Episode Overview

Theme/Purpose:
In this episode of Jill on Money, host Jill Schlesinger answers a listener’s important personal finance question regarding a school pension. The listener, Mark from Nebraska, wants advice on whether his wife should leave her funds in her teaching pension plan or withdraw them now that she has left the profession. Along the way, Jill and her producer Mark Tularcia dive into broader family finance topics, including cash flow, retirement savings, housing considerations, and essential protections for young families.

Key Discussion Points & Insights

1. Listener Background [03:27–04:27]

• Mark’s Situation: Mark’s wife recently stopped teaching after seven years (she is vested in the teacher’s pension). She’s currently at home with their three young children, ages 4, 2, and 9 months.
• Pension Details: The cash-out balance of her pension is approximately $34,500.

2. Should They Withdraw, Leave, or Roll Over the Pension? [04:27–13:04]

• Is Returning Likely? Mark’s wife is likely done with teaching and, if she returns to work at all, she’d prefer nonprofit or volunteer work.

• Jill’s Guidance: With no strong chance of resuming teaching, the default advice is to take the cash value and roll it over to an IRA. This consolidates retirement assets and offers more investment control.

  • Quote (Jill, 12:35): “I would roll it over, especially... she has really no ambitions about going back into teaching.”
  • Producer Mark concurs: “I would... I think I’m just inclined to take it.” (12:33)

• How-To: Mark’s wife already has her retirement accounts at Vanguard. The plan: do a direct rollover of the pension funds to her traditional IRA.

3. Family Finances: Cash Flow, Retirement, Emergency Fund [05:22–11:31]

• Income and Budget: Mark earns ~$101,000 (base plus bonus); the household is making it work on one income, though it’s tight.
  • Mark adjusted his W-4 to reduce over-withholding on taxes: “I'm not looking for a big refund check. I'd like it each month.” (05:47)
• Retirement Savings:
  • Mark’s 401(k): 6% of salary (Roth contributions); employer matches 4% and adds an extra 5% all to traditional, totaling 9% match. (06:20)
  • Combined retirement assets (not counting the pension):
    • Mark’s Roth IRA: $61K
    • Mark’s Traditional IRA: $42K
    • Wife’s Roth: $9.5K
    • Wife’s Traditional: $5K
    • 401(k) balances: Mark Roth ~$11K, Traditional ~$20K
• Remarkable Progress: “You guys have saved a lot of money and you're very young. I mean, that's incredible.” (07:58)
• Kid College Savings: 529 plans started for two oldest kids but contributions paused due to tight cash flow and growing family (08:14).
• Emergency Fund: $27,000 saved (11:24)

4. Housing Situation and Future Moves [09:12–11:24]

• Current Home: Worth ~$320,000, $148,000 remaining on a 15-year mortgage (rate: 2.125%).
• Potential Move or Expand: Considering moving for more space, but low mortgage rate is a powerful incentive to stay and consider an addition.
  • Jill: “Moving with that kind of a rate... I would absolutely investigate how the idea of adding to what you have could create more space for you.” (09:39–10:47)
  • A move would increase payments by $600–700/month—likely unaffordable on current budget.

5. Other Debts and Spending [11:31–12:05]

• Car Loan: $9,000 left, payments of $380/month at 6.5%.
  • Jill asks about keeping the car long-term: “Is it a car that you can just keep and own for a while?” (11:51)
  • Mark: Yes—a minivan “our children are in the process of destroying.” (11:59)

6. Final Advice & Hallmarks of Good Planning [13:04–15:59]

• Consolidate Pension: Direct rollover to Vanguard IRA; keep retirement accounts simple.

• Monitor Cash Flow: Wait to see the true impact of going down to one income and adjust savings/contributions as needed.

• Explore All Options for Space: Prioritize cheaper home addition over expensive move. If addition is possible, might reduce retirement contributions temporarily to save cash for it.

• Life Insurance/Estate Planning:

  • Mark: $2 million on himself; coverage on wife too.
  • Wills and guardianship done after first child, up-to-date.
  • “I think you’re in really good shape.” (15:43)

• Producer Mark’s Endorsement: “Ahead of the game... Definitely ahead of where I was when I was 30.” (15:55)

• Jill’s Closing Wisdom: “Do something nice for someone else today... Change your work, change your wealth, change your life.” (16:36)

Notable Quotes & Memorable Moments

On Perfection vs. Practicality

• “I’m not into optimizing anything. I think you do the best you can do. Let’s try to get you a bunch of different options and get you where you want to go.”
  — Jill [01:49]

On Family Chaos

• “Oh boy, you have got your hands full.”
  — Jill, on hearing the ages of Mark’s children [04:59]
• “It’s a minivan that our children are in the process of destroying. So I’m sure, yes, we’ll drive it to the ground.”
  — Mark [11:59]

On Retirement Savings

• “You guys have saved a lot of money and you’re very young. I mean, that’s incredible.”
  — Jill [07:58]

On Housing Math

• “I would absolutely investigate how the idea of adding to what you have could create more space for you and then compare that to what it would cost to move.”
  — Jill [09:41]

On the Pension Decision

• “I would roll it over, especially... she has really no ambitions about going back into teaching, you know?”
  — Jill [12:35]
• “If she takes that and rolls it into her traditional IRA... now she’s got $35,000 in the account, it’s consolidated, it’s in one place.”
  — Jill [13:02]

On Being on Track

• “30 year olds doing great, right? Good savings, low debt, everything’s looking good to me.”
  — Jill [15:43]
• “Definitely ahead of where I was when I was 30.”
  — Producer Mark [15:55]

Timestamps for Important Segments

| Timestamp | Segment | |-----------|------------------------------------------------| | 01:49 | Jill's Intro—her philosophy on advice | | 03:27 | Mark explains his wife’s pension situation | | 04:21 | Is she likely to return to teaching? | | 05:22 | Family income and cash flow | | 06:20 | Retirement plan and contributions | | 07:34 | Other retirement savings | | 08:14 | College savings status | | 09:12 | Housing dilemma—move or add on? | | 11:24 | Emergency fund and other debt | | 12:33 | Producer Mark and Jill: the pension decision | | 13:02 | How to roll over the pension | | 14:00 | Monitoring cash flow and spending adjustments | | 15:25 | Life insurance and estate planning check | | 15:55 | “Ahead of the game” conclusion | | 16:36 | Jill's closing words—philosophy and kindness |

Summary: Actionable Takeaways

• Pension: With little chance of returning to teaching, roll over the pension to an IRA for better control and growth.
• Housing: Strongly consider a home addition instead of moving (due to historically low mortgage rate and high moving costs).
• Cash Flow: Track expenses closely as your financial situation changes; be prepared to adjust retirement savings if needed to meet future priorities like home expansion.
• Protect Your Family: Maintain adequate life insurance and up-to-date estate documents.
• Perspective: You’re doing better than you might think. Don’t stress about perfection—solid, sensible steps forward are what matters.

This episode exemplifies Jill’s practical, jargon-free financial guidance. Her tone is encouraging, realistic, and adaptable to real family circumstances—which makes the advice both effective and reassuring.