Why Use Bonds?

Summary

Podcast Summary: Jill on Money with Jill Schlesinger – "Why Use Bonds?"

Episode Date: June 18, 2026
Host: Jill Schlesinger, CFP® (with producer Mark)
Main Theme: Understanding the Role of Bonds in Your Portfolio and Listener Q&A

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Episode Overview

In this episode, Jill Schlesinger delves into the why and how of using bonds in an investment portfolio. Responding to a listener question, she discusses the distinct role of bonds—especially in light of current interest rates and the availability of competitive yields from CDs and money markets. The show also features nuanced guidance on retirement account strategy (Roth vs. traditional), financial planning for major life transitions, and maximizing investment choices across varying life stages. Jill’s trademark approachable, jargon-free manner keeps the complex world of personal finance understandable and entertaining.

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Key Discussion Points & Insights

1. Why Use Bonds?

Timestamp: 03:00 – 05:45

• Listener Diana’s Question:
  “You always talk about bonds being part of a portfolio… I’m getting 3.5 to 4% with CDs and money market. Why not stick with that for my safe money?”

• Jill’s Insight:

  • Bonds provide diversification and act differently than stocks, balancing risk.
  • Bonds produce consistent income, offering a "ballast" in a portfolio.
  • CD and money market rates are currently strong, but those rates can change quickly as interest rates shift, while bond ownership offers opportunities through price appreciation and reinvestment when rates change.
  • “When you have an interest payment, it's nice to have that consistency of income.” (Jill, 05:05)

• Mark’s Perspective:

  • “It’s not like owning the S&P 500… but every single month you're going to get that payment.” (Mark, 04:52)
  • Even if bonds are “in the negative column,” steadily reinvesting can improve your outcome over time.

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2. Traditional 401(k) vs. Roth 401(k)

Timestamp: 05:50 – 07:55

• Listener Karen’s Scenario:
  Recently turned [age not specified], $392,000 in 401(k), $211,000 in IRA, considering Roth 401(k) contributions. Currently earns $100,000/year, single, no debt, owns home, aiming to retire at 62–65.

• Jill’s Analysis:

  • Describes the potential for a lower tax bracket in retirement, favoring traditional pre-tax savings.
  • Suggests diversifying across both Roth and traditional accounts “just to create some money that has already been taxed.”

• Mark’s Recommendation:

  • “I would like to have a mix of both, kind of just hedge my bet… I would love to have some Roth assets going into retirement.” (Mark, 07:36)
  • Continue to build cash savings, given early retirement plans.

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3. Retirement Savings Balance – Living vs. Saving

Timestamp: 07:55 – 10:35

• Listener Sarah’s Concern:
  At 34, saving heavily for retirement; wondering when she can allocate more of her income toward goals like buying a house or starting a family.

• Jill’s Encouragement:

  • “Aunt Jill loves the idea that you actually have a life… use a brokerage account to do that.” (Jill, 09:57)
  • Advises a holistic view: balance retirement saving with immediate goals, especially significant ones like a house or adoption.

• Mark’s Take:

  • “You gotta find a healthy balance. You don't want to be putting yourself under all this financial stress just because you're, you know, saving, saving, saving. You gotta live.” (Mark, 10:00)
  • Recommends considering a brokerage account, especially if retirement plan expense ratios are high.

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4. High Earners, Tech Compensation, and Advanced Planning

Timestamp: 10:45 – 14:20

• Listener Emma:
  Longtime listener, now in tech with RSUs, high joint income ($500,000), low expenses ($100,000), planning for kids and home purchase, working with a financial advisor at a very low fee.

• Jill’s Perspective:

  • Praises expense restraint, advises Roth 401(k) and backdoor Roth contributions to build tax-free assets, even in high-tax California.
  • “You're kicking tush. You are kicking butt.” (Jill, 12:11)
  • If advisory fee is 0.05%, “that seems kind of reasonable to me.”

• Mark’s Input:

  • “Yes and yes for sure… do [backdoor Roth],” provided no interfering traditional IRAs.
  • “If not, yeah, do it.” (Mark, 13:50)

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5. Podcast and Content Updates for Loyal Listeners

Timestamp: 14:20 – 17:10

• Listener Joyce’s Feedback:
  Misses Jill’s radio show; unsure where to find new/older-audience content.

• Jill’s Assurance:

  • The Jill on Money podcast remains active and inclusive of all ages.
  • The upcoming Money Watch/ Money Moves show will be both podcast and video — “It'll be audio and video. Whatever you prefer.” (Mark, 15:40)
  • Recommends subscribing to both podcasts to never miss an episode or update.

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Notable Quotes & Memorable Moments

• “It has a, that you, when you have an interest payment, it's nice to have that, that consistency of income. So maybe not a ton of [bonds], but like a little bit… it's like a ballast.” — Jill, 05:05

• “It's not like owning the S&P 500. And yes, they will oftentimes be in the negative column. I get it. But every single month you're going to get that payment.” — Mark, 04:52

• “I am all in on that. Aunt Jill loves the idea that you actually have a life.” — Jill, 09:57

• “You gotta find a healthy balance… You gotta live your life, have a good time along the way.” — Mark, 10:00

• “You're kicking tush. You are kicking butt. First of all, making a half a million dollars and only spending 100 is amazing.” — Jill, 12:11

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Important Timestamps

• 03:00 – Why bonds still matter despite high CD/money market rates
• 05:05 – Consistency and role of bond income in portfolios
• 07:36 – Roth vs. traditional strategy for mid-career savers
• 10:00 – Balancing living and saving in your 30s
• 12:09 – Advanced planning for high earners in tech (backdoor Roth, advisor fees)
• 15:40 – How to access Jill’s shows for all ages and platforms

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Takeaways

• Bonds remain a valuable part of most investment portfolios, chiefly for diversification, consistent income, and as a buffer against equity volatility—even when alternative “safe” yields are attractive.
• Retirement savings strategies (Roth vs. traditional) should account for likely future tax brackets, but hedging with both is usually wise.
• Life goals matter: prioritize balanced saving and spending, using brokerage accounts for flexibility.
• High earners can consider both backdoor Roths and Roth 401(k)s, especially aiming for tax diversification.
• Jill’s content is available in multiple formats—podcast, newsletter, and soon, video—ensuring listeners can connect in the way that suits them best.

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For more questions or to be featured on the show:
Visit jillonmoney.com — click “Contact Us”, check the box to join live, and explore all available resources.

Transcript

[A]

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[B]

No, no, I don't agree with that. I mean, I realize they're not sexy. It's not like owning the S&P 500. And yes, they will oftentimes be in the negative column. I get it. But every single month you're going to get that payment.

[A]

Yeah. And so that's the thing. It has a, that you, when you have an interest payment, it's nice to have that, that consistency of income. So maybe not a ton of it, but like a little bit. And even if you said, hey, it's in the negative column, but like, I'll put a little bit more in now, then you know, that'll improve my outcome over time. Sure. So I don't know, I just think I like it. It's like a ballast. Okay. That's what's important. Karen is asking about a traditional versus a Roth. And she goes on to say, I recently turned and I have $392,000 in my work, 401k, 211,000 in a rollover IRA. My company offers a Roth 401k option. I'm wondering, should I start to contribute to the Roth instead of the traditional? I make $100,000 a year and my company matches 100% of the first 4% I contribute. The company matches pre tax. I'm single, I own my own home. I have no debt. I've never done a Roth because I ass my income would be lower in retirement. I'd like to retire at age 62, 65 at the latest. I have about $15,000 in my HSA. I currently contribute the maximum to that HSA. The only other savings, $6,000 in a savings account, $22,000 in a CD. I am working to boost my savings account each pay period. Hey, you know what, Karen? Here's something to consider. You think that your income will go down. I get that. Your income would go down like the $100,000 that you make. Right. You think about that. You're in a 22% tax bracket. So you might say to yourself, well, maybe when I retire I will be in the 12%. So maybe this is a case where you could be right. On the other hand, you might also say to yourself, well, I have a bunch of money that I've already saved. Right? I've got this four, five, six, you know, I've got six hundred and so thousand dollars, maybe just to create some money that has already been taxed that I might put that into a Roth. Now Mark, this might be one of those cases though where she really will see her tax bracket drop by 10 percentage points. So would you like to weigh in on the traditional versus Roth question for Karen?

[B]

I mean, I would like to have a mix of both, kind of just hedge my bet. I mean she's going to be in the workforce for another seven to 10 years.

[A]

She says yes.

[B]

She's already got half a million pre tax over that. More than half a million. I mean I would love to have some Roth assets going into retirement and

[A]

also I would do some Roth, but I also would the. And very focused on building up some of your cash also, especially if you're going to retire at 62. Sarah says. Ready for the subject, Mark? When can I stop investing as much for retirement? Hi, Jill and Mark. I'm 34 years old, single, no kids. Okay. I work in a school system with a side hustle. I've been prioritizing retirement savings. But I'm curious if I could stop contributing as much to pursue other goals like buying a house or adopting or fostering a child or traveling. I still plan on investing. I'm just not sure if I should continue taking advantage of a 457 with moderate expense ratios, less than a half a percent a year or maybe shift to a brokerage account. I want to optimize my dollars in my 30s for long term growth. I don't want to keep saving at this rate. Long term, I'd love to take my foot off the gas, spend my money in other ways. I just don't know when that should be. If it's advantageous to keep grow grinding for another hypothetical five years, I'm more than willing to do that. But I'd like to have a timeframe in mind for when I can ease up. Thanks for all you do. Okay, mark, so Sarah's 34. Here's the thing she didn't tell us like how much money does she have saved already? I'm okay with people wanting to do more than just save for retirement, especially when you're in your 30s. Like I'm, I am all in on that. Aunt Jill loves the idea that you actually have a life. And certainly, certainly if you're thinking about adopting a kid or buying a house, you need to save money outside of your retirement account and use a brokerage account to do that. But I would be very interested to learn like how much money are you putting away? Are you just killing yourself to get all this money in a plan and have nothing else around? Like so we need a little bit more information. But Mark, is there a theory that you have about you? You are a young single in your 30s, right?

[B]

I sure was, yeah.

[A]

You saved money outside of retirement if I recall.

[B]

Yeah, I did. I did I mean, you know, I think you got to find a healthy balance. You don't want to be putting yourself under all this financial stress just because you're, you know, saving, saving, saving. You got to live. You, you know, you're young. This is what this is. You got to live your life, have a good time along the way. I'm not crazy about the 457 with those expense ratios. So yeah, I would probably start splitting the difference with a brokerage account.

[A]

Yeah, I, I like the idea of using a brokerage account because it'll give you optionality and that's really where I like to listen. Like, I like options, I like plan A, B and C. I really do. And so I think that would be really helpful for you. All right, Mark, another person in their 30s who says we only have old people on this show. Oh, wait, I said that because they're like me. Okay. Emma is a longtime listener for more than six years and she's written him before. She said since we last spoke. I moved across the country, started a new job in 2020 in big tech with RSUs. Those are restricted stock units. Married my long term partner of over a decade. Oh, mazel tov. Okay, so Emma wants the advice on what to do with my personal money and investments. Now that we've combined income and expenses. Should I use a backdoor Roth, knowing I max out my pre tax 401 and my HSA? My husband also maxes out and is able to submit additional funds to retirement because he works for a public entity. She has 300 grand in retirement, husband has 250. Annual expenses are about $100,000 a year and household income is about a half a million dollars. So they're making 500 expenses of 100. In addition, she gets roughly 30 to $40,000 a year in restricted stock units. Should I keep using a financial manager to keep me well rounded in my investments? Since I'm so heavy in big tech, I have a financial manager who controls all of my personal non retirement assets. That's 319,000 at a fee of 5 basis points. How's that possible, Mark? An annual fee of 5 basis points.

[B]

I mean, keep using the cheap.

[A]

That's the cheapest thing I've ever heard. I mean, if that. Unless that's a typo, if it's a half a percent, maybe different, but they also opened a joint brokerage account. 74 grand, 100 grand in checking savings. They're gonna have a child next year, hopefully another one. So they're gonna have a couple kids. Wanna buy a home? So how are you doing, Emma? You're kicking tush. You are kicking butt. First of all, making a half a million dollars and only spending 100 is amazing. I would love it. I mean, because you make a lot of money. I get the whole pre tax and you're in California high tax state. But I would just be careful in terms of your assumptions going forward. I think that often we'll hear from people who are in high tax brackets who live in high tax states like New York and California and they'll say, I really want to do pre tax and you guys are in the 35% tax bracket, maybe mostly 32%. I don't know. You're going to have to make a decision soon to start using a Roth in general. Like maybe if you can start to. I'm sure Mark will want you to try instead of using a pre tax 401k to maybe use a Roth 401k for one or both of you or some part of that. And of course you're going to have to start saving some more money in that brokerage account so that you can save up for your home down payment. Oh, wait, wait. We want to buy a home in five years, but we already have a down payment sorted. They already have a down payment fund. So Mark, should we be doing backdoor Roths or using a Roth 401K for these folks who make a half a million dollars in a high tax state?

[B]

Oh, I say yes and yes for sure. The backdoor Roth. I mean, they're making half a million, they're spending 100,000. I would assume that they have the cash flow to do it. Yeah, for sure. There's no reason unless you have existing IRAs elsewhere, which makes it a mess. But if not, yeah, do it.

[A]

And if you do have existing IRAs, just roll them into your pre tax retirement accounts and make them go away. If you're paying somebody at five BAS points or 0.05% on an annual basis, that seems kind of reasonable to me. I'm not sure I'd mess with that, but if it's a typo and it's more, then let us know. Okay, this is from Joyce, who says, I have a question. I just listened and laughed through your May 30 show regarding your new podcast, Money Watch, Turning into Money Moves and whatever title you decide upon. The funniest quip was when you said you'd put new content out every Wednesday and Friday. Mark said, no, I thought it was Tuesday, Thursday, and you barreled Ahead undeterred. Evidently this is not even clear to the Mark, the makers of the show what the new show will be. But my question today, is there anything someone over the age of 40 can listen to Now? I heard you. It's only for 20 to 40 year olds and it's only on YouTube show. I miss the radio days. I stopped watching any CBS shows after they cut your radio show. And Colbert, bottom line, whatever name or days you decide to do, can you just clarify when, where do I north of 40 year olds tune in? Thanks for making it fun. Okay, so if you're over 40, should listen to the Jill on Money show, which is totally doable and that's just a podcast and there is no video yet. If you want to tune into the new show, Money Moves, it will be through the Just subscribe to the Money Watch feed. It will be a podcast and it will also be available on YouTube. Both, right?

[B]

Not, not, not just YouTube. It'll be audio and video. Whatever you prefer.

[A]

Whatever you prefer. In fact, I just, I, I often will listen to many shows and not do it when they are on video. I very much like listening. That said, we are, we are just in a little bit of limbo land as we talk to you right this second and maybe we'll know more. Maybe, maybe we will. I'm. I'm thinking, Mark, I have maybe not dates, right? Well, I think it is going to be now. I think it is Tuesday, Thursday. I think we'll probably launch next week or the week after, but it could be. But I feel like I never want to say another word about this till I know for sure. So here's how you can never miss us. Subscribe to this show. Then also subscribe to the Money Watch show, which right now drops on the weekends. Mark and I are going to continue doing shows and make sure that you subscribe to our free weekly newsletter because we'll tell you all about what's going on and that way you're never going to miss us. Keep watching a little bit of cbs. My colleagues and I are continuing to do good work there. So no protests necessary. Someone just said that to me recently, like, well, they canceled your radio show. I'm not going to watch anymore. I'm like, well, I'm still on tv, but okay, you do what you. Mark, I know you're watching constantly.

[B]

Not in many years.

[A]

Mark watches only the segments that I'm on so he can post them on our website.

[B]

That's exactly right.

[A]

So if you think you want to like check in with what's happening on TV and you want to check out a segment or something. Or something like just like you like the headline, we have it on the [e-mail] okay gang, thanks again for listening. You can always subscribe to us on the Odyssey app again or wherever you find your favorite podcast. Maybe it's Apple, maybe it's Spotify, whatever, just do that. And of course just make sure that you always lift someone. That is the good juju we put out there. Change your work, change your wealth, change your life. Thank you for listening and we will talk to you tomorrow.

[C]

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