and impending RMDs. Jill and Mark agree: absolutely leverage the employer match, do not contribute more to pre-tax, and choose Roth or brokerage according to individual need—both have merits at this stage.

Tone: Friendly, affirming, and practical—Jill and Mark deliver direct (and jargon-free) advice, focused on real-life consequences, flexibility, and the importance of tax planning as retirement nears.

For Listeners:
Regardless of your current position, the advice is clear: maximize matches, understand future tax implications, keep your withdrawal options flexible, and be sure your estate planning matches your living arrangements, especially if not married.

Notable Call to Action:
"If people are listening and you’re hearing, like, Oh my God, I don’t have that much money...get in touch with us. Maybe we can help you out. All you need to do is go to the website jillonmoney.com, click the contact us button. Write us a note..." (15:45)