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*A Roth conversion may not be suitable for your situation. The primary goal in converting retirement assets into a Roth IRA is to reduce the future tax liability on the distributions you take in retirement, or on the distributions of your beneficiaries. The information provided is to help you determine whether or not a Roth IRA conversion may be appropriate for your particular circumstances. Please review your retirement savings, tax, and legacy planning strategies with your legal/tax advisor to be sure a Roth IRA conversion fits into your planning strategies. All rights reserved.
Video Transcript
Rebecca Powers 00:24
Welcome to this week’s edition of On the Money with Secure Money brought to you by Brian Quaranta and his amazing team at secure money advisors. I’m Rebecca Powers. So happy to be with you, Pittsburgh and everyone across our great state. Great to see you, Brian.
Brian Quaranta 00:39
Good to see you, how are you this morning?
Rebecca Powers 00:40
I am wonderful. We got these beautiful new mugs, new to our marketing team. And of course, your book, it’s been reprinted again, because you’ve given so many copies. We really want you to make an appointment, though to get this book. A lot of people are just getting the book and that’s fine, too. How important is it? When you talk about right track your retirement, that’s the name of the book, the name of this show is secure money for a reason. Yeah, let’s talk about how important those five key areas of retirement are that you outline.
Brian Quaranta 01:11
Yeah, they all lie in the book. And really, I needed to put together a roadmap for people that was simple and easy for them to understand. Because, look, the invention of Google and Yahoo, and all of our search engines have been a great thing. But it’s also caused a lot of problems. I mean, you can go on there, and you can google whatever you want about any health ailment that you might have, I think doctors have even created a new name. It’s called Cyberchondria. Right. But people get so they get they get so worked up with something they found on their arm or their neck, right. And all of a sudden, they think they’ve got cancer, and all it is an ingrown hair. Well, if that happens on the health side, imagine what’s happening on the financial side. So, we have access to information, but that information is confusing people. So right track, your retirement was written to give people a very, very simple guide to help you understand how to build a retirement strategy. The difference between an investment plan and a retirement plan are very, very different. And the five key areas are income, taxes, investments, health care, and your estate planning. And if you make sure that each of those areas are handled, now we’re talking about having a real retirement plan. I hate to tell you if you have a 401k. That’s great. That’s wonderful. But you have investments, you don’t have a retirement strategy yet. Yeah, that’s what yet. Yes. And that’s exactly what we do at secure money advisors is teach people how to build that strategy.
Rebecca Powers 02:42
So, once you call all of you listening or watching us at home, once you call, we’ll send you this book, even before the appointment or don’t want to give it to them in that first appointment.
Brian Quaranta 02:49
No, they get it they get it before the appointment, they’ll get a little package in the mail with the book, and what to expect on the appointment. And, and usually, if you could read that book, prior to coming in, it’ll really prep you for a lot of the conversation that we’ll have in that meeting. Absolutely.
Rebecca Powers 03:03
So, income that is the first thing Yes, it is. So, you cannot retire. Because when you have retirement coming your way, it’s wonderful. Not if you don’t have income, though. So, you still have bills?
Brian Quaranta 03:15
Yes. Well, there’s not a whole lot that changes between your working years and retirement years from an accounting perspective. Right? Right. During your working years, we have money coming in, and we have money going out, right. And in retirement, it’s still the same money comes in, money goes out, but where the money is coming in from is what changes, because when you retire, the paychecks gonna stop. But bills, taxes, and all the things that you promised yourself that you were going to do in retirement, what we call the bucket list, right? You’re going to need money to do all those things. And you know, Rebecca, unfortunately, Social Security for a lot of people is just not enough money for them to live off of probably most people. Yeah, and the major problem that we have in our country right now is about 80 to 85% of people retiring today do not have a pension. So, the only predictable income they’re gonna have is Social Security. Well, most people, if not all, are going to need money above and beyond that. So how are you going to do that? How are you going to take that money from your 401k? How are you going to start withdrawing it? And how are you going to do it in a way that you don’t run out of money? You know, studies have been done one recently by AARP. And they interviewed 1000 people and they said, What do you fear most? The fear of running out of money, or do you fear death? 90% of those surveyed said they fear running out of money more than they feared death alone. And this is why you have to get the income, right because remember, your 401 K or your IRA is not designed to provide income. It was designed to grow your money, right? So, you have to make a fundamental shift when you retire to get the money that you’ve accumulated over that pier. It’s time to start providing you with an income stream. So, what we teach people to do and what I talked about in the book, which by the way, if you go to onthemoneyoffer.com, again, it’s onthemoneyoffer.com, you can get a copy of the book there. And you can also schedule a 45-minute complimentary meeting right there where you can come in, and we can go through your specific situation. But in here, I talk about how to go about building that income, because you’re going to need to give yourself a pension if you don’t have one.
Rebecca Powers 05:27
And that income plan, because so many people, I would say nine out of 10, and I used to be one of them did not have a written plan for retirement. If it’s not in writing, it’s not really a plan. So that income Yes, is that big, important part of your retirement house? Where are some other pieces or places we can get income? Yeah, it’s exactly general like Yeah,
Brian Quaranta 05:47
I mean, if you look at most people, I mean, there’s a few ways you can generate income. One is your Social Security. Two could be a pension. But again, 85% of people don’t have one and three could be some type of rental property, right? If your rent, if you have rental properties that are generating cash flow, you could have dividend paying stocks. But if you look at most people’s investments, typically they have growth-oriented investments. And those growth-oriented investments are not designed to generate income. And that’s what nobody’s talking to them about. And that’s what I want to teach you, when you come into secure money advisors is how to take what is probably designed for growth, meaning your 401k, your 403 B, your IRA designed to grow your money, but not designed to generate a paycheck. So, when you come in, we’ll teach you how do you go about building a private pension for yourself? How do you give yourself that peace of mind security that we all deserve going into retirement, so that you can enjoy the things you want to do spending time with your family, your grandkids? going on vacations, that’s what retirements about. So, if you go to onthemoneyoffer.com, you can not only get a copy of the book there, we send it to you absolutely free, no charge, I don’t know any other way to say it, or even call 1-888-382-1298, our team is standing by to take your call, and you can get them scheduled. My promise to you is this. If you come into the office, nobody from my team will ever try to sell you something or press you to do anything. But the meeting that you will have will be very eye opening and informative. So, we look forward to seeing you there.
Rebecca Powers 07:18
It could be life changing. I know it certainly was for me and my husband. So, we’ll be right back with Brian Quaranta, we’re going to keep talking about those five key areas of retirement, call that number now get that book. And again, it has absolutely no cost and no obligation more with how to keep your money secure right after this.
Brian Quaranta 07:35
So, everybody can tell you how to invest your money. There’s not a lot of people out there and a lot of firms that can teach you how to use your money. Most people also tell you that they’re scared. And the reason they’re scared is because they’re afraid of running out of money.
Neil Major 07:49
The last thing you want to do is have a really good job and you’re in your 60s retire and be looking for work again in the late 70s.
Brian Quaranta 07:58
The average person might say, well, a good portfolio would be a good mix of stocks, bonds, mutual funds, none of a good portfolio is all designed around the five key areas, income, taxes, investments, health care and legacy planning.
Neil Major 08:12
Because we’re not just product pickers here, what we do best here as we build retirement plans.
Brian Quaranta 08:17
9 out of 10 people, when they walk through the door would ask us, we just want to know if we’re on the right track. And I always say if you’re not on the right track, when would be a good time to know it. Probably now,
Neil Major 08:27
People, you know, can actually see a vision once we start to really build out their plan.
Brian Quaranta 08:33
This is about you if you’re not getting what you need. And you feel that when you walk out of the advisor’s office, it’s time to get a second opinion. And you can’t get a second opinion from the person that gave you the first the difference at secure money advisors, as a fiduciary firm, we help you manage the risk, build the income and give you the retirement withdrawal.
Rebecca Powers 09:04
Welcome back to On the money with secure money brought to you by Brian Quaranta and his amazing team. And I’m Rebecca powers. We spent the whole first part of our show just talking about income. Yeah, because that is the foundation of your house. Yes. Another thing that people and I was one of them didn’t even realize how important tax planning is. If your advisor or hopefully you have a fiduciary is not having those conversations with you about tax planning forward. To me, that’s a red flag. Let’s talk about the importance of tax planning forward.
Brian Quaranta 09:35
Yeah, well, first off, if you ask most people, do they feel taxes are going to be going up or down in the future? Well, let me ask you, do you feel taxes are gonna go up or down in the future? They’re going down?
Rebecca Powers 09:46
Everyone will say they’re going up everybody will say they’re going what’s our national debt now? 35 trillion. I can’t even keep up. It’s a lot. We
Brian Quaranta 09:53
can go to the national debt clock and we can figure it out. But you know, at some point you just can’t keep up with it. But here’s why tax free My name is so important because for most of us, we were given a retirement plan from our employer called a 401k. So, when you made a contribution to that 401k, you got to deduct that contribution from your taxes, well said, You got to deduct it from your taxes. That means that when that money goes into that account, it is going to grow tax deferred. So, let’s just do some simple math. Let’s say you put $100,000 in that account, okay. And over a 20-year period, it grows to a million dollars, okay? Well, if you want to take all of that million dollars out 100% of that money, every single dollar is taxable, at whatever your income tax bracket is. Yeah. So, here’s why tax planning is so important. And you really have to understand this, because what we’re really talking about here, when we talk about tax planning is we’re talking about protecting your purchasing power. So let me use the example of somebody needing let’s say, $1,000 a month from their retirement account. So, if they take $1,000 a month out of their retirement account, and it’s a tax deferred retirement account, that means they’re going to owe taxes on that $1,000, let’s assume that they’re in a 20% tax bracket, that means that $1,000 is only going to net them $800. But if we believe that taxes are going to go up, and let’s say your tax bracket goes from 20% to 30%. Now that same $1,000, withdrawal is only going to net you $700, not 800. So just by taxation alone, Rebecca, we’ve lost purchasing power, now, it gets uglier, because add inflation into that now, right at a 3% inflation rate, which is not where it’s at right now.
Rebecca Powers 11:48
It feels like 30. But anyway, it’s a lot more.
Brian Quaranta 11:51
So, what we’re really talking about when we’re talking about income and taxes is we’re talking about protecting your long-term purchasing power, we need to make sure that 20 years from now, or 30 years from now, you still have enough money to pay your bills, to put food on the table to do the things that you want to do. And that’s why tax planning is so important from an income perspective. Now, there’s the legacy component of it, too. But I think we’ll pause on that one.
Rebecca Powers 12:18
Yeah, let’s stay on taxes. Because you pointed out a few months ago that at the end of 2025, the current tax bill sunsets, yeah, that means it ends so whoever’s in Congress, it could be the Wild West, really, Oh, am I wrong? Do we have any idea what they may or may not do?
Brian Quaranta 12:33
Tax rates, we have no control over, right, we have no control of where tax rates are gonna go. Because when they do sunset, things will change. Who knows what they’ll try to implement. And this is why one thing that we’ve talked about with our clients, and this is not going to be for everybody, okay, not everybody is going to qualify to do what I talked about next. But that’s something called a Roth conversion. Roth Conversions can be an advantage to you in retirement, potentially, depending on what your situation is. So, you can convert from taxable money to tax free money. So, for example, let’s just say somebody had $100,000, and an IRA account, and they wanted to convert it. So, we convert the $100,000. Maybe we do it all at once. And maybe they got to pay 25% in taxes. So now, they’re going to net $75,000. So that $75,000 Now is going to be in a Roth IRA, but all the growth on that account now is going to be tax free. And in the future, when you start to take $1,000 a month out or whatever you would need, it’s actually 1000. No, it’s actually $1,000. Now this is very important. Because the example I gave prior the $1,000 coming out, and you’re paying taxes on it, the reason why Roth Conversions can be good is because when you do Withdraw $1,000 from a Roth IRA, it is $1,000. Even if tax rates go to 50%, it’s still $1,000. And this is why I want you to take advantage of the offer today, I want you to go to onthemoneyoffer.com You can get a copy of my book there, I lay out this entire strategy. In my book I walk you through it’s a very simple guide to help you build income provide you with peace of mind and security, retirement, which is all we all want. With our retirement dollars. We’ve worked so hard to get to where we’re at. The last thing we ever want to do is get it wrong. This is not a dress rehearsal, we do not get a second chance at this, we have to get it right out of the gates. So again, go to onthemoneyoffer.com You get a copy of my book, you can also schedule your appointment there. Now. My team is also standing by so you can call 1-888-382-1298 Again, that’s 1-888-382-1298 and you can schedule directly with them to come in. We’ll send you a copy of the book and a little packet of what you can expect during your appointment. That appointment that we’re going to do with you is for you. It’s designed to give you an hour of our time absolutely free there is no charge for it whatsoever. All you have to do is schedule that appointment today. Don’t kick the can down the road. This is not the time to procrastinate called 1-888-382-1298 and scheduled today. Absolutely.
Rebecca Powers 15:11
And it is a very short, easy read. I promise you can do it in just about an hour. And it is extremely informative. It is about keeping your money safe, more with secure money and Brian Quaranta right after this.
Announcer 15:30
The work never seems to end until the day it finally does. After nearly a lifetime on the job, you should be rewarded for all the time you spent working. Whether that’s crossing off items on your bucket list, learning a new passion or rekindling the love of an old one. After all, life isn’t over when you stop working. It’s the start of an all-new chapter, the one where you’re the writer and you get to choose how your story will go. A way to achieve that is by having a clear financial plan to sustain your golden years, the biggest fear most retirees have is if they’ll have enough money to maintain the lifestyle they’ve always enjoyed. Having a plan to help protect you against the curveballs life often throws will help to maintain your lifestyle. Call today to get your free written financial plan to see me live every day to the fullest and enjoy the retirement of your dreams.
Rebecca Powers 16:22
Welcome back to On the money with secure money. And of course, Brian Quaranta with secure money advisors go to onthemoneyoffer.com During this broadcast, because we really want to send you this book, Brian even pays for the shipping and handling. And that first appointment, leave your checkbook at home. It truly is just to get to know you. You’re the opposite of the cookie cutter.
Brian Quaranta 16:44
Yes, yes, you’re
Rebecca Powers 16:44
not the big box experience, you are a true fiduciary.
Brian Quaranta 16:48
Correct. And folks, as I’ve always said, during all these shows, our promise to you is that when you come to the office, nobody from my team is ever going to try to sell you anything. I know that coming and seeing a financial advisor can potentially be a very intimidating process, you might be concerned that, well, I don’t think we’ve saved enough, we might not have enough money to see these individuals. You know, I feel like I don’t have my stuff together. It’s all this organized. You’re not there to come in for us to judge you. Right, you’re there to come in and tell us what’s going on. It’s no different than when I go to the doctor and I say doc, I’ve got this sore throat. It’s been scratchy for a couple of days. I don’t know what’s going on. He does a few tests. And he says, here’s how I can get you better. That’s exactly what we’re going to do. We’re going to help diagnose the problems first. If there are any problems there, we’ll talk about some solutions that can potentially help you. But if you’re on the right track, if you’re doing the right things, the one thing you’ll love about my team is that we will shake your hands and tell you that you are on the right track. Just keep doing what you’re doing.
Rebecca Powers 17:53
And since you compare that to a doctor, it’s kind of like how can you get a second opinion from the person who gave you the first if you had a health scare, you would certainly a serious health scare, especially Yeah, go to get that second opinion. So, the five key areas of retirement, this is what we all need to know. We talked about income already. And we talked about tax planning how to save potentially massive amounts of money in a full lifetime. Yeah, what’s kind of the next step?
Brian Quaranta 18:17
Well, your investment strategy. So, your investment strategy plays a big role in tying back to your income. So, remember, we were talking about the different ways to get predictable income, you know, you’ve got your Social Security, you’ve got rental income, you have pension, you have dividend paying stocks, if you were to own them. So, what are other ways to generate income if you need money above and beyond that, let me give you a case that I worked on a couple of weeks ago with an individual. So, there’s something called portfolio equivalent value. Okay, never heard of that, oh, equivalent value. That’s que PEV portfolio equipment value. Here’s what that means. In my book, I talk about how Wall Street wants you to take income from your investments, they use a strategy called the 4% rule. I’m not going to dive too deep on it here, you can read it in the book. But the idea of the 4% withdrawal rule was, if you saved doesn’t matter how much money I’m gonna use a million dollars as the example you saved a million dollars in your very first year of retirement, you could withdrawal $40,000 from your investments. And then every year you can increase the withdrawal by 3%, or whatever the inflation rate is to give yourself more money on an on a on an annual basis. Well, here’s the problem with that. We know the market doesn’t go straight up. Right now, people got a little bit spoiled over the last, you know, probably seven, eight years where the markets kind of went straight up. That’s not the norm. We have a bear market since 1929. We have bear markets every 3.4 years on average, every 3.4 years on average, we will have a bear market. So, you know there’s going to be a time period where the markets go down. Well, if you’re following the 4% withdrawal rule, it says just take 4% a year plus your inflation rate from your investments. Well, what happens when your investments go down in value, and you need income.
Rebecca Powers 20:14
And inflation is going up? And probably taxes. Yes.
Brian Quaranta 20:18
Yes. Now you need income. Now your market your account’s down, because the market’s down, and now you take money out to live off of, you’re compounding your loss, you’re compounding the losses and you’re locking into losses. See, when you’re retired, the losses will hurt you more than the gains will help you. So how do we take the least amount of money and get the most leverage with it? So, for example, a young lady that I was working with a young I mean, when I say young, I mean, I think 60 years old is young. I mean, that’s young.
Rebecca Powers 20:50
It’s the new 40 they say.
Brian Quaranta 20:53
It is. But, so, for her she needed about 40,000, I’m sorry, 30? About $30,000 a year in income. Okay, so we use an income annuity. All right. So, at 60 years old, we took $300,000 of her money, and we put it into this income annuity. Now, just like Social Security, the longer you wait, what happens to the amount of money you get with Social Security, it grows, it grows. So, we put this $300,000 into the income annuity. And in five years, she’ll be able to turn on a guaranteed income stream for the rest of her life of $29,000 a year, every single year for the rest of her life. Oh, by the way, if she dies, her husband will continue to get the income. And if her husband dies, the balance in the account we paid to the kids now, if I needed to generate $29,000 a year, for her using the 4% rule where I had to use the stock market, yeah, I would need that $300,000 to grow to over $650,000 over that five year period. So ask yourself this, where is the probability of success higher, us taking $300,000 putting in the stock market and hoping and praying that this thing grows to 650,000 plus in five years, or buying a guarantee, a contractual guarantee from a big, strong safe insurance company that guarantees you that in that fifth year, or if you wanted to wait longer, it would even go up? This way, you’re taking a small amount of money, and you’re creating a private pension. This is the stuff you need to know about. Yeah, people are not telling you about this stuff. This is the stuff that’s going to give you the foundation, the peace of mind, doesn’t mean you have to have. It doesn’t mean you don’t have to have any money in the stock market, you can have money in the stock market. But any money to keep in the stock market folks, that needs to be long term money, it needs to be an account that you’re not going to touch for at least 10 years or longer, because studies show that time is your friend when you’re in the market. And if you’re in an income phase, and you’re pulling money out when the markets down, the market is not going to be your friend.
Rebecca Powers 23:02
Absolutely. And when you hear about diversification, it doesn’t just mean have different stocks in your portfolio. It truly means diversify. Yes. Right. Social security, maybe a little rental property, maybe this, maybe an annuity. And I can say that my husband and I, you know did that very thing. And it’s incredible peace of mind. Yes. Explain how the insurance companies as you said those big giant 100-year-old insurance companies, yeah. Why are they so strong, even when the stock market is going down? It’s not in the market, but it’s tied to explain how you can still get some of the gains? Yes.
Brian Quaranta 23:33
Well, you know, I get this question a lot. Like how can an insurance company pay me that kind of money for the rest of my life? Ask yourself this. How can I buy a new car today? Get in an accident tomorrow and they write a check for the entire amount? Yeah, right. How can I have homeowners’ insurance and my house gets caught on fire, knock on wood, and they pay for the whole thing? Right? Insurance companies do something better than no other company out there. They know how to mitigate and leverage risk through reinsurers and reinsurers right. But insurance companies are also highly regulated, which means that they don’t have the autonomy to just go out there and buy anything they want. The insurance departments that regulate these companies keep what they can buy in a very- so they they’re really forced to go out and buy really good triple A rated bonds to back these guarantees because they are providing you with a contract, which is the which is the greatest form of guarantee you can have is a contract. If you’ve ever signed paperwork to be in a stock market, you know, all that fine print that probably none of you read basically says if they lose all of your money, you can’t do anything about it. That’s not a contract, right? That’s them disclosing that, hey, you taking risk in the market, you may lose all of it. And if you do, there not a whole lot you can do about it. And this happens to people over and over and over. But think about This, we insure everything in our life. We insure our health, we insure our homes, we insure our cars. Right? But why do people don’t take the time to insure their retirement income? I don’t understand. And here’s why I think they don’t. Because Wall Street, which I worked for, for a long time, has said that annuities are the worst thing you can purchase on the face of the earth. And that has done a disservice to the American public. Because all you’re doing when you buy an annuity is you’re essentially buying yourself your own private pension. And this is why I want you to go to onthemoneyoffer.com. Again, it’s onthemoneyoffer.com Get a copy of my book, you’ll see it’s called right track your retirement. The reason I call it that is because most people want to know whether or not their retirement is on the right track. If you weren’t on the right track, when would you want to know about that? In this book, I lay out the five key areas that you absolutely must handle going into retirement, your income, your taxes, your investment strategy, your healthcare strategy, and of course, your estate planning strategy. So, call 1-888-382-1298, my team standing by, you’ll be able to schedule your appointment, you also get a copy of the book, we’ll send you out a little packet of what you can expect during your meeting. I don’t want you to be intimidated about coming and seeing us. We’re not there to judge where you are, what you’ve done, we’re there to help my team and I live by a very specific set of rules. And that is we are problem solvers. And we are going to try to identify any problems. If but if there are no problems, we’re going to reach across the table and tell you you’re on the right track, you’re doing the right things, you don’t need us. But how good are you going to feel to get that confirmation. So again, call 1-888-382-1298 You can go to onthemoneyoffer.com You can scan the QR code, there’s lots of places that you can schedule and get a copy of the book. But you got to do your part, don’t kick the can down the road. Don’t procrastinate. And as always, my promise to you is when you come into the office, nobody from my team is going to sell you anything. Nobody’s gonna pressure you to do anything. So, take the time and schedule today.
Rebecca Powers 27:15
And this is the opposite of a big box experience. I can promise you that. Brian and his team. Of course, Brian is a fiduciary. Join us next week we’re going to talk about the difference between what a fiduciary is and maybe some other advisors. How often have you been speaking to your current advisors, and this can definitely be life changing and eye opening. As you said, Brian, if you’re on the wrong track, when would you want to know it’s right it would be today.
Brian Quaranta 27:39
Yeah, I would want to know today, wouldn’t you? Absolutely. Yes,
Rebecca Powers 27:42
it can be a real game changer. Thank you so much for joining us with on the money with secure money with Brian Quaranta the team is secure money advisors Remember to go to onthemoneyoffer.com To get your book. We can’t wait to meet you. Thanks. And we’ll see you next time.