John, good to see you. We are talking through the three biggest retirement expenses and how to control them, and you have to make sure these expenses are part of your financial plan, or you may run out of money. First, though, you need a written income plan. The only way to combat the possibility of expenses exceeding assets is to have that written retirement plan for your income, which is why it's usually step number one for you and your clients. John, yes, that is the foundation of your plan. As you can see here on the screen, we have the one shot the life of that shows people's expenses to taxes. And you know, you have to understand, you know, can you afford retirement the life you want? Because there's, there's a difference in retirement. Sarah, right. Some people you know, want to travel the world or travel the country, and some people just, you know, they travel for work. They just want to stay home, spend time with the family. That comes with two significant you know, tax bills. Is their mortgage paid off? Or do you still have a mortgage or a new mortgage in retirement. So you want to understand how much assets you have, what your expenses are, if that's sustainable, and then also what your tax bills get. And you hit the nail on the head our first largest known expense, that is taxes.

Yeah, you know, I've taught a lot of classes. I've done these YouTube videos, yeah, and I've asked people, what is your largest expense? And you know, some people, you know, who have the courage to raise their hand, some of them will say houses. And you know, folks, while that, while at home, you know, especially now with today's interest rates, is a big expense. Taxes always have been and will continue to be the largest expense. Just think about it. I mean, you know, in some cases, a lot of people are spending 20 to 50% of their income going to state and federal taxes. So that's your largest expense that always has to be a key part of your planning is, how can we be tax efficient in our investments, in our income stream and in our assets? We always want to pay taxes at the lowest rate, which is what we're currently in, and we want to have the most control over our taxes as possible, which is, you know, perhaps doing tax planning now and in the next couple of years, when you're paying taxes at a rate, you understand, you understand, and you know what your tax bill is versus the $36 trillion of Debt and what our future tax rates could be next. We have our largest potential expense, which is health care.

Yes, so health care, you know, for a lot of people, they had careers and they had corporate, you know, insurance policies. So, you know, insurance was still pricey, but they really get the sticker shock when they retire before Medicare. And I have a lot of public safety retirees who retire at 55 and I have a lot of private sector people who retire, you know, at 60 and they have, they have five to 10 years to bridge up to that magical 65 of Medicare, and all of a sudden they go from corporate insurance to private sector, and they realize they get a little bit of sticker shock on how how expensive health insurance is. Then we get to Medicare, we get a little bit of, you know, a cost break. But as we get older, we're going to naturally have to see the doctor or get surgeries and have health complications that will add to those tax bills. And then there's the big elephant of the room, which we just did a video last month on long term care. Yep, you have to have a plan for that. You just can't bury your head in the sand, because that will catch up to you and it will hurt you. So plan for long term care, and then, you know, kind of wrapping it up, and you're, we're talking about income and expenses and planning for these the best way to reduce your health care is to take care of yourself. Have health goals, stay active. And you know, if you're healthy, you eat good, you stay active. You're going to reduce those health expenses because you're not going to need the doctor, and hopefully you won't need a long term care facility. And then last we have the silent thief, inflation.

Yes, inflation is the most insidious tax cost known to man, and here's why, right? Because it erodes the purchasing power of your dollar. So your investments. Key Concept of your investments is not, you know, huge market growth. It always needs to be trying to outpace inflation, because if your dollar is not worth $1 in 10 years, well then you're going to have to have to take out more money. And here's the bad thing about inflation. Inflation is a double edged sword. The cost of goods and services going up, and we've seen this over the last five years with lumber or eggs. You know, we've seen some outrageous cost increases. Well, if all that is going up, then guess what? You're going to have to take more money out of your IRA, which is going to increase your tax bill. So, you know, it's not just wow, you know, eggs or lumber or groceries in general are that much more expensive than we have to spend that much more well, it's going to get you on the back end for taxes too. So that's what you have to be aware of. So when you're doing your income plan, do not be conservative. And you're in, you know, don't be well, you know, inflation, the historicals, one and a half, 2% Yeah, really stress. Give yourself a three and a half, 4% inflation, because you might you it's better to stress your your income plan and where it doesn't really look great, and if you never hit three and a half percent average levels over 30 years, you're going to have more money in the end, which will help you out.

Just to explain to everybody watching the sun has gone away in my neighborhood right now, which is why I'm so dark. But John, you wanted to add one bonus expense that should be on everybody's radar as well.

Yes, so that's, I love the segue here, because for some people, volatility or the investment expense and darken can't control it. Can't control it, right? It's not always sunshine and rainbows in the stock market. So this is something where, again, you should always invest to your goals and your values. Do not try to keep up with the Joneses, because if you're not an aggressive person, or you cannot afford to have big market losses this and you are aggressively invested, and then you get hit with a big market loss, like we had in 2022 or 2020 for a short period with covid, or, you know, the financial crisis, especially early in retirement. That is going to darken your retirement, like Erin's room, so you're in the dark right now, yes. So as you can see here on the screen, going back to our income. You know, we're showing our clients. Listen, you can't you have a risk capacity of 25% if you lose more than that, then you're going to have to, you know, adjust your retirement. So that's an expense, right? You know, an expense is something that comes out of your assets. And if you lose 300 you know, if you have a million dollars and use $300,000 well, you just gave $300,000 in expenses to the market, right, right? The last thing I'm also going to say when it comes to market losses is, we just talked about inflation. Market losses, especially early in retirement, coupled with withdrawals, that sequence of returns risk, when you add that third layer of inflation in with inflation going up, and your account balance is going down, and that really, really stresses your retirement. So you want to keep up with inflation. But again, remember investing in retirement should have more of a focus on conservation, then in your working days, where you could be more aggressive, right? Well, again, John, you live in this world. You are well aware of these expenses. You account for them, you mitigate them as part of everybody's financial plan. So if somebody wants to sit down with you, make sure that these expenses are in their plan, that their portfolio is stress tested. What's the best way to reach you?

Yeah, well, visit our website, www.gosecurus.com you can learn about how we help our clients, and we have a ton of videos and podcasts on every subject that we discuss today. And while you're on our website, if you want to schedule a 20 minute phone call where we'll answer any general questions, or you want to schedule a 60 minute vision and clarity, just click on the contact us tab and you can schedule your appointment right from our website.

John, thank you. Thank you.