*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.
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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 Secure Money Advisors each week. We love all the education Brian gives us. We learn so much from his free book. If you would like to go online, it’s easy to do OntheMoneyOffer.com, and I’m Rebecca Powers, so happy to be with you. I’m considered a consumer advocate now, after almost 30 years as a television anchor and a news reporter and an investigative reporter, so it really is so enlightening and wonderful to be here, because you’re all about peeling back the veil and letting people understand it doesn’t have to be scary or confusing to plan your retirement.
Brian Quaranta 01:08
That’s right. That’s right. And we’ve got to plan because we don’t get a second chance. Good point. You know, as I’ve said before, it’s not a dress rehearsal, so we’ve got to get it right. And there’s a lot of people out there that plan based on emotion, versus actually running spreadsheets exactly, having a model and what we have to realize is that success in retirement does not come from big market gains. It comes from consistency over time, and you need just small little base hits every single year to win doesn’t take big rates of returns to win, although people are they conditioned, conditioned to like those big home runs. But those big home runs are risky, risky, risky, risky, risky. And in my book, I write about, you know a little, I have a whole little story in there about Babe Ruth, and he used to say, you know, if you swing big, you miss big, right? Yeah, and you will hit some home runs, right? But you’ll, you’ll strike out quite a bit too, yeah, but you can’t strike out a lot when it comes to your money, otherwise you wind up doing some real damage that you can’t recover from. And so really, what we’re teaching people is not only how to have a plan, but also how to behave around that plan, so you don’t make irrational decisions when the markets don’t cooperate. Because if you’re investing in the stock market, which you should with some of your money, not all of it, sure, and depending on your age and depending on your age, but we’ve got to stay away from emotional decisions. We have to make sure that we understand what rate of return we’re trying to achieve, because you can have a loss in the market and still be on track, and that’s what a lot of folks don’t realize, is that you can still have volatility and be on track, but you have to know what on track means. And I think the one thing that we do really well at Secure Money Advisors is teaching what it means to be on the right track.
Rebecca Powers 03:07
And it’s also the illustrations. You know, you’ve told me many times you’ve seen people with a whole lot of money not successful in their retirement because they didn’t plan. They didn’t have the right type of planner. And you’ve seen people with not much money that planned very well and still had a healthy, good retirement, because the illustrations that you all do, the reports you print out, it gives us a true picture of what’s going on. That’s right.
Brian Quaranta 03:33
And really, what it comes down to is how much is it going to cost you to maintain your lifestyle, and for those that do a really good job in controlling how much it costs them to run their lifestyle on a monthly basis, those people can have a really great retirement. But there’s people out there with a lot of money that have a very expensive lifestyle, and they have the same anxieties and fears that people with very little money have that haven’t controlled what their lifestyle is costing. So, you’re right. You can have a very little amount of money and still have a great retirement and have a really rich retirement, because you’ve learned to control the cost of your lifestyle, and part of that cost comes down to managing your debt load. And a lot of people carry a lot of debt still into retirement when they when they shouldn’t be.
Rebecca Powers 04:27
Right. And the other big thing about planning forward, and we talk about this so much, in the big box, never talked to me and my husband about this, is the tax implications, the tax liabilities. How often do you see people taking mega risks instead of just looking at different situations and options, figuring out, I want to save a half million in taxes, I’m not going to keep risking my money to hope to get a half million in the stock market?
Brian Quaranta 04:55
Yeah. Well, look, take this for example, and this is why we created this. Calculator called RightTrackMyTaxBill.com. By the way, folks, what I’m going to share with you right now, you’re going to be able to go to RightTrackMyTaxBill.com and get your own personalized report and see how much you could owe in taxes if you don’t do any tax planning. But let’s just use a very simple comparison here. Let’s say you’ve got two people with $300,000 saved, okay, and they both need that $300,000 to live off of in retirement. One has done tax planning and the other hasn’t. So, the one $300,000 that we have is in a Roth IRA, the other one is in a traditional IRA. Okay, well, they both are going to pull out $1,000 a month. Well, the person that has the tax free $300,000 when they pull out three- $1,000,
Rebecca Powers 05:51
It’s $1,000.
Brian Quaranta 05:52
It’s $1,000. The other folks that have the $300,000 that is not tax free, that was tax deferred, like most Americans have, when they pull out that $1,000 they’re going to owe taxes on whatever their tax bracket is. So, if their tax brackets at 20% they’re only going to net $800 but let’s say they both need to net $1,000 that means this individual over here has to take out two to 300 dollars more than this person over here to net the same $1,000 that this person has taken out over here, right? So, this person over here is going to have a higher probability of running out of money because of taxation, and this is why you’re going to want to go to RightTrackMyTaxBill.com. Again, that’s RightTrackMyTaxBill.com. And go through the process of putting your information in so you can get your customized report on how much taxes you would owe if you did know tax planning compared to if you did do tax planning. And I will tell you this, when you do tax planning, you are saving yourselves in so many other areas also because what you have to realize is that when you withdraw money in retirement, there’s a lot of things that it impacts, other than just the fact that you owe income taxes. It could affect how much you have to pay in Social Security taxes, it could affect how much you have to pay on your Medicare premium, so it compounds the problems in all other areas, and that’s why you have to right now go to RightTrackMyTaxBill.com and get your personalized report so You can see the difference between tax planning and no tax planning, and you will find that you will see an incredible difference in those that do tax planning. And if you look at your report, when you get it, you’ll be able to also schedule a complimentary time to come in and sit down with my team and we can further investigate your situation so that we can eliminate you having to pay these taxes in retirement, and therefore giving your money even higher probability of lasting the rest of your life, so you don’t ever run the risk of running out.
Rebecca Powers 08:18
Absolutely. And You can also go to OntheMoneyOffer.com because Brian wants each of you to have this book that he wrote. It’s a wonderful book. It has some personal stories, but some great, great advice. And tax planning is definitely one of those chapters that I really like. All right, stay with us. I’m Rebecca Powers here with Brian Quaranta, we’re talking about securing your money. Stay with us.
Brian Quaranta 08:39
See, 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 08:53
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.
Brian Quaranta 09:01
The average person might say, well, a good portfolio would be a good mix of stocks, bonds and mutual funds. No, no. A good portfolio is all designed around the five key areas, income taxes, investments, healthcare and legacy planning.
Neil Major 09:16
Because we’re not just product pickers here. What we do best here is we build retirement plans.
Brian Quaranta 09:21
Nine 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 09:32
People, you know, can actually see a vision once we start to really build out their plan.
Brian Quaranta 09:37
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. And give you the retirement you dream of.
Rebecca Powers 10:07
You know the old adage, A penny saved is a penny earned. Well, imagine saving big, big bucks. That’s what tax planning for does. That is why it is so wonderfully powerful, not only during your retirement. What about your heirs? Brian, you want to leave your boys more than you give to Uncle Sam. How do we do that?
Brian Quaranta 10:26
That’s right. So, so tax planning for your heirs is a little bit different than tax planning, okay, for yourself, right? Okay. So if you’re just joining us, the first thing I want you to know is that at the bottom of the screen, you’re going to see, RightTrackMyTaxBill.com RightTrackMyTaxBill.com I want you to go there right now, because I’m going to show you how you can see with your own personal money, how much you would owe in taxes right now versus if you did tax planning. And so, what Rebecca and I are talking about here right now is how to eliminate taxation when you pass it on to your heirs. Okay, so first off, let’s use a story that I’ve told many times on the show, and that’s the story that was in Money Magazine many years ago about John Barron, who inherited a half a million dollars from his father. Okay, so John Barron inherits a half a million dollars from his father, and not knowing how IRAs are passed from generation to generation, John Barron sends a death certificate in. Says, my dad’s passed. What do I do? They say, fill out this, these forms of death and will process everything for you. So, they do. He does everything they ask them to do. They process everything. They send him a check for $500,000 John is happy, right until three weeks later, he gets a 1099, in the mail saying that he owes taxes on $500,000 which, by the way, John and his wife were earning about a little over $100,000 in combined income on top of the 500,000 he just received from his father. So now they’re paying income tax on $600,000 putting them in the highest tax bracket there is. Their tax bill is over $240,000, half of Dad’s wealth wiped out. Does not have to happen. So, let’s use John again. And let’s say John went to RightTrackMyTaxBill.com like you’re going to do, and he puts in his information in the calculator, and he says, holy smokes. I cannot believe I’m going to owe this much money in taxes. I’m going to call Secure Money Advisors right now, because I want someone to tell me how to fix this. There are ways. So one of the ways, and this is a little trick folks don’t know about, but what John Barron’s father could have done is he could have said, Okay, this $500,000 that I have saved in this IRA account I don’t really plan on using, but when it passes to my son, he’s got to pay all this money. So, I don’t want him to have to pay all that money. So let me offset the cost of those taxes. Well, we all know that the IRS is going to force you to take money out at 73, right? So now they force you to take money out at 73 called the requirement and distribution, and that on $500,000 that would be about $18,000 that he has to take out of that IRA every year. So, he could either take that $18,000 and pay the taxes and put it in his pocket, or he could do something much smarter with it. He could take the 18,000 pay the taxes, because, remember, he has to take it. He doesn’t have a choice. He doesn’t take it requires a 25% penalty. Okay, so he has to, but rather than taking that money and just put it in his pocket, and when I say put it in his pocket, I’m referring to the bank probably right, where it’s just going to earn interest, not much, and it’s going to get taxed again. Do you understand? Yeah, tax again. He could take the money that he’s receiving, and he could take the $18,000 and it wouldn’t be 18,000 after taxes. Maybe it’s 15,000 okay, but he uses it to buy a million-dollar life insurance policy. So, every year he takes the RMD, he buys a $1 million life insurance policy with the RMD. Okay, so now, when he dies, he has a million dollars that pays to his son, 100% tax free, because life insurance is one of those tools that people think about only having when they’re younger. They don’t think about it as a wealth planning tool, and this is a wealth creation strategy. So, I want you to understand, folks, what we’re doing as Secure Money Advisors. We’re talking about wealth creation, right? That’s much different than investing. Now we’ve got investing strategies, but. You also want wealth strategies, and this is a way for you to create wealth. And so, by doing this, he gets a million dollars tax free when his dad dies, okay, but he also gets the remaining balance in the IRA. Oh, wow. So now, rather than John only walking away with 250-260,000, right? He walks away with over 1.2, 1.3 million, because of this strategy, and all we did was redirect how the money was being used. It didn’t cost him anymore. It was just redirecting it.
Rebecca Powers 15:37
And it’s totally legal.
Brian Quaranta 15:39
It’s to- of course it is! Haha!
Rebecca Powers 15:40
I mean, of course it is, I know. But some people say it sounds too good to be true. Yeah, do what the billionaires do, not what they say. And when you look at this, yes, Congress, they’re never going to get rid of that, probably.
Brian Quaranta 15:52
No, they’re not, no.
Rebecca Powers 15:53
Because they use it for their own growing wealth.
Brian Quaranta 15:55
That’s right. That’s right. Life insurance is one of the great, greatest wealth creation tools you will ever see in your entire life. Most people do not know how to use the tools properly, right, right? And I will tell you this, there’s all kind of- people say, Oh, you don’t need life insurance, folks. I am telling you, when you educate yourself on the way these tools really work, and you understand the pros and cons. It’s hard for a logical person to look at this and go, What a terrible idea. Usually, people that are saying it’s a terrible idea usually have an agenda for something else. Exactly. So folks, if you want to know more about your tax situation about how much money you’re going to owe to the IRS go to RightTrackMyTaxBill.com right now, and I want you to put in your information so that you can get a customized report showing you what you would pay in taxes right now if You do nothing versus if you do tax planning, and that’s the gift I want to give you right now, absolutely free of charge. All you have to do is go to RightTrackMyTaxBill.com and enter in that information, and you will get that report. And when you get that report, if you’re as shocked as most people are, you’re going to want to click the next button that says, I want to talk to a financial advisor at Secure Money Advisors, because I want to further discuss this problem. Because no one else has discussed this with me, and now that I know this problem exists, I want to fix it. Or again, you can go to OnTheMoneyOffer.com you can get the book for free. Yes, you can tell them all that.
Rebecca Powers 17:46
Yeah, you can get the book for free. It’s true. It’s really wonderful. It’s a great offer, because Brian wants all of you to have it, and he’ll even pay for the postage and handling, like you see on some commercials, not including postage and handling. Well, this does Yes, so it does not cost you a penny. And once you figure out your tax bill, like you said, it’s another great opportunity, and then that appointment is also complimentary to sue for the right fit for you, give us a call, go to the website, and we’ll be right back.
Speaker 1 18:20
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 19:12
Welcome back. I’m Rebecca Powers here with Brian Quaranta of Secure Money Advisors, it is all about protecting your money. It’s kind of like when you’re a football coach, like, do we throw the Hail Mary? No, you’ve worked 30 years. No. Need to risk we’re going to be defensive now, and that’s what it’s all about. We talk so much about tax planning forward earning money by keeping money. Very powerful. You’re the opposite of a big box. You’re an independent fiduciary. How does not only the tax play into- you mentioned Medicare and Social Security? How can you actually shoot yourself in the foot by not doing it altogether as a holistic plan?
Brian Quaranta 19:54
Yeah. Well, this is, this is the problem with most big box firms, right? Right? And look, if, if I, if I’m out playing pickleball, and I twist my knee, my doctor is going to refer me, probably, to a knee specialist. Right. The medical community is really good at referring out to the specialist, the financial community is not so good. Not so good. The financial community think they can do everything, right? And so, the financial community, the big box firms, who really focus on investing, stock picking, mutual fund picking, right? And they’re there to take risk with your money and grow your money. When it comes to people asking them about planning for retirement, they pretend like they know what they’re doing, but a lot of them don’t, and so people-
Rebecca Powers 20:56
Some aren’t even allowed.
Brian Quaranta 20:57
Some are not even allowed, that’s correct.
Rebecca Powers 20:58
The big boxes, right? They won’t even let you speak of these things.
Brian Quaranta 21:02
Yeah, that’s right. That’s right, usually. And I know this because yeah, and, and they, and there’s very limited product that you’re allowed to look at for your clientele. And that was one of the reasons why I decided to go independent, as a lot of advisers are, and I’m very proud of my industry, because my industry is finally saying enough is enough, man. You know, there’s a lot of good people out there in finance, finance, course, and they want to do right by people, but they don’t want, they don’t want to be handcuffed by you know what? What they can do for their folks, right? I mean, you know, I don’t know what handcuffs are doing behind here, but this is what you don’t want when you’re with a financial advisor.
Rebecca Powers 21:48
That’s an entire story.
Brian Quaranta 21:49
This is what working for a big box firm is like, you’re handcuffed to helping your clients, and that’s not what you want. You want someone that’s free to be able to really be on your team and roll up your sleeves and start problem solving together, right? And it’s critical that you have that, because if you don’t, then you’re there’s just, there’s a bias there, right? And they’re going to guide you towards what they can do. It’s why I left. I mean, I would go out, and I’m not going to name the big box firm that I work for, but I had to use a certain grouping of products, right? So, if someone had something they were trying to solve, you were trying to, you know-
Rebecca Powers 22:34
Make that product fit them, instead of finding the perfect fit for them.
Brian Quaranta 22:39
That’s right, yeah, it’s like a square peg into a round hole. Commission. It’s not going to work. It’s not going to work. And, you know, we’re fortunate to scare money advisors, because we’re a very, very busy office, yeah, you know, we’ve got 30 team members. And I will say, probably the most special thing that comes with this book with the tax calculator is all those 30 people at the office that support you, that are there to take care of you, that are there to make sure that you have the experience that we want all of our clients to have. And that is one where you go out and you are a raving fan for what we’re doing, but it first starts by us being able to show you what we’re capable of doing. And I think one of the biggest areas that is overlooked for a lot of people is that in depth tax conversation with their advisor, because there’s so many different taxes, you know, there’s, I call it the tax puzzle, because you have income tax, you’ve got Social Security tax. You’ve got different tax strategies you could do like
Rebecca Powers 23:48
The stuff you mentioned (indistinct) business owners
Brian Quaranta 23:50
Capital loss harvesting, right where you know, where you can harvest gains or harvest losses and write them off. You have capital gains taxes. You got different taxes on dividends. So, there’s a lot that goes into this tax puzzle, and creating a tax efficient retirement plan does a lot for you, and here’s what it really does. If your money is tax efficient, it doesn’t have to earn it as much either because when you have to pay large amounts of tax on your dollars from your investments, your money has to work so much harder and get such a greater rate of return for you to achieve a goal, versus that money being tax efficient or tax free, right? And so, folks, if you haven’t done so yet, go to RightTrackMyTaxBill.com Again, it’s RightTrackMyTaxBill.com and put your information in and get a customized report so you can see the difference between what tax planning can do versus you not doing any tax planning. And like I’ve said before, when you see that problem, like most people do when they see it, you’re going to want to click the next button, which is, do you want to speak to a financial advisor at Secure Money Advisors? You’re going to click that button and you’re going to be able to come in and sit down with one of our team members and go over your situation and look for strategies and techniques that can help your money becomes as tax efficient as we can possibly make it.
Rebecca Powers 25:29
And we truly say this, leave your checkbook at home. Don’t even bring your Visa card. It is not about that. Your very first appointment if you choose to come sit down with Secure Money Advisors, is also complimentary we haven’t even touched on today the fact that you do a third-party report showing actual risk, showing actual fees we’ve paid over the last 20-30 years. That’s when my husband almost got angry. Why have we been with the big box all these years? I didn’t know we were paying 3%, I didn’t know this insurance policy didn’t do anything for our heirs. There are so many squeezes of that orange that you can get out if you take the initiative.
Brian Quaranta 26:08
Yeah, and, you know, I think that the first part of it is transparency, right? I think what makes a good partner when you’re working with somebody is transparency. That’s your number one. You’ve always said that. And whether you’re, you know, having someone build you a kitchen or remodel a bathroom, whatever it is when someone is transparent and they are working in your best interest, and you know that they are, and they’re not just telling you, they’re showing you, it’s the why not the what, right? And it’s Secure Money Advisors, we’re not just going to tell you, we’re going to show you. We’re going to show you the tools that are telling us this information. We just don’t go and make this stuff up. But it’s important for you to see what we see, because you need to see what we’re seeing, so that you understand that it’s the problem that you have, not the problem that we’re trying to fabricate, right? So, once we identify that problem, now we can really start to problem solve for you. So, there’s two things we can do here, at the end of the show here, Rebecca, we can go to, RightTrackMyTaxBill.com and get it and get your tax report. Okay? And the second thing you can do is go to OnTheMoneyOffer.com and get a copy of my book Right Track Your Retirement, where I lay out the whole roadmap for you on how to build a simple plan that will guide you through retirement and give you the security and peace of mind and confidence that we all want in retirement.
Rebecca Powers 27:41
Absolutely. We’re trying to make it very, very simple for you. There’s also the QR code. It’ll bring you to our landing page. All right. Great show today. Great having you with us. We love you and we’ll see you next time.