In this episode of the One of a Kind Financial Show, host Mike Milligan and co‑host Gary Nolan discuss how to protect retirement income when a long‑term care or assisted‑living event occurs. They explain why the biggest risk is not running out of money but spending the wrong assets first, and they walk listeners through a series of concrete financial tactics: coordinating required minimum distributions (RMDs) with care costs, tracking medical expenses to meet the 7.5% of adjusted gross income threshold for itemized deductions, using a "shoebox" method for receipts, leveraging lower‑tax‑year windows for Roth conversions, and applying a bucket strategy to balance short‑, mid‑ and long‑term cash needs. The conversation also stresses the importance of updating legal documents (powers of attorney, healthcare proxies, beneficiary designations) and maintaining clear family communication. Throughout, Mike repeatedly invites listeners to contact his firm, One Oak Financial, via his personal cell (757‑403‑5078) for personalized planning. The episode blends practical tax‑planning advice with a promotional call‑to‑action, aiming to help retirees and their families navigate the financial chaos that can accompany health crises.
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Welcome to the One of a Kind Financial Show.
This is your host, Mike Milligan. Whether it's your spouse, your parents, or yourself, nothing can prepare you for a long-term care event. When your circumstances change, so does your retirement income strategy. Uh, recently on the One of a Kind Financial Show, Gary Nolan and I talked about what to do from a smart money move standpoint Especially when it comes to RMDs, retirement accounts, and tax planning when something unexpected happens health-wise to somebody you love. Enjoy this.
Let's say you and your spouse just got home from the hospital and they now need full-time care, or maybe you had to move a parent into assisted living. The first thing you ask is, how am I going to pay for this? That's a big question, Mike.
Uh, it's right, you know, through the chaos of, um, Of this event. I mean, many of us who are listening here today, I personally have been a part of this too. You're picturing this scenario. You're picturing just being in the hospital or having done it in the past. You're picturing the scenario of what the future could look like with a loved one in a facility. This biggest risk here isn't running out of money. It's spending the wrong dollars first. You have to get, you have to stop for a second, you know, consult with a licensed financial professional, and you have to get strategic about which accounts you pull from and in what order.
Let's talk about RMDs. They can complicate things. Am I right, Mike?
Well, exactly. If you're over 73 now, you're required to take money out of your IRA or 401, whether you need it or not. And that counts as ordinary taxable income.
Yeah, but don't you think there's a lot more to it than that? I mean, there's some strategy involved here, don't you think?
Yeah. First, you can coordinate your RMDs with care expenses, using those distributions to cover recurring care like home aides, medication, or rehab. And pay attention to your tax bracket. A sudden spike in expenses might justify taking more than just your RMD, especially if you're temporarily in a lower income year. You can fill up your tax bracket without jumping to the next one. You could shift extra distributions to fund Roth conversions or cash reserve for care. And if the account owner dies after starting RMDs, the beneficiary has to continue them in the same year. Plus, for those non-spousal folks, you have to empty that account within 10 years. The one other thing I will say here, Gary, too, is keep track of your medical expenses. Because remember, even though you're retired and you may be taking RMDs, on your annual 1040, medical expenses can be an itemized deduction.
Sure.
Yeah. As long as it's more than 7.5% of your total income. So keep track. I encourage people to have a shoebox method with medical expenses.
Sure.
Shoebox method is just any receipts that you get, any statements that come in on medical, like those health insurance claims or doctor's bills, pay them if they're bills and then put them in that shoebox. At the end of the year, add them all up and see if they can either help you with that 7.5% rule, but don't wait until the end of the year to try to add that up because that'll just create more chaos and confusion.
Yeah, absolutely. I want to talk about Roth conversions. I think it's the most unused tool in a caravan. A lot of people think that the crisis means it's too late to plan, but in most cases, it's the perfect time.
Well, if your income drops temporarily, especially like, for instance, if you have these big medical expenses that cause itemized deductions to lower your income, maybe your spouse, and maybe even during that time during the medical, your spouse stopped working to care for you. Or maybe one of the partners passed away. You may fall into a lower tax bracket. And a lot of times you don't realize you're in a lower tax bracket until you file your taxes the next year. That's why tax planning is so important because tax planning allows you to see the opportunity in front of you. And in this case, if you have lower income, the opportunity could be to convert traditional IRA funds to Roth. The benefit there, you lock in the lower tax rate now, Future withdrawals are tax-free. Roth IRAs do not have required minimum distributions, so you reduce future taxable income. And you just want to do it carefully so you don't trigger, trigger an IRMAA surcharge on Medicare or push yourself into a higher bracket without realizing it.
Right. The show is the One of a Kind Financial Show. I'm Gary Nolan, your consumer advocate. Mike Milligan with us each week at this time. Let's get you on the calendar. All set up with that comprehensive plan, with that one-of-a-kind financial plan that Mike's going to talk about again in just a few minutes. The phone number this weekend, his personal cell phone, one more time: 757-403-5078. Because Mike's a glutton for punishment. 757-403-5078. No, he loves talking to folks. He really does, uh, get off on talking to folks, and he will again this weekend. So if someone is trying to restructure their income plan after a caravan, what's a good place to start, Mike? We got about a minute and a half.
We've talked about the bucket strategy many times. So I'm not going to talk and go in details here. But it's the bucket strategy, some short-term money, midterm money for income, and then some growth money. The idea is to balance predictability and flexibility, especially if one spouse is still healthy and living independent. So yes, Gary, the bucket strategy is more for just retirement. It could be also for long-term care.
Yeah. And don't forget, just because one person needs care doesn't mean the rest of the retirement plan stops. You still have to account for inflation, taxes, and rising living costs for the surviving spouse too, Mike.
That's right. The financial side is one piece, but there's also legal clarity and communication. That means updating powers of attorney and healthcare proxies, reviewing beneficiaries, and making sure someone knows where the accounts are and how to access them. So for anyone listening who feels overwhelmed, don't try to figure out this alone. Partner with a fiduciary advisor who understands income planning, taxes, And long-term care risk.
Give us a quick recap, Mike.
So, after a long-term care event or what looks like one to come, review RMDs and how they fit into your cash flow. Consider Roth conversions while you're in the lower bracket. Layer your income sources smartly. Protect the surviving spouse's retirement plan and keep your documents and family communication up to date.
Absolutely. All right, tell us all about it. We want to know the one-of-a-kind financial plan.
Guys, we give this advice for educational content, but we do that because we want you to work with us. And if you don't have a relationship with an advisor now, if you're doing it alone, if you feel isolated, especially around key topics, you don't have somebody to talk to that listens first and gives advice second, One Oak Financial is right for you. We will hear you. I will hear you today when you call my cell phone. I will hear What is most important to you? And then we'll build a plan around taxes, retirement income, investments, long-term care, healthcare planning, and legacy. That's called the One of a Kind Financial Plan because I believe you're unique. I believe everybody needs to be heard. I believe this world deserves the best version of you. And we'll build that plan so you can live a one of a kind life.
That's the way it goes. Absolutely, folks. There's no cost. There's no obligation. Get a better handle on your financial situation. Starts by dialing this number, Mike's direct cell phone number. weekend. 757-403-5078. 757-403-5078. Do it right now and get yourself on a calendar all set up. There's no cost, there's no obligation.
I appreciate you listening today to the One of a Kind Financial Show Daily. This is a serious topic, one that many people are experiencing on a daily basis. Our clients at One Oak Financial experience this. We're Or all of a sudden, a sudden slip, a fall, a health scare, new test results reveal that the financial plan previously created and maybe planned for, but most of the times not, now needs resuscitation. The plan needs to be brought to life because what you've saved and earned is now at risk of collapse and calamity. We at One Oak Financial are here to help you. I build one-of-a-kind financial plans for your one-of-a-kind life, especially when time— when troubled times happen. So I invite you to reach out to us.
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