Mike MilliganFounder and CEO, 1.oak Financial · Founder and CEO, 1.oak Financial

Planning for Financial Chaos of Long-Term Care & Assisted Living

4 Feb 2026 · 1 min

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In this segment, financial advisor Mike Milligan advises retirees, specifically addressing a listener named Gary, to diligently track medical expenses throughout the year because they can be itemized on the Form 1040 if they exceed 7.5% of total income. He recommends a simple "shoebox method"—collecting all medical receipts, insurance statements, and doctor bills in a container—and urges viewers to total these expenses before year‑end to avoid last‑minute confusion and to maximize potential tax benefits, especially for those taking required minimum distributions (RMDs).

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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.