John Very good to see we have a really important question today, what is a good monthly retirement income? So let's start with some data. According to the Bureau of Labor Statistics, the average annual expenses for people 65 plus in 2021 was $52,000 which comes out to about $4,000 a month. But of course, no two people are alike, so figuring out how much money you will need to live your ideal retirement is going to be different, but there are some prompts we're going to walk through to help you figure out that number for yourself. Prompt number one, you need to picture your ideal retirement and be as specific as possible.

Yeah. Well, Happy New Year. First of all, so let's do some new year's resolutions, some retirement planning. And you know what, Erin, when you come into our office for your first appointment. It's called the vision and clarity consultation, because in order to plan, you have to have a vision. So if you're watching this video, I want you to do a simple exercise. Just close your eyes and imagine what's your perfect Saturday like, because now in retirement, every day is Saturday. So is that golfing? Is it going to the spa, or is it just teaching the grandkids how to make your favorite cookies? Wait The point is you want to be as specific as possible, because in retirement, we want you to live the dreams you thought of all throughout your working life, and if that is traveling to Europe or Tahiti, or just having a simple garden and spending time with the grandkids, or being your kids new free babysitter. Each one of those scenarios has significantly different costs. So in order to understand and plan for the retirement you want, you have to come to us with a vision right next. You need to know what you're spending now, so track your expenses and create a spending plan, right?

You have to look at, especially if you're working now, what are your expenses during your working years now, in retirement, we want you to live a better life than when you were working. We definitely don't want you going backwards. We want you spending that money, but we want you spending it smarter. So you have to ask yourself, can your retirement assets fund your current lifestyle? And you know, with people working, we often find that expenses of convenience are higher, right? Let's take that $5 cups of Starbucks coffee that you probably get on the way to work every day, or once you get to the office. If Erin is it still $5 I don't think so much more. Yeah, six, seven, probably now every day Saturday, you have a little bit more time on your hands in retirement. So think about this way, if you spend $5 a day at Starbucks, but you only went 300 out of the 365 days a year. So you're taking over two months off from Starbucks. You're still spending $1,500 a year on cough. Now, I get it. Some people love their coffee, but in retirement, could we do it smarter? Why not buy your own coffee? Espresso, cappuccino machine? I'm talking a high end machine. I actually looked up these machines. You can buy them anywhere from 600 to $2,000 depending on how crazy you want to get that was on Amazon, on Costco. Make your own coffee. You can get just as good of beans from Costco, at wholesale. Make your own coffee. Save the trip and save money. The point of the matter there is, you're not reducing your lifestyle. You're probably actually even making better coffee, but for cheaper. So what we want you to do is just simply look at your credit card statement and go, What are the frivolous things that maybe I used at a convenience that I can now replace live just as good of a lifestyle in retirement, but for less money, don't be frugal, Just be smart.

Right. Next, you need to consider common risk factors, including inflation, longevity and changes to Social Security.

Yeah. Erin, so this is what I love about our planning, is we use a proactive income planning software, one of the top out there. So I'm going to show you a screenshot from this, and this is going to tell us Listen Mr. And Miss Mr. And Mrs. Client you have. You can spend this much money, gross and net of taxes a month, but if we have changes in your scenario and your assets level go up or go down, then you may have to make these specific changes. And you can see here where the client, if they go, if they go up or down in the market or in their assets, the changes that they're going to have to take with their income. Now, what are some of these changes? Inflation? Right? If you've been alive the last couple of years, you know well what inflation is longevity, you have to plan as if you're going to live forever. An estate plan is if you're going to die tomorrow, right? So, income plan if you're going to live to forever, because 90 is the new 70, yeah, and you don't want to the only thing worse than dying with money is living without you also want to plan for well, what if social security benefits are being reduced? Right? You can't be like our government officials and keep on kicking the can down the road. They're telling you that your benefits can very well be reduced by 2031 2034 that number keeps on changing plan for it ahead. What about the market? If the market goes up, you could give yourself a little bit of pay bump. But guess what? Folks we are at all time highs in the market. What goes up must come down. And you have to understand that this is no longer your 401. K money, this market, this money that's in the market is your livelihood. So you have to understand the amount of risk you can take, the sequence of returns, and if the market does drop and your assets go down, the adjustments you're going to have to make proactively to make sure you don't run out of money. Then there's taxes. My favorite topic, right? We're at historically low tax rates. Are you taking advantage of it? And we are also at skyrocketing government, high debt. That's not a good combo, so you have to plan for higher taxes in the future, because it's a math problem. And last but not least, healthcare, I hate to tell you this, but if you're getting older, your healthcare costs are going to go up. So we have the ability to show our clients proactively what they can spend to have the peace of mind to get them to and through retirement.

Next of course, you say we need to build a robust nest egg. But more than that, it needs to be a tax diversified nest egg. Yes, and I use the term asset location, and this is being diversified within the tax code, right? We talk about diversification and investing all the time. Everybody knows that you have to be diverse. That's called asset allocation for taxes. We're talking about asset location. Do you have all your money and that ticking tax time bomb of a tax postponed or tax deferred account? By that, I mean the four, 1k, or the IRA, right? Do you have any of your money in taxable accounts, which are taxed every year at more favorable capital gain rates? Or do you have your money in the best of them, all the tax advantaged or tax free Roth IRA accounts? You need to be diversified through all those funnels, right? And then last of course, you need to decide if you want to leave behind a legacy, and that's where working with an advisor can really help you with creating that legacy plan.

Yeah, and you know, this is a question that I ask in the first appointments, because for a lot of people, it's different, right? Do you want to leave a legacy? Some people say, listen, we're just going to leave what is left over. We're going to live our life and we're going to give whatever is left over to our kids. That's perfectly fine. It's your money. Some people say, Listen, I want to give little Jimmy or little Susie a half a million dollars even. That's fine too. But that's very important to know early on, because we don't want you to lessen your lifestyle, to let Jimmy and Susie live the lifestyle of their choosing. So if there's a more efficient way, both in cost to you and taxes to them, then we want to start that planning very early on, and give them and plan for giving them that money from the get go.

And this is a good reminder to everybody watching that we have done specific videos on each one of these prompts, John, which they all live on your YouTube channel, so people can kind of watch them at their own pace while they're drinking that homemade cup of coffee, which I do have a great machine, and I love it as well. So that's great advice. But how else can people reach you with questions? Yeah?

Well, you can also listen to the retire happy podcast, yeah, my good friend Tom O'Connell, that's also on our YouTube channel for on the Retire Happy Podcast, you can visit our website, www.gosecurus.com, where we have a ton of information. And while you're on our website, you can visit the contact us tab, where you can schedule a 20 minute complimentary phone call, where we answer any general questions, or you can schedule that vision and clarity consultation. It's complimentary one hour in our office, or just simply give us a call at the office.

John, thanks so much for your time today. I appreciate it.

Thank you, Erin.