Laid Off at 62, Will We Be Okay?

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1:02Well, many thanks. Good, sir. Here is my discover card. They accept a discover at Renaissance Fairs? Yeah, they do here. Discoverers accept it at the places I love to shop. Get it with the Times. With the Times. You're playing the loot. Yeah, and it sounds pretty good, right? Discoverers accept it at 99% of places that take credit cards nationwide. Based on the February 2025 Nilsen report. Welcome to the Jill on Money Show. It's Thursday, March 26th. And we are here answering your financial questions. Mark, come on the microphone because I'm in a huge, excited, positive mood today as we record this. Do you know why? Well, I do, because you just told me off the air. Okay, but now act surprised when I tell you on the air. Ladies and gentlemen, boys and girls, people of all stripes and shapes. I met one of my favorite rock and rollers at the CBS Mornings green room this morning.

2:07It's not March 26th. It was last week. It was so awesome. I heard Melissa Etheridge was in the house. And so, Mark, you don't know this because the whole studio the way it's configured has changed since you left CBS 100 years ago. But there's a special green room when famous people come in. And then there's the regular one for like the, the Shlubs like us, right? And so she's in her special green room. And I'm kind of peeking over to see if she's coming out. She can do this and they, oh, she's going to be on an 811. She has a tease at 808 in the, the regular green room. Okay. So I'm like, all right, I'm going to kill some time. My my segment was over by 745. I go upstairs. I thank my hair and makeup people, which I always do after every appearance because you believe me. It takes a village to get me on the air. Then I come downstairs and I've missed her walking through. And then she's sitting in the green room and she's waiting for her tease. And it's like 803. And I go in and I'm like, I am so sorry. I don't mean to like disturb your vibe.

3:08I said, I cannot tell you how much your music shaped me. And then of course, I do like the, the blurred out. I'm a lesbian and I work here. It's morning said, you're the one who I conspired me and you took care of me. And all of your music was so important to me. And I've seen you a million times and I saw you on Broadway. She could not have been nicer. She was so lovely. She goes, really? That's so awesome. Thank you for introducing yourself. Let's take a picture. I was like in 7th heaven. It was amazing. She was huge back in the day. Huge, huge, huge. And she has a new album coming out. And she's been, I think she's nominated to be in the Rock and Roll Hall fame. She's going to hear in a month or two. But it was so awesome. And she was so lovely. They're not all so lovely, guys. You know, you meet some of these people. They're not so lucky. She was lovely. So that is it. I mean, I'm on cloud nine right now. So that's why I'm in such a great mood today, gang.

4:08So if you want to share your Melissa Etheridge favorite songs or experiences, go to JillOnMoney.com. Click the contact us button, write us a note. And if you want to come on the air to do that, you can just check the box. Also, use that exact same website to ask us your financial questions. See, I worked it all in, Mark. Today, we're joined by Miss Cindy from Texas. Now Cindy, are you a Melissa Etheridge fan? I am on the side, I would say. I'm not a big music person. I listen to music a lot. But like my husband knows dates and who was in the band, I'm not that into music. All right, that sounds good. Well, all right. What brings you to us today? You love finances also. I do. I do. I love your show. I've learned a lot. Thank you. That's so nice. Tell us what we can do for you. Well, I'm calling because my husband is 62 and just got noticed that he's getting laid off after 20 years. No way. Was this a surprise?

5:09Absolutely. Because part of his company had gotten bought out and they said you are safe. You're, oh, no, they told him that. They said you're safe. And then a week or two later, they said, sorry, you're out. Oh, I'm so sorry. That sucks. It does. But we're just trying to assess if we're going to be okay. You know, we're, he's 62. I'm 63. We got later, we got married later in life like two years ago. Wait, what? Hold on, hold on. I want more of this story. Stop. You're 63. He's 62. You got married two years ago. So this is not your first wedding or your first marriage. Sorry. That is correct. So do you guys have kids from previous relationships? We do. We do. Are they all said and like read it a rock and roll and there's nothing you need to worry about? I have two adult kids that are launched and doing very well. He has one one child who is launched but constantly asks for things.

6:12Well, maybe he should go to his mother. I think it's a concern of mine. And also they just had a kid and they don't have like insurance. So I'm worried about that stuff. But that is another story. Cindy, are you working? No, I've been retired since 58. Did you retire from a profession like teaching nursing? Something with a, I'm looking for a pension is what I'm looking for, my friend. Yeah, I do have a pension and I was like a process engineer. Oh, okay. How much is your pension? My pension is 47,8. 47,800 a year. Yes, but I will say we're kind of weird because since we got together later in life, we have separate kind of accounts but then joint accounts that we kind of keep the house running jointly. Okay, I'm going to have my own money and he has his and I'm kind of thinking his money is what I'm trying to talk about.

7:14Okay, so for him, let's just talk, so with your money, you're, let me just get to you first since I have you on the line. So you have, you have 47,8 in pension. Have you claimed social security yet? I have not. When do you plan to do that? Probably late as possible. So seven days. Okay, yeah. And do you know what that amount will be at your age 70, Cindy? I do. It is 54,500. 54,500. Okay, and your, so the pension right now, does that cover half of the household stuff that you need to contribute to with your husband? Yes. Okay, so that basically covers your needs. How much was your husband making? He was making 120. And did he get any severance or anything? They still haven't told them. They don't like, they like to only communicate bad news and nothing else.

8:15So he's still working right now. Till mid April. Okay, will he be entitled to a pension? No. Okay, does he use a retirement account through that job? He has a 401k right now. It has 150 in it. Okay. Does he have other money? Yes. He has 760 in don't yell. I'm not yelling. I mean, they're fixed. They're not variable. So that's okay. Yeah, and it's roughly around 5%. He's okay. Fine. I'm not, what am I yelling at? I meet you where you are, Cindy girl. I'm not, I'm not going to go back and rewrite things, right? Okay, so 150 in the current 401k, 760 in fixed annuities, are those fixed annuities retirement annuities or non-retirement? It might say qualified or non-qualified on the statement. They're not qualified all of them. Okay, so they're non-qualified.

9:15Okay, got it. And the 401k is traditional, I presume? Correct. Okay. What else does he have? That's it. Cash? Like 40,000 in the mattress. Okay. These are mattress times, I have to say. Okay, 40,000 in cash. Do you guys own your home together? No, we don't. He pays for it right now, kind of buying into it. We have about 148,000 left on the house. How much is the interest rate on the house? All right, Mark, 2.249. Oh, God. It's like, you want to trade? They really want to, they just want to just tantalize you. Okay. 2.25%. What's it worth? Like 40,000. And you want to stay there, right? Yes. Great. So that's good. So carrying this house is not bad. And he's basically doing that? Yes. And it'll be paid off in like 10 years.

10:17Do you happen to know what his social security looks like? Mm-hmm. I do. Tell me what the choices are for him. Um, we're at 62 right now. Mm-hmm. It's 26, 472. I'm sorry. Let me just ask you this. Is he in good health? Not so good health? What's his, what does he look like? It's interesting. We just had kind of a health scare, but we went to the pretty colleges yesterday. And they're like slapping them with a stand and off you go. So it wasn't as hard as we thought. But yeah, scary. Okay. What's 67? It is 41, 436. 41, 436. Look at that difference mark. 41 grand versus 26 grand. Yeah, that's a real number. That's a real number is right. For five years. Yeah, exactly. I have an idea. Anything else that we should know about when it comes to his financial life? Well, I guess the big thing we worry about is health care because I was on his health plan. Mm-hmm.

11:17It's July 65. His co-worker for him jumps from 273 a month to almost 600. Okay. All right. So it may be worth it for you to look. I mean, you may want to stay on Cobra for a bit. But I think the, you know, your only income right now, okay, to be clear is your pension when his, when his stops, right? So that'll be that where he may get severed. So I hope he gets something. But it'll be your pension and whatever. Do you have a brokerage account? Let me just go a little bit about you. I know it's where you're not really asking about you, but I'm just trying to get a sense of this more from your tax position for the two of you because you are married. So Cindy, your retirement assets? I have like a million. Okay, great. And that's mostly traditional. Mark stopped laughing. He's laughing because he's like she's, she's growing in it. I don't feel that way. I have in my brokerage that's a raw.

12:20I have 315. 315. Okay, keep going. I have a Roth annuities of 170. New guys in the annuities. I know. Some some insurance salesman went crazy. He did a fixed IRA at 410. Okay, that's my taxable stuff that I still, I've been doing Roth conversions. Oh, great. Not qualified 86,000. And then a regular brokerage at 20. And right now, you are converting the taxable into Roth and paying for it how with what cash on hand. That's 20 that's in the brokerage. Or what are you using to when you have do the conversion? Yeah, I had been using money that I had in my mattress. I do have actually, I have 26 in a high yield interest. I didn't put on here. All right, it's good. It's all right. Don't worry. And you're not worried about yourself.

13:20You just worried about him. Yeah, I mean, I always worry about myself, but I think the bigger thing is him. And he clips off about 5K in his monthly expenses a month. Okay. And what about you? Like, what are your, like, if you sew his five and what do you spend a month, you figure? Probably 4500. Oh, let's just say 5 grand each. Let's make it like that. Do you think that 5 grand includes helping his adult child? Or do we think that there's something else that's like floating around that you don't know about? That's the asterisk. Uh-huh. We don't know. We don't know. Help for adult child. Okay. But here's something that's good that I see. Okay, let's just pretend it's the middle of April. He gets like, how long he's been there for 20 years? Yeah. Does anyone, has anyone else gotten laid up? I can't believe they're not going to give him any severance. One of his managers got laid off recently

14:21and they gave him, he had less years than him and they gave him three months. So we're not expecting a whole lot. So much for 20 years, huh? I know, unbelievable. Thank you, Corporate America, right? Is he still putting money into his retirement plan right now? He is, but I just moved it. Once we got noticed, I moved it into the bond and dex fund instead of S&P. Does he have a match? He does start in this year. He, um, two percent. So he's barely gotten anything. So just pull it, don't, don't put, I mean, just for the next bunch of weeks, I know that it's only like a few weeks, but like, he should just put two percent in. Just reduce his retirement contribution to the match to two percent. Okay? Oh, okay, okay. I want to make sure he's got a little extra cash as much as possible. And also, if you do it at two percent, that way, if he does get any severance, it'll be two percent of that severance that will hopefully be used, but nothing more. I don't want them to take a big chunk out

15:21of input it into retirement right now. All right. So what we need to figure out is how he lives for five years, right? Until he claims social security. And what he can do to make that work really well. Okay, I have an idea. You ready? Yes. I am thinking that one of these fixed annuities, you said fixed annuities. Are there a couple or are there like five? Five. Okay, five is a lot. Are they all basically the same? So the one maturing the soonest is in 28. That was paying 5.55. Yeah. That's 100. It's at 142 right now. Okay, great. What would happen if we enuatized it right now? Do we know? Would there be a fee? Would there be like a surrender fee or something? I mean, yes, the surrender fee. Okay, so here's what we're going to do. He's got this traditional account, the 401k, right?

16:24We know that he needs this five grand a month. So I think that at the very least, what you could do is, you know, for the rest of this year, he's already made 30, right? He'll get paid whatever he gets paid in some severance, a couple months. You're going to take 50. When he retires, you'll take a distribution, take 50 grand out of the 401k, you'll pay tax on it. Now he's going to be fine for this year. Now the beginning of next year, 27, right? We're going to take another chunk of money out of that 401k. He'll pay the tax on it. No problem. This is not a problem, okay? You're going to pay the tax on it. Lower tax bracket. You're not claiming Social Security. He's not claiming Social Security. He's going to pull out, you know, what, let's say, have whatever's left in there. So let's say, you know, if he took 50 out this year, next year, let's just pretend there's no, nothing more goes in. There's 100. He can take his, let's say, 65 or 70 out of that,

17:26pay the tax that's due, use that to live on. That's his five grand a month, right? The following year, which happens to be 2028, he's going to empty out the whatever's left in the 401k. And then he's going to nuitize the annuity that's worth 142 now. And he's going to say, I want all the money out of this over the next, let's call it. Let me just see something. He's 62. It's five years. This is the third year. So he can get an annuitization of like get over five years or three years. Whatever gets all the money out of that thing. And the tax liability will not be as significant. Necessarily because he put some money in. And the only thing that's taxable to him will be the growth. So if he put 100 in and it's now worth 142, you're only going to get taxed on the 42. It's whatever it has grown to since he put it in. And so you're going to say 401k for this year. Just top it off, right? You're going to say like, all right, I already got paid 30 grand.

18:28And maybe it ends up being 40 because of, you know, the severance then take out and say 50 grand this year from his 401k. You do it again next year, except you're going to need a little bit more because he hadn't been paid, right? And so he's going to take some money out of that 401k. Maybe it's 60, 70 grand. He'll get that it's probably 70 pay the tax on that. Gets him through 27. Now it's 28. He's going to finish out the 401k. He's going to annuitize one of those fixed annuities that gets him through 28, 29, 30. So he's going to basically take the money out of these annuity products to get him to age 67. Now at age 67, he's got 41 grand a year coming. He'll still need to live off of some of these fixed annuities. He'll still need to pull some of that money out. But we'll have a different decision to make because he won't need as much money. So the annuities, it may be that you're just like,

19:28well, we don't have to annuitize them. We can just take a little bit out as we need it. But that's basically how he's going to use the fixed annuities to top off what his needs are above social security. Here's the thing. He's going to basically end up plowing through all this money. And you're going to help him out because you know why? Because you married. And that's just what's going to be. And you can afford it because honestly, when you think about it, he has social security of 41, right? You have your pension at 47. He'll be able to contribute, but you know, he'll be able to really hold his own for a few more years. Like probably when he's like 72 or 73, he's probably not going to have so much money. Maybe even 75. You're going to need to actually say, okay, well, my pension, my social security, his social security, that's going to be what mostly floats us. And your money is going to be helpful in this.

20:30But you're not going to have to plow through all your money. You're going to have to just use your cash flow to help. Okay. Okay. How does that sound? It's not so bad, right? Not so bad. Nope. Does he think he might want to get another job even just a part time job? Yeah, he will. And then the other thing, not to be morbid, but why not? Mom is 87 and she's got some properties that would go to him. But, you know, I don't want to count on it until we know it. Yeah. I, okay, well, that's good. I mean, not good. Sorry about that. I'd be like, it's good not to count on them as what I meant to say. Boy, I have some roast way of thinking about some of this stuff. You know, it's interesting. I wonder if he would to get another job or even to work part time. You know, that'll also help to fray that extra cost for health care. But, you know, that is what it is. But that's what I think the game plan should be. I think so. Don't buy any more annuities. Okay. Okay.

21:30I guess because he's very risk averse. When I first met him, it was all in the mattress. And, and I, you know, CDs was high risk for him. So then, I love that. I thought, you know, okay, can I just give a special shout out to him as part of this episode so you can play this for him. And this part is what's important. Cindy's husband, I need you to hear me. You cannot afford to help your adult child. You need your money to live on. This is an unexpected negative surprise that has just happened to you, which stinks. But during this period of time, you really need to be clear that the money you have already accumulated, which is great. You know, it's fantastic. You've got $900,000. You need that money so that you can support yourself. If you're too generous with your adult child, what will happen is you are going to run out of money.

22:30And then you will be stuck. So be careful with this adult child. Try to put some guardrails up. How's that Cindy? Did I do okay? Amen. Amen. Cindy, you guys have estate documents? Yes, and no. He doesn't have a will only because the only personal property he has is his vehicle. Okay. He's going to transfer a death with beneficiary on it. Okay. Wait, what happens if he gets sick? Who pulls the plug? I do. Is that on a document? Yeah, we do have. Oh, okay. Oh, okay. I see. I see. All right. Well, is he will averse? It doesn't seem like that big a deal. He doesn't have, I mean, right now the house is in my name because he's paying kind of into it. Okay, I got you. Yeah. Okay. Well, listen, if it works for you guys, as long as you have that, you know, and a power of attorney you have for him, okay. It's very funny, Mark. I'd never heard of someone having those two documents, but not a will. And everything, they're all the beneficiaries are designated.

23:33Everything is all clean, right? I checked them. Yes. I love Cindy. Cindy from Texas. Keep us posted. I want to know, can you just shoot us a note and let us know what the severance was because I'm going to lose my mind if it's not good. But that's just me. All right. Thank you so much for getting in touch with us. I think your husband's going to be okay. I'm sorry this is happening for you guys, but I do feel comfortable that you know, you have a loose game plan ready to enact, okay? Thank you so much. Of course. Hey, if you have a negative shock in your financial life, maybe it is a losing of a job. Maybe it's an illness. Maybe it's something else. Give us a holler. Go to JillOnMoney.com. Click the contact us button. Let us know if you want to come on the air by checking the box. Don't forget to sign up for the free weekly newsletter, which comes out every single Friday. And that will also entitle you to our blog. Just remember you can subscribe to us on the Odyssey app, or wherever you find your favorite podcast.

24:34Do something nice for someone else today. Change your work. Change your wealth. Change your life. Thanks for listening. We'll talk to you tomorrow. Finding a skilled hire takes more than just reviewing a resume. As AI raises the bar on how experience is presented, hiring managers need better ways to evaluate skills and fit. That's where Robert Half can help. Their recruiters combine their expertise with award-winning AI to review what's behind every application quickly. Learn how they can find you specialized talent in finance, accounting, technology, and more. At Robert Half, they know talent. Visit roberthalf.com slash talent today. Have you ever felt like you were living just a B or B plus life? It's so dangerous to live that more dangerous than a B minus or a C plus life because when you're living a B or B plus life, you don't change it. You think it's good enough? Is it? I'm Susie Welch. I host a podcast called Becoming You.

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