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Video Transcript
Rebecca Powers 00:23
Welcome to this week’s edition of On the Money with Secure Money. It is brought to you by secure money advisors. Of course, the CEO and founder Brian Quaranta is with us. And last week, I like to kind of start where we left off last week, because you have a lot of loyal followers and watchers, we left off talking about secure money. Annuities is one of the tools, there are many tools. Social Security is a part of your income plan when you get to retirement. Yeah, but it’s just a part because some people that we’ve had viewers right in saying, isn’t Social Security going to be enough? Right? It’s certainly not, right?
Brian Quaranta 00:58
No, as a matter of fact, about 85 to 90% of the people retiring today are going to need additional income above and beyond what they’re going to get from Social Security. So that means that most people are going to have to rely on their retirement savings for that additional monthly income. And it’s a pretty scary thought. And it’s what I’ve called the grand experiment. Because if you go back 30-40 years ago, it was really easy to retire. You didn’t need to watch a television show to figure it out, right? You didn’t have to go to an educational event. You didn’t need to consult with a bunch of advisors. And you probably actually knew the day that you were going to retire. We’re talking about a pension. I’m talking about the days where not only you know, are you going to get a pension, but you’re gonna get Social Security check. So, you go back 30-40 years ago, and just between soul security and the pension. People knew when they would be able to retire, and they had retirement parties, remember those? Watch, you know, I remember my grandparents were going to retirement parties all the time. Yeah, you don’t see them anymore. Very rare. Do you ever see a retirement party anymore? So, what’s happening though, is that employers got rid of the guarantee pension. And they went to something called the 401 K match. And I call it the grand experiment, because nobody knows how this thing is going to work out. Yeah. So, the question is, when do you collect your Social Security? And when do you start pulling money out of your retirement accounts. And at secure money advisors, we’ve created a social security and income maximization report that helps you figure out when is the best time to turn the Social Security on, but more importantly, when and how to start withdrawing the money that you need from the retirement account itself, and how to do it the right way.
Rebecca Powers 02:50
So, Social Security, when and when not to turn it on. Somebody might say, Oh, I’m gonna wait, I’m gonna wait as long as I can. But that’s not always, I guess everyone is a snowflake. Everyone is completely different. So don’t listen to your neighbor. I don’t do it till later. Everyone is different.
Brian Quaranta 03:06
Everyone’s different. Yeah, that’s talking about that. I’ll give you a good example. So, I had a guy come in a couple weeks ago. And, you know, he said, I, I’ve decided that I’m going to wait to take my soul security. I said, I completely understand. I mean, at the end of the day, if you’re looking at it, just from black and white standpoint, you know, if you wait till age 70, that’s when you’re gonna get your maximum out, right. And as a matter of fact, for every year that you wait up until age 70, you get an 8% increase. So that’s not too bad, right? Where are you gonna get an 8% increase on an income? But here’s the question that you have to ask yourself before you make that decision. How’s your health? And how’s your family health history? When it mom or mom and dad’s still alive? At what age? Did they die? Have a grandma and grandpa, when did they die? Because if you look at the break-evens on Social Security, I mean, they can get out to age 78. You know, 80 to 83. Right? And what I mean by the break-evens is, it doesn’t matter whether you collect social security at 62. Or let’s say 66, you’re gonna break even around 7879, somewhere around there. Okay? The difference between 66 and 70, you’re gonna break even somewhere around age 83. Okay, so think about where you’re going to be at that point in time, are you even going to be alive, right? So, I think where people get confused, and they get a little paralyzed of what to do, or they make the wrong decision is they start Googling, when should I collect my Social Security? Well, there’s always going to be smart people online talking about the benefits of delaying and how much more you’re going to get, but they’re also taking into account that you’re going to live till 95.
Rebecca Powers 04:37
Or that you’re single, or that you’re married. When you talk about that, there’s a big difference.
Brian Quaranta 04:42
Big difference on single, married, divorced, all of that makes a difference. And that’s why the Social Security, income and maximization report that we do during our right track retirement review helps people come to a decision of when to collect social security, when to start turning money on from their investments. And that gives people the real clarity that they need to know when they can turn it on. And more importantly, if they do that, they have a high probability of success, meaning they’re not going to run out of money, right? Because the number one fear of anybody entering retirement is, is my money going to last? As long as I do, right, right? Or are you going to wind up having, you know, a situation where you run out of money before you die? And that’s a scary day, you know, AARP did the survey, and they surveyed 1000 people, they said, What do you fear most? running out of money or death? You know, 90% of those people said, they fear running money more than they fear death alone, I would agree. Yeah, I would agree. And the worst day of retirement is not the day you run out. It’s the day you figure out, you’re going to run out, and there’s nothing you can do to stop it. And unfortunately, we meet those people, because the advice in the marketplace today, right is if you’re having bad results in your investment portfolio. Typically, the advice is this. Don’t worry about it, right? Because you’re in it for the long haul, right. And that’s not a strategy. Now, you know, hoping and praying is not a strategy, you better have a way to buffer the volatility of the market. Because if you’re 100% in the market, and you plan on pulling money from there, you’re going to increase your probabilities of probably running out of money.
Rebecca Powers 06:22
I know you write a book about this, because retirement really is your passion. And we were certainly not taught this in school how to retire, right? So Social Security is part when you do the right track retirement review. You also look at where your income is going to come from. Yes, yeah. Security is just one of those things. Yes. Yeah. What your risk is, let’s talk about that our word risk.
Brian Quaranta 06:42
Yeah, risk is one of those elusive type of words. Yeah, what it is now? Yeah. What does it mean to be risky or not risky? Right? Well, first off, let me tell you how I define risk. Yeah. If it can go up in value, or down in value, it’s a risky investment. If it can only go up in value, and it can’t lose money. It’s not a risk investment period. Bottom line, right. So now in the financial planning world, we have quantified risk as conservative, moderately conservative, aggressive, very aggressive. Well, I can go, I can look at just even this last year, where people had what we call target date retirement funds, where, you know, rather than an individual going into the retirement account and having to pick maybe four or five different mutual funds, they could just go in there and say, Well, I’m going to retire around 2025, or I’m going to retire in 2030. And the idea of putting those types of investments in retirement plans was to make it easier for the employee to allocate their plan. And the idea is that if you chose a 2025 retirement fund, it would get it would get less and less risky, it would go more and more to bonds as you got older. Well, the problem is it has to automatically do it by prospectus, which means that if they say, by law, this is what we’re going to do. They can’t change what they’re going to do. So, here’s what’s happened. 2025 retirement funds started going more bond heavy because it needed to be more conservative. Okay, problem is interest rates went up at the same time, and bonds were going down. 10, 15, 20%
Rebecca Powers 08:18
Gotcha. So bonds used to be safer, but now they’re just as risky as stocks.
Brian Quaranta 08:23
Because interest rates create risk with them, right? Yeah. So, you know, you’ll see a lot of people say, Well, you know, I want to be more safe. My advisors move into me to bonds, it’s one of the worst things you could do right now. because interest rates are going up at such a rapid pace, that the bond prices are going to continue to drop on you. And this is where people get it wrong. And this is why folks, I’ve created this right track retirement review, because I want you to be on the right track. I want you to get this right. You know, so what if you weren’t doing the right things? What if you weren’t making the right decisions? What if you didn’t have the right investments, the right tax strategy, the right income strategy, the right health care strategy, the right estate planning strategy, our right track system, our review that we’re going to do is going to help you identify any red flags in those five key areas. All you have to do is call today, it’s a complimentary, no obligation appointment. You come in, we sit down with you for 45 minutes, and we go through what you’re currently doing, and what the concerns are that you have. And then we give you a report, a fact driven report, not an opinion report, a factoring report so that you can make very informed decisions. But all you’ve got to do to schedule that appointment is to pick up the phone and call us at 1-888-382-1298. Again, that’s 1-888-382-1298 Schedule your right track retirement review today.
Rebecca Powers 09:36
And absolutely, as Brian said, it really is no cost, no obligation, just a warm meeting to see if you too want to work together. There’s a number again, (888) 382-1298. We’ll be right back.
Brian Quaranta 09:47
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 there’s scared is because they’re afraid of running out of money.
Neil Major 10:02
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 10:10
The average person might say, well, a good portfolio would be a good mix of stocks, bonds, mutual funds, kind of a good portfolio is all designed around the five key areas, income, taxes, investments, health care and legacy planning.
Neil Major 10:24
Because we’re not just product pickers here, what we do best here as we build retirement plans.
Brian Quaranta 10:30
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 10:40
People, you know, can actually see a vision once we start to really build out their plan.
Brian Quaranta 10:45
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 of your dreams.
Rebecca Powers 11:15
Welcome back to On the M oney with Secure Money. We were talking about how to keep your money secure. Believe me, ladies and gentlemen, it is possible it does not have to be a gamble every time you go to sleep at night wondering what’s going to be in the news. So, Brian, we were talking about the right track retirement review how it’s absolutely complimentary. Part of that is tax planning. Yeah. You all know, ladies and gentlemen, if you watch the news that the IRS has recently hired 87,000 new agents. Yeah. Right. We’re just going after the millionaires and billionaires. I don’t think that’s true. I think we can all agree that they’re going after us. Yeah. The middle, the hard-working durables on the wheel. Yeah. That’s all right. How important is tax planning? I don’t think people understand what you mean, when you say tax planning?
Brian Quaranta 12:00
Yeah. Well, look, the if you look at the tax code, first off, its volumes thick. All right, I bet. I mean, it’s volumes thick. But there are some basic fundamentals that you want to follow as you approach retirement, especially the more you can get the IRS out of your life, the better. I’ll give you one thing that gets people hung up in retirement when it comes to taxes that can get them in trouble required minimum distributions. You see, it used to be at age 70 and a half that whether you wanted money out of your account or not, you were forced to take it right, that was called the required minimum distribution. And you have to do this on all of your retirement accounts. So, let’s suppose you had $500,000 in retirement accounts? Well, it used to be at 70 and a half, you’d have to take money out, now they change that, and they say, Okay, well, you can, we’re gonna force you to start taking money out now at 72. Okay, so let’s say you had a half a million dollars in retirement account, well, at the calculation, you’re going to use it 72 is a divisor number, you can find it on the IRS website, it’s something that we calculate for our clients, okay, but on a half a million dollars, you’re going to be required to pull out over $18,000, and that you’re going to have to pay taxes on. But if you don’t do that, let’s say you forget to do it, or you don’t do the calculation, right, and you forget to pull that $18,000 out. It would be a $9,000 penalty, a $9,000 penalty, half of your money those percent, they will take in a penalty if you do not do your required minimum distribution, right? Did you know that with tax planning, you could actually not even have to worry about required minimum distributions at 72. Because you could literally start converting your money from tax deferred money to tax free money, okay, at the IRS out of the picture right now. Yeah. And now every withdrawal you take out of there is tax free. Oh, and by the way, they don’t force you to take money out now. And when you’re forced to take money out in the future, what’s going to happen is your income tax is going to go up the taxes you paid, your Social Security might go up, your Medicare premium might go up. So, it becomes a compounding effect, having to take that money out in those later years. And if you think that the IRS is gonna let you slide by on missing those, I promise you with 87,000 new IRS agents, they’re not going to.
Rebecca Powers 14:09
They’re definitely not gonna let you sign. And it’s also like, would you rather pay taxes on the acorn instead of the giant oak tree?
Brian Quaranta 14:16
Yeah, yes right, the seed or the harvest, right, so you’d rather pay taxes on the seed, not the harvest. And that’s what we’re really talking about when we’re doing tax planning. But there’s other great tax planning tools to like one of the things that people don’t realize is that typically, when we get older, the biggest question I’ll get is, do I still need this life insurance policy do I do my husband and I still need to pay for this life insurance policy? Well, it depends on what your goals are. So, for example, I have a client that his main priority is to leave money to his daughter. Okay. Well, one of the great things about life insurance is it’s all tax free. So, he’s got a million-dollar IRA account that he has, and then he has an insurance policy that we’ve just bought him And now why would we do that? Well, if he leaves the million dollars to his, to his daughter, she’s going to owe about four to $500,000 in taxes on that IRA when she receives it. That’s right, how rude how rude, right could wind up even being more. So, think about it, if you’re planning on passing along your retirement accounts to your kids, just know that they’re not going to receive most of that money, right? The IRS is going to get a big chunk of that. But you could get a better strategy in place so that you can maximize the amount of wealth that goes to your family. And one of those tools that you can use is life insurance. So, for example, he had to start taking required minimum distributions out. So, taking up about 20,000 a year. So, what would you do with that 20,000, you got a couple of options, you could pay taxes on it, and then you could put it in the bank, or you could buy investments. But when you die, you’re gonna get taxed again, right? Okay. Well, rather than doing that, why not take the 20,000 out that you’re required to take out for the required amount of distribution? And rather than redirecting it to somewhere where it’s going to be taxed? Again, why don’t we redirect it, where it’s going to be tax free. And you can do that by redirecting the $20,000 a year to a life insurance policy. And in this case, because of his age and his health, we’re able to get about 1,200,000 and tax-free life insurance. So now, he’s funding this life insurance. So now when he dies, not only is the daughter gonna get the million-dollar IRA account, but she’s gonna get $1.2 million of tax-free life insurance. And this is how you create generational wealth from family to family to family. And it’s things that we don’t talk about.
Rebecca Powers 16:30
That’s right. And these people were not taught that. And people say, Oh, the millionaires get richer, because they hire someone who understands that we all work by the same rules, right?
Brian Quaranta 16:39
We- were- the question is, are you using the rules to your advantage? Exactly. Are you using the rules to your advantage? And most people we sit down with Rebecca will tell us why hasn’t anybody told me this? Hey, man, I would have known this I would have done this 10 years ago.
Rebecca Powers 16:51
They don’t want you to know the person but let’s give that phone number Brian and tell them tax I mean tax free. Look at that. Cost free to come into a meeting.
Brian Quaranta 17:02
Yeah, our right track retirement review. Folks, I truly built this out for you. It’s a very simple process that we bring you through where we go through five key areas income, taxes, investments, health care and estate planning, it is going to give you the clarity and peace of mind that you need. And more importantly, it’s going to help you determine whether or not you are on the right track. So, call today 1-888-382-1298 and schedule your complimentary, no obligation, no sales pressure, when you come in, we’re literally going to sit down, roll up our sleeves and help you solve the concerns or the problems that you’re currently dealing with again, called 1-888-382-1298, and schedule your right track retirement review today.
Rebecca Powers 17:44
All right, call, let’s get your calendar ready, we’ll get you a slot to come in and meet Brian and his amazing team at secure money advisors more right after this.
Brian Quaranta 17:52
If I can help you increase your income, if I can help you pay less taxes, if I can help you potentially maximize the returns of your investments, while reducing risk reducing fees if I could help you prepare for a health event or more importantly, when the good Lord decides to take your home to make sure that the money you’ve accumulated over your lifetime goes to your family and to your charities rather than the IRS would that be worth the time to come in and get a second opinion.
Rebecca Powers 18:22
Welcome back to On the Money with Secure Money. And I want you to know that this is brought to you by secure money advisors and Brian Quaranta started this really because you wanted to empower and inform you used to be with a big box retail. Yeah, you went independent. Yeah, I know your wife Katie, and your kids are just loving life because you truly do have a passion to help people retire.
Brian Quaranta 18:44
Yeah, I’m lucky to have found something that I really love to do. You know, and it’s, you know, working with people and their money is never, you know, scary. Nothing you could take lightly, right. But what I’ve learned in my 20 plus years of planning, is that if you follow some simple fundamentals, which I’ll teach you, when you come in and do the right track, return review, I’ll teach you all about these fundamentals. And I write about them in my book, which you’ll get a copy. When you schedule the appointment, you get a copy of the book, which is great, because I made the book such a simple read, right? I called I said I need an airplane read, you know, because I love reading but I also hate it when an author drones on chapter after chapter after chapter, you’re like, Wow, you took the four chapters to say that you could have said it in one. So, I did that I got right to the point so that you have a clear understanding. But when you’re planning for retirement, there’s basic fundamentals you want to follow. And if you understand those fundamentals and know how to use them to your advantage, you truly do get peace of mind security going into retirement and through retirement. And I hear it year after year, month after month, day after day. Why hasn’t anybody shown me how to do this?
Rebecca Powers 19:52
Yeah, it almost makes you mad a little bit when you think about it. Like, I hated algebra in school. Why didn’t they teach me about compounding interest? Einstein said it should be the eighth wonder of the world.
Brian Quaranta 20:01
Yeah, well think about what we’re asking people to do. So here you have professionals, doctors, nurses, plumbers, electricians, right carpenters, landscapers. You know, I could go on and on in every profession in every industry, right? These folks are really great at what they do. Okay? I am always amazed, you know, we’ve got, you know, a three-year-old and a six-month-old. So, you know, just being at the hospital again, and watching my wife give birth to her second child. I’m always amazed at how good the nurses are, right? Like, I remember when we had our first child, and I’m watching these nurses change diapers and feed them like, oh, I can do that. And I, you know, and then I get to get them in my hands, and I can’t get the diaper on. And I’m like, they make it look so easy. But that’s because it’s their profession. I have attorneys that I work with that no matter what question I ask them, they’ve got the answer. But I wouldn’t know these people are really great at what they do. Now. We’re asking them, when they get ready to retire, to take the money that they’ve accumulated in this company plan, yeah, and now create their own pension for the rest of their life. And it’s up to them, they’re responsible for it, they’ve gotta go figure it out, or they gotta go find somebody to do it. And that’s even more scary, because not see, people think when you talk financial advisors, or financial planners that we’re all created equal, we’re not now we’re not we specialize in different things, right? There’s some folks that specialize in in growth and accumulation, right, and they’re really good at it. But there’s others who focus on generating income and maximizing tax strategies and passing money on to the next generation and getting you through retirement. That’s what we do at secure money advisors. Net, what’s what makes us so different, because there’s not a lot of people that focus on that area of planning, most people are focusing on those earlier years of accumulation.
Rebecca Powers 21:48
Because, that’s, again, the big bucks, that’s where they get their money when young people are working and putting all their money in stocks and bonds. Correct. So, when is the right time to start thinking about retirement,
Brian Quaranta 21:58
I always say if you can start really getting serious about it, five years out from retirement, that’s enough. That’s enough. Because up until that point, you’re really going to be in that accumulation phase. But once you get to that five-year mark, you need to start making decisions. So, I’ll give you a good example. So, I’ve had some folks come in over the last two years, that we’re about five years out from retirement. And we’re looking at their retirement and I’m going okay, because of the market going up as much as it did, they had accumulated enough money that we could actually get them through retirement, all right. But had they kept 100% of that money exposed to market volatility, they would probably have to delay retirement right now. Now, fortunately, because we were able to do some planning and remove some of that risk and protect some of that money, when the market started going down. They only had this much money at risk, not this much money at risk. Because the idea of being in the market with 100% of your money in retirement is the worst decision you can possibly make. Especially if you’re going to need to start withdrawing income, you need what I call a two-bucket strategy, you need a way to create time for your investment account to grow without you disturbing it by taking money out. Because if you have, you know, let’s say $500,000, and you plan on taking $30,000 a year out of this account, and you just lost 20% or $100,000. And now you take 30,000 out, you’re not done 100,000, you’re down 130,000, you just compounded the loss, you never want to pull money from a risk account. So, you have to have what I call a buffer account, or a bridging account, where we can generate cash flow for at least 15 to 20 years 15 to 20 years of cash flow from this bucket, which means we’ve got 15 to 20 years to just let this money grow. And what people try to do is they try to put it all in one bucket, and they try to diversify it between stocks and bonds, and they get hurt over and over and over again. And at secure money advisors when you come in and we teach you about that right track system that we’ve built, we’re going to teach you these basic fundamentals so that you do make the right decisions. Absolutely.
Rebecca Powers 24:09
And the right track retirement review. You give it to them in a binder. I mean, is it for five years is the rest of their life. What is the time? Yeah, way? And I guess they you look at the overhead. Yeah,
Brian Quaranta 24:21
well, the review itself is a system that we go through, it’s a step-by-step process to where we’re really first understanding what’s going on in their life. we’re analyzing what’s going on. And then what we do is we take all that information they give us, and we have very powerful software we use that it’s going to evaluate the risk in their portfolios, it’s going to evaluate the fees and their portfolio, it’s going to evaluate the probability of success. So, if you have X amount of money saved and you need to take so much money out. The question is how long is that money going to last? If you gotta pull it out? And what rate of return I write about this in my book, what rate of return are you going to need in order to be successful? Whole, meaning most people don’t ever really figure that out. So, for example, I talked about three rates of return in my book, I talk about the spend down rate, the preservation rate, and then the legacy rate. And the spend down rate is very simple. What’s the minimum rate of return that you need to get on your investments? To take the money that you need every single year and maybe run out of money by the age of 95? Or 100? Right?
Rebecca Powers 25:22
What does that actually go with that?
Brian Quaranta 25:24
What interest rate is that? Is it 2%? Is it 3%? Okay, then your preservation rate is okay, if you have a million dollars or $500,000, doesn’t matter? What rate of return do you need to do to take the money out and still preserve the principal? And then, of course, if you want to take money out and still grow it, which is the legacy rate, what does that rate look like? Now you’ve got three rates lined out in front of you. And now you know, the parameters of which your account needs to perform. So now, when you go in, and you sit down, and somebody starts throwing out a mix of investments, you go, hold on timeout, yeah, I don’t need to take that level of risk, I only need a four and a half percent rate of return or a 5% rate of return. So, let’s invest the money in the safest way to get that four to 5%. Rate of Return, whatever your return is, you first have to understand what it is. And in the right track retirement review. It’s one of the things we’ll go over with you. So that’s part of the reporting that we give them. And what’s great about it, Rebecca, is it’s black and white information, right? Not our opinion. It’s not bias. It’s all math. So, here’s the math, right? You do what you want with it, okay, you want help fixing it, we can help fix it. Right. But what it also does, is we have found that it helps people get a lot more clarity on what they’ve been being told, right? Yeah. And you know, sometimes, you know, when they finally get the information that they need, their eyes start to open up and go, Whoa, timeout, I think that I’ve been being given the wrong advice for quite a bit of time now. So again, folks, that’s our right track retirement review. Again, like I’ve said, this is not your time to keep your head in the sand, kick the can down the road. Don’t procrastinate. Volatility is not something you want to mess around with, especially if you’re close to retirement, or are in retirement, that don’t worry about it. Hang in there. You’re in it for the long haul, folks. Those are not strategies. Those are cookie cutter phrases that are designed to manage your emotions. And that’s it. A real plan should never involve a strategy where we’re not worrying about it hanging in there. We’re in it for the long haul because we have to protect some money to make sure that you’re going to get through retirement without running out of money. So scheduled today, your right track retirement review, all you got to do is pick up the phone call 1-888-382-1298. Folks, it’s complimentary. There’s no obligation, schedule with us today again, call 1-888-382-1298.
Rebecca Powers 27:44
And absolutely no sales pitch. That’s what I love about you and your team Brian, thank you at home for joining us and we hope to see you again next week.