Too Much in a Single Stock?
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Welcome to the drill on money show its friday, november fifteen, and we are here trying to help you make Better, less bad, more considered financial decisions. If something's going on in your life, all you need to do is go to our website, gill on money, click to contact us, but then let us know if you would like to come on the area by checking the box market, could do everything else while you're on the website.

Don't forget to sign up for the free weekly newsletter and also check out our youtube show. It's called jill on money power word by the compound. Today we're going to answer some emails.

This first one is from dasha, whose subject is, is eight hundred thousand dollars in a single company? Stopped too much answer? yes. Okay, let's hear about this. Dash says my husband worked for a company for over twenty five years and has accumulated almost eight hundred thousand dollars in a profit sharing trust.

The company has just recently introduced the ability for employees to diversify, and we are discussing the idea of putting half of that money into small and large cap equity index funds. Your thought, given the fact that my husband would like to retire in four to five years? God, i'm so into this idea and and i'm not sure why do to stop four hundred, you're gonna a have to pay taxes.

That's gonna be painful. I understand that. However, i'd love for you to make sure that you get this money diversified. You are only four or five years away if the words I don't know how much you guys make together, if the worst cases that you're paying twenty three point eight percent on the gains of this so bit IT is so scary to me to have all of that money in one single stock.

And I also love to hear more about udi are in terms of like, well, how much money do you make? What do you need? What other money have you saved? This is all part of the process.

So get back in touch with us. But yeah, diversification. Thank you very much. I would love that. I really would. This next question is from Chris, who writes stay the course with pension or go private for big box. I like that question.

So this is a dilema that Chris has and says, I have twenty years into a pension plan and making good money about one hundred eighty thousand dollars a year. But the idea of going private and making great money, two hundred and fifty to three hundred thousand dollars year and for going the years of service in the pension is out there. Well, Chris, this might be tantalizing, but I don't know if it's gna work.

I really would love to know what is the pension benefit right now and um what does that mean to do ten more years, usually most pensions kind of max out at thirty years and maybe that extra money that you're making or you would be making no one hundred or one hundred twenty thousand dollars a year that's taxable and saving the amount of money that the pension could crew is really hard. I'm GTA guess my god says, stick IT out unless you are offered something with for a lot more money. So again, this is one of those questions, like what am I leaving on the table? But i'm pretty sure this is gonna a pension first kind of question.

So unless i'm missing something, I bet you have to make a lot more money unless it's like completely miserable areas. But I doubt because he's been there for twenty years, if you are miserable, that's different. But if you're not, I love that pension.

okay. And by the way, this message is for mark. So maybe you like to stay on the mike mark because IT says, hi mark.

Hi mark. I love the show. My wife and I are three years away from retirement. We are public employees with one hundred thousand dollars of pension each very grateful.

Not only that, mark, they have saved one point seven million dollars in mostly traditional four or three days. There is no significant debt, no mortgage on the home, and that estimated worth of that home, one point two million dollars. We live in a high cost of living area, college plus age kids.

However, however, we may need to still help them trying to just get established. We'd love to get your take on possible rough conversions. Does IT make sense for us because we're always going to be in a high income bracket due to those two wonderful pensions.

Also, should we take survivor options in the pensions to promote most family legacy money, we could afford to reduce pension if IT made more financial sense to do so. Also, thoughts on a snowbird home buying in the south used to be reasonable home Prices, ensuring its set of gotten crazy. Would love to chat with you about just renting each year instead of buying a second home.

Yeah, i'd love that idea. By the way, can we stay ninety percent invested in stocks due to that steady pension income? How comfortable can we feel in spending our retirement assets when we have to pay taxes on that? We've saved our whole life.

Maybe it's now it's time to fly first class, mark. You know how I feel about that? They've got basically seven point seven million dollars.

If you think about a that way, really, that's what they are. I mean, because you're considering the present value of the pension, right? So this is something that I think is interesting for you guys. Um I don't know exactly how old you are, but what i'm not sure about is how much money you have saved outside of retirement. So if you were to do a conversion, have to have the money to pay the taxes outside of retirement.

And maybe you do, maybe you don't, but i'd be much more inclined to just pull the money out a little bit at a time and maybe that's how you pay for the reduce pension benefit. Mark, I know you always like to take a little bit of a haircut to have a survivor benefit. So I presume that's what you think they should do, right? yes.

I mean, this case is a little different just because they both have a hundred thousand, I don't know. I'd had to know what the haircut is. That's the thing.

We had to know how much you give up. But what I would do agree with you about is renting. I would not buy something else.

I really wouldn't. And I think that um if you want to figure out how you could afford, you say you can afford to reduce pension. I think that mostly i'd like a reduced pension just to give a nice cash low going forward.

And that would be kind of a piece of mine decision. But I think, uh, a home, a second home in the self H I wouldn't do that. I definitely wouldn't do IT get back in touch to us if we are missing something on the pension.

Um okay, this is from death um which by the way, I love because this is like a good on the heels of the previous question. Beth subject need to spend my wealth with an upside upside down smiley face and cool glasses okay, check this out. Death rights on seventy one.

I retired when I fifty five. I am happily divorce with no kids, and I would like to die broke. The only debt I have is at least car, which is ridiculous, since I generally return the car with less than fifteen thousand miles.

Ninety eight percent of my money is in vanguard, great mutual funds, exchange draft funds and money markets. I have two million dogs. Sorry, out to laugh at this.

I read ahead, and that's why. Gigged a little bit. Guy, sorry.

I two million dollars in a road account, a million dollars in nine, eight, seven, two thousand dollars in a rough. I ve always done my own investing. I do my own taxes.

I receive thirty five hundred dollars from social security that also includes erma taken out. And I also have a seventeen hundred dollar a month pension. I spent sixty five hundred dollars a month.

I've been a compulsive saver, and I would like to spend more money. I have travelled in my earlier years, and hopefully I will never get on a plane again. My cow is only worth two hundred thousand dollars, is no mortgage.

My friends spend money on travellin restaurants. Eight healthy food is my medicine. I rarely to the doctors, i've been eating up more, but not enough to delete my savings.

I was a snowbird for ten years. However, I sold my place last year and i'm on the fence regarding selling my cop and renting and buying something else. Please help me to quote, learn how to spend more money. Thanks that.

You know what? I'm ugly to be able to do that this is who you are. I get IT. But I will say, since you are our seventy one and you do have a million dollars in an ira, maybe what you should do is, if you really want to start spending your money, why don't we think about a qualified charities able distribution from that iron? You can send a hundred grand year, I think it's one hundred five now, a to a charity, public charity, directly from your I R A account.

Wouldn't that be fun? Maybe I can get you to spend money if it's for a cause that you love, otherwise I don't know. Like you, you don't spend money.

I don't feel like you're gonna do that going forward. Go do something fun or give a bunch of money away. That's fun. I love that. All right, now, here is one more question.

This is from Tracy, who writes, I will be inherited a large sum of money from an irrevocable life insurance trust in the near future. I want to be prepared to handle this money when the time comes. IT will be about six hundred thousand dollars.

okay? My husband is sixty seven. I am sixty four. We are retired. We are currently budgeting on our pensions and my husband social security. And then I will add my social security next year, netting nine thousand seven hundred fifty dollars a 嗯， that's pretty good. Okay, they have, you're ready for this.

One point nine million dollars in a four or one k in a company for a one kate, a half a million dollars in a roll over. Another two hundred thousand dollars in a roll over. Ira, that's in saving.

So the five hundred grand is in broken age, two hundred savings in also in an iron right, another two hundred twenty thousand in some saving, some designated for home stuff, a five hundred eighty thousand dollar house its paid off, another one hundred eighty three thousand dollars in a broker account, forty grand, and cds and saving bonds. Okay, so here we go. They're going to get six hundred thousand dollars.

Here are the things that they are considering. I initially put IT into a savings account. No, I don't love that idea.

Split into some different credit unions to you, make sure your underneath the limit. I'd like to consider investing some on thinking of putting sum into a second broker account. This is so weird.

okay. Let me just be clear. There's money that cheese inherited and there's money that's coming in. There seems to be some question about taxes.

So what I would do is that you can put all these accounts separately, figure out the tax situation. And as soon as that tax situation is figured out where you're having, you know, so that you don't co mingle assets, fine. But what I really like you to do is get all this money invested. There is absolutely no reason that this money should be sitting in the back and you've got plenty of money.

You doesn't you didn't tell me how much money you're spending that know if you're living on, you know, on your social security, on your husband social security and your pension now and you're going to get even more money from your social security and this money let's get invested know what I might do though i'll tell you what. I might look at that company for a one k and think about starting to convert some of that to a rough. So I need to know a little bit more about you guys.

But the only reason I would keep that money in cash right now is if you're planning to slowly convert some of this money and maybe not even so slowly, I might get that done. I love to chat with you more. I wonder if you're a little bit nervous about this tax situation and maybe you shouldn't be.

Maybe we could look at the numbers and we could look at what you inherit IT and we can make a determination as to whether or not you will have a big tax liability lean on professionals during these times, you know, look at what you have, but also due projection to see what you might need to keep set aside for tax purposes. And you know, again, I just love the idea of converting your one point nine million dollars. Maybe it's not all at once and not telling you should do that, but maybe it's gonna a couple of hundred thousand dollars a year.

Maybe it's going to be a one hundred fifty thousand, whatever, maybe would keep you in twenty four percent tax bracket, which sounds like kind of where you are gonna land for all intense purposes. I'd love to get that money out. I'd love to pay the taxes to do right now and not roll the days on the future.

So give us a holler if you need more assistance. And if anyone out there is listening, you've got a big chunk of money coming in a big life changing event like retirement. Maybe you're thinking about changing careers.

Maybe you want to leave that pension based job. Don't do IT keep the pension, give us a holic good a jill on money document. Click the contact us, but and write us a note.

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