Can We Afford to Help Out Our Sons?

Added: 2026-05-07

[00:00:00][music] >> Welcome to the Jill on Money Show. It's Thursday, April 30th. Oh my goodness, the last [music] day of April. Where does the time go? Mark and I have talked about this many times that because of our schedules and the way that we record in advance for a lot of stuff, it always feels like it catches us by surprise how quickly time does fly. So, before time flies too much and before something is going on that is out of your control, why not get in touch with us right now while you have a good handle on what's going on in your financial life? Or, if you feel completely out of control, now's the time to get in touch with us because we don't want to wait too much longer. If you've got a financial question, if something is going on, you can always reach us by going to our website jillonmoney.com, click the contact us button, write us a note. If you would like to join us live on the air, check the box, Mark will do everything else. That is what Steve did.

[00:01:02]He joins us from the Mid-Atlantic.

[00:01:04]Hello, Steve. How are you? Oh, hi Jill.

[00:01:07]Hi Mark. Yeah, again, thank you so much for having me on and trying to help me out. Of course. So, tell us what brings you to us. What's going on? Well, I need a financial gut check because I would like to retire in 2 years when I turn 62.

[00:01:23]But and and I've been a very good saver over the years.

[00:01:26]But between now and retirement, I want to help my two grown sons financially and also I have I need to renovate my house, so that's going to be a little costly. And I'm just wondering with these additional costs right before retirement, will my retirement still be good for 30 years? I do have longevity in my family. You know, we live until the 90s. So, I am concerned about whether or not it will hold up over 30 years. Steve, are you married, single, partnered? I am married married for for over 30 years.

[00:02:02]And are you both working and planning on retiring? Like what's the game plan with work life for both of you? She's sort of semi-retired, just working part-time and but she'll retire with me and so we're going to go out at the same time.

[00:02:16]>> [laughter] >> I It's funny when you say go out. It's like Yeah, I I I I'm like I maybe we'll use a different term, but yes, retire at the same time. So, two How much are you guys earning right now?

[00:02:26]What do you earn, Steve? Our our household income is about 250 and I do have a a pension of about 4,800 per month. Wow, and that will start us in 2 years, right?

[00:02:39]>> No, actually I I'm collecting that now.

[00:02:41]>> Oh, so wait a minute. 250, does that include 4,800 a month or it's 250 and then on top of that there's 4,800 a month?

[00:02:48]>> The pension is on top of the 250. Oh, wow. That's amazing. That Is that from a previous? Is it Were you in like law enforcement or military? Like where'd that come from?

[00:02:59]Oh, I worked a federal job for for many, many years. I retired several years ago.

[00:03:04]Wow. I got bored, decided to be a contractor, so that's what I'm doing.

[00:03:08]Amazing. Holy smokes. Okay. So, when you look at your spending, this is this is a big part of it, right? So, forget about the two grown sons for right this minute, but what are your expenses right now?

[00:03:23]My expenses right now is about maybe 9,000 per month after tax. Okay. We would like to increase it to 11,000 a month to include some travel costs in that.

[00:03:34]But not kids. So, the 11,000 would be fun, but not the helping the kids.

[00:03:40]Correct, yes. Yeah, my kids are all grown up.

[00:03:43]I'm helping grown kids financially.

[00:03:45]Okay, you might be if we give you permission. Yes. First of all, so let's now talk about So, the pension is incredible. That's great. And you'll also both be entitled to social security, right? Correct. And the full retirement age, a combined social security payment will be roughly $6,200 a month. Okay, so that's at your 67. Is she about the same age? She's a year older than me, but you know, roughly the same age.

[00:04:14]>> All right, so 6,200 a month in addition to you will And again, at your 67, so in 7 years, so that That's great cuz there we have 11,000 of pre-tax, I know, income cuz you pay tax on Do you pay tax on your pension? I should have asked that. Yeah, I I do. It's $4,800 before it's taxed and you know, roughly under 4,000 after taxes. All right, great. This is already like incredible cuz we know that we have this time horizon, these next well, not 7 years, but it'll be 5 years after you turn 62 where you'll need to live on some other money that you've saved, but once you hit 67, I mean, 6,200 plus your $4,800 pension to Let us now explore how much money you have set aside in retirement.

[00:05:10]So, give us a rundown of what you've saved. Okay, I I have about 2.45 million in a pre-tax 401k, no Roth. I have about $450,000 in a mutual funds. Most of it is S&P 500 and there's some in money market, so the total of 450 there. And I have 35,000 in cash for emergencies and I do own my home and that's worth about maybe $700,000 with no mortgage.

[00:05:39]>> Okay. No mortgage. And you want to stay where you are?

[00:05:42]Yeah, I'm stuck.

[00:05:43]>> [laughter] >> Yeah, my wife doesn't want to move. All right, you know, I get that.

[00:05:50]So, that's a ton of money, which is incredible. Obviously, you know that you're kind of going to be staring down that big big retirement distribution forced on you. So, is your game plan 2 years, you've got your money, plenty of money. Do you have you know, you're Are you putting money Are you putting money right now into that pre-tax 401k for the next 2 years? I am taking a company matching, so that's roughly about I get 12,000 matching and I contribute about 10% of my current income and so I'm doing okay in that area for sure.

[00:06:30]Yeah, I'll say. So, let's say that 2 years from now, you are done and then what you would do is you and your wife would want to pull money out of that pre-tax account to start getting money out of there, right? We need to get Yeah, like I'm sort of thinking let's just look at tax rates right now.

[00:06:52]The 22% tax bracket, which is, you know, you're probably in somewhere between 22 and 24. Like you pop into 24 because of that pension income. So, let's say that you'd say to me, hey, I want to pull out as much money as I can at the 22 or the 24% bracket, which you should do for those years between 62 and 67. You know, if it's 22, you're going to be able to pull out like 150 grand a year, maybe a little less. If it's 24%, you can get up to like 350 coming out and paying tax on it.

[00:07:30]It's going to be up to you. Do whatever you want. It's You are in great shape.

[00:07:35]So, if you were saying you want a financial gut check, you're in great shape. How much money are we talking about in help to the grown kids?

[00:07:44]Yeah, one son I one [clears throat] son remaining to get married and I promised to pay for his wedding, so that's at least $50,000 just for that. And my other son, I would like to help him buy a house and I would like to >> a house or is that what you want? Good question.

[00:08:02]I think it's both it's it's what he wants and what I want for him also, so it's kind of combined. And uh >> Do you want to make it even Steven? Do you say to yourself, well, you know what? I'm going to pay for this wedding, that'll be 50 and then I want to give the other guy 50 or do you want to say like I want to give them each 100? Like what what are you thinking about right now? Well, 50 for the one son getting married and 150,000 at least for the other son who needs a house.

[00:08:26]>> Wait a minute. What are you going to do about the other guy? But wait a minute.

[00:08:29]Why do you like this other son so much, three times as much as you like that first one? The guy's getting married.

[00:08:36]Come on. The other son who's getting married has already bought a house on his own, so he doesn't need help on that area.

[00:08:43]So, are you sure that son number two wants this house? I really I'm asking that like not facetiously because, you know, you could easily just say, hey, you know what? I'm paying for one wedding and, you know, I'm happy to have, you know, I I would like to give you the 50. You're not getting Is he not married or is he getting married? Like what's his story?

[00:09:03]>> Oh, he's he's married, but he has been house hunting with his wife and he's complaining about the high cost of houses in the area and he he told me it's going to be a struggle for him to get a down payment together and that's when I thought, okay, I think I can help you here. Yeah. So, he was and I've been house hunting with him too to see what's out there. Let me ask you something. Is your wife on board with this? I want to make sure that there's going to be marital bliss at the end of this. [sighs] Great question. The answer is she's totally fine with it. Okay. Mark, how do you feel about getting more money out of this retirement account than we had anticipated? Does the other son know about the discrepancy? Is that going to cause an issue down the road?

[00:09:43]>> Oh, good question. He doesn't know yet, but he will eventually. Do you want to make it make good on this? Like, you know, maybe Are there any grandchildren yet? Not yet. No grandkids.

[00:09:55]I mean, so there's a couple ways to do this. Obviously, the wedding is coming up, so you got to get the money anyway, right? Mhm. Okay. So, the first question is because you're still working right now, and you are like I'm not sure like you could just pull the money out of the mutual funds, right? Yes. Okay. So, whatever you have to sell some off, you'll get some capital gains, but you'll figure it in. So, there's the 50 there. I think that I'm okay if you say look, my other kid, I want to help him.

[00:10:30]We're going to get that down payment.

[00:10:31]You're going to probably end up kind of depleting a lot of not the whole thing, but you're going to deplete a good chunk of this account and cuz you're going to have to pay some taxes as well. So, you deplete it. Maybe instead of having 450 at the end of all of the gifting and all this, you'll have 200 grand in there.

[00:10:49]But then when you retire, I think that's when we probably have to get start taking some more money out of that pre-tax account. I don't want to do the I I certainly don't want to take pre-tax money out now while you still have all this income. Mhm. But I think that you'll replenish. You'll just have more money in there. You'll live on that money. I think you can well afford to do this. Mark, are you feeling okay about this? The the help I think that Mark's biggest concern is that we don't create a schism between the boys because of the disparity. So, I guess there's the other thing is you could say to the younger one, we're going to give you 50 for your wedding. There's going to be another 100 grand coming, you know, but not this minute, but it there but we're going to make this right cuz you're we're helping your brother with a down payment. How's that sound? Or you make it Or you make it right way down the line in your estate documents. Yeah. But you know, but it sounds to me like you wanted them to have the money while they're young and they need it, which I'm all for. I'm totally all for that. I I what I don't want there to be is like some strange weird thing that happens that causes any problems down the line. That to me is the what we want to avoid. No, you're right cuz I I've been thinking about that same dilemma and something I have to face. I just don't know how to do it yet, but uh I I'll make it up to the other boy.

[00:12:08]Yeah, exactly. You say like if we'll make it up to you, you know, I don't know if they're planning on having kids.

[00:12:14]Either we'll do it with in the form of 529 plans or we'll gift you money, but you know, as soon as I retire, we'll have a game plan ready. And that's what you do. Good? Sounds like a plan. I can't believe I'm I'm giving you all of this this today being Jill Schlesinger, the dream maker.

[00:12:32]Uh oh, the one of the one of the big costs is I do want to spend about $80,000 on a home renovation.

[00:12:38]And so that will come out of the mutual fund. Yes. So, you're going to deplete the mutual fund, which by the way, so when you retire, maybe it's going to be that, you know, you'll take 150 grand out every year for the 5 years between 62 and 67. Get it out, pay it at the 22% bracket, rebuild the mutual fund the the post-tax money. You know, so you're going to live on some, but you're also going to just take it out to reduce your burden in the future cuz you are going to have a big RMD. I mean, a big one, right? Cuz you have 2 and 1/2 now and you're young. So, I think that getting that money out depending on where tax brackets are, etc. will be uh very beneficial to you down the line. Hey, do you have your estate documents done since we were just talking about estate documents like making >> had my will done last year, but I I I plan to do a a trust when I retire in a couple years. All right. You probably don't need a trust, but okay. You could.

[00:13:36]A lot of your money's going to pass by contract, meaning that, you know, a lot of that money is in retirement assets, so Okay. I'd go talk to talk to somebody.

[00:13:45]It's not It's worth having a conversation for sure. Yeah, I just want to make it easy for my kids to inherit the property and the money, so. Man, Steve is a good dad. We have another listener who needs whose kids need help.

[00:13:58]Can you help them, too?

[00:13:59]>> [laughter] >> Pass on that.

[00:14:01]>> uh Mark, we're going to have some sort of uh sort of socialist approach to our listening audience. We have people with means, they will spread it out across the audience. Hey Steve, good luck to you. Thanks for getting in touch with us.

[00:14:14]If you are like Steve, again, trying to [music] juggle the kids, your own needs, need a little bit of a gut check, we're here for you. Come join us. It would be so much [music] fun if you would. Go to jillonmoney.com, click the contact us button, write us a note. If you'd like to join us on the air live, just check the box, [music] Mark. We'll do everything else. You can subscribe to us on the Odyssey app or wherever you find your favorite [music] podcast. Don't forget, you've got to do something nice for someone else today. It's going to make [music] that person feel better.

[00:14:44]It's going to make you feel better.

[00:14:46]Change your work, [music] change your wealth, change your life. Thank you for listening. We'll talk to you tomorrow.

[00:14:52]>> [music]