transcript

Speaker 1:
[00:00] Spring always flips a switch for me. I love cleaning out closets, reorganizing my space. It makes me want to spread that over to my financial life. And you know, I love a clean and tidy financial life. That's where Monarch can be a game changer. Let Monarch do your financial spring cleaning for you. One dashboard that gets your entire financial life organized. No more clutter, no more mess, no more scattered logins, just accounts, investments, property, and more, all in one place. And you can get your first year of Monarch for half off, just $50 with promo code Jill on Money. And what's cool about Monarch is you can see your cash flow laid out. You might be surprised just how much of your income is quietly seeping out towards random spending. Monarch makes it obvious, and you'll likely adjust your spending because of it. And there's a great weekly AI recap, which flags spikes before they become habits. That's huge. Monarch isn't just tracking. It helps you plan ahead, set goals, and actually understand your money with AI that's tailored to you. Use code Jill on Money at monarch.com to get your first year half off at just $50. 50% off your first year at monarch.com with code Jill on Money. Ever feel like you need one app for sales, another for inventory, another for accounting, and the list never ends. Managing a business shouldn't feel like a full-time job just to keep your software in check. That's why Odoo exists. Odoo is the only business software you'll ever need. It's an all-in-one, fully integrated platform that handles everything. CRM, accounting, inventory, e-commerce, HR, and more. No more app overload, no more juggling logins. Everything works together seamlessly, so your team can focus on what really matters, growing your business and serving your customers. Beyond simplifying your workflow, Odoo also saves you money. Instead of paying for multiple expensive platforms, you get one system for a fraction of the cost. And whether you're just starting out or managing a large company, Odoo scales with you. It's easy to use and fully customizable. It streamlines every process, giving you more time and freedom to focus on the parts of your business that matter most. Thousands of businesses have already made the switch. Why not you try Odoo for free at odoo.com? That's odoo.com. Welcome to the Jill on Money show. It's Friday, April 24th, and we are here trying to help you make better financial decisions. Sometimes it's just less bad. Sometimes we're just there as your coach or your mentor, like your feel-good cheerleader. Sometimes Mark will just call me a dream crusher when I don't want to make something happen for you. No, I always want to make something happen, but sometimes we're dream makers. Sometimes we're dream crushers. We just try to give you straight talking, financial guidance, understanding that much of your financial life is also emotional. And I don't think that's a bad thing. That is called being a human being. We are not all AI yet, AI-driven robots or bots that can make decisions in a vacuum, and we have feelings. And so if you have feelings and it's messing you up with your financial stuff, we get it. If you have no feelings, but you're scared that you might have some, or you've got a spouse or a partner who does, get in touch with us. Just go to our website, jillonmoney.com, click the Contact Us button, write us a note. If you'd like to come on the air, click that box and Mark will absolutely take care of everything else. You check the box, Mark gets you on the air. It's so terrific. Hey, while you're on our website, check out our subscription service. It's called Jill On Money Live. That is where you have access to quarterly live webinars. The back catalog of those webinars, bonus audio and video content, it's all going to be 45 bucks for the next 12 months. And our next webinar will be on Wednesday, June 17th with Social Security expert, queen of Social Security, you might call her, Heather Schreiber. But you can only join us live if you are part of that subscription service. So check that out. Okay. Today, we are talking to Linda who joins us from Illinois. Hi, Linda. What's going on?

Speaker 2:
[04:32] Hi. Thanks for letting me join today. I love your podcast.

Speaker 1:
[04:36] Of course.

Speaker 2:
[04:37] So I wanted to reach out because I just recently was laid off from my job. It wasn't a total surprise, but I had worked there for 30 years.

Speaker 1:
[04:48] Wow. Oh my God. Okay. But you know what? Even if it's not a surprise, even like I got to tell you something, I'm in an organization right now where there's been multiple rounds of layoffs. And I promise you that if my name were on one of those lists in these various times, I would have not been surprised, but I still would have been like kind of gut sucker punch. So I'm sorry that happened to you. So 30 years. Wow. How old are you?

Speaker 2:
[05:15] I'm 59.

Speaker 1:
[05:17] Married?

Speaker 2:
[05:18] Yes. My husband's 62.

Speaker 1:
[05:20] Is he working still?

Speaker 2:
[05:22] He works just part time a couple of days a week.

Speaker 1:
[05:25] Okay. All right. So are you still in the morning mode or are you in activity mode? What's happening for you?

Speaker 2:
[05:34] I'm in a detox, so work detox.

Speaker 1:
[05:37] I love that.

Speaker 2:
[05:39] Just trying to get sleep again and chill out. I definitely have no desire to go back to work. Certainly, I'm ready to retire my career. Kind of let that be. But down the road, maybe in a year or two, maybe I would consider part-time. But for right now, I'm definitely in that mode of time to just focus on me, you know, get my life all strained out from the health and fitness and chilling perspective.

Speaker 1:
[06:09] Good for you. It's a lot. I have to say, all of my friends who have retired, whether it's their choice or not, have said that that detox period is vital. That like, just to get your, it's like getting yourself back. And it's fascinating to see. It really is that like, I can't wait to figure that out. Mark won't let me retire. So I'm not gonna need detox from this. It'll be everything else. So have you guys spent a bunch of money in the past? And are you nervous about that? Have you saved money? Like, how are you feeling?

Speaker 2:
[06:42] I feel, I mean, we have good savings. This was, I would say, probably a couple years earlier than when we had expected. We expected to retire maybe when I was closer to 60 to 62. So it's a little bit earlier, but we do have money saved. We spend about, I've been tracking all of our spending, and it's between 12,000 to 14,000 a month. That's a little bit, it's generous. I can always round up because I want lots of buffers. And it does include some traveling because we do traveling now. And so it does have about 20,000 a year in travel. Okay.

Speaker 1:
[07:22] Now, did you get a big package out or was it like, here's the door, good luck?

Speaker 2:
[07:29] I did get a severance. It's a year of salary. So that's 300,000. Okay.

Speaker 1:
[07:37] And how is that? Is that doled out monthly or is that a lump sum that you got?

Speaker 2:
[07:41] It'll be a lump sum. So right now I'm still technically on the books. There's like a non-working period. And then, so I'll get that paid out in June and it'll be one big lump sum. So I'm sure we'll have to owe some taxes on that.

Speaker 1:
[07:57] Right. Did you have a 401K at work?

Speaker 2:
[08:01] I did. So I have about a million eight in a 401K.

Speaker 1:
[08:06] That's great.

Speaker 2:
[08:07] And then between, I also had another IRA and my husband did two, does two and so that's about 350,000 total for those two.

Speaker 1:
[08:17] Okay. Traditional.

Speaker 2:
[08:20] Got it.

Speaker 1:
[08:20] What else?

Speaker 2:
[08:22] I have a small Roth of 10,000 and then health care savings account about 55,000.

Speaker 1:
[08:32] Okay. So right now when you are severed, what happens for your health insurance? Will you go on COBRA?

Speaker 2:
[08:42] We will go on COBRA for sure for the rest of the year because we've had so much paid in already for deductions and stuff. But then after the end of the year, I'll evaluate, will we go on ACA, or I still have the option to use the retirement through my company. So I still have all my retirement benefits. So they do have health care retirement coverage, but the prices they initially gave me is they're pretty much similar to what COBRA would be. So it's pretty expensive. It's about $2,000 a month for both of us. And then once my husband turned 65, it'd be about $1,000 a month.

Speaker 1:
[09:24] Okay. So 1.8 in the traditional 401k, 350 in traditional IRAs between the two of you, small Roth, HSA. Are you entitled to a pension or not?

Speaker 2:
[09:36] Yeah, so I do have a pension, and right now the lump sum benefit is $150,000.

Speaker 1:
[09:42] Do you have a bunch of choices about annuitizing the pension or is it only a lump sum? Is it a cash balance plan that's sort of shut down?

Speaker 2:
[09:51] No, it has the whole suite of choices. It's just the payout when I've looked at it, so it's only about $1,000 a month, and that's one that has a joint so that it would cover my husband if something happened to me. So just based upon the small amount, I always figured we just take the lump sum.

Speaker 1:
[10:10] Fine. How about other money? How are we generating all this $14,000 a month of travel and excitement and fun and detox? What other money have you guys saved up?

Speaker 2:
[10:21] So we have about $260,000 right now in a brokerage.

Speaker 1:
[10:26] Okay, great.

Speaker 2:
[10:27] We'll be getting that severance money, obviously. And then we have about $185,000 in high-yield savings and CDs, just socked away.

Speaker 1:
[10:40] I love it. Perfect. That gives you a little peace of mind, right?

Speaker 2:
[10:43] Yeah, yes. Yeah, I took my bonus this year and put it all into the savings, just anticipating in case something happens. Okay.

Speaker 1:
[10:53] What about your house? You own your home?

Speaker 2:
[10:56] We do. We own our home. And so it's worth about $600,000 to $650,000 right now.

Speaker 1:
[11:03] Do you think you'd stick around there? Is that your intention?

Speaker 2:
[11:06] Yeah, until we figure out what our kids are doing, so we have two grown daughters that are all out on their own. And so like we plan to stay here for say, certainly the next five to ten years.

Speaker 1:
[11:18] Okay.

Speaker 2:
[11:19] My father is still alive. My mother-in-law is still alive and they're nearby, so we want to be around for them. But who knows? Who knows in seven, ten years, who knows where we'll be.

Speaker 1:
[11:31] Any need to take care of them besides, you know, sort of the being close by, financial obligation to them?

Speaker 2:
[11:38] No, they have money set aside. I expect we may get a little bit, you know, but nothing that we're banking on and stuff, but nothing that we have to provide for them.

Speaker 1:
[11:49] So they're okay financially, is the most important thing. Okay, and the kids are okay also. They're on their own.

Speaker 2:
[11:55] Yes, they're launched and on their own.

Speaker 1:
[11:57] What is the key to that, Ms. Linda? Was that good luck or was that, how did we get them launched when so many before them have come and said to me, oh no, we are not, they're not fully launched?

Speaker 2:
[12:11] I mean, we supported them through their college. You know, we paid for their college and kind of then said, you know, that's it. You know, there's my, one of my daughters has had, you know, job changes. And so we had to help her out a month or two with that, but they're pretty independent. They take care of their money and so far so good. I will admit they're still on our phone.

Speaker 1:
[12:36] This is the funniest thing. I cannot tell you the number of people who are like sheepishly tell me, friends of mine whose kids are like have good jobs, they're still on my phone plan. I'm like, I don't understand. That seems like the last, that is it. That's the final chord that must be cut. Okay. So Linda, you said your husband works part time. How much does he bring in?

Speaker 2:
[12:57] About 20 to 25,000 a year.

Speaker 1:
[13:00] Okay. And you don't want to be held to having to do that. Like, you know, he's doing his thing, whatever. It's like he's working for his health insurance. What is it that you think is going to be the most likely path? Like, maybe you will, maybe you won't, but I don't want to have to. So we have to figure out if all the assets you have can generate the money you need, this 12 to 14 grand a month, right? And tell us about the social security strategy that you, it sounds like a couple of the parents are older, so you've got some longevity?

Speaker 2:
[13:35] Yeah, I mean, both of our parents are, one parent died younger, and then there are parents that are still alive now are like 85.

Speaker 1:
[13:45] Okay. So what's your game plan, 67 or 70 for social security for you?

Speaker 2:
[13:51] I was thinking 67.

Speaker 1:
[13:53] Okay, what's the amount at 67?

Speaker 2:
[13:56] 4,050.

Speaker 1:
[13:57] Okay, and your hubby?

Speaker 2:
[14:00] Um, we were just thinking maybe 65. I mean, there's no magical thing.

Speaker 1:
[14:05] Give me 67 just for the heck of it. Do you know his?

Speaker 2:
[14:08] His is a 1,600. Okay.

Speaker 1:
[14:11] All right. So, you know, in some group of years, five, seven years, we're going to have $5,600 that's coming in. So that's, you know, some chunk of your social security. Do you think it's fair to say that by the time 67 rolls around, your husband's going to be on with the 20 to 25 grand a year?

Speaker 2:
[14:31] Yeah.

Speaker 1:
[14:31] Okay.

Speaker 2:
[14:32] Yeah. We're thinking, yeah, until, or actually maybe 68 till I turn 65.

Speaker 1:
[14:37] Okay, fine. And so then what we need to figure out is, do you have the money that would allow you to just never worry ever again? Like this happened a few years before you had planned on it. But, you know, still, you do have a bunch of money that has been saved. You're going to have, let's say that this lump sum 300 probably turns into, I don't know, let's just call it 200 after you pay your taxes. So you'll have 460 in your brokerage, and you've got your emergency reserve, and then you've got this like 2.4 ish in traditional assets, right? Oh, and we'll have, I'm sorry, we'll have the pension also, the lump sum pension five. So, right, that's, yeah, okay. So that is five. So yeah, 2.3 ish in your pre-tax, and the kids are on their own and your parents are okay. So Mark, 2.3 million. Let's, what would happen if, you know, let's say this year is fine, right? This year, you're going to have plenty of money. You're going to live through, you're going to live on some of the money you have in brokerage, but you're going to be fine, right? Because this will come, you'll, we'll take 100,000 outside of this and make sure you can live on that. And then there'll be the 300. Then the question is, what do we do from 60 to 67, right? And from 60 to 67, I know you asked about converting to a Roth. I think you might be better off just pulling money out of your retirement account to live on it and just do that a little bit at a time so that you can support yourselves. Now, the question is, will you run out of money or not? Mark, you got your magic calculator going? Yeah, it's tough. It's close. People are going to hear, oh, they got millions, they're fine. $14,000 a month is what gives me pause. If you told me it was $8,000 or $9,000 a month, I'd say no problem, you guys are good.

Speaker 3:
[16:35] But $14,000, it's a big number.

Speaker 1:
[16:37] Well, also because the 2.3 hasn't been taxed yet. Right. Okay, so even if we said, let's say that by the time you get there, you're going to have $2 million, and then you could pull meaning you'll have $2 million after tax I'm looking at, and we're going to pull money out. I think that there is a case to be made that even if you could, Linda, just do a similar thing to your husband, like two grand a month bringing in, I think that would be helpful because I think from 60 to 67 is where we're mostly concerned, right, that you would have, you have a little bit more income, and if you could have 50 of your 12 or 14 grand set, that would be really helpful, right? And then from there, like we're going to have to like kind of spread this out because you could live for 30 or 40 more years. You really could. So I think what it looks like to me is that it's kind of close. I would feel better if you know, again, not in this minute, but in a year from now, if you had an ability to just do a little something, two, three grand a month. Do you think that that sounds horrendous right this second?

Speaker 2:
[17:54] No, that's fine. No, that's yeah.

Speaker 1:
[17:57] I mean, like it could even be honestly, if you figured out how to say like, hey, I'm going to work three and a half days a week doing something, and you can do that and get some health insurance. That's I mean, the health insurance is a bear for you guys. It just is. But I think you're going to have to, you guys are going to have to come up with, you know, at least a third of your need, that 12 to 14 grand a month between the two of you in your part-time income that you can't afford to convert right now, because the conversion will eat into your other money. So it would, I think it would make sense to, yes, pull a little bit of money out of your traditional assets, especially while you're not making as much money. And, you know, I might even think about what would happen if you waited till age 70, depending on how things are going. But we'll have a lot of time to figure that out. And if you land in a place where you're like, oh my God, Jill, I'm making, you know, $55,000 part-time and I get health insurance, things are going to look better. It's just a tiny bit close, a tiny bit close. And I see why the three more years would have really made a difference. But we, you know, again, you didn't ask for this. You know, this happened to you. What do you, how are you hearing this?

Speaker 2:
[19:15] I think that's what I maybe expected you guys to tell me.

Speaker 1:
[19:19] Yeah.

Speaker 2:
[19:20] Though I'd love to be one of those that's like, oh my gosh, you've got it made. But I thought too, it's a little bit close. So there may be a period of time that we both do need to do work the part-time.

Speaker 1:
[19:31] Yeah.

Speaker 2:
[19:31] Especially like you said, like it's the insurance thing and I haven't done research to see like if there's anything else. I'm just kind of staying very conservative on my assumptions and keeping buffers and stuff. But yeah, I thought that, okay, we'll just right now, which is like, I'm so done with working that I just need to like, kind of wait it out a year and stuff. And then I think I'll have a different perspective on, I'm doing a part-time job.

Speaker 1:
[19:59] I agree. And I think it is good, you have earned the right to take your gap year, as the kids would call it, and to kind of like recoup, like just be like, okay, let me get myself back. I think that that's the part when you've worked in some place and then you worked in one company for 30 years. It's pretty remarkable. So it seems to me that this is a well-deserved break. Let's kind of see where you land after, keep your little network alive. I'm sure you've got one. And you know, it's funny, we were just talking to a guy, same exact thing happened. You know, he got he got laid off a year and a half ago. He started a little consulting practice. He's not going to go back to making the big money he did make. But he's like, hey, you know what? I'm doing okay. I'm making it do. I'm covering my expenses. And he's like, I can do this longer than I could have done my other job. And then maybe that's what might emerge for you. Maybe, you know, and if it's all like freaking you out too much, I know we're here for you, so we're happy to talk to you again, okay?

Speaker 2:
[21:00] Awesome. Thank you so much.

Speaker 1:
[21:01] I'm sorry about that you had to work for a bad place. And maybe it wasn't so bad. But anyway, I'm sorry for your rotten luck. And, you know, when everyone listening, it's funny when we talk to people like labor economist Teresa Gillarducci, and she'll talk about this idea that you have an idea about when you want to retire. You don't know what's going to happen in the future. You know, Linda thought she was going to work at this place till she was 62, and all of a sudden, she's 59 and something changes. And all of us have game plans. We think we know what we're going to do, but part of the process is reacting to what has happened to you and trying to lay out different opportunities for you. So if that's you and you're kind of like have an inkling that things could change in your workplace and you want some help developing your plan B, get in touch with us. Go to jillonmoney.com, click the contact us button, write us a note. If you like to come on the air live, check the box. Mark will do everything else. And remember that you can subscribe to us on the Audacy app or wherever you find your favorite podcasts. It is Friday. Let's do some business. Our music is composed by Joel Goodman. Mark Tolarizio is our executive producer and king of all things Web. And we are distributed by the fine folks at Audacy. Try to lift someone up. Change your work, change your wealth, change your life. Thanks for listening. We'll talk to you on Monday.

Speaker 3:
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Speaker 4:
[22:46] 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:
[22:58] I've heard my whole life that she invented the margarita.

Speaker 4:
[23:00] And then, we're going to investigate those stories and find out how much of it is true.

Speaker 1:
[23:04] He gets a patent one month before the Wright brothers. Oh my God!

Speaker 4:
[23:08] Please follow and listen to Family Lore, an Audacy podcast available now on Apple Podcasts, Spotify, or wherever you get your shows.