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Video Transcript
Rebecca Powers 00:20
Welcome to this week’s edition of on the money with Secure Money with Brian Quaranta. Of course, he is the CEO and founder of Secure Money Advisors. What they do is in the name. It is in the name of the show. It is all about securing your money. Great to see you, and thank you for dragging Maggie in.
Brian Quaranta 00:41
I did drag her in.
Rebecca Powers 00:45
Literally, yes, Maggie has been with you for 15 years. She is the silent strength behind everything that goes on in the office. You say she is a bulldog in the boardroom, but so wonderfully educated about so much, because you love books. Tell us about your journey and how why you’re so passionate about being with Brian.
Maggie Wenzelburger 01:07
Well, speaking of books, I actually started out as an English literature major in college. I never anticipated that I would become a financial advisor, and when I was 25 years old, I was looking to pay off my student loans from my English degree, and I told Brian that I was looking for a job for a couple years. And next thing I knew, he was teaching me how to fill out paperwork, and I was learning how to make financial plans. Started assisting him, and the next thing I knew, I was I was in the conference room.
Brian Quaranta 01:35
Yeah, and she sees all of my clients, which are now all of her clients, I actually would say that they prefer to see you, that they prefer to see me. I hate to admit that, but they’re like, is Maggie there? And I’m like, what about me?
Rebecca Powers 01:54
You’re too friendly. A lot of times you deal with a lot of women who have lost their husbands, a lot of widows, and they feel comfortable with a woman probably what about some of those stories? Give me a story where you had a widow and she was going down this kind of wrong track, and you showed her the better way, and it changed her trajectory.
Maggie Wenzelburger 02:19
What I often see with widows is it’s, it’s an unexpected loss, and maybe they’ve never worked with a financial advisor before, or they simply don’t know what to do. Their husband was in charge of finances. Yes, and they come to me with a 401, K, with an IRA, they’ve done a great job of saving, but they don’t necessarily know how to turn that into an income plan. So, we’ll look at what their finances were like as a couple, what their income was, and my first goal is always to rebuild that income and do that for them with instruments that will protect that income and give them the comfort that they need.
Brian Quaranta 02:55
Yeah, because you know, the average loss of income for a married couple, if your spouse dies, is about 40% that’s a lot of income to lose. So, you know, a big part of what she does in those situations, is, when she talks about rebuilding the income, is, you know, we have to take the income plan that we’ve built, take the husband’s income out, and now we’re seeing the big drop, and that’s the problem that needs to be solved. And most women, and I would say, I think the real connection that they have with Maggie is that, you know, Maggie’s Maggie is on her own, right, so she knows what it’s like to be on her own. She knows what it’s like to have to manage things on her own. So there’s a connection when a woman comes in and is dealing with her on a one on one basis, because she can relate on so many levels, maybe not the pain of losing the spouse, but understanding what they’re going to be going through being a woman and taking care of things themselves. And I think that’s the real comfort that they get in working with her on that, and that’s something I would never be able to relate to relate to that she can and she does such a great job at it. And lot of tears in the conference room, lot of tears, lot of hugs.
Rebecca Powers 04:16
But you’re in it together. It’s about a relationship. You’re never going to call and ask, can I speak to my advisor? And they put a kid on the phone like was your experience when you were right with a big box? It is truly a relationship. Social Security. That’s another thing. When you have a widow, she may not be aware that she’s entitled to her husband’s higher earnings. Talk a little bit about that.
Maggie Wenzelburger 04:37
That’s correct. Many people are not aware that for a married couple with certain limitations. Whenever one of them passes away, the surviving spouse is going to continue the higher of the two benefits. Yeah, and often people do not know that.
Rebecca Powers 04:52
Is Uncle Sam going to tell you that?
Brian Quaranta 04:55
No, they really don’t, but they take away the lowest check very quickly, take away the low check very quickly. So for those of you that don’t know if you’re a married couple, when your spouse dies, the lowest check falls off, you keep the highest check so, but there are situations where you know, if you know, you might have a state worker, like a police officer, that has not paid into Social Security because they’ve paid into some type of TSP, yeah, state pension. If they die, they could lose the pension. And there’s something called the Windfall Elimination plan, which causes the spouse not to even receive any social security. So those are really challenging cases that you know people are not aware that that’s about to happen to them. So, you’ve got to be aware of those things up front, and that’s why, front. And that’s why we always feel that the best thing you can do as a married couple is plan together, right? And one of the things that we do in the planning process is we look at what happens, what happens if your husband dies first? What happens if your wife dies first? What’s going to be that drop in income? Because we would rather solve that on paper now than have to solve it in a crisis situation to where you’ve never looked at it together. What better place to make a decision together than looking at what would happen if one of you dies? So that you make that decision together in a strong position of mental well-being, because not everybody is in a good mental space when they lose a spouse. Yeah, so but, and that’s important, and that’s where the planning process comes in, and that’s why we believe in everybody having a really good written plan.
Rebecca Powers 06:31
Absolutely, he is so passionate about that, so much so that Brian also wrote a book right track your retirement. Very short, easy to read. Give us a call for complimentary consultation. Meet this amazing team, and you also get a free book, and he’ll even mail it to you. You feel so strongly, you even pay for shipping and handling.
Brian Quaranta 06:49
I do, and I want you to get a copy of this book, because it really is a simple planning guide to help you through retirement, to make you avoid all of the noise that’s out there. There’s so much noise on how to do retirement planning, and because there’s so much noise, people get paralyzed. They don’t know what to do. This will give you the clarity and peace of mind that you need, that will give you a simple model to follow, that you’ll be able to understand. And what’s most important is that you understand what you’re doing, because most people are walking out of their financial advisor’s office more confused than when they walked in. So don’t let that happen to you. Go to onthemoneyoffer.com get a copy of the book. As Rebecca said, we will send this to you absolutely free. I’m paying for the shipping and handling myself. That’s how much I want to get this into your hands. But while you’re at onthemoneyoffer.com you can schedule the complimentary appointment to meet with our team and go through that first appointment process, and I will tell you, nobody from my team will ever pressure you to do anything. We’re here to help you solve a problem. Or if you don’t want to go to on moneyoffer.com just call 1-888-382-1298, the team standing by to take your call and get you scheduled.
Rebecca Powers 07:56
And there’s also a QR code to make it even easier for you. Give us a call during this quick break, and we’ll be right back.
Commercial Break 08:09
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Rebecca Powers 08:58
right, welcome back so many of our questions and ideas for the show we get from you. So, I want to go straight to that. We have some really great questions. I’m going to let you take this first one. Maggie, okay. Lori says I am 70, still working, about to have to start paying myself. Is it better to withdraw from tax deferred or tax-free accounts first?
Maggie Wenzelburger 09:17
That’s a great question. We typically recommend that you withdraw from the tax deferred accounts first. And the reason is that when you turn 73, years old, you have to start what they call the required minimum distribution, which is essentially the IRS saying it’s time for you to start paying taxes on this money. So rather than going to your tax-free accounts, it makes sense to start drawing from those accounts and get that process started.
Brian Quaranta 09:41
Yeah, and when you start a withdrawal strategy from those accounts, you’re essentially satisfying in that required minimum distribution. At the same time, you don’t have to take additional money out above and beyond that. But here’s the other important reason tax deferred accounts because you’re. Forced to take money out of those and those accounts are very poorly passed to your beneficiaries, meaning, if you die and you pass your IRA, your 41k your four three booth, whatever it is to your children, if they take that money, that money is 100% taxable, whereas your taxable accounts, right? Those accounts get what we call a step up in cost basis at death. So that means, if I put $100,000 in a taxable account, and it grew to $500,000 All right, if I sold that personally myself, I would owe capital gains tax on $400,000 but if I were to die and that money were to pass to my children, they get a step up in cost basis, and they own the account at the date of my death, the value of that account the date of my death, which would be 500,000 so technically, if they turn around and sold it that day, there’s no taxes owed. And so you hear a lot of advisors telling people to withdraw their taxable accounts first, rather than their tax deferred accounts, when those accounts are the most tax efficient, not only in the future, because you’re only paying capital gains tax rates if you need to take withdrawals versus ordinary income tax. And on top of it, it’s better for your children to inherit that money.
Rebecca Powers 11:17
Wow. See, there’s so many things like social security. There’s so many little ins and outs of everything. That’s why, even for do it yourselfers you really need, even if it’s a second opinion, yes, and you’ve done that for people, you’ve said, do this, do that, but otherwise, you’re on the right track, absolutely.
Brian Quaranta 11:32
And I think Maggie would agree. I mean, when folks come in and we feel that they’re doing the right things and they have the right investments, there’s no reason to change anything. You know, we’re such a busy office, right, right, that we’re looking to help people that are candidates to be helped. If you’re not a candidate for our office and we can’t help you solve a problem, make a major impact in your life, we’re not going to onboard you as a new client. Would be pointless, and it would be worthless for us to do that for you
Rebecca Powers 12:00
Absolutely.
Brian Quaranta 12:01
So, you know, we’re very particular of who we onboard, because we truly want to help them solve a problem. And if there’s no problem to solve, there’s no reason to move money around. But
Rebecca Powers 12:08
it’s a great thing to hear. You know, you’ve even told people, oh, you’re ready to retire now. Oh, yeah, yeah. I mean, they think it’s three years away, and you do the numbers and you’re happy to tell them the great news.
Brian Quaranta 12:19
Well, I think, I think this is one thing. When Maggie and I were doing a lot of appointments together. I mean, you know, we’ve had a long journey together. So we’ve had many long nights of being at the office till eight, nine o’clock at night, running meetings. And one of our favorite things to do when we met with people was to show them that they could retire now if they wanted to. And a lot of people, for the first time, are just seeing those numbers, and they’re not even aware that they can do it.
Rebecca Powers 12:47
Wow. What a moment. All right, let’s take another question. This one is from Denison Edgeworth, what role does Social Security play in my overall retirement income strategy? That’s a good question, because you always talk about the need for knowing where your income will come from the rest of your life. Yeah, yeah.
Brian Quaranta 13:05
Why don’t you take that one? Yes?
Maggie Wenzelburger 13:06
Well, one of the first things you need to consider is when to start Social Security. And many people will default towards waiting until their full retirement age, or even the age of 70, because they’ve heard that that’s the way that they can get the most bang for their buck, but we typically recommend that you start Social Security when you’re ready to retire to supplement that the supplement the income that you’ll have coming in from your investments.
Brian Quaranta 13:30
Because every dollar that you get in Social Security is $1 that you don’t have to take out of your retirement account. And remember, Social Security is only a benefit that you receive while you’re living, so why would we not use it to supplement the income? Because if you want to retire right now and you’re going to need a certain amount of income on a monthly basis, but you want to delay your Social Security, well, that means 100% of your income needs to come from your retirement accounts. Now how is that going to impact you, potentially spending down your money at a faster rate, or running out of money before you die? And these are the things that you have to take into consideration. And this is why we build the math models that we do. Because when we deliver a plan, we’re delivering something around solid math. We’re not just delivering a plan saying here’s some hypothetical things that we think, if everything goes in the right direction, will work. That’s not how we want to plan. We want to plan with as much certainty as we can and take out as many variables as we can out of the planning situation.
Rebecca Powers 14:42
And you’ve also talked about this a lot, you need to enjoy your life. If you haven’t spent enough money, then you haven’t really enjoyed your retirement. So, is that what you mean about taking Social Security sooner than later?
Brian Quaranta 14:54
Well, I mean, Maggie can answer this, but I think a lot of people just don’t know how to use their money, right?
Maggie Wenzelburger 14:59
Yeah, that’s true. You spend all of your working years accumulating that, that money, but what do you do with it once you’ve reached the goal post and you’re ready to distribute it? Yeah,
Brian Quaranta 15:08
they’re not sure how to actually turn that pile of money into the utility of utilizing it, right? Because if you think about it, what’s the purpose of saving the money? So you have it, you have it when you need it. And typically, most people will say it’s going to be money that we’re going to need to live off of. Okay, fine. How are you going to do that? Right? Are you going to use a stock market strategy where you’re going to just diversify it and hope and pray that the stock market performs and take withdrawals on a monthly basis. Well, how do you know what your balance is going to be in the future? If you don’t know what your rate of return is going to be, right, what do they always say past performance doesn’t guarantee future performance, right? But you’re going to put your money in an account that doesn’t guarantee future performance and hope and pray that every dollar you take out, right? It’s going to work out for you. But in fact, a lot of times it doesn’t, because there’s a mathematical risk that shows up in retirement called sequencing risk, which we can talk about on another episode. But sequencing risk is essentially when you’re taking money out and you’re not getting the right rates of returns, and the question is, is, what’s going to be your rate of return when you’re ready to retire on your money? You don’t know, because the market does this. Is it going to be up? Is it going to be down? And that is a very dangerous situation to be in,
Rebecca Powers 16:30
and that’s why you are so passionate about doing a plan, because you can also put different scenarios on paper. You could do hundreds of scenarios, right?
Brian Quaranta 16:38
Yeah. And look, I mean, we use annuities a lot explain the idea of the use of annuities so that people understand why we believe in them as the PLA as a source of income, absolutely.
Maggie Wenzelburger 16:49
And it’s important to keep in mind that we use fixed and indexed annuities. We don’t use annuities that are invested in the stock market. So, these annuities are based on contractual guarantees from the insurance company that we’re not going to have any stock market risk. And many of these annuities will also guarantee you a certain amount of income for the rest of your life, no matter how long you live.
Brian Quaranta 17:10
Yeah, not only the rest of your life, but if you die the rest of your spouse’s life, and it keeps them out of probate. It keeps them out of probate in some situations. But not only that, if both of you die, any balance is paid out to the children. But here’s where the insurance component comes in, and this is what frustrates me a little bit about people saying bad things about annuities. They go, Well, you’re not going to make the rate of return you would in the stock market. Well, no kidding, it’s not a stock investment, but you’re not going to lose you’re comparing apples and oranges. It’s insurance. You’re ensuring your income. If you think about it as an investment of growth, you’re thinking about it the wrong way. You’re insuring a portion of the income. So the other money that you do have in the market, you don’t have to sell off during a down market because you need income. The annuity is taking care of that. And by the way, the reason why we call it insurance is because if you’re taking money out of the account and you’re both still living, or one of you are still living, and the balance goes to zero, right, you still receive the income. Look, we insure everything in our lives. We insure our health, we insure our cars, we insure our homes. Why would you not learn how to ensure the most important thing you’re going to need in retirement, and that’s your monthly income? Why would you ever take the risk of getting monthly income from a risk investment that you do not know how is going to perform. If you want to take risk, take risk with money that you can keep in a long-term account that you do not touch. And that’s the contradiction in retirement. They always tell us all the big box firms, Wall Street tells us, if you want to be successful with your investments in the market, you have to be in it for the long haul, which is 100% true. But how are you going to be in it for the long haul when you need income right now to live off of this is why our planning model that I write about in right track your retirement, where we have a non-correlated asset allocated strategy to teach you how to build the income and still keep your money in the market, to offset inflation, to have more money in the future. This is what I want you to learn about. Go to on the money offer.com. Get a copy of the book right now. Do not procrastinate. We don’t get a second chance at this, folks. It’s not a dress rehearsal. Do it now. Or if you don’t want to go to on the money offer, call 1-888-382-1298, and my team standing by to take your call and schedule your appointment to come in.
Rebecca Powers 19:43
And when we come back, we’re going to talk about something. Another thing you may not have heard of the first time I’ve heard it is from these folks refinancing your retirement. You refi your house when the interest rates are low. Let’s talk about refinancing your retirement when interest rates are high. Very exciting. We’ll be right back.
Brian Quaranta 20:00
Most people worry they’ll run out of money in retirement. Are you one of them? After decades of working, you deserve peace of mind knowing your money will last 2030, even 40 years. Maybe you want to leave some for your family after you’re gone. I’m Brian Quaranta, president of Secure Money Advisors, after getting to know you and hearing your goals, we build you a customized principal protection plan based on your unique needs, focusing on five key areas of retirement, secure money advisors helps you with things like income, investments, taxes, healthcare and legacy planning, we can right track your retirement. Let us show you how visit our website or call us to schedule a free meeting today.
Rebecca Powers 20:49
Welcome back to Secure Money. I’m Rebecca powers here with Brian Quaranta and of course, he dragged in Maggie Wenzelberger by the back of the neck. But you have so much great information. I want to talk about something I’ve never heard anyone say until you refinance your house when interest rates are low, but nobody tells you to refinance your retirement when interest rates are high.
Brian Quaranta 21:11
Yeah, it’s so true. It’s so eye opening. Yeah, because there’s so many accounts that people own, especially in the annuity market. You know, if you bought an annuity four or five years ago, you may want to look at refinancing that now that interest rates have gone up. Let me give you an example. One of my advisers recently had a couple come in and they had bought an annuity about four or five years ago, and the guaranteed income from that annuity was about $26,000 but here’s what was interesting, that $26,000 was only guaranteed for one person’s life, the husband’s life. So that means that if the husband died, the spouse was not getting any income. They looked at refinancing it. Mean all they did was shop it around in the open market with big, strong, safe insurance companies, and they were able to get $32,000 a year in guaranteed income. But the difference was it was guaranteed for both of their lives. That’s refinancing your retirement. But you can also do that. Think about the money that you had in a savings account or a checking account. We have CDs paying over 5% right now. We have treasury bills paying over 5% we have fixed annuities, two year 24, month fixed annuities paying 5.3 right now, five and a half, five and a half fixed, fixed right? No, no risk whatsoever. I mean, think about this. If you had $200,000 right, $200,000 and you put it in a two-year fixed annuity at five and a half percent, that’s $11,000 a year in interest you’re getting that you could either just let build up, or you could take $11,000 out as income and never touch your principal. These are the things that people need to know about.
Rebecca Powers 22:55
Ao many wonderful things. All right, we’re going to take another question. This is actually from a college student at Carnegie Mellon said, how can I adjust withdrawal strategies? I’m helping my grandma, and I don’t understand about market conditions. She is too old to keep taking such risks. How do you help with withdrawal strategy?
Maggie Wenzelburger 23:11
Well, I think what we need to do is reframe the initial plan. Our concern would be that we’re pulling income from the stock market in the first place. This is really where we should be using a fixed product that can provide the guaranteed income without any stock market risk.
Brian Quaranta 23:28
Yeah, because again, I mean, we’re talking about adjusting the withdrawal strategy. When I hear adjusting the withdrawal strategy, that means that you’re adjusting it because the performance of the account is not doing what it should be doing. So adjusting the withdrawal strategy means you’re dropping or lowering the income that you’re receiving from the account so that you don’t spend down the account as quickly. But typically, as we get older, right cost of living might go up. We might need more money. There might be a situation with your health where you need to take a large portion of money out, and the better approach, as Maggie has said, is to not have a plan that requires you to take money out of that account in the first place. So again, this is why this non correlated asset allocation strategy that we do, that I write about in the book is the better approach, and allows your money that’s in the market to have the long term growth that it needs to be successful with.
Rebecca Powers 24:28
And I was pleasantly surprised last week when you mentioned that some annuities even give you liquidity, that you can take some cash out of certain annuities, right? Of course, yeah.
Brian Quaranta 24:36
I mean, I didn’t know that. Yeah. I mean, we have annuities that will do up to what to 20% 20% percent, 20% so Okay, so I’ve got, you know, $100,000 in that account, and if I want to take money out without incurring a penalty, right? Because think about a CD when you buy a CD at 5% and I it’s a two year C. Year three year CD, the bank doesn’t let me take any money out of there without incurring a penalty. But an annuity is different. An annuity will allow you up to 10 in our case, we have companies that do 20% liquidity, so that’s a lot of money for you to be able to take out of an account that’s guaranteed. Now there’s something called the liquid premium yield, which is basically the yield you get for the illiquidity that you have in your account. And so it with annuities, you’re getting a better rate of return, because they say that you can’t take all your money for a two year period. So that’s why they’re able to pay a better rate of return.
Rebecca Powers 25:41
And they’re able to give such great rates right now, some aren’t even charging because with the interest rates being high, insurance companies and annuities actually do better right after 2020 when we had that terrible loss in the market, they sold 300 billion in annuities.
Brian Quaranta 25:56
And the In the numbers continue to skyrocket, because look, BlackRock, okay, recently announced that they’re going to be the first company to inside of 401k’s put an income fund. So now BlackRock, inside of the 401k’s are going to have an option for you to put some of your money that you’re going to be able to get monthly guaranteed income from and Larry Fink, who runs BlackRock, said, we’ve done the American public a disservice, because we’ve taught them how to save their money, but we haven’t taught them how to use their money, Amen and secure money. Advisors, we’ve been trying to teach you how to use your money the last 25 years. So please go to onthemoneyoffer.com get a copy of my book read through this. It will give you the roadmap that you need to give the peace of mind and clarity to build a really great plan. It will also give you the information you need to even have better conversations with your current advisor. And again, you can’t get a second opinion from the first that gave you the first opinion. So take advantage of our complimentary consultation. Go to on the money offer.com. You can schedule a time to come in the office, and you can also get a copy of the book there, or scan the QR code, or call the one 800 number, which is 1-888-382-1298 my team standing by to take your call, get a copy of your book and get you scheduled do it now. Why it’s on your mind? Get out, go to the phone, go to your computer and get a copy of the book right now.
Rebecca Powers 27:31
And again, there’s no cost. There really isn’t. There are no strings attached, no obligation. Just want to see for the right fit for you. And of course, you can meet wonderful Maggie if you have a certain concern when you call, tell the person who answered the phone that, because we want to know exactly what’s on your mind and what you’re really worried about, and try to start solving that. It all starts with a plan. Thank you for joining us. We’ll see you again next time.