Can I Retire in 6-10 Months?
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Welcome to the drill on money show. It's friday, november twenty second, and we are here answering your financial questions. If you have one, just go to our website, jill, on money dot com.

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We are talking to one of our listeners ers. Her name is called from the bay area high. Welcome to the program.

Thank you so much, and so happy to hear talk you guys today.

excEllent. What can we do for you?

Well, I am sixty years old, almost sixty one, and I am looking to retire hopefully with in the next .

six to ten months OK.

I've been in a pretty a high intense job for several almost thirty eight years now in the same wow, yeah so i'm i'm the're changing the rules, playing the game. And so i'm kind of ready to bow out Gracefully.

Okay, let's see if you can. So you're almost sixty one. Are you married or single divorce? What's going on, mary? okay. How will the spouse? S spouse .

is sixty three.

What spouse is situation on the on the retirement front? yeah. Your name with you .

are not so totally. He wants me out a year ago.

but does he wanted be out of his own job?

Oh, no. He's going to be working for at least the other five years.

Oh, so you that's great because you'll get health insurance. yes. Okay, great. How much does he make?

He makes a hundred and thirty thousand years.

And how much are you earning right now?

I make anywhere from two hundred and fifty to three hundred plus. OK.

great. That's awesome. Now do you have grown kids that are settled .

and taken care of two step children who are launched? And son, our son is a nineteen one on twenty and in college .

right now.

So we we have two and a half more years of college.

Okay, great. So since he, we got college and that's kind of set, you have the money set aside for college already.

I do for the most part. You, for the most part, I am you out of, out of my money, but out of my income. yeah.

Okay, in this thirty eight year career, you've squirl away a lot of money. I'm just guessing, because you make them a lot of money. So what tell us about the amount that you have saved so far?

Well, let me tell you, the one of money did not really start coming in since about the last fifteen years.

okay. So like for first. So you had a lot. So let's just say that for two thirds in your career, you are making a lot less now you're making a lot more OK. So what do we got?

We i've got a square. I am a squirl and I keep IT many different places. So I have um like cash accounts and I think i'm a little heavy on cash.

And that's one of the reason why I wanted to I always want to talk to you Better in account. I have ninety seven thousand and mary, I have one hundred and one fidelity and S P X, X. I have one hundred and three and another hundred and seventy four thousand. And and trial.

okay. So one, two, three, four, like a half a million dollars .

in cash back.

pretty good. H, okay, let's see what else? See if we got right?

Let's go from there. Let's go from cash. What's your next category? four? O N K, or i've got a little .

other piddly things. There are little veteran eleven thousand privileges set that I bought when I think that was twenty for one hundred box and it's twenty two, twenty two thousand. Now I have eyes, bond for twenty five, twenty nine for my son at only twenty six thousand.

And then I go into, like the stocks. Now, this is where I was with fidelity back or not. Fidelity, excuse me, fish in the day. yeah. And they put me in eighty three different stocks.

Stomach.

yes, in three different accounts, pretty much the same stocks, but eighty three different ones. And then when I moved to fidelity, I moved them in kind, and I haven't touched them sense.

Are these broke all brokerage accounts? Another, as these are all taxable accounts. Eighty three.

they drew about to tell me infidelity. Two or iras.

and one is IT. Okay, what is in the fidelity? Broken age? How much? Not the retirement accounts, just the taxable account.

Let's see. Four hundred four, five, six, seven, eight, nine, about million.

Okay, a million box. Now, what's in the retirement accounts?

Oh, i'm sorry. I take that back.

Sorry, take that back.

Take IT back. Socks, I have four hundred thousand. Iras, I have six hundred thousand.

okay? And that's fidelity yourself managing, okay. So four hundred in the taxable broke age, whatever this five hundred grand ish.

And you know, a little bit more, a little bit less. Ira, six hundred thousand. What about your current return? Oh, any rough I erased at fidelity now.

okay. Now let's go into your current return account. What's in there?

My husson has about seven hundred and one thousand.

so it's seven hundred, seven thousand. And your husband's retirement account and your retirement .

account one point.

Okay, that's great. We ve got a lot of money that hasn't been tax yet, right? correct. okay. Now what else do you have that .

I should know about nothing.

That's how much is .

the housework. Th probably .

one three, one four. Okay, not moving though. Got that kid thing right.

Yes, for now.

okay. Um no second property, nothing. Okay, great aging parents we need to think about.

嗯， no.

okay, i'm sorry. Alright, how much money guys spend on an annual basis?

I want to say it's anywhere from twelve to fourteen thousand a months.

okay.

but that could .

very down. I'm not going to count on that sorry kid up. okay. And will either you be entitled to a pension?

No, but you will .

both be able to do social security, correct. Do you happen to know your social security um estimate at this point?

I do. And that's one of the other thit questions I have this set time when I retire. I would like to not pull IT until in sixty seven point eleven years old, so I can get around four thousand dollars a month. Okay, my husband will. I was inhaling sixty seven hk at about thirty eight.

Anything, any other like grand desire that we should consider right now.

There's a few grand desires and then there's a few needs like me.

let's do need, let's will do need first. Okay, new roof. How much do we got to pay for that?

Twenty five to thirty thousand.

okay, but you have, like, I have million dollars of cash. What do you thinking about?

bid? Come on. Pay for IT. Just pay for IT OK OK, right? Add a cash .

at a cash, cash at a cash, your cash heavy.

And then just, you know some stuff are around the house that needs to be thick. So total would probably be fifty gram. And then i'd like to do in retirement a family big family vacation to.

yes, you would. Yes, we would. Yes, you would.

So how much more cheats we spend on that family vacation to italy? Where are we going? We're going to fifty. We're taking, i'm saying fifty. I was for sure, at least .

because of the husband has connections of telling connections, we have access to a villa for a reasonable amount.

So I like just i'm going to say fifty with the heck. So out of out of your half a million dollars of cash, lets just say one hundred is gone for the house stuff and the italy trip. Okay, great.

Next, from the time you retire, we have to figure out how we can supplement your husband's income, right? So you said he's going to work for another five years. It's really gonna. Five years is going to be less because I don't trust that often times what will happen is you give your notice you're living large and he's like, that looks nice.

He loves his job.

He does. Let's have keep working. Let's have an keep working. fine.

okay? So he goes five years you get your metic he you can also let him off the hook. S, you get your medicare. So he works for five years.

And we know that you're going to pull some money out of your total savings to come up with that fourteen thousand dollars a month, right? Are you going to be the kind of person, you little girl, that you're gna allow yourself to do this? And what do I mean by that? I mean that you have to set up a system.

If you are going to retire, you have to set up a system so that you feel like you can spend the money that you need, you know, and you need about one hundred seventy grand a year. He makes one hundred and thirty. How much does he put into his retirement account right now? What percentage? Mac maxes.

Yeah, I don't know if I would do that. They're got like two point six million dollars in pretax, no more three point two million in pretax retirement. I don't feel like he should he should put any more money.

And I mean, he came up to his match, but that's IT. I would my number one thing first would be like, okay, we get all of cash flow, that's good, but we still need some money. And we have this time horizon over the next seven to ten years where you guys can you really are going to have to start pulling money idea or retirement actions.

You're going to get slammed, right? Absolutely slammed. So what are the ideas to do this? Well, look, tax rackets are now.

And again, we don't know what's to say for the next five years tax rackets or where they are going to be for the next five years. Right now, you guys are used to being in the top racket of like thirty two percent, maybe twenty four. But mostly you you're paying for most of your tax dollars are in the twenty four percent.

That's a huge two hundred to three hundred eighty four thousand dollar category, right? So that's kind of where you guys are, right? And you might go up a bit in certain years, but say you're twenty four or thirty two percent now.

The only thing is onna happen in when you retire in six months is that you're going to lose that big chunk of money that you get. We're going to have your husband stop contributing to his retirement or just put into up to the match. And then I think you should start pulling money out of your retirement account. Yours, okay, you're one point nine or your I R A, I don't care, which i'm sure you're going to move your four one k into your retired, your I ra you know fidelity community.

Yes.

right? So then you're going to have two point seven million dollars. So now what I think I would do is I would take the money that you were having, you were pulling out in salary.

I may pull out a little bit less, like two hundred thousand to twenty five dish. I'd pulled that out of the account, adding your husband's one thirty on top of that, that keeps you in the twenty four percent bracket. And i'd start pulling money out aggressively out of your retirement accounts, your pretax accounts, that's like golden for you.

You'll just be able able to pull money out, pay the taxes to top reca will be twenty four percent. And you can try to get as much money as you can add of those accounts. I think that's a good game plan.

And I would keep doing that for as long as I possibly could. I may even keep doing that collect until I might push out your social security, claiming how's your health? How's your like longevity in your .

family desent eighty eighties.

okay. I might wait to them seventy even and just pull the retirement money out. Your benefit will go up.

His benefit would go up. It's kind of A A nice it's a nice way. Pull money out and you know IT will IT would work for you from there. Got a really interesting situation that occurs. You're seventy years old.

Let's just wind the clock ahead, right? You have eight ish thousand dollars a month out of your you got like half of the money you need at coming out of your retirement account. You've got the other half that you will pull out of your four when you're pretax dollars.

Remember, we've got to add your husband's money in there also by the time he gets there. So then the question is how much money can we get out of these accounts between the moment you start claiming social security seventy to seventy five, we have to start pulling the money out. And you know, I think we will have to determine at that time.

I think it's still gonna. You're going to pull more money out then you need in order to middle down the accounts. The real question is whether or not you feel comfortable trying to convert instead of just pulling the money out, should you be converting the money into wth assets?

Now, mark, there is a lot of cash here. I get the sense that collect and her husband kindly like havin cash because you don't have a half a million dollars in cash. If you don't like cash, would you soaked up some of that cash by converting?

I mean, they have so much in pretax, I don't know how much of a dent are going to be able to make. Yeah and I think you would might freak them out a little bit. Yeah, I thinks I think so too.

So I wanted to say, yeah, we know you already. So what I think, what I think you should be doing is a couple of things. Use your cash really, if you want, and then we'll use the retirement account, pulled the money out as as as you, you know.

And if all this time you call me back in a few years, you're like, oh my god, our retirement accounts are kicking bot. We have so much money, and there there are other things we can do. You can pulling money out.

You can do qualified charitable distributions when you turn seventy and a half. But I think this should be the general game plan. Now the eighty three different stocks that are in the fidelity, the taxable fidelity broker account, are they still there?

yes.

okay. Is everything at a game?

There's a few losers.

okay. Now so at the very least, what I would do at the end of this year is server losers against the winners. Just clean up as much as can this year. Okay, then you're left with the winners next year and maybe not next year, could be some maybe a year later. But IT may be that we think you should try to start at least putting money into this account and trying to change the location a little bit or maybe it's that you start selling some of the winners as needed if you needed some of the broken age money. But it's such japan in the sector manager, I know.

So i'm a personification, actually told me to sell everything in the iron you do and sell them all and then just buy two, three.

four, maybe four exchange traded funds or um or mutual index mutual. Sure i'm all in on that. Get rid of that.

That's nonsense. Just possible. Yeah so little and come up with a good game plan that you're comfortable with.

And from there you will be is so great, you'll have a much easier structure to manage. I don't know what Fisher investments was thinking with. I wonder if this was all before. Like exchange treat.

And you know what that happens is when you have a big management company having eighty three stocks for them is no biggie because it's just everybody's in the same portfolio, right? So it's a pain in the blood for you. Are you charitable at all, by the way? Yes, yes, okay. This may be another really good idea to have a sense of how much you give away every .

year about no, I don't even have close idea because I i'm pretty bad at that.

Okay, I think so we .

go here's what I think .

you should do with your fidelity person. I think you should explore with them opening what's called the donor advised fund a daf. It's called the fidelity. It's a great plan. Here's what you could do one way that you could start getting rid of some of these winners in the the old the broker account with all those eighty three possession ons you know is you could say, okay um give me a name of something that, no, that made a lot of money NVIDIA.

oh invidia perfect.

okay. So in video I have a position worth, let's just pretend. Five thousand dollars.

What you could do is IT more than that? yes. How much is IT? Let's just do.

Let's do this. This is fun in video. What's the how much is that worth add of your four hundred ground?

Six hundred. I mean sixty thousand.

Okay, great. Do you think you would give away like five gRandy year? Ten grand ear?

Okay, easy. Pz, right? Okay, here's what you're going to do if you want. You could take the entire and video, tell this to the fidel dude.

Say, hey, I want to take my invidia position on and maybe even this is such a good idea for this year. I'm so brilliant. I'm so happy. okay. So for this year, do you guys claim itemized or do you claim the standard deduction?

Standard deduction .

you're gonna claim this year in twenty twenty four. I think you're going to be able to claim itemized because what we're going to do is i'm going to suggest that you take a few of your big winning positions and make a contribution of hundred thousand dollars into a fidelity donor advised fund. There's no tax do when you do IT, but here's why I want you to think about IT.

You're in a high tax bracket right now, right? You can take this money, you can put a hundred grounds and you're going to to get the charitable contribution in twenty, twenty four of a hundred grand. You don't have to give the money away this year.

You can driver IT out. You can do five thousand dollars year for a long time. You can do ten thousand dollars year for the next ten years.

And then you don't have to get nickelled and dime throughout the year. You've got this one place where all the records are kept in the year, where you have a big year like this year. Or maybe you decide if you work with an accountant.

By the way, I need a new one OK you work for.

you find, ask your friends about this. You find an account who can help you with this. There's a great idea, which is you could essentially say, i'm pulling money out of my retirement account so my tax rack is going to be high.

But then i'm gonna some of this t this low basis stock. These appreciated positions the the legacy Fisher investments since now sitting infidelity. And now you can start to widdle that down and use that for your charitable giving.

But you don't have to do IT all in one year in terms of giving me away that you do pick the year when you're a higher tax bracket and you're going to itemize your deduction and you jammed into the donor advice fund and it's there for you to give away over the future years. Now you don't have you can you can not give any money away. We spoken to experts who say you really have to give be giving like five grand a year in that account, but you do that anyway. So it's so awesome and it's a beautiful thing to do with those unrealized big gains like you have within video. So it's a possibility you could just say i'm going to keep in video, I don't care, and then you can move a whole bunch of other things in there, just clean up that account.

right? right? okay. So besides that, that one specific stocks, so I could do some of the other ones that I had, baby, keep a couple of the invidia.

And yeah, you could say like i'm going to say twenty thousand of invidia, twelve thousand of microsoft, this one that you know you can do with .

everyone and I have to do that before the end of the year.

You don't have to. I would because I think you're going to be in a high tax back this year. This is be a peak gear for you guys, right? correct.

So I would do IT this year. Talk to the fidelity, dude and see see what they think. Now, do you guys have your estate documents done?

Yes, but need to be redone. K, because the children are no longer children.

I know I love when people like, well, I guess guardian ships not an issue. I just put the high pressure on my sister. And like, i'm not i'm not a guardian anymore.

I don't want that job. You gotta fix this. I think it's, I think it's great. You've got tons of money and tons of opportunity. I'm so excited, mark. I feel like a very, a very positive today because I ve made people's dreams come true just today.

If you would like to go to italy and you want to get your permission structure in place, permission granted for our friends here on in the bay area, it's gonna fun. Collect, and her hubby are ready to rock and roll. Now, if that's something you're considering get in touch with us.

And you know IT doesn't have to be retirement. IT can be a lot of different things. IT may be just like I wanted take IT a year off.

I need a gap year that I forgot to take twenty five years ago. Give this a holiday to jill and money 点 com， click to contact us, but and write us a note. Let us know if you'd like to come on the air.

Don't forget to check out all the free content that lives on the website. IT is friday, and I would like to do some thank you ah thank you to joe goodman and congratulations and muscle tough on your recent nuptials. Mark to layer have the best executive producer and king of all things web and are fine folks at auto sa.

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