The Jon Sanchez Show
07/01-15 mistakes to avoid 5 years before retirement
Hey everyone, it is Ryan Seacrest here. Ready to heat up your summer vacation? Get ready, things are about to get sizzling at Chumba Casino. Your summer getting a whole lot hotter with a special daily login bonus waiting just for you. So sign up now for reals of fun and reals of prizes right here at Chumba Casino. With yours truly, join me at Chumba Casino.com and dive into a summer of social casino fun. Sponsored by Chumba Casino, no purchase necessary, VGW Group. Forward, we're prohibited by law. 18 plus terms and conditions apply. Good Monday evening to you. Welcome to the John Sanchez show on his talk. 780 kwh. It's a pleasure to be with you. One day down, full day tomorrow, mark a closes at 10 o'clock on Wednesday. Obviously, shut on Thursday. It's going to be a great week. Going to be a great week. Oh, again, I hope you had a great weekend speaking of which and an even better 4th of July holiday coming up to you. Flying solo Monday, Wednesdays and Fridays, Mr. Gotten has the week off. So I am in charge for you. Let me tell you what I have lined up for you tonight. We're going to be recapping, of course, today's stock market activity. Big, big surge in bond deals. I'm going to tell you the, well, I'm going to say the guesstimate because there is no real reason behind it, but boy did they surge up. But guess what? Didn't have any negative impact on the stock market. Of course, the Supreme Court ruling of President Trump and his immunity, maybe that was the reason the market had strength today. Who knows? But that was just one of the many headlines that we dealt with. Then we're going to move into our topic of the evening. I'm sure many of you have heard the saying as we were growing up, you will have a window of opportunity at certain points of your life, right? We all know that. And it's true. A lot of times, I mean, how many times have you ever got that perfect job or job offer, right? You had this window of opportunity, you got to give a decision in the next 24 to 48 hours, or maybe that dream house that you wanted to buy or that dream car. You've got a window of opportunity, meaning you got a short period of time to make a decision and not really make any mistakes with it. Well, I'm going to take that window of opportunity analogy tonight, and we're going to throw it into the world of retirement planning. But your window of opportunity is not the next few hours, but a period of about five years. And here's what we're going to discuss. If you're going to be retiring within the next five years, or even longer than that, but when you get within that five year window, you need to ensure that you have done everything that you possibly can correctly. Because if you don't, and I've seen this happen with people, retirement's out the window, right? All your best laid plans are gone because you forgot to do one thing. Now, what is that one thing? Well, there's not one specific one thing. It's a combination of things. And usually the culprit is going to be you lost money in the stock market because you didn't have a defensive strategy. You drop dramatically. And what you thought was going to be your retirement nest egg is maybe 20, 30% lower than what you planned on. And what you planned on, of course, was going to generate income for you. But if that nest egg is lower, that means your income is going to be lower, right? Pretty simple, you know that. Well, tonight, what I'm going to be discussing with you is very simple. In the next five years, I've put together a list of what I feel are the 15 most critical things that you need to do, mistakes to avoid during this five-year time period. Now, where does the time period of five years come into play? Well, I kind of feel bad saying this, but I'll tell you in real life versus textbook. So in textbook, stock market cycles, bull markets, bear markets, et cetera, generally work in three to five-year cycles, meaning historically, quote, quote, if there's such a term, the markets go up for three to five years, they go down for three to five years. Of course, that theory, the reason I laugh about that, that theory has been thrown out the window these last few years, right? Because we've had so many different shocks to the economy. We had COVID, we had a housing crisis, we've had a lot of different things. So that's what I mean. A lot of times nowadays, you really can't do that, but we have to pick some type of time period. So if you're within this five years, and you're coming off of a bull market, historically, the market would go down for three to five years after it has risen for three to five years. So that's where the term, the five-year retirement window comes into play. But you can really throw out what I just told you, the five-year window. You can narrow that down to four years, three years, two years, or even one year. Because the closer that you get to retirement, the less room you have for error, the fewer mistakes you can make, or again, your retirement plans go out the door. It's really a scary time period. Not only, of course, are you giving up a steady paycheck, maybe some medical benefits, saving in your 401k, whatever. And of course, hopefully the love that you have for your job, a lot of things go through your mind when you've made that decision to retire. But first and foremost is, can I retire? Can I afford to retire? Well, hopefully the answer is going to be yes after you go through my list of 15 with me. But again, you mess up on one or multiple of these things, and that answer may be no. So my goal tonight is to make sure that that answer is always yes for you, to make sure that you've accompanied and planned for some of the common mistakes that we see people do in that five-year window. All right, so I'll get to that momentarily. In the meantime, let's go back to the stock market side of things today. Well, it was an interesting day to day. We got the Supreme Court decision again. I know many of you have already heard about that, that President Trump is immune from criminal prosecution for quote official acts as president. That limits the evidence and the scope of special counsel Jack Smith's case. Remember, he was charged with four count indictment with a legally conspiring to overturn his loss as president. The vote today was six to three drew a scathing dissent from Justice Asanya Sotomayor, who wrote that it effectively creates a law-free zone around the president. You can say any president. So this was a historical case today, one that was obviously very beneficial to the former president. And so, I don't know, like I said, I can't quantitatively say that it had any reaction to the stock market, but it was just one of the many headlines that we dealt with today. We had ISM manufacturing numbers come in, showed the economy still struggling a bit on the manufacturing side. How do we represent that or measure it? Well, remember, we want a reading above 50 for manufacturing. Reading came in at 48.5. Now, that was also a little bit lower. That was June's reading. That was a little bit lower than May's reading of 48.7. So two things kind of hurt us there. We were below the reading of 50 and we declined from the previous month reading. Only other report we had today was construction spending down one tenth of a percent month over a month. That was May's data. That compares to April's data, where we rose three tenths of a percent. So the market kind of had to look at this and start digesting things. Now, the culprit today of, if you want to say anything, kept a lid on the gains to start off the quarter, would have been rising interest rates. We had a significant increase in bond yields today. Let me run right across the curve with you, because this was not a day where it was just, oh, just the 10-year was up or the two-year or something. No, it was right across the board. Listen to these increases. The two-year was up five basis points to a yield of 477. The five-year rose 11 basis points to a yield of 444. The 10-year, which we talk about every night on this program, rose 14 basis points. That's right, 14 basis points to a yield of 448. And the 30-year bond also rose 14 basis points to a yield of 4.64%. Now, again, we had some economic data that came out in China. The official reading of some of their manufacturing, now, they didn't have any problem. Their manufacturing was 51.8. So that was maybe one issue. Like I said, I can't pinpoint my finger. I'm not going to sit here and tell you that I know I can't pinpoint my finger for the surge. It was just, again, kind of one of those days that happened periodically, where the traders began to bail out of the bonds and they began to maybe redeploy the capital somewhere. Maybe they moved to cash. But whatever the case happens, when those bonds go down, those yields surge, and we had that. But I think the most ironic takeaway of today's trading action was it didn't affect the stock market. Normally, when you have a massive move like that in one day, I mean, again, 14 basis points is very significant in the 10-year. Then, of course, you have the negative impact on the stock market. And especially, the interest rate sensitive technology area was in the case today. Some of these winners today in the tech space. Apple $6.13 rise, 2.9% to 2.1675. Amazon gained $3.95, 2% to 1.9720. Microsoft hired by $9.78, 2.2% to 4.5673. And boy, Tesla had a heck of a day today, up $11.98, a 6.1% increase to 2.0986. Tesla was reacting to a solid June delivery from Chinese EV makers before reporting their second quarter deliveries tomorrow. But if we, you know, lay back the layers of the onion, as I like to say, we get into the bowels of the stock market, it didn't look good today. Declining issues led to advancing issues on a two to one margin on the New York Stock Exchange. Declining issues led to advancing issues by three to two margin on the NASDAQ. So, like I said, there was just some underpinnings. But once again, we've got some of these major tech names. And like I keep saying, over and over again, those tech names move up. The market goes and when vice versa. The video was quiet today, by the way, didn't really participate in the tech rally. So my collectors have been pulling back a bit lately. The video was up 34 cents is all 0.28% to 123.88. Now, how did we finish? How about a 51 point gain on the doubt? Our close was 39,169. NASDAQ gained 147 or 0.83%, closing at 17,879. And the S&P, a 15 point gain, a 0.27% finished at 5,473. Had a big run up in oil prices, though, my goodness, that holds, we're going to feel the pain at the pump. A 2.4% rise, 83, 46, a barrel. Gold didn't even move. It was, I mean, just a fraction of a move. I'm going to say it was flat at 2,338, 90. And then like I said, 14 basis point increase on the 10 year treasury out of yield of 448. Other than that, like I said, volume relatively light is going to continue to get lighter and lighter as the week progresses due to the holiday. So with that said, when we come back, I'm going to move into my topic tonight. 15 of the common financial mistakes you need to avoid in that five year retirement window. Let us turn it over to Kristin Snow. She's in the right now traffic center. Hey, Kristin. Welcome back to the John Sanchez Show on new stock 780 KOH. Happy Monday to all of you. Well, almost Tuesday now for from a work standpoint. So happy almost Tuesday. All right, here's how we finished once again, a 51 point gain on the doubt. The NASDAQ rose 147, the S&P higher by 15. Before you get to my topic tonight, again, 15 mistakes to avoid if you are within five years of retirement. I want to throw a couple headlines actually also that we're kind of interested in today on that news of the president and the Supreme Court decision. Trump media and technology DJT assemble on a decent day today up 1.01% or 33 cents to $33.08. Other big story that this helped out the Dow because Boeing is a Dow component. Boeing confirming the acquisition of Spirit Aero Systems. Remember, they owned them. They sold them off. And then of course, the quality supposedly has gone down the tubes because of Spirit on the fuselage construction and all the different problems that Boeing has had. So Boeing announced a while back that they want to buy back the company. Well, they finally did it. It's officially announced today that they are purchasing the company. Price tag is going to be $37.25 a share. Spirit closed at $33.80, up 2.83% or 93 cents. Boeing, a big move. Like I said, $4.31 gained a 2.37% rise to $1.8632. Now, Boeing also, when that news is announced not long before that Bloomberg reported that Boeing reported that Boeing may be charged with fraud by the Department of Justice, according to again, Bloomberg. So that obviously did not have much of an impact on the stock. And then Roaring Kitty, Keith Gill, the guy that ran up the GameStop stock and made himself very, very wealthy. And remember, last week, I'm sure all of you saw, he posted a picture of a dog. And so people thought, oh, what does this mean? And a cartoon character of it. And it was very similar to the chewy logo. So people thought, all right, he's going to move into chewy. And he did disclose over the weekend that he has a 6.6% stake in a chewy. And then this morning, it was announced that yesterday on Sunday, a class action lawsuit was filed against him for his pump and dump scheme, according to the lawsuit, class action might do, regarding GameStop. So that didn't have much of an impact throughout the day. And lo and behold, this afternoon, the gentleman that filed the class action lawsuit mysteriously dropped it. And so, well, I don't know, again, everyone's trying to figure out what the heck happened, not that I care. But chewy for the day was down a book 92, a 7.05% loss. A lot of this came in the after hours or so, or this loss, 2532 closing level GameStop down 5.71% or $1.41 to 2327. I've often wondered why someone hasn't done this. Why one of the regulators or somebody hasn't done this, again, a pump and dump is where you go on whatever method that you want, chat room, social media, et cetera. And you pump up the stock. And then when everyone starts to buy it, then you dump it. That's where the term pump and dump comes from. It's an age old fraudulent scheme that goes on. And the regulators, of course, will find you if you do that. So maybe this is not the one that's going to get them. But I think something down that road will, because what he does is just not appropriate, in my opinion. I know many of you may have made a lot of money, but I'm just telling you from a legal standpoint with that guy can get away with that, you know, licensed professionals like myself and things can't not I'm not jealous. I mean, God bless him for making a whole bunch of money and hopefully he made a bunch of people money, but just the way that it's done, it's just, you know, it's going to get himself in trouble. I promise you that sooner or later, it will happen. All right. So now you're up to date on the headline. So with that said, let us get to our topic this evening. As I said, the beginning of the show, we all know the term window of opportunities. Well, our window that we're going to discuss tonight is five years within retirement. Again, the reason five years is important because of the cycles that the markets work five years, three to five years up, three to five years down, even though again, these last few years, we haven't had that cycle before. But the other way to look at I was thinking about this during the break. The other thing I should have explained to you when I described the window of opportunity in this five year window is five years sounds like a lot, but when you're planning for retirement, it seems like it could take forever, you know, because you're anxious, right? But the other thing is, is it's not a lot of time to recover, especially if one of the problems is a significant decline in your portfolio. Five years is not a lot of time to recover and that'll be one of the things we talk about. So just follow me here on the five year window situation. So I'm going to cover 15 mistakes that I see very commonly. All right, we're going to start with number one. Some of these are going to be a repeat all this warning. Some of these are going to be a repeat of some of the things Jason and I talk about on a regular basis. Some of these may be a little bit new to you. But when you culminate them together, this is where the problem really comes in. You culminate them together and it's not just one mistake, but maybe three out of the 15 or five out of the 15 or sometimes 10 out of the 15, that's when there can be real problems and derail that retirement plan. All right, so the first one, you underestimate your expenses. Folks, this is why I cannot stress enough. Forget about how much worrying about how much money that you have. Forget about saying, Oh my God, I don't have a million dollars. I only got 1.5 million. That does not matter per se. What matters is what your cash flow is. That's what matters. I've told you a million times and I'll say it again, you know, I have clients that have retired with not significant sums of money saved in the retirement account, but they live one heck of a life because they're debt free. They watch their money and so on and so forth because it's all about the cash flow, right? So our first point is underestimating your expenses. So if you are failing in the retirement planning process to accurately estimate your retirement expenses, this, of course, can lead to insufficient funds, right? Negative cash flows, we call it. Now, what does this happen? Well, first of all, people don't plan. A lot of advisors don't plan about this. They've worried more about how much money they can take out of the portfolio for your income and not so much on the expenses. We do it just the opposite. And that's again, why I created risk retirement income savings calculator that you can find on our website that will do all this work for you, right? We want to know what your expenses are because that helps us in determining what kind of income you need to generate from your portfolio and other sources. Now, what are some of the major expenses I see people failing to account for? Health care costs, right? It's extremely expensive, as we all know, to go out and purchase your own health care. Heck, it's even, as I'll mention in a moment, it's even expensive when you're on Medicare. So health care costs are a major, major, expensive retiree that sometimes they forget about. Of course, it's nasty thing that we're still going through inflation. How about lifestyle changes, right? You decide to live in this in a new part of the country, maybe more expensive, maybe less expensive. Maybe you decide you want to do a bunch of travel. It's like, dog gone it. I've busted my butt for the last 35 years. I'm going to go travel. So that's a lifestyle change. Or, of course, they ever so important, unexpected expenses. It doesn't matter what they are. We can't predict every single expense, but we can get a good handle on what we know about, right? Our credit card bills, our mortgage payments, our car payments, things that we know about. And remember, the way I like to look at this, and Jason and I, is we break down our expenses, just visualize a cross, right? CROSS. And one in the upper left court quadrant, you have your fixed expenses. So things like your mortgage, the upper right, you have your fixed income, things like social security and pensions, etc. We net those two numbers out. We want to know exactly what's coming in no matter what happens on the variable side. Bottom left quadrant is variable expenses. Those are things that we can control, right? Things like groceries and clothing and beauty care and so on and so forth. Bottom right column, that's variable income. Things like portfolio income, maybe part-time income, small business income, whatever the case is. We net those two together. Now we know exactly what we have coming in, regardless of what happens in the stock market on the fixed side. We factor in the variable income side. It's like, okay, now I know what I've got coming in on a variable format, but guess what? If times get tough, market goes down, whatever the case is, we can always cut back a bit on the variable expense side of things. We can't really do much on the fixed income side, or fixed expense side of things. So that's why we want to break these down separately, and then we net them all together. And then we go, okay, client needs 2,000 a month, 4,000, whatever it is, can we generate that from the investments? And in most cases, we can. And then that's where we start creating the retirement income plan. So expenses, I just can't stress enough how important that they are. All right, we'll come back with our second point on our 15 mistakes to avoid if you are within five years of retirement. Let's turn it over to Kristin Snow. She has news traffic in with her. Hey, Kristin. Oh, okay, great. Welcome back to the John Sanchez Show on this stock 780KOH. Once again, we finished with a gain of 51 on the Dow, the Nasdaq Rose 147, the S&P higher by 15. All right, 15 mistakes to avoid when you are within five years of retirement. Just got the ball rolling. Let's continue. First one I mentioned was underestimating your expenses. The second mistake, not having that diversified portfolio. We don't need to spend a lot of time on that when you know how important it is to be diversified, again, balancing the risk, the returns, et cetera. Third point, claiming Social Security too early. Common question. Get it a couple of times a week. John, do I take my Social Security 62, 65 or IE full retirement H or do I wait till 70? My answer is always this. It depends upon your situation, right? Everybody's situation is different. Real simple rule of thumb I use. If you need the money, claim it at 62. If you don't need it, wait till you hit full retirement age, 65 years, 10 months, whatever your situation is. And if you really don't need it, wait till 70, right? You get a guaranteed 8% return from your full retirement age per year, that is. You get a guaranteed 8% return if you wait from full retirement age to age 70. Not bad. Nice little raise there, right? 8% a year guaranteed. As we'll talk about here in a little bit, longevity. People are living longer. So does it really matter? I mean, if you wait another four and a half years or something, whether you need the income or not, that's again up to you. So don't think there's one right answer. I hate some of these websites and people's going, oh, yeah, you always claim it at full retirement age or wait till 70. No, every situation is different. And again, that's why we go back to our first point, underestimating near expenses, right? If you need it after you run the cashflow, if you need that social security income, then take it. You know your big boys and girls. You know how much it's going to cost you by taking it early, but if you need to, to suffice your dream of retirement, beautiful. That's what it's there for. Fourth mistake to avoid, not planning for health care costs. Boy, underestimating the cost of health care and retirement, that includes your insurance premiums, your co-pays. Don't forget about that. Long-term care, it can be a major, major strain to finances. You, especially for those of you that remember it, 65 is when Medicare kicks in. Consider Medicare, right? And again, most companies, if you're still working at 65, some of them will supplement you or pay for your Medicare because you're getting off the company insurance. Every situation, again, is different. But consider Medicare. People think, oh, it's, you know, fairly inexpensive. Well, it is compared to going out and buying your own insurance. But you have to where I see people always make the mistake. They fail to account for the supplementals. The, all the different supplemental policies, you know, the pharmaceutical and they extended care. I mean, there's just a million things that, you know, can come with Medicare. It's not just the basic premium. I don't mean to say long-term care. That's my other point. But, you know, there's various supplemental packages that you can choose. Sometimes you have to, sometimes you don't. And again, they can add up what I see with our clients. And again, this is just a absolute rule of thumb. Medicare runs per person about $280 to $350, right? It depends upon their income, etc. That's kind of the norm. But by the time they tack on all the different supplementals, probably looking at another $100, 150. So let's just call it 500 bucks a month, still usually less expensive and better coverage than going out and buying your own policy. But it is an expense that you have to account for, especially if you have a significant other. Now you're talking $1,000 a month to be on Medicare, right? That can add up. Now the long-term care. This is one, of course, that can devastate an entire estate. I've seen, I've shared with you many times, multi-million dollar estates wiped out because one of the spouses has to go into extended long-term care, right? Long-term care is extremely expensive. You know, typically here locally, you're going to be looking on the low end, $3,500 to $4,000 a month. On the high end, upwards of $6,000, $7,000. If you go out of the area, I've got some clients down in the Bay Area. They're looking at $8,000 to $10,000 a month, depending upon the quality of the facility they go to. If you get into extended memory, Alzheimer's, etc., even locally, $9,000 to $10,000 a month is not unheard of. So just do the math and say, "Okay, if I had to pay that every single month, how long would my estate last? Would your spouse who's not in extended care or in long-term care, would they be able to live the lifestyle that I want them to live?" If the answer is no, sooner rather than later, please consider long-term care insurance. It is one of the best values that are out there. The old days, as you've heard me say many times, the old days, if you're just buying a straight long-term care insurance policy, those days are gone, right? Those are way too expensive. The industry now is combining life insurance with a long-term care writer, and what that has done is bring dramatically, dramatically brought down the cost of the long-term care component of this. I mean, I've been insurance licensed for 40 plus years, and one of the biggest things I always tell people, or what people you would always tell me when I propose long-term care insurance is, "Oh my God, if I don't use it, I lose it." Well, this is true. We have that with pretty much any type of insurance other than life insurance. So that's why the industry said, "Look, let's offer a long term," or excuse me, let's offer a life insurance policy, usually it's universal life. You're in a little bit of interest. You got the typical life insurance tax-free benefit coming to you, and let's add a long-term care writer to it. Because guess what? Well, no one thing. We're all going to die. So at least someone will benefit from the life insurance component if you've never used the long-term care component of it. So clients seem to swallow that pill much, much better than just, again, the long-term care insurance stand alone in and of itself. And the cost has come down dramatically by doing that. Typically, I mean, I shouldn't even quote, but put it this way. If you want to let me know, send a request to our office or call the office, we'll get a quote for you. It is significantly less than probably what any of you think it's going to be. But once again, the problem, if you don't have it, you can wipe out your estate. So as you're planning and retirement, don't forget to plan for the long-term care statistics. I cannot talk tonight. Statistics are north about 62, 63% of us will need some type of long-term care in our lifetime, right? It's just the way the odds are. But again, it can wipe you out if you don't have the proper insurance for it. Mistake number five. Again, I don't need to spend a lot of time on this one, overlooking inflation. Now, early in my career when I would run financial plans or create financial plans, we always factored in 3% inflation. That was kind of the average, right? That accounts for low periods of inflation and high periods. I don't think that's inaccurate anymore, and that's why we don't even use that at this point because, you know, again, what's the norm? Is the norm three, four, five? We had periods of 9% inflation right after COVID. So again, so many of the norms have gone out the window. That's why as you'll hear, when I get down to the end of my list, one of the most important things is you got to keep this plan up to date because things change all the time. But if you don't account for inflation, that of course will erode your purchasing power. So make sure that your retirement and consortices can keep up with inflation. I cringe so many times, you know, when someone says, oh, yeah, I'm doing great. I've got a couple hundred thousand dollars locked up in my 5% CD. First thing I say is, well, enjoy it because you'll probably not see that again in quite some time. Number two, are you really making 5%? What do you mean? Well, let's factor in, you know, 3.2, 3.3% inflation. So that wipes out, you know, leaves you a net of all those be generous and leaves you a net of about 2%. And then you've got to pay income taxes on that CD interest. So are you really coming out ahead? What are you really netting? One, one and a half percent? So don't think a fixed income investment is going to keep you ahead of inflation. It may sound good at a cocktail party to say you're getting 5% on your cash on a CD, but in reality, what are you really, really earning? So that's where, again, diversified portfolio, have a little bit of stock market, some income-producing bonds or bond-like type products, et cetera, that are paying much more than that. That's how you overtake inflation and make sure that you do not overlook it in your retirement planning process. Number six, failing to pay off debt. Oh, such a common one. This is why we require that we run risk on all of our new clients when we're planning for retirement. Because look, one of the things that we always find is why you paying $1,000 a month on a $5,000 credit card bill, right? This doesn't make cash flow sense. So we'll come together, get the money for them, and have them pay out that off. We see that a lot. You got to pay off the debt as much as you possibly can. You all know the adage, good debt, bad debt, good debts, considered mortgage, bad debts, consider pretty much everything else. But remember, debt is debt. I don't care if it's good or bad. It's coming out of your pocket in retirement, therefore impacting your cash flow. So try, and again, this is part of this five-year window. Try to get as much of that debt if not all of it paid off. Maybe you're not going to be able to pay off your house, but that's okay. As long as you know what it is, and it's worth it to you, or then you consider other things like downsizing and so on and so forth. But boy, failing to pay off the debt can really have a major impact. All right, we'll come back with point number seven on our 15 mistakes to avoid when you're within five years of retirement. Let's wrap it up with Kristen Snow in the right now at Traffic Center. Welcome back to the John Sanchez Show on Newstalk 780k, which he has a quick reminder. If you've missed any of our broadcasts, please go to your favorite podcast distributor and pick up the show. I was looking at the stats over the weekend. It's amazing. We just started really doing the podcast and going back 2021, and we have done 795 podcasts. That's right. That's what's out there. And to go back and look at some of these topics, it's amazing. Pretty much anything financial planning wise you want to learn about, it's there. So just search the John Sanchez Show on iTunes, on Spotify, et cetera. Our numbers are going through the roof for some strange reason, and I love it. But I want to continue the momentum. So please pick up your favorite podcast, or pick up our podcast at your favorite distributor and listen, it's like I said, just a great way to learn on 24/7, 24/7. All right, now let's get back to our topic tonight. I've got a hustle here. 15 mistakes to avoid when you are within five years of retirement. Let's go to our next one. Not having an emergency fund. Well, again, we all know we don't want to tap credit cards. We don't want to have to liquidate investments if we don't need to when an emergency arrives. So you got to have that emergency fund. And again, as we've discussed many times, what's the rule of thumb? Three to six months of living expenses. That's the quote textbook answer, but that's not the world Jason and I live in. We live in the real world. Whatever you feel comfortable having. If you got a good steady job, probably don't need six months worth. Got a job where you're in complexity, which maybe you're a small business, whatever it is, maybe you want a year's worth. That's again up to you. But just have an emergency fund, park it in a money market account, something that's accessible, and again, that'll stop you from having to tap into your investments at the least possible worst time. Misjudging your longevity. As I've shared with you many times, when I started in this business, we used to plan for men living in the basically late 70s, then it bumped up to the early 80s and now it's mid 80s. But frankly, we try to plan for the 90s for both men and women. Money, people live longer, so money's got to last longer. Don't misjudge your longevity. It's better to be safe than sorry. Don't adapt that camper. A lot of clients say it kind of jokingly, but they're also serious is I want to bounce my last check is what they say. And then also I want to die with a dollar in my account. And I always say, well, you tell me the day you're going to die. And we'll make sure you have a dollar in that account. And that kind of shuts them up on that side. But it's it's fun talking. But again, don't misjudge your longevity. Point number nine. Oh, near and dear to my heart, you don't have a defensive strategy. You know, I just spoke with some clients over the weekend and late Friday night. Look it. You got a plan for this, folks, things are good right now. They won't always be, you know me, I'm Mr. Optimistic, but I have to plan for our clients. Jason, I have to plan for when times do get tough. So we have defensive strategies. If you don't, please come visit us. We will show you different things that you can do, but you have to have a defensive strategy. Otherwise, you may have enough money going into retirement, but can you sustain it if you have a defensive strategy? Probably not. That leads to number 10, not adjusting your investment strategy. So as you get closer to retirement, yeah, most people, you know, you're in a growth mode when you're working. Now you need to be in the capital preservation mode. Remember, there are three goals when it comes to portfolio management, capital preservation, growth and income. What are your priorities? Number 11, overlooking the tax implications taxes can kill you in retirement. You know, you usually have had your money, your income withheld. So you get to do these wonderful things called quarterly taxes, and that can be an entire learning experience there. So don't overlook the tax implications and knowing what accounts to withdraw from to supplement your retirement income. Number 12, I'm going to be biased, not consulting a financial advisor, whether it's ourselves or somebody else out there. Man, please work with a professional. This is stuff that most people have no idea how to do. And it's your nice nest egg. You've saved all these years for it. Number 13, failing to update your estate plan. Number 14, ignoring the impact of these market downturns. And number 15, not reviewing and adjusting your plan. Remember, this is a living breathing document. You have to adjust your plans as your situation changes and the market does. I hope this was helpful. I've enjoyed it. We will do it again tomorrow night with the boys on the John Sanchez show. God bless. Have a great evening. This program was sponsored by Sanchez Wealth Management. The material in this program was intended as general information only and should not be taken as specific investment tax or legal advice. None of the information on this broadcast was intended to be a solicitation for the purchase or sale of any security. Further information is available by contacting john@sansheswealthmanagement.com or 775 800 1 801. John Sanchez offers securities and advisory services through independent financial group LLC, a registered broker, dealer and investment advisor. Remember, FINRA SIPC securities offered only in states John Sanchez is registered in Sanchez Wealth Management LLC and independent financial group LLC are unaffiliated entities. Looking for excitement? Shumba Casino is here. Play anytime, play anywhere. Play on the train, play at the store, play at home, play when you're bored. Play today for your chance to win and get daily bonuses when you log in. 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