How to Plan for a Big Expense in Retirement

0:00Hey, thanks for joining. Here's a question I was recently asked on my show How to Retire On Time. Take a look. Yes. All right. I got any more questions here. We do have a couple more. Do we have time for like one more? We got eight more minutes. Okay. Let's all hear. We mentioned the top of the show that we might talk about some healthcare. What should we know about Medicare? Ooh, this season. So it's going up 2.4% increase. I think it's 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 here, take a step back and don't assume that your plan is going to be the same plan next year. They can have the same plan but still make adjustments

1:01along the way. So as a general rule, I highly encourage people to every year assume that you have to re-shop and revisit everything and then make a good assumption. 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. Medicare at plans are a great option. Medicare Advantage are a great option. But it depends on who you are and what your needs are. 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 this advantage plan for 2027. You just don't know. Yep. That auto renewal is a trap. Yeah. Yeah. And then we expect, do they have an announced the exact premium for Medicare? Yeah, but it'll go up a little bit. It always does. Yeah. Two point. Well, yeah, part B, I don't know right now what it is, but it's coming out soon. But yeah, make sure to put on your calendar that you're going to talk to someone. Talk to us. David here does all of our clients. Yeah.

2:04The director of our healthcare services. And we just, it's, we're indifferent about it. What plan is right for you? We're a little bit different. Well, hey, here's your plan. Here's a better plan. Just get that agent that collects the commission 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 iron, erotic conversions? Should we be aware of that? Should we not be aware of that? Like 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 why next year? And we try to take a more comprehensive approach to this. So what's the October 15th is when you can start. Yeah, October 15th to early December. Yeah. So is the open enrollment annual enrollment? Put 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. But yeah, lots changing. So do not assume that you

3:05just want to renew into the same plan. Recheck. Check your assumptions. See if anything changed. And then we'll go from there. The, um, what's the, A knock, the ANOC document? That's the one that really is telling about what you're actually going to get. ANOC, alpha, Nancy, Oscar, Charlie. Yes, there we go. And we got one last question that we can fit in last five minutes. 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? 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, um, your first level, your first level is your emergency expenses. So you know, two to six months of just general needs. 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 to 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. Instead, having a little bit left over and knowing that

4:09you 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, you just got a little bit at 15% effective or 15% growth. You're going to pay that anyway. For other people, it 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. It's okay to illustrate. Well, let's expect, you know, a new roof here, here, and so on. That's fine. Yeah. But you don't want to plan so rigid that you can't adjust along the way. Life is dynamic, and so should your plan. 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.

5:15Markets 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 and losses. Right. So appreciate you all being here. Leave in the comments if you've got any feedback. This is the Q&A just for you for all those who are downloading the book, attending our workshops. We want to help you ask better questions, not the oversimplified advice, but let's get into the nitty-gritty. Let's have that kind of a conversation. If you want to schedule that call, the call is free. The retirement leaks analysis is free. Go to retireontime.com. Slash call to get that introduction scheduled today. And tomorrow, 630. You got a register for this. Retireontime.com slash class. You can go to our mini workshop or 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 for products to help you with your

6:18longevity. Have a good rest of your day. Talk to you next time.