Episode 123 – Cryptocurrency and Retirement Planning

On this week’s episode of Retirement You Radio, Brian Quaranta discusses market volatility, the three buckets of retirement, and how to invest for retirement with cryptocurrency.

To see a full schedule of our radio airtimes, please click here.

Radio Show Transcripts

Announcer 00:00

Investment advisory services are offered through foundation investment advisors, LLC. an SEC registered investment advisor Brian Quaranta and his guests provide general information not individually targeted, personalized advice and are not liable for the usage of information discussed. Exposure to ideas and financial vehicles should not be considered investment advice or recommendation to buy or sell any of these financial vehicles. This information should also not be considered tax or legal advice. As performance is not a guarantee of future results. investments will fluctuate and when redeemed may be worth more or less than when originally invested. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products, fixed insurance and annuity product guarantees are subject to the claims-paying ability of the issuing company.

Brian Quaranta 00:39

On today’s show, we’re going to outline some things to consider whether it makes sense or not when we come right back here on Retirement You Radio

Announcer 00:48

And now, Retirement You Radio

Brian Quaranta 00:51

Good retirement plan starts with the foundation

Announcer 00:54

Asset protection, tax reduction, holistic planning.

Brian Quaranta 00:57

You think that’s the difficult part? That’s just getting started!

Announcer 01:00

Featuring Pittsburgh’s wealth financial and income coach Brian Quaranta.

Steve 01:08

And welcome everybody. This is Retirement You Radio increasing your financial IQ with Brian Q. Brian Quaranta is here. Brian, of course the guy behind the Right Track Retirement System. He is president and CEO of Secure Money Advisors. He is a fiduciary and independent, got a lot of experience and so much more. Hi, Brian. What’s going on?

Brian Quaranta 01:26

Steve, it’s good to see you again. Man. I’ve been off for a week or two here enjoying some of the last bit of Summer.

Steve 01:31

Right? Oh, yeah. Well, Neil did a good job filling in for he did a great job.

Brian Quaranta 01:36

He did a great job.

Steve 01:37

I was enjoyed talking with him.

Brian Quaranta 01:38

He’s a smart fella, isn’t he?

Steve 01:40

Absolutely. Yep. You said it. And this is gonna be a fun segment, Brian. And we talked about this just before we got started. And we talked about cryptocurrency Bitcoin. And when it comes to retirement and retirement planning, I guess the big question, Brian is, should it be in our retirement plan? What do we what do you think?

Brian Quaranta 01:59

Well, I don’t see any reason that it shouldn’t be or should or should be. I think what we have to understand here is fundamentals. So go back to basic fundamentals, I always like to break down retirement planning into three basic buckets of money. You know, so if you think about your money in buckets, the first bucket you should have is some type of emergency cash reserve, typically 6 to 12 months, I would say on the higher end now, you know, especially with, you know, experiencing COVID. I believe more and more that if you have at least 12 months of a cushion put away, you’re going to be good. But that first bucket of money is always your cash reserves. It’s what I call bank money. I also, I also, at Secure Money Advisors, we call that the blue bucket, by the way, okay, You probably didn’t know that Steve, we call it the blue bucket, then the second bucket of money you should have is what we call a pension bucket or an income bucket. And the reason for that is that 85-90% of the people retiring today are not retiring with pensions. So, what they’re retiring with their 401Ks, 403B’s, 457 plans. So, all those accounts are designed for growth, they’re not designed to provide pension like income. So, we want to get ourselves a green bucket, which is also known as pension money, okay. And we can show you how to do all this at Secure Money Advisors, then we get to the third bucket, which is the red bucket. And we call that the growth bucket. Now, this is where Bitcoin can belong, okay, it can belong in this longer-term growth bucket, right? It means that you’re not going to need this money for at least 15 to 20 years, you’ve built your portfolio with some good guarantees in the green bucket and blue bucket so that you can absorb any volatility of the red bucket, but sticking the fundamentals before you go out and just buy bitcoin, what we don’t want to see is someone taken 30-40 years worth of work and rolling the dice on Bitcoin. Steve, I just don’t think that would be a great idea.

Steve 03:46

No, probably not. And, again, so I know right now, it’s kind of the Wild West when it comes to cryptocurrencies. I mean, there’s, there’s a theory of them, there’s those non fungible tokens and you know, I mean, there’s a lot of different elements of this thing. Where does it fall when it comes to taxes then do you see the government getting more involved in cryptocurrency from a tax standpoint?

Brian Quaranta 04:07

Well, holding Bitcoin or other cryptocurrency in a retirement account can make sense due to tax issues associated with digital assets? Okay, so let’s take a look at this, like maybe how it could fit your portfolio. So, is Bitcoin an appropriate investment? I think we need to ask that most importantly, okay. It’s an alternative investment, right. Traditionally, alternative assets, I always like to consider the 10% rule when we’re talking about alternative assets, no more than 10% of the portfolio, right or even less, but alternative assets have included direct investments in asset classes like precious metals, real estate, commodities, private equity, hedge funds, those types of things. Sure, education is key. So, you got to really work to understand how this stuff works. You shouldn’t just be buying it because everybody else is buying it. Please, if you’re gonna go out and buy it, have a little bit of an understanding of how the technology works, and why you would buy it or maybe why you would use it in your own life and that’s a good Test to whether or not you should even own it as you ask yourself, could you see yourself using it? If you could see yourself actually using Bitcoin to help you out in your everyday life? It might be worth you investing and if you can’t, don’t invest in it just to invest in it. That’s not a good idea. Right? But cryptocurrency and taxes if bitcoin or other cryptocurrencies are in an appropriate investment, investing via a tax advantaged retirement account, like an IRA, or a self-employed retirement account, like a SEP IRA might make sense, because you’ll get some tax deferral, the tax issues though, surrounding Bitcoin, Etherium and FTS, which are the nonfungible tokens, and other crypto related investments are complex. The Biden infrastructure bill contains provisions that would strengthen the tax enforcement surrounding the crypto transactions, the complexity, and changing the nature of the crypto taxes can be a reason to hold Bitcoin in a retirement account. One other thing I want to add to this is Bitcoin in a self-directed retirement account, investing in Bitcoin and other cryptocurrencies in an IRA or other types of retirement accounts can be a bit more complicated and simply open up an IRA at one of your standard custodians like, you know, fidelity or TD Ameritrade or, you know, Merrill Lynch. So, it’s a little bit more complex. But really, in order to make this part of your portfolio, my message to everybody is educate, educate, educate, don’t buy it just because your friends buying it. Okay? Understand what you’re buying, why you’re buying it and determine what your exit strategy is going to be. Are you going to hold on to it for a year? Are you going to trade it? Are you going to hang? Are you going to be in it for the long term and hang on to it for 10? Or 15? years? Are you going to have an exit strategy? So maybe you bought in at 30,000? Are you going to exit at 100,000? Are you going to exit at 60,000? Where are you going to exit? Have a strategy to get out of Bitcoin before you get into Bitcoin.

Steve 06:51

Oh, that’s a good idea. That’d be that’s a great way to say it, too. And I mean, just I mean, it is so mainstream, I just read a story, Walmart is going to start accepting bitcoin cryptocurrency.

Brian Quaranta 07:00

Yeah, you’re seeing it all over the place. I mean, you know, it’s time to it’s time to learn, it’s time to learn, it’s time to learn, the economy is changing. There’s no doubt about it. And it’s changing very, very quickly. And we don’t know where this whole thing is gonna go. But making sure your retirement is on the right track is the most important thing you can do. And that’s exactly what we do here at secure money advisors is help you get on the right track. For most people, the five key areas they need to focus on a retirement planning will be their income, their taxes, their investments, their health care, and the legacy planning. We’ve seen people charge up to $1,000 or more to do a review of your portfolio, we’re going to do it if you call us right now for the next 10 callers, we’re going to give you a complimentary Financial Review. It will take the mystery out of financial planning, they will help you map out where you are right now, and where you need to go. We’ll also do a tax analysis; we’ll show you how you can save on taxes. But more importantly, we’ll show you how to create income and retirement that you can’t run out of that will help you get through retirement. Because remember, when you retire the paycheck stops, but bills and taxes and all the things you want to do is not going to stop. So you have to replace that paycheck. But you’re also going to need a paycheck. Because in retirement, those are the things that you want to do is go out play and have all the fun that you wanted to have that you’ve told yourself you’re going to do for years. So, call us today for the next 10 callers as a comprehensive financial review that we’re gonna give away complimentary with no obligation.

Steve 08:20

That sounds great. Brian, folks take advantage of what he’s offering today. It’s really a true practical financial review and it’s a phone call away 800-656-8616 You heard Brian 10 callers right now, get that comprehensive financial review plus all the extras, the portfolio analysis, associate security analysis, all of that no cost, no obligation and then when you walk out the door, you’ll have in your hand that roadmap that we talked about a guide that will help get you to where you need to be 800-656-8616 again 800-656-8616

Brian Quaranta 08:53

If you think saving for retirement is a chore just wait till the IRS tells you you have to start withdrawing your money at the age right now of 72 called an RMD we’re going to talk about how that can impact your retirement and your taxes when we come right back here on retirement you radio

Announcer 09:17

Do you ever feel like you’re fighting for financial knowledge? Don’t let bad advice be a punch in the gut your retirement and take advantage of a complimentary no-cost no obligation consultation with a local trusted financial coach. Call Brian Quaranta host of retirement you radio 800-656-8616 or text Brian Q to 800-656-8616 we’ve made it easy for you to take advantage of this fantastic offer. All you have to do is call or text Brian Q to 800-656-8616

Steve 09:57

We’re back on Retirement You Radio increasing your financial IQ I’m here with Brian Quaranta. We’re on to course who we’re talking about. He’s president, CEO of secure money advisors. And I’m consumer advocate, Steve. He’s (Brian) an all-around, good guy, have your back. And I know you’re busy. And I know you’re just coming off vacation, but you’re feeling good? You sound good.

Brian Quaranta 10:15

Yeah, we’re super busy man. You know, we’re, we feel very blessed. I mean, I think people, you know, just to really appreciate the education that we’re providing and the good information. Look, I’ve learned a long time ago, I’ve been doing this for 22 years. If people have good information, and black and white facts, they can make good decisions about their financial situation. And that’s all we’re trying to do. We’re just trying to provide as much value to the marketplace as we can as much education as we can. So to help people steer them in the right direction and get them on the right track.

Steve 10:42

All right, well, let’s dig in, let’s figure it out. I’m gonna talk about some strategies you to avoid costly tax traps. I don’t like the sound of that “a tax trap”. But one way that that’s what we’re gonna do, we’re gonna talk about how to avoid those traps and keep more of your money that you worked so hard for. And we have to talk about RMDs: required minimum distributions, and we got to follow the rules.

Brian Quaranta 11:06

Yeah, it’s big. I mean, first off, before we even get the RMDs, you know, let’s just talk about the retirement savings tool that we have available to us. You know, the number one thing that we’ve all been, you know, told to do for years is to invest in some type of individual retirement account, like an IRA, or a 401 k or a 403B. And basically, they said, if we put money in these accounts, that they would give us a tax deduction, you know, today, they would give us a tax deduction. So, you know, if I deposit $15,000, into my 401 K, I get to take that off of my gross income and pay less in taxes. So, sounds like a pretty good deal until you realize that as the money grows in those accounts, and it gets bigger and bigger and bigger, your silent partner also starts to get a larger and larger share. And yes, that silent partner that doesn’t participate in making any contributions to your plan, nor do they go to work and work hard to make all the money that you make, that silent partner is the IRS. And the magical thing that happens at the age of 72 is called the required minimum distribution. So, let’s suppose that you’ve got a half a million dollars sitting in your IRA account. And you for some reason, don’t need to take any of that money out at all, because you got plenty of money coming in between social security and pensions? Well, the IRS is going to tell you sorry, at 72, it’s time for you to start withdrawing money, whether you want to or not. Now, if you do not withdraw money, at the age of 72, there is a small little penalty to pay of 50%. Steve, did you know that?

Steve 12:40

Whoa, 50%, that’s a big knife.

Brian Quaranta 12:43

It’s a big bite. Imagine you were supposed to take $10,000 out and you didn’t do it, the IRS is gonna say, Hey, that’s a $5,000 penalty you need to pay us. So, these RMDs we got to get right RMD, again, stands for required minimum distributions. Once you hit at age 72, you have to start taking this minimum amount out of your retirement accounts. And again, retirement accounts will refer into IRAs, 401, KS four, three B’s 457 plans, anything that you got a tax deduction on, you’d have to take the RMD by April 1, the year after you turn 72. And by December 31, in subsequent years. In other words, if you turn 72, and 2021, you have until April of 2022, to take your first RMD. And again, if you have multiple IRA accounts, you got to take multiple RMDs. So, you got to make sure that you understand this calculation, because again, if you forget to take it, it’s a big penalty. So, but remember, there’s ways that we can avoid this. So, let’s talk about what happens actually, when you take these RMDs, when you take these RMDs, it counts as income. So, let’s suppose you got a half a million dollars in retirement account at 72, that’s going to roughly work out to about an $18,000 Minimum withdrawal that you need to take that $18,000 Minimum withdrawal you take is going to count as income in the year that you take it, which means that it’s going to affect your income taxes, but it’s also going to affect your Social Security tax. And it could also increase the cost of your Medicare. So, think about the compounding effect there of the RMD. So, with proper tax planning, we can get rid of these RMDs. Matter of fact, we can make all the money in your retirement accounts tax free with proper planning, and people need to realize that it’s better to pay the taxes on the seed versus the harvest. Because the harvest, you’re gonna get slaughtered. And you don’t want to get slaughtered in retirement because the money that you’re giving away to the IRS could be going to your family. And with proper planning, we can make sure that more money stays in your pocket in your family’s pocket rather than against the IRS. And these are legal things that we can do under the current tax code, like Roth conversions, backdoor conversions, contributions to Roth 401, K’s life insurance, cash value, all tax-free opportunities for us to get the IRS out of the picture, and these are the things that we do really well here at secure money advisors, and this is all about keeping you on the right track. What does the right track retirement even mean? It means that you have an income strategy, a tax strategy and investment strategy, a health care strategy and a legacy strategy. Yes. When the good Lord decides to take you home, I know that you probably want the majority of that money go into your family and charities versus the IRS. Anybody would? It’s I don’t, I think it’s important that we all pay our taxes. But I certainly wouldn’t mind just only paying my fair share, right, so. But folks, call us today for the next 10 callers who call in right now we’re going to create a one-page financial review. It’s our right track retirement review. It’s a complimentary financial review of your current portfolio, we’ve seen other people charge $1,000 or more for similar features or offers, we’re going to do it at no cost, it will take the mystery out of financial planning for you, we will give you a track to run on turn by turn directions of where you are right now and where you need to go to improve your current situation. If you are on the right track, wouldn’t it be great to get confirmation that you are but if you’re not on the right track, when would be a good time to know that? So again, for the next 10 callers who call in right now that’s a complimentary, comprehensive financial review. We’re giving away at no obligation. Hey, that

Steve 16:21

sounds fantastic, folks, this is a great opportunity to really sit down get a financial roadmap put together, Brian and his team at Secure Money Advisors are there for you they understand they can take that complex financial world and really make it something clear and easy to understand. It’s your chance to get a true practical financial review. If you’ve never done it before. No time like the present. If you need a second opinion. I know a lot of you’re looking for that. Now’s the time to make that call. 800-656-8616. You’re heard Brian the next 10 callers will receive that financial review that Right Track Retirement plan, and you will find out where you are today. Yes, but more importantly, you’ll find that you’ve now got a roadmap that can help get you to where you need to be. Call right away. 800-656-8616, 10 callers right now 800-656-8616

Brian Quaranta 17:15

Are you ready to retire? Just saying yes doesn’t mean you are. When we come back, we’ll highlight several steps to take now to make sure you’re ready for retirement.

Announcer 17:32

He’s letting the clock run out on his social security at age 70 For maximum benefits. And here comes the Roth conversion. He’s got some outstanding coaching with that lifetime income plan. He’s created his own pension as well. And it looks like he’s going to go All! The! Way!

Play your best retirement game, call Brian Q 800-656-8616. Or text Brian Q to 800-656-8616. Call or text Brian Q two 800-656-8616.

Steve 18:08

Welcome back, everybody. This is Retirement You Radio increasing your financial IQ with Brian Q. Brian Quarnata is taking a well-deserved break Neil Mager sitting in today. Neil, Senior Advisor at Secure Money Advisors, he is a fiduciary. He’s got some experience behind him. And he’s ready to answer some questions. Let me ask you this, Neil first. So, you guys, I know do a lot of seminars, are you are you back to doing live seminars? Again?

Neil Mager 18:33

We are we’ve we are back out there in the public, you know, educating people on the important aspects of retirement planning. We typically right now have been doing just one a month in the summer months, we’re really looking forward to the fall. And getting back out there. You know, typically, where we really like to do them are at the local colleges and universities, community centers, libraries, things like that. So, you know, we’re eager to get back out there and do those. I think in September, we’re really going to get aggressive with, you know, being back out in the public. We did do one at Narcissi Winery last month, and we have one coming up in July. Folks can check our website for more information. But we’re going to do another one towards the end of July in Narcissi Winery.

Steve 19:24

All right. Sounds good. Boy, a little retirement talk and wine, can’t get any better than that.

Neil Mager 19:28

And good food

Steve 19:29

And good food, even better.

Neil Mager 19:31

Yeah, makes- wine, I think makes people listen a little better. From what I have heard.

Steve 19:36

I think you’re right. 800-656-8616. So again, those are the kinds of things I mean, again, the seminars this fall, I would guess we’ll get the whole schedule when it rolls out. Right?

Neil Mager 19:47

Yeah, we’re definitely looking forward to you know, because of the pandemic, we weren’t able to do a lot of the educational events in those types of places over the past year and you know, seems like right now. People are really comfortable getting back out there being in a restaurant setting, sure being, you know, a college or a university. So yeah, we’re, we’ll definitely make you all aware when we’re back out there in the public eye. Because you know, it’s a great way to, you know, like we talked about sometimes last time, a one-on-one can be a tad intimidating for some, well, this gives you a good idea. One, you can gather some great information to, you can get a good feel for the firm, right? And the person that you’ll be meeting with. So, you might say, Well, this guy seems like, he’s okay. He doesn’t seem like he’s going to be a high-pressured salesperson or anything like that. So maybe take advantage of his offer.

Steve 20:42

Right. And, folks, if you want to know more, the website, I would recommend you visit securemoneyadvisors.com That’s secure money. advisors.com. That website, it’s constantly changing. I mean, I go there frequently. And there’s always something new, there’s always something different. I mean, it’s what we call robust.

Neil Mager 21:02

Yeah, we do a good job of keeping up with it, it gives you a good idea of the, you know, current team members at the office, so you can understand what each and every person here at the office does. It gives you a good understanding of, you know, what our philosophies are, and how we approach retirement planning. And so, you can get a good feel and vibe to see if you know, we’re the right fit for you.

Steve 21:24

Right? Well, again, that’s important. 800-656-8616 securemoneyadvisors.com. Alright, let’s jump into a couple of these questions here. While we still have some time, George has checked in, he says, I have to start taking my required minimum distributions this year, I have three different IRAs. Should I take some money from each account? Or take it all from one?

Neil Mager 21:46

That’s a great question, George. And, you know, we’ve heard that question frequently. So, I’m glad you asked. Now, the IRS has a number that you need to withdraw from your accounts. Okay. Now, that calculation needs to be done, and you got to make sure that you get the number pulled out correctly, or George would face a 50% penalty. What I mean by that is, out of all three accounts, George, if you had to pull out $20,000. And if you didn’t do it for some reason, you would owe the IRS a $10,000. Penalty. So, you got to make sure that you get the calculation correct. But the answer your question, no, you do not need to take it from each of the three accounts. If you wanted to pull it just from the one and satisfy the RMD. From all three, you’re able to do that now at secure money advisors. What we do and how we set things up is we typically have a now soon later, three buckets of money now soon and later. Now, the soon bucket is typically our one the 15-year money. And that’s how we generate cashflow in income. So, our RMDs would come from that account, the other buckets are going to be more focused on growth, and they’re going to have more risk. So those buckets we don’t want to be pulling money from So great question. You can’t satisfy your RMD just from one IRA, you just got to make sure you get the calculation, correct?

Steve 23:17

Well, at Secure Money Advisors, if I’m your client, and I need to start taking RMDs you just take care of that for me, don’t you? You make sure that-

Neil Mager 23:25

George won’t have to worry if he was a client of Secure Money Advisors, because we’re going to take care of that for him. And we’re going to make sure that, you know, we’ve identified what the correct amount is from all of his accounts, how he wants to take it, does he want to take it on a monthly basis as cashflow? Does he want to take it as a lump sum at the end of the year? And we’re just really, you know, on top of those things to make sure that, you know, he would never accrue any penalties. Yeah, again, that’s

Steve 23:51

that’s, there’s a comfort in that. And folks, it starts with a phone call. 800-656-8616. Let’s, let’s see, we got time for one more quick one. Let’s go to Penny. She’s asking are social security benefits withheld because of excess earnings returned to you in monthly installments when you reach full retirement age? That’s good question too.

Neil Mager 24:13

That is a great question. And yes, they are Penny. Now they’re gonna just pay you back in tiny, tiny increments. So, it’s not a lump sum. That’s not a lump sum.

Steve 24:24

Well, hey, Neil, let’s go ahead and invite folks to call one last time today. What do you think?

Neil Mager 24:29

Yeah, folks, we’d love to see you in the office for the next 10 callers who call in right now. We’re offering our right track retirement Financial Review. During this meeting, we’ll find out if you’re on the right track and the five key areas of retirement planning, which are focused on investment planning, income planning, tax planning, health care planning and legacy planning. We’ve seen other friends; other firms charge over $1,000 for the review. We’re offering at absolutely no cost and no obligation for the next 10 callers who pick up the phone and schedule this review early. It takes the mystery out of financial planning and let you know if you’re on the right track. If you weren’t on the right track, when exactly would you want to know? Pick up the phone, give us a call the complimentary right track Financial Review. Hey, that’s

Steve 25:12

Great opportunity. This is the last time today, folks, we’re opening up the lines inviting you to call 800-656-8616 That Right Track Retirement review. Now’s the time to make that call. Don’t procrastinate. Don’t put it off another day. Take advantage of this way for you to get a true practical Financial Review. 10 callers get that comprehensive financial review. You’re going to see where you are today. Yes, of course. But more importantly, you’ll end up with a roadmap that’s going to help get you to where you need to be when it comes to retirement. 800-656-8616 again, 800-656-8616 Neil, as always, a pleasure to talk with you and just great information today. And always fun.

Neil Mager 25:55

Yeah, my pleasure, Steve, thanks for having me. We’d let BQ take a rest today.

Steve 26:01

All Right. A well-deserved rest folks. We want to thank you for listening. We really do appreciate it and we’re gonna be back again next week. New topics, new questions and more right here on Retirement You Radio.

Announcer 26:17

Investment Advisory services are offered through foundation investment advisors, LLC, an SEC registered investment advisor. Brian Quaranta and his guests provide general information not individually targeted, personalized advice and are not liable for the use of drip information. Discuss exposure to ideas and financial vehicles should not be considered investment advice or recommendations, buy or sell any of these financial vehicles. This information should also not be considered tax or legal advice. Past performance is not a guarantee of future results. investments will fluctuate and when redeemed may be worth more or less than when originally invested. Any comments regarding safe and secure investments and guaranteed income stream for only two fixed insurance products did not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company.

find us here:

Sunday: 12:00
Mondays 6:00 pm
Saturdays 12:30 pm
Sundays 12:30 pm
Sundays 2:00 pm
Mondays 9:00 am
Fridays 9:00 am
Saturdays 9:00am
Sundays 10:30 pm
94.5 3WS
Mondays 7:35 am
Saturdays 7:00am
The answer
Sundays 1:00 pm
Mondays 6:00 pm
Saturdays 12:30 pm
Sundays 12:30 pm
Sundays 2:00 pm
Saturdays 7:00am