John, so good to see you. We're getting back to basics today. Three easy ways to jeopardize your retirement. According to Kiplinger, only forty-four percent of people have ever calculated what they'll need to live on in retirement. So, of course, first you need to crunch the numbers and then rethink the way you spend now before you retire to ensure that you don't outlive your nest egg. So let's talk through those three pitfalls.

First, many retirees carry credit card balances, auto loans, mortgages, or other high-interest debt into retirement, sometimes totaling fifty-five thousand dollars, according to Investopedia. So how critical is it to enter retirement debt free? Yeah. So obviously the fifty-five thousand is probably not including the mortgage, right? Erin, I would like to separate good debt from bad debt. If you have a mortgage with a two and a half percent interest rate and you perhaps maybe have ten years left on it, that's, in my opinion, not bad debt. You have something that you're building equity in. The bad debt is that credit card debt. And far too often I talk with prospects or when I used to teach a lot of workshops, people are buried in credit card debt. And I thank my lucky stars that not my financial advisor dad, but my mom hammered the fact of you never carry a credit card balance. If you don't have the money to pay that credit card balance off at the end of the month, you don't make the purchase. Yes. And, you know, when you start looking at some of these credit card APRs, you're talking nineteen, twenty, twenty-five percent. Yeah. Right. Folks, that's outrageous. Do not carry that credit card debt.

Now, if you had some type of financial emergency—which you should be planning for anyway—but if you had some type of financial emergency and you had to put it on your credit card and now you're kind of stuck in that debt cycle, well, if you have a house, do you have a home equity line of credit? Right? Access that and pay off your credit card debt. Or you're going to go on to a website like NerdWallet and find credit cards where you can do a zero percent APR cash balance for one year and help reduce that twenty percent APR. Again, I'm not saying, hey, go start spending what you want and put it on your home equity line of credit. Not at all. What I'm saying is if you have a twenty percent APR somewhere and you can get that same balance down to nine percent, that's a significant amount of wealth you are saving. Do that. But the moral of the story is don't get bad debt. If you want to have that car and interest rates over the last couple of years were six percent, well, do you really need a new car or can you buy a certified owned used car where now your total payment is going to be less, the interest on that balance is going to be less in terms of dollar amount? Use out-of-the-box—well, it shouldn't be out-of-the-box, but for a lot of people it is—out-of-the-box thinking to come up with a better solution to where you're not giving away money. That's what interest payments are if you're not getting any equity out of something; you're just giving money away to buy that something, right?

All right. Number two, this kind of gets me right here, John. A record number of parents—fifty percent, according to Savings.com—are financially supporting their adult children, with the average support around fifteen hundred dollars a month. That includes expenses like groceries, cell phone bills, rent, health insurance, even vacations. So how do we prioritize our retirement while still helping our family? Yes, and this is a very touchy subject. And the general consensus and rule number one is we are going to follow the airline's rule. When you're getting on a plane and the flight attendant's doing their safety brief, what do they say? They say that in the event of an emergency, masks will come down from the ceiling. Parents, you put your mask on before your kids. I use that same general principle with my clients and when I teach, because if you can't take care of yourself, you're not going to be able to help your kids.

Now, where this gets touchy is, today's market and today's generation of kids, the cost of living is extravagantly higher than it was twenty years ago, especially for people like me that live in San Diego, the most expensive city in the nation. So this is where, on a psychological approach with parents, I would want to take care of my kids. But are your kids—did your kids do everything they're supposed to do, right? Did they get their vocational training? Did they go to college? Are they in the job market? And are they trying to save up to get that house or to be able to do things, but they need your help getting there? Then I tell, I encourage that. Listen, that's our job as a parent is to help our kids and help them have peace of mind. But if your child who is now an adult is still acting like a child and is making a bunch of poor decisions or is just sitting at home, not job hunting or playing video games, then that's really a conversation where you have to be the hard-line parent and realize that it's not helping your situation out and it's not helping them out. Because what happens in the event you pass? Are they going to be able to financially take care of themselves? And that may not be, you know, a popular statement with a lot of parents who want nothing more than to take care of their babies, but that's the financial reality of it. Right.

All right, the third easy way is living large. Simply put, living beyond your means. But how can we determine if we are spending more than we should? Because this is such a delicate balance in retirement. Yeah, and this goes back to having that plan that we've talked about in almost every video. You have to have an income plan. So when we do an income strategy for our clients, we ask just two very basic questions: What are your necessary living expenses? And then what is your fun money, your discretionary expenses? We don't start off going into too much detail. Just give me those two numbers. And then we run it within our system. Now, if they have plenty of money, then, hey, just stick to that number and you should be good. If there's a shortfall, then we kind of dig deep into what nobody wants to look at—their budget, which we market as a spending plan. But it's really taking a deep dive into what you're spending and saying, listen, if you want to live in retirement and have that peace of mind without running out of money, you can't afford this lifestyle and you need to take out some of these expenses. So which is the first one that you're going to cut?

And it's also about having smarter expenses. We talked about the auto loan in the past. I don't buy new cars. I always buy off pre-certified because I'm not going to pay the depreciation. I have a car that I'm very happy with. It's a nice car. But I paid substantially less because I bought it off of a lease and it's certified by the dealership. You have an extended warranty that lasts even longer and I'm paying a lot less. So don't keep up with, you know, don't overspend. And I've had a lot of conversations with people where I've refused to work with them. Because they're saying, we want to spend this much. And an expert in myself was able to tell them that's unsustainable. I'm not going to help you on this path of financial destruction. So you need to understand, you need to really lean on an expert in income planning to help you understand whether you're spending too much or you can afford that extravagant lifestyle. And if you really want that extravagant lifestyle, an advisor, an expert, an advisor tells you you can't afford it, don't go against their word, right? They're trying to tell you, listen, this is not a good idea. If you want it, then go back to work, save more, or work part-time to help fund that. But when it comes to spending in retirement, it's either you have the assets and if it's a shortfall, you have three options. You either work longer, save more, you work part-time, or you cut those expenses out. Right. Right.

And so, John, for everybody who's lucky enough to be watching now, you also have a fourth bonus sign. Yes. And it's going to come as a shock to some of our regular viewers. But that fourth and most important bonus is have a plan. Yeah. Have a plan for the unpredictable, painful events. Yes. Because this can derail your retirement nest egg and your peace of mind. And these are uncomfortable conversations. What happens if one of us gets sick, gets cancer, has a major stroke, needs skilled nursing, or dies—what happens? No one wants to talk about that, but I know I'm not surprising anybody watching this video that that is what happens in life. We all know people, we've all known people who have cancer, who have skilled nursing needs, or have passed. And if you don't have a plan for that, you're going to get financially destroyed. Now, I'm not saying having a plan is going to alleviate the stress of that bad event. However, if you understand that if one of us gets sick and we need skilled nursing or if one of us dies, this is what's going to happen financially, then you're setting yourself up to have more success and peace of mind versus saying, I don't want to talk about this and I'm just going to hope and pray this never happens. And then if and when it does happen, you have no plan, it's going to increase your stress. And you know, if you haven't taken the steps to mitigate that, it's going to really, really impact you in a negative fashion financially. So always have a plan for those uncomfortable events. Yes, absolutely. I mean, the plan accommodates for all of these easy ways to jeopardize your retirement, right? Helping you figure out a spending plan to get rid of that debt, helping to maybe figure out if you can help your kids financially. And of course, living large, making sure that again, it comes back to what's your budget, what's your income and your expenses, having the plan.

So John, if somebody would like to sit down with you, make sure that they aren't jeopardizing their retirement, what's the best way to reach you? Well, you can always visit our website, www.gosecurus.com. We've got tons of videos on income planning and podcasts on income planning. And while you're on the website, you can visit the Contact Us tab where you can schedule a phone call where we'll answer any general questions for you. Or if you're interested in our services, you can set up a complimentary vision and clarity consultation. Great. John, thank you. Thank you, Erin