To see a full schedule of our TV airtimes, please click here.
Video Transcript
Rebecca Powers 00:23
Welcome to this week’s edition of on the money with secure money with Brian Quaranta, I’m Rebecca powers, of course, Brian created secure money advisors, and I am his co-host. Happy to be here every week. Thanks for having me.
Brian Quaranta 00:38
It’s great to be here with you today.
Rebecca Powers 00:39
We’re always talking about the roadmap to retirement. How do you get there? How do you see a clear, easy path? Brian wrote this book, and he wants each and every one of you to have a copy of it, so definitely give us a call during this broadcast. We can get you in for that complimentary consultation. The foundation of any retirement is, how am I going to pay the bills the rest of my life, right? That’s where you always start.
Brian Quaranta 01:01
That’s right. How are you going to replace that paycheck? Because the majority of people retiring today do not have pensions. Matter of fact, statistics show us that 85 to 90% of the people have a 401K, not a pension. A 401k does not provide a guaranteed source of income. They’re mostly investments that are designed to grow when the stock market is going up, but they’re also designed that they’re going to go down when the stock market is going down. So, there’s a fundamental shift that people have to make when it comes to making that retirement plan work, the things that got them to the retirement are not the same strategies and techniques that are going to get them through retirement. They’re completely different, actually, right, completely different fundamental change, and that’s the biggest challenge for most people, because the big box firms are just going to tell you to roll over your 401K and diversify into an investment portfolio, and probably take some money out each year or every single month to replace your paycheck, because Social Security is not going to be enough money for people to live off of Social Security was only designed to replace about 40% of your income. So, what are you going to do when you need 60% more income? Because most people that were retiring, they’re not retiring on less money. They typically needed the same amount of money, because they’re going to not want to change their lifestyle. So, these are the fundamental challenges that we’re dealing with at secure money advisors. But this is where we have the best solutions, because this is the area that we focus on, right? We’re not a generalist, we are a specialist, and we specialize in the retirement planning area. So, we’re constantly seeing the same problems over and over. I’m concerned that I’m not going to have enough money in retirement. I’m concerned that I might run out of money in retirement. I’m concerned that I can’t take this much risk with my money, because I can’t afford to take another big market loss, because I don’t have the time to recover. These are all the things that we hear people tell us, and that’s why I wrote the book, so that you would have this guide to help you navigate this territory and get rid of all the noise that is on the internet, that’s on TV, all the talking heads. You need a simple plan that’s easy to understand, that’s black and white, that’s going to get you through retirement with peace of mind and confidence.
Rebecca Powers 03:36
And since you said the word plan, it always starts with a plan, and that doesn’t mean your statement that you get each month from your stocks. It is a written, complete, comprehensive plan. And I know I’ve asked you to do this before, but please give your personal story about you did work for the big box, and you saw the people with the stress and the question marks. And that’s the whole reason, the philosophy of why you created yours.
Brian Quaranta 04:00
I write about it in the book, because the thing that bothered me was, look, I didn’t grow up with a silver spoon in my mouth. My mom and dad worked really, really hard for their money. As a matter of fact, my dad had a mcgum rewards catalog store. Most people watching this right now probably remember mcgum rewards catalog store. My dad had one in New Jersey, and at the time that he had the store, things were really well. I remember things being actually pretty darn well. There was a popular doll being sold at the time called the cabbage patch doll, and I can remember there was a line out the door for people to pick up this cabbage patch doll. Now, there was no social media back then, so News didn’t travel as fast as when it travels today, but my dad got a call one day from a friend, and he said, hey, Bob, did you watch the news today? And he says, no, what happened? He says, Montgomery Ward just filed for bankruptcy, and they just announced that they’re going to be closing the number of the catalog stores. So, my parents went from everything being okay one day to the next day, you know, no longer had. In a store no longer having an income,
Rebecca Powers 05:02
and they have pensioned, and Montgomery Ward?
Brian Quaranta 05:05
No pensions. So, he didn’t even have that no pensions, right, just the savings that he had and no plan, right, what to do. So, what my dad taught me is, if you work really hard and you put your head down, you can dig yourself out of any situation. But because of that, I was always very sensitive to the fact of how people were managing their money, right? I remember my dad always talking to a stockbroker, and he would be buying things like Snapple tea, if anybody remembers. I mean, it’s still out there, but, but those risky things, risky things, hoping, hoping that he’s going to hit this lottery ticket, right? And that’s the thing with most people, people that invest in stocks, is they think they’re going to hit big, and what they don’t realize is, if you’re investing in stocks, you got to prepare, be prepared for those stocks to go down, and you got to be prepared to take as much as a 50% loss and be willing to wait for it to recover. Now here’s where the contradiction comes in with retirement planning. The contradiction in retirement planning is if you are telling if all the big box firms and all the information out there is telling people you need to be in the investments or in the stock market for the long term, right? You always hear that, right? You want to be successful with your money in the market. Be in it for the long term. Don’t worry about the volatility, just wait and everything will be fine. Well, answer this question for me, which most people can’t answer, if I need to be in the market for the long term, but yet when I retire, I need to start withdrawing money from my accounts. How can I be in the stock market for the long term when I’m disturbing that account every single month when I’m withdrawing money, right? And this is the fundamental problem. This is why, when I was at the big box firm I had gotten, you know, I just started, I was about two weeks on the job, and I remember they said to me, hey, kid, you’re going to be answering the phones for next couple weeks. So, I’m answering the phones. It’s 1999 going into 2000 the tech bubble had just bursted. And I remember taking a call from a guy that was very upset. He says, I need to get out of the stock market. He says, I can’t afford to lose any more money. This is all the money I’ve got, and I need this money to live off of every month he was taking withdrawals. So, every month he staking withdrawals. But on top of it, the account balance is going down because the stock market is not performing well. So, as he’s taken the withdrawals and the market’s going down, he’s compounding his losses, compounding his losses, and he says, I need to get out of the stock market today. So I go to his advisor, and I said, I got a call from your client. He’d like to get out of the stock market. Are you okay if I place the trades to get out? And the advisor looked at me and said, Brian, I need to teach you something. We do not sell. We are long term investors, and we need to hold on. So, I want you to go back and let this guy know that everything is going to be fine, to not worry about anything, to hang in there. He’s in it for the long haul. So as a good employee, I go back and I tell this gentleman, look, I talked to your advisor. He said, not to worry about anything. You’re in it for the long haul. Don’t worry. And what the guy said to me next is, why changed my life, why I wrote the book? And I said, people need a better, safer strategy. But he said, Brian, I’m 75 years old. How much long haul Do you think? Does this guy think I’ve got left and that’s the truth? If he needed this money, and he’s pulling money out and the market is going down, he’s going to deal with what most people’s number one concern is, and that’s running out of money in retirement. Let me tell you something. The worst day of retirement is not the day you run out of money. The worst day of retirement is the day you figure out you’re going to run out of money and there’s nothing you can do to stop it. And this is why I wrote the book, right track your retirement. Because let me ask you something, if you weren’t on the right track, when would you want to know? When would you want to make adjustments? That’s what this book is all about. It’s a guide to help you have a simple understanding of what retirement planning should be, a simple strategy that will give you the peace of mind and confidence to generate the income you need, but also get the growth of the accounts that you need. So, all you got to do is go to on the money offer.com and I will give you a copy of this book absolutely free. My team will ship it to you in a gold envelope, just like Willy Wonka, and you’re going to get it, and I want you to go through it and make highlights on the pages, mark the pages up, whatever you need to do. And if you’re like most people that get the book, what they do is they schedule an appointment also, and they come in, and usually when they come in after they read the book, they say, I want to know more about how to do this. Or folks you can just call 1-888-382-1298. My team is standing by to take your call, get you a copy of the book and get you scheduled for a complimentary appointment. Don’t procrastinate on this. We don’t get a second chance at retirement. We’ve got to get it right the first time. So again, onthemoneyoffer.com or call 1-888-382-1298.
Rebecca Powers 10:19
And there’s also that QR code that will take you right to our landing page. And remember, there is no obligation. There’s absolutely no cost. It really is just a kind of meet and greet and get to know you. So give us a call so we can get your appointment set and we’ll be right back more with Brian Quaranta, how to secure your money. Stay with us.
Commercial 10:37
See everybody can tell you how to invest your money. There’s not a lot of people out there and a lot of folks, 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. The last thing you want to do is have a really good job in your 60s, retire, be looking for work again in your late 70s, the average person might say, well, a good portfolio would be a good mix of stocks, bonds and mutual funds. None of them. A good portfolio is all designed around the five key areas, income taxes, investments, health care and legacy planning. We’re not just product pickers here. What we do best here is we build retirement plans. Nine out of 10 people when they walk through the door, we 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 people you know can actually see a vision once we start to really build out their plan. 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 opinion. The difference at secure money advisors, as a fiduciary firm, we help you manage the risk, build the income and give you the retirement you dream of.
Rebecca Powers 12:05
All right, as he just said, it is all about you, and that’s what the show is about. That’s what this entire fiduciary mindset is, the philosophy of why Brian created secure money advisors. So not only will he send you this book, we also love your questions and comments. Sometimes we get ideas for the show from your questions. So, I’m going to jump in. We’re talking about income today. So, we took all the income questions. This is Sarah from Moon Township. She said, how can I generate a steady income for my 401 K during retirement? How do I know how much to take? Great question.
Brian Quaranta 12:38
Well, so first off, let’s talk about 401 k’s and taking income. So, 401 k’s are a terrible account to try to take income from, because if you try to withdraw a systematic monthly withdrawal from a 41k you’re going to be subjected to a 20% mandatory tax withholding. So, the recommendation is, once you retire, is the first roll your 401 K over into an individual retirement account or an IRA, okay, there you’re going to have access to an unlimited amount of investment choices, right? And you’re not going to be subjected to just what’s in your 41k so you’re going to be able to plan better through an IRA than you are a four 1k not only from a tax perspective, but from an options perspective, also, right? But once we do the 401 K rollover, which there’s no taxes or penalties to do that, especially if you’re 59 and a half or older, and if you’re under 59 and a half, you can still do it, but you need to be separated from your employer. So, there’s a lot of people out there that have older 401 K’s that can be rolled over. But when you start to withdraw money, you can do it on a systematic basis. Typically, the recommendation is to use something called the 4% rule, right where you can systematically withdraw 4% per year. That’s been the information and guidance for a long time from the big box firms, but that’s changed because of market volatility. A lot of the data and a lot of the studies coming out of the universities, from the economics professors, from people that are studying retirement planning, they’re saying, Look, if you’re going to start withdrawing money from an IRA that’s invested in the stock market, you might want to reconsider how much you’re taking out, meaning, 4% might be too much. You might want to drop that to three or 2% right, which doesn’t give you a whole lot of income. Imagine if you’ve got a million dollars saved. It used to be that you could take out $40,000 a year, right now they’re saying you should only take out 20 to $30,000 a year. Well, that might not be enough money for people to live off of. They might need 80 or $90,000 from that money, and that’s where you can either use a fixed rate annuity or an income annuity. Now, I personally like the use of an income annuity because the income annuity does something extremely important. Return. It guarantees and protects your income. Now, if you really think about what the 41k was designed for, right, right, by transferring it to the IRA and putting it into an income annuity, which, again, you can do this without incurring any taxes, you put some of that money into an income annuity, and now you’re insuring another source of income for
Rebecca Powers 15:23
the rest of your life, for the rest of your life, and your contract, it’s
Brian Quaranta 15:27
a private pension. That’s all you’re doing. If you look at even the big companies out there, give you an example, Heinz ketchup. Everyone knows Heinz ketchup. They just sold their pensions off to big insurance companies. Why? Because insurance companies manage risk better than the pensions companies. And Heinz said, Look, we’re going to give it to an insurance company because they’re going to be better at making sure that the money that we promised you, that we were going to give you, that you’re going to get for the rest of your life. And so, what you’re doing when you buy an income annuity is, again, you’re ensuring your income for the rest of your life. And think about it. Rebecca, we insure everything that’s important. We insure our cars, we insure our homes, we insure our health. Why would you not take the time to ensure the most important thing that you’re going to need, and that’s monthly income? Because your other choices are this. You try to do it through dividends, right? But dividends can change, and you’re still subjected to the risk of the market, because whatever dividend you’re receiving from whatever stock you’re invested in, that stock can still go up and down in value. You can do it through just doing systematic withdrawals from your diversified portfolio, but again, what happens if that portfolio is not performing and getting the return that it needs, and you’re pulling money out, you’re compounding the losses, and now you’re subjecting yourself to the biggest concern most people have, and that’s running out of money. And as a fiduciary, think about this, I’m held to the highest standard as a fiduciary. Why would I choose an income annuity if I’m held to the highest standard? And you know, annuities have gotten a bad rap, and there’s lots of different types of annuities out there, but once you understand how a basic income annuity works, when you look at the logic in it, and you look at the math, it’s very hard to say that it is not a good thing for you with a portion of your money to get the income that you need for the rest of your life. Then any money you have left over, you could keep in the market and have it long term, but now it’s truly long-term money, because you don’t have to worry. You’re not pulling money out; you’re leaving it alone. That’s the key here. And nobody’s talking about this contradiction in retirement, where, you know they’re telling us to stay in there for the long term, but yet all of us need income. Nobody’s addressing that, but we are at secure money advisors, and we’re addressing it every single day with folks just like you.
Rebecca Powers 17:57
And when you come in and you start that conversation, and then you start that written financial plan. Income is the first. It’s the first, the foundation of your retirement home. So, you’ll say to them, what is your retirement dream? What does it look like? Let’s reverse engineer it into there. And then, okay, I need 10,000 a month to live. I only have 5000 where do we get that 5000 so that’s all you’re doing, step by step, for the individual.
Brian Quaranta 18:20
For the individual, and then whatever amount of money it takes. Let’s say, for example, you know, we had a couple come in a couple weeks ago, and they needed about $30,000 of income, okay, from their investments. They had about a million dollars. So, $30,000 we needed about $300,000 of the million dollars to put into an income annuity to generate that additional $30,000 a year. Now, that means $700,000 of their money could still be in the stock market, but it’s long-term money now, and if, if the market goes down, we’re not forced to sell investments at a loss to pay for your income needs, because we’ve got the annuity that’s handling that. And again, folks, I write all about this in my book, right track your retirement. It truly is a simple guide that’s going to give you peace of mind, and it’s going to give you the confidence to not only start retirement, but to get through retirement. I don’t want you to get caught up in the noise out there, the noise is what paralyzes you, and the noise is what gets all of us in trouble. You need a simple plan, a basic strategy that you understand if you’re walking out of your financial advisor’s office and you’re still confused, because all you’re doing is talking about performance. That is not a plan. I want you to have a plan based around five key areas, your income, your taxes, your investments, your health care and your estate planning strategy. So, get a copy of this book. It’s absolutely free. My team will send it to you as soon as you order it. You can go to onthemoneyoffer.com scan the QR code, or my team standing by right now to take your call. 1-888-382-1298, again. Don’t procrastinate out on this. We don’t get a second chance at this, folks. It’s not a dress rehearsal. You got to get it right now.
Rebecca Powers 20:11
All right, give us a call during this very short break. There’s also that QR code, and I’ll be right back with Brian Courant and how to secure your money. You
Commercial 20:26
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 see me live every day to the fullest and enjoy the retirement of your dreams.
Rebecca Powers 21:17
Welcome back. I’m Rebecca powers here with Brian Quaranta, and each week we talk about the simple, clear path to your retirement. It shouldn’t be confusing. It shouldn’t be guesswork. You should know exactly where you’re going. I know we keep mentioning this, but right track your retirement. Brian named it right track because almost all the people coming into him said, Am I on the right track? So that’s exactly how you came up with the name, all right. So that’s why we love taking your comments and your questions. Dorothy from Monroeville says, hi, Brian, love your show. What are the tax implications of withdrawing from my retirement accounts? I’m 71 but still working.
Brian Quaranta 21:51
Well, anytime you withdraw money from your retirement accounts, you’re going to have to pay ordinary income taxes on that money. So that’s got to be worked into your plan. Now, one way that you can avoid that is considering tax planning strategies. And tax planning strategies are not something that are done like that. They take time to do. It’s not like doing your taxes right. Tax Planning is different than actually getting your taxes done, because when you get your taxes done, your accountant is looking at the history of the year and then telling you, based on your income, your expenses, what you owe. Tax Planning is looking forward and saying, we have an account that is going to cause you to pay a lot of taxes, like an IRA, because it’s never been taxed before. And so, if we want to eliminate taxation on that, we can slowly create a plan where we’re converting from taxable money to tax free money through a Roth conversion. But that has to be done with enough time, meaning most people wait until it’s too late. They’ll wait until the day they retire at 62 or 65 and usually by then, it’s too late to implement a strategy like that. So, the sooner you can get towards a tax planning strategy, earlier on in your retirement, the better you’re going to be. And now you can turn your income stream from a taxable income stream to a tax-free income stream.
Rebecca Powers 23:14
Okay, perfect. Thank you so much. I love that question. Here’s another one. This is from Libby. And so quickly, what are the risks of withdrawing too much too soon from my retirement accounts? There’s a sequence that you map out for them as well, when to draw from what it’s very important.
Brian Quaranta 23:30
Well, there’s a time that you can withdraw, maybe a little bit more up front, and then later on, slow it down. Because, okay, we talk about this a lot at our office. You know, when you retire, we like to call it your go years, right? You’re going and going and going, you want to do all the things you promised yourself you were going to do. Then as you get all that stuff done, you start to go into your slow go years, where you’re just, you know, we did it all, you know, I just, I had clients that were on the road, traveling in a big RV. And they did it for seven years. And they would send me pictures every single year. You know, they would be at the balloon Fest in Mexico, they would be at all these different parks, and they met so many great people along the way. But after seven years, they were ready to come home, seen it all. Yeah, I’ve seen it all, and I’m ready to just settle down back into a house. And that’s them slowing down, right? And eventually you get into your no-go years where you’re not doing much
Rebecca Powers 24:31
Right, you know, and you might need help, and you should plan for that too, in case that’s right.
Brian Quaranta 24:35
I mean, look, my wife’s grandmother is 96 years old, her day starts with a cup of coffee and then goes to playing some puzzle games, and then going to bed. Not much more that happens than that every single day. Those are the no go years, and that’s okay. So there are ways to pull money out of your plan. More money out of your plan during your go-go years without, putting you at risk of running out of money. And these are the problems that we solve for you folks, because we give you a real written plan based around the math, and we give you real documents. I mean, we’re giving you real spreadsheets with your numbers on it so you can see what happens when you withdraw this money, what rate of return that you’re going to need, and what the balance of your account is after those withdrawals. And that’s how you build it. It’s a math formula. And the things that we can control, we want to control, like if we can control the interest rate that you’re getting, then we can control knowing where the balance of your account is going to be at any given time and again. I write about all of this stuff in the book right track your retirement to help give you a clear understanding of how to properly do this.
Rebecca Powers 25:49
And it’s not just your opinion and your brilliant staff, it is a third party. You have several software’s that you have third party reports that when you put in that information and then this potential client can actually see their fees, their risk, what they’ve actually spent. That’s a jaw dropping moment, I think for most people. Yeah, not
Brian Quaranta 26:07
Yeah, not only is that that a jaw dropping moment, but so is getting to see a completely different strategy. Yeah, because nine out of 10 advisors are following the same model, right? You’re going to take your money, diversify it in stocks, bonds, mutual funds, cookie cutter, they’re going to give you a story about how these dividends are going to pay you income, right? And maybe it works, maybe, maybe you get lucky, and it works. But retirement is not about building a plan around getting lucky, right? Retirement is about building a plan around guarantees. And I would ask you this at this point in your life, what are you more inclined to take a sure thing or a maybe? And I would prefer that my clients focus on taking a sure thing, something that we know is going to work, backed by big, strong, safe companies that most of the academics are recommending that you do now, the Wall Street big box firms are convincing you that it’s still okay to take risk with 100% of your money. We don’t feel that way at secure money advisors, we believe that you deserve part of your money being in something secure and safe that you can rely on. That’s the difference between us and most firms. But on top of it, we’re going to teach you how to not only understand your plan, but how to build your plan so that it all makes sense to you. So again, go to onthemoneyoffer.com get a copy of the book, or call. 1-888-382-1298, my team standing by to take your call and schedule you for an appointment.
Rebecca Powers 27:46
And there is no cost, no obligation at all, our promises that you will never be sold anything. We just want to get to know you. Thanks for joining us. We love you. We’ll see you again next week.