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How to Plan for a Big Expense in Retirement · How to Retire on Time

• 0:00
  Mike: Hey, thanks for joining. Here's a question I was recently asked on my show, how to retire on time. Take a look. Yes. Alright.
• 0:07
  We got any more questions here?
• 0:08
  David: We do have a we do have a couple more. Do we have time for like one more?
• 0:12
  Mike: We got eight eight more minutes.
• 0:14
  David: Okay. Let's all here. We mentioned at the top of the show that we might talk about some healthcare. What should we know about Medicare this season?
• 0:25
  Mike: So it's going up 2.4% increase, think is what was decided for your Medicare Advantage plans. The Part D. So if you're traditional Medicare with the Part D, a lot of the, a lot of what was supplementing that lower cost for Part D, which is the drug part of it, is going away. So especially this year, take a step back and don't assume that your plan is gonna be the same plan next year. They can have the same plan, but still make adjustments along the way.
• 0:56
  So as a general rule, I highly encourage people to every year assume that you have to reshop and revisit everything and then make good assumptions. You don't just roll over into the same plan over and over again and close, you know, any sort of, concept. Review the plans that are available. Yeah. Traditional Medicare is a great option.
• 1:16
  Medigap plans are a great option. Medicare Advantage are a great option, but it depends on who you are and what your needs are.
• 1:23
  David: Right. Yeah. Because those contracts that they have with big hospital groups change every year. And so the provider you're seeing today might not be covered under this advantage plan for 2027. You just don't know.
• 1:35
  Mike: Yep. That auto renewal is a trap.
• 1:37
  David: Yeah. And then we expect they haven't announced the exact premium for Medicare yet, but it'll go up a little bit. It always does.
• 1:46
  Mike: Yeah. Two point well, yeah. Part b, I I don't know right now what it is, but it's coming out soon. But yeah. Yeah.
• 1:53
  Make sure to put on your calendar that you're gonna talk to someone. Talk to us. David here does all of our clients. Yeah. He's the director of our healthcare services.
• 2:01
  And we we just it's we're indifferent about it. It it what plan is right for you? We just we're a little bit different. Well, hey, here's your plan. Here's a better plan.
• 2:09
  Just get that the agent collects the commission and calls it good. We try to push back and say, hold on. Are there any healthcare changes? What are your tax implications? Are you doing heavy IRA to Roth conversion?
• 2:20
  Should we be aware of that? Should we not be aware of that? We need to know what's going on. And your traditional Medicare agent isn't talking taxes, isn't talking income strategy, isn't saying, well, hey, next year. Try to take a more comprehensive approach to this.
• 2:36
  So what's the October 15 is when you can start?
• 2:40
  David: Yeah. October 15 to early December. Yeah. So Is the open enrollment, annual enrollment.
• 2:46
  Mike: Put it on your calendar. Get it done before Thanksgiving. It's free to talk to David about your, to shop around and what you want as well.
• 2:54
  David: But Absolutely.
• 2:56
  Mike: Yeah. A lot's changing. So do not assume that you just wanna renew into the same plan. Recheck. Check your assumptions.
• 3:03
  See if anything changed. And then we'll go from there. The, what's what's the ANOC document? That's the one that really is telling about what you're actually gonna get. ANOC.
• 3:14
  Mhmm. AlphaNancyOscarCharlie.
• 3:17
  David: Yes. Here we go.
• 3:18
  Mike: And we got one last question that we can fit in last five minutes.
• 3:21
  David: Yeah, let's do it. All right. Last one. How do you plan around large one time expenses like a new car or a new roof?
• 3:28
  Mike: I would say the same way that you plan around it with your income. So you're working, right? You know that something's coming up in the future. You've got your salary coming in and you've got your, your first level. Your first level is your emergency expenses.
• 3:42
  So, you know, two to six months of just general needs.
• 3:45
  David: Mhmm.
• 3:45
  Mike: It's in a high yield savings account, doing nothing there. But that's what you can tap into. And the second level is you've got other assets you can tap into for larger expenses. I don't think it's good to plan to zero age 100. I think that's kind of a risky proposition.
• 3:59
  Instead, having a little bit left over and knowing that you have your first line of defense, which is your emergency cash. And then your second line of defense, which is tapping into the portfolio in a tax efficient way. For some people that's looking at your brokerage account. Your brokerage account, the taxable amount. Yeah.
• 4:17
  You just got a little bit at 15% effective or a 15% growth. You're gonna pay that anyway. For other people, might be just a little more from the IRA. There's not much you could do. But the plan is meant to guide you along the way.
• 4:31
  It's okay to illustrate, well, let's expect, you know, a new roof here, here, here, there, and so on. That's fine. Yeah. But you wanna, you don't want a plan so rigid that you can't adjust along the way. Life is dynamic and so should your plan.
• 4:48
  And a plan that's built right, at least in our opinion, is able to be dynamic. So if you didn't expect a large expense to happen, you still have a system that tells you where to pull the money and how to go about that. And part of that too is your reserves. Even if you need a new roof, let's say, horrible hail happens. You need a new roof.
• 5:09
  Markets are down. Gosh, how do you handle this? You've always got enough liquidity from your reserves. The accounts that have growth potential, no downside risk. So if the markets are down, you still have enough liquidity that you can tap into that without accentuating losses or locking in losses.
• 5:24
  Right. So appreciate you all being here. Leave in the comments if you've got any feedback. This is the Q and A just for you. For all those who are downloading the book and attending our workshops, we wanna help you ask better questions.
• 5:36
  Not the oversimplified advice, but let's get into the nitty gritty. Let's have that kind of a conversation. If wanna you schedule that call, the call is free. The retirement leaks analysis is free. Go to retireontime.com/call to get that introduction, scheduled today.
• 5:50
  And tomorrow, 06:30, gotta register for this. Retireontime.com/class. You can go to that that our mini workshop where we're talking about longevity. Will my money outlive me? Let's talk about that and the different ways that you could structure a plan, explore strategies, and then pick the right investments or products to help you with your longevity.
• 6:13
  Have a great rest of your day. Talk to you next time.