transcript

Speaker 1:
[00:00] Hey gang, you know I used to think the hardest part of health care was getting the appointment. Turns out, it's just the beginning. Waiting on those referrals, dealing with insurance approvals, trying to interpret test results, and then somehow making sure every doctor's on the same page. That's why I was so happy to learn about Solace. It's a platform that connects you with a dedicated health care advocate who helps you navigate all of that in a real hands-on way. A Solace advocate can find the right doctors and schedule appointments, fight denied insurance claims to help get care approved, and make sure your doctors stay coordinated so nothing gets lost in the shuffle. They can also join your appointments remotely, translate medical language into plain English, and break down test results and treatment plans so you actually understand your care. These are experienced health care professionals, often nurses with years of experience, and they've already helped tens of thousands of people get better care. Go to solacehealth.com to see if you qualify. It takes about two minutes, and it's covered by insurance. That's solacehealth.com. Must be 18 or older. Advocates do not provide medical or legal advice. Hey gang, I've recently been thinking about how to make my home feel more functional, especially my work area. So I have turned to Wayfair, and let me tell you, it was a game changer. I found lighting for my desk that really has helped me when I wake up early. And you know how early I wake up, gang. And shopping was a breeze. I filtered by exactly what I wanted. The style, checked out the reviews. I even used the Wayfair Verified to make sure everything was top quality. What sets Wayfair apart is how fast and simple everything comes together, from furniture to home accents. Everything feels thoughtfully curated and actually fits my style. And now, Wayday is the sale to shop the best deals in home. We're talking up to 80% off with fast and free shipping on everything you need. Head to wayfair.com April 25th through the 27th to shop Wayday. That's wayfair.com. Wayfair. Every style, every home. Welcome to the Jill on Money show. It's Wednesday, April 22nd. And we are here answering your financial questions. And maybe it's even not just financial. Maybe it's your bigger, larger life questions. And you need to figure out if your money can help answer those questions. So if you're going through a big decision, maybe it's a new job. Maybe you're thinking about buying or selling a home. Maybe you're really thinking about a completely different way that your next group of years is going to come together for you and your family. Get in touch with us. Go to jillonmoney.com. Click the Contact Us button. It's always in the upper right hand corner of the website. And write us a note. Now if you are shy, give us a lot of detail. Make sure that you tell us how much money you spend. Make sure that you tell us what else is going on. We need as much of the data that would be necessary to help guide you along your way. Now, if you are lazy, like me, you'll just check the box and then you can tell us your whole story when you come on the air with us live. Mark will do that. He will arrange to get you on the air and it will be, I think, very easy for you to just kind of get into the rhythm of talking to us. And we try to make this a comfortable conversation, okay? So don't make it harder on yourself. Check the box, come on the air. It's more fun. Of course, we do emails from time to time, so that's fine. We're happy to do that as well. While you're on our website, please subscribe to our free weekly newsletter, which comes out on Fridays. It also entitles you to our blog. And you'll see all other stuff that's on that website, resources, videos, links to buy my books, whatever it is you want. I think we've got it. Okay, today, let us do some emails. Mark says, the inbox is piling up. Let's start with Karen who writes, we have about $85,000 in a savings account. It's not earning very much. I would like some suggestions on what to do with it to earn more. Now, I don't want to take it all out. I want some to be in my savings that's easily accessible. The rest, maybe we would tie up for six months, perhaps a year. Thank you for any ideas you might have. Well, Karen, the easiest thing to do would be to find a place where you could have a high-yield savings account. And hopefully, that's at the institution where the money currently is. But if it's not, you can go online to depositaccounts.com, to bankrate, and just seek a place where you can sock away some of the money. Now, if it's in a high-yield savings account, the good news is it will also be easily accessible. If you want to keep some of the money in CDs, that's when you would look at a 6- or a 12-month option, or 6, 9, 12, and you can do the same thing. Go find the best rates that are out there. But if you like the institution where your money is currently sitting, maybe ask them for some ideas. Just don't buy any products. Again, liquid, high-yield savings account, maybe a CD, couple CDs, that should be just about it. And I hope that will help you out. Remember, gang, Emergency Reserve Fund, six to 12 months of your living expenses in a safe, liquid account. Okay? All right. Now, here is a question from LaDonna, who wants to know about taking Social Security early. She even starts by saying, I want to take Social Security early. Is this a bad idea? Here's the message. Hey, Jill and Mark, I talked to you guys a couple of years ago and received great advice. I'm back for more Things Have Changed. You usually tell people to wait to take Social Security as long as they're in good health and have a long life expectancy. And I tend to agree if a person doesn't need the money. But I'm starting to feel like I need the money. We've had all kinds of unexpected, though normal kinds of expenses in the past month. New hot water heater, two crowns, now an upcoming cataract surgery. I would feel better if we turned on an income stream instead of continuing to raid our brokerage account. Oh boy, this is going to be a Mark question. He's going to go nuts about this. But LaDonna says, am I wrong? Here's the deal. We're both 63 and retired. My husband does work part-time for fun and a little income, about $14,000 a year. He has a pension with no cost of living adjustment. The medical is paid for and so it comes to $2,300 a month. Okay, check this out gang. Remember, they're 63. $502,000 in traditional IRAs, $318,000 in Roths, $97,000 in a brokerage that is in a Vanguard Money Market Fund, and we consider that our emergency fund. We'd like to keep it liquid. We also have $15,000 in a credit union. Our yearly spend, $60,000, although I imagine this year it will be more because of those expenses. We already run a deficit every month. We've covered it by accessing the brokerage account. We own our home. It's worth about $450,000. We've got no debt. Just got a new car, paid cash for it. Okay. She's got a pension with no cost of living adjustment. She doesn't want to actually claim it yet. If she waits, she will get more and more money. She's hoping to take that pension at around 72, which would be $1,635 a month. She's got Social Security benefit of just under $2,000. The husband's $2,400. But because of the expenses, I want more cash flow. We're trying not to touch the investments. We want to leave a large inheritance to our two kids. Come on. Am I panicking for no reason? You ready, Mark? Let me ask you this question. Mark, is LaDonna panicking for no reason? Should she claim Social Security early? The quick and easy answer is no, they should not.

Speaker 2:
[08:17] I don't know if we're going to convince her of that. I get the numbers. I see what they have. I see what they're spending.

Speaker 1:
[08:22] There's a little deficit there. Probably the wrong move. Totally the wrong move. Not probably. Mark is being very nice. I can't say this more strenuously. Absolutely do not claim Social Security. And by the way, don't even use the money market account if you don't want. How about taking some money out of the traditional IRA before you start getting all this pension income and Social Security income? Why don't you just start pulling money out of your traditional IRA, leave the Roths, hang with the brokerage a little bit, and that's it. And then when you get your Social Security, again, he's going to be 70, yours will hopefully be 70. I'm hoping you can both wait till 70. I'd pull money out of the retirement account, pay the tax that's due, you're paying it at a lower level before you get that pension of your own, you're pulling money out where you're at a reasonable tax bracket. The answer is you are panicking for no reason. Do not, absolutely do not claim Social Security early unless you have now told me that you've gotten some horrible diagnosis and your life expectancy has changed. So no, no to Social Security. She's going to do it. You know why? The kids. Whatever. I can't even speak to the kids. Just deal with this. Take care of yourself. Let your kids will inherit whatever they inherit. And let's be smart. Because by the way, if you have a higher Social Security payment, chances are all the other money is going to accumulate and then they'll inherit the best batch of assets, which are the Roth assets or the money that's already been taxed and they'll get the house. Okay. Judy wants to know, is it smart to have multiple brokerage accounts as buckets? Remember the whole bucket thing? I think that's still a thing. For instance, one for vacation, one for a future down payment on a vacation home, or just one. Would compounding come into play if I had multiple? I like the bucket strategy, but not at the cost of profit. Love the pod. Hey, Judy, don't worry about it. Whatever you like. I'm fine. You want separate accounts and you can manage it, fine. The only reason we tell people to consolidate is that it's easier to manage, but if you don't worry about managing it, then fine. Right, Mark, you feel good with that? What, buckets?

Speaker 3:
[10:36] It's whatever works for you. The compound is not going to matter either way.

Speaker 1:
[10:39] You'll still get the benefit. Susan is 65. She's a widow. She has about 1.7 million bucks. It's cash, 401k raw fire rate, no debt, house is paid for. How much can I withdraw a year? Just the typical 4 percent. I live in Illinois. I mean, you could start at 4 percent, but I mean, I always think the withdrawal rate, it's a screwy thing because it has so much to do with everything going on in your financial life. So yeah, three and a half, four percent is probably fine. Love to know what else is going on, what's going on in terms of your income, what else do you plan to do? I don't know, is there a pension? Is there anything else go? But yeah, three and a half, four. Some people do four and a half percent, Mark. I think it depends on what's going on in the market that given year as well.

Speaker 3:
[11:27] You got to be able to adjust.

Speaker 1:
[11:29] A lot of people like to do this thing where they say, oh, you know, in a bad year, I'll just take less money and then I could take more in a good year. I find that to be a little bit, I don't know, I feel like the emotions will get into your head about that, because once it's a bad year, you're going to be like, but I really want to live the way I was living before. That's why people use one number. But you know, a lot of discipline. It does. And I don't know, people are not long on discipline in general. Lynn wants to know, do Roth conversions always make sense? I'm a high income earner, 95% of my assets are in pre-tax retirement accounts. I'm 66, I'm still working. Have I missed the boat on Roths? Does it matter? May not matter, but I mean, I'd need to know more. No, Roth conversions don't always make sense. But Lynn, if you've been a high earner, here's a question for you. Let's just pretend that you like, let's push forward the retirement clock. And now you're like, okay, I'm retired. And I don't know how much you have. Like, let's say you've been a big earner, and now you're 72 years old, right? And you have to start taking, or 75 years old rather, you have to start taking money out. Let's just pretend, I don't know, if it's all in pre-tax, how much do we want to give her in terms of a retirement saving? She's a high earner in a high tax bracket. What do you think? Let's say three. All right. Let's say three million. Okay. So let's say she's got three million now. She's got a little bit more. Let's just pretend she'll have in nine years, let's say she'll have four million in nine years. Okay. That's when she has to start taking money out. The first required minimum distribution will be $160,000. Okay. So here's the problem. That sounds no big deal. Maybe you're making way more than that now. Maybe you're making four or five, six hundred thousand. So you say, oh, that's not a problem. But the problem continues to compound. So it's not necessarily that you have to make the choice about a Roth conversion, but maybe you would make a choice about getting that money out of the account in a more expeditious way. So maybe what you would say is, well, you know what I'm going to do is when I'm 70 years old or 70 and a half, I'm going to do a qualified charitable distribution, and I'm going to start socking money away and giving that to charity. Or maybe I'll just, when I retire in a couple of years, I'll start pulling money out slowly but surely. But maybe if you stopped working, again, I don't know your tax bracket, but let's say you're making five, six hundred thousand dollars and you're single, you're in the 35 percent bracket, you stop working and now all of a sudden you're in the 24 percent. So maybe we would tell you to start taking more money out of the account quickly to get that money out to reduce your future required minimum distribution. But we have to know more about you. But the answer to your question, do Roth conversions always make sense? No, they don't always make sense. There are always other things going on. All right, that's it. That is the program. Thanks so much for sending us your questions. If you've got one, just go to the website, jillonmoney.com. That's jillonmoney.com. In the upper right-hand corner, please click the Contact Us button, write us a note. If you would like to join us live, check the box. Mark will do everything else. Don't forget to check out all the cool stuff that lives on the website. It's all there for you. You can subscribe to us on the Audacy app or wherever you find your favorite podcast. Please leave us a rating and review wherever you listen. Lift someone up, change your work, change your wealth, change your life. Thank you for listening. We'll talk to you tomorrow.

Speaker 2:
[15:14] You're listening to this podcast, so I know you've got a curious mind. Here's a helpful fact you might not know yet. Drivers who switch and save with Progressive save over $900 on average. Pop over to progressive.com, answer some questions, and you'll get a quick quote with discounts that are easy to come by. In fact, 99% of their auto customers earn at least one discount. Visit progressive.com and see if you can enjoy a little cash back. Progressive Casualty Insurance Company and Affiliates, national average 12-month savings of $946 by new customers surveyed who saved with Progressive between June 2024 and May 2025. Potential savings will vary.

Speaker 3:
[15:50] Hi, my name is Lloyd Lockridge, and I'm the host of a new podcast from Audacy called Family Lore. In this podcast, I'm going to have people on to tell unusual and sometimes far-fetched stories about their families.

Speaker 1:
[16:02] I've heard my whole life that she invented the margarita.

Speaker 3:
[16:04] And then we're going to investigate those stories and find out how much of it is true.

Speaker 1:
[16:08] He gets a patent one month before the Wright brothers. Oh my God.

Speaker 3:
[16:12] Please follow and listen to Family Lore, an Odyssey podcast available now on Apple Podcasts, Spotify or wherever you get your shows.