Episode 179 – Income in Retirement

This week on On the Money with Secure Money, Brian Quaranta tells us all about annuities and other sources of retirement income.

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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, they’re 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. 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 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.

Steve 00:42

Hey, welcome, everyone. This is On the Money here with Secure Money. Brian Quaranta’s here, I’m consumer advocate, Steve, today we are digging into some things that well, you’ve been saving for retirement. That’s a good thing, of course. But as the day gets closer, you’re thinking okay, so I need to arrange this money somehow, some way, you know, but I’m not sure how I need to do that. So, we’re gonna hold go ahead and tell you some ways, give you some opportunities to figure out where to put that money because purpose determines placement, and a whole lot more coming up today On the Money with Secure Money. Brian Quaranta. What do you think?

Brian Quaranta 01:13

Yeah, absolutely. Steve, maximizing your savings to continue to grow your nest egg is always important to do. But there are some ways that you want to approach it when you’re approaching retirement and going through retirement when we come right back with On the Money with Secure Money.

Announcer 01:30

And now, On the Money.

Brian Quaranta 01:34

Any good retirement plan starts with the foundation,

Announcer 01:38

asset protection, tax reduction, holistic planning,

Brian Quaranta 01:42

these are the things that start to move you towards having a retirement plan.

Announcer 01:46

Retirement doesn’t have to be complicated.

Brian Quaranta 01:49

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

Announcer 01:53

And now On the Money with Secure Money.

Brian Quaranta 01:59

Righttrackyourretirement.com. Boy, I tell you folks, go there, get the book. Because in my book, I give you a three-step income plan, not only do I give you a three-step income plan, but I teach you all the ways to actually save on taxes in retirement, because the three most important things you’re going to need a plan for going into retirement and through retirement is a plan for your income, attack strategy, and an investment strategy. And I talked about a lot of other stuff. So again, righttrackyourretirement.com, you get a copy of my book absolutely free. Yes, I did say free, I paid for the shipping and handling, it shows up at your house and a nice puffy envelope with a few other goodies for you. Nice. So righttrackyourretirement.com Go get a copy today, you can also schedule a complimentary appointment there with my team and take advantage of getting a complimentary written plan prepared by a certified financial planner, where we can walk through your accounts and diagnose quite a few things. But you and I will talk about that a little bit later in the show. Steve, ‘cause I think it’s important that we talk about savings for retirement. I do this.

Steve 03:08

Absolutely. Well, one of the things, you know, we talk about where are we going to stash that money. And obviously, I mean, there are places that are going to be better than others. And so, in this segment, we’re going to talk about where we should think about putting it and why. And at the top of the list, and I know this is going to not sit well with everyone, but it’s fixed annuities. And I think-

Brian Quaranta 03:26

Ooh, did you say annuities?

Steve 03:27

Yes, I did. Fixed annuities.

Brian Quaranta 03:27

You did?

Steve 03:28


Brian Quaranta 03:30

Oh my gosh, annuities, isn’t that the most terrible investment you can make?

Steve 03:34

Well, if say so. But again, so again, you know what I do when people say that to me? The counter is “so tell me exactly what Social Security is?”

Brian Quaranta 03:47

Yeah. Right. Because Social Security is exactly that. It’s an annuity.

Steve 03:51

And a darn good one.

Brian Quaranta 03:52

Yeah, look, you know, I’ve been screaming at the top of my lungs for a long time about the importance of utilizing annuities. But I’ve been up against, you know, the Wall Street firms, you know, the big firms that, you know, absolutely have no interest in using these, although I will say that I see more and more financial advisors at the big box firms starting to use them. Because they know that the number one priority and responsibility they have for their clients is to make sure that the client doesn’t run out of money, and they guarantee and protect a stream of income. Now, I look at it. It’s really simple to me, you insure everything in life, you insure your car, you insure your home, you insure your health. The one thing people don’t insure, though, Steve, is retirement income. Now explain that to me. The one most important thing you need is income and people don’t take the time to insure it. Doesn’t make any sense to me.

Steve 04:35

It doesn’t at all. No. But again, that’s why I think it’s important to work with an independent fiduciary advisory advisor who can really take us through that process and you’re looking out for us and if an annuity is not right for us, you’re going to tell us.

Brian Quaranta 04:54

Well, Steve, think about it. I’m a fiduciary. So, for those of you that don’t know what a fiduciary is, number one, we’re held to the highest standard by law to Do what’s in the best interest of our client. We’re also required to have a higher level of education and have a deeper understanding of the planning process so that when a plan is presented, there’s trust between the advisor and the client. Now, as a fiduciary think about it, if I’m held to the highest standard, and could get in trouble for not making the recommendation in the client’s best interest, why in the world would I potentially add annuities to some of my planning for clients? Because it is absolutely the right thing to do in certain circumstances. If people would get the right information, though, and understand how these would work? They would have that same moment I did as a financial planner, where I would say, why isn’t everybody doing this? Why is not everybody doing this with some of their money? You see, the biggest mistake that people make is not guaranteeing their retirement income, the biggest mistake they make is that when they retire, they don’t make the fundamental change that they should, they might change some things around with their investments, maybe move some of their mutual funds to maybe bond funds, move some of their stocks to bonds to try to make it more conservative. But that’s not a fundamental change, you still have all of your money at risk. And we’re talking about getting money protected, getting money in a place that no matter what happens in the stock market, you can still go on with your lifestyle. Today, I just did a video for my Insider Circles Club, where I give advice on all kinds of different things. And in that video, I talked about the lost decade. Do you remember the lost decade?

Steve 06:28

I do, yeah.

Brian Quaranta 06:29

Yeah. It was like 2000 to 2010. Somewhere around there when nobody made-

Steve 06:34

Yeah, nobody made money, right? If that’s what you’re saying?

Brian Quaranta 06:35

That’s the lost decade, right. Nobody made any money. The stock market was volatile. Housing prices had collapsed. You know, I mean, they say history doesn’t repeat itself. But it certainly does rhyme. I mean, does this sound a little bit familiar, I mean, stock market is volatile, it’s down, interest rates are going up, which is causing housing prices to go down. We’re on the verge of a potential recession, if not already in a recession. Right? And we’re seeing unemployment rates, they’re pushing the- feds are continuing to push interest rates higher to try to drive unemployment up because they want to slow everything down. So, could we be going into another period to where we see, you know, nobody makes any money? And if that’s the case, and you plan on taking money out of your retirement accounts, and you’re relying on rates of returns from the stock market, you just have to hope and pray that it works, because there’s no guarantee that it will. And that’s why every week on our show, we always leave room for 10 callers to get a complimentary Right Track Retirement Review. And for the next 10 callers who call in right now. That’s exactly what we’re going to do. It’s a complimentary Right Track Retirement Review, there is absolutely no pressure when you come to my office, nobody from my team will try to sell you anything, nobody will pressure you to do anything you’ll leave your checkbook at home, my promise to you is that the meeting will be very eye-opening and very informative. Our complimentary Right Track Review goes over three key areas. Number one is your income will teach you ways to maximize the amount of income you get retired, increase the amount that you’re getting, to eliminate the fear and possibility of not having enough money, we’re running out of money. The second is we’ll show you a tax strategy. And we’ll show you ways to reduce the amount of taxes you’re paying. Because the biggest thing that will erode your purchasing power is taxes and inflation. We’ll show you how to avoid some of that in three, we’ll build a report for you built by our CFP, who will analyze your investments to find out what level of risk you’re taking what fees you’re paying, taking and calculate what the probability of successes of your current plan if you call right now call 1-800-656-8616. You can schedule that meeting today.

Steve 08:33

That sounds great Brian folks to take advantage of it. It’s really as a one way that you can get a financial roadmap put together, Brian’s there for you, he understands takes that complicated world and breaks it down into something that really just makes sense. It is an excellent chance for you to get that true practical retirement review. And if you’re listening, give us a call. It’s 800-656-8616 you’re going to get that comprehensive financial review, you’ll see where you are now, you’re going to get all the extras that go along with it and you’ll walk out with a roadmap a guide that can help get you to where you need to be when it comes to retirement 800-656-8616, 800-656-8616

Brian Quaranta 09:13

When we come back, we’re going to continue to talk about ways that you can invest for retirement and show you all the places you should consider putting your money and then we’re going to talk about places you shouldn’t put your money when we come right back with On the Money with Secure Money

Announcer 09:34

And now On the Money with Secure Money.

Steve 09:41

We are back On the Money with Secure Money. Brian Quaranta’s here. Brian, of course, is an author he wrote the book called Right Track Your Retirement. You can visit the website to learn more about the book righttrackyourretirement.com not only can you learn about the book, you can get your own book right there, righttrackyourretirement.com it’s fascinating, Brian. And the book is a super easy read. But it’s very informative and you take us, it’s you can just kind of hear your voice as you read the thing. I mean, it’s, it’s really well done.

Brian Quaranta 10:13

I appreciate it, you know, and I’ll tell you, when people go to righttrackyourretirement.com, to get a copy of this book, when you get a copy of this book, I want you to pick it up. And I want you to go to chapter two where I talk about, you need to start thinking like a pensioner, and not a gambler. Start to think like a pensioner, not a gambler. And then the chapter that I want you to read is about the two-bucket strategy. So that’s all in this book, right? Track your retirement, as Steve said, super easy read. And I designed it that way. Because at the end of the day, when I pick up a retirement book, I want to be able to get I want the author to get right to the point and that’s exactly what I did, you’re gonna get a strategy in this book from A to Z of how to think about building your retirement plan. It’s gonna be very, very helpful. It’s righttrackyourretirement.com Go there, get a copy, absolutely free, right now.

Steve 10:58

And so, in the first segment, Brian, we were talking about, you know, places we should put our money, how we could maximize our savings. We were talking about annuities and fixed annuities in particular, but let’s talk about other retirement accounts. And because we often have those, I mean, an annuity is not an all your eggs in one basket kind of a thing. We need other options as well.

Brian Quaranta 11:19

Well, other things you can use is dividend paying stocks, right? Like the dividend aristocrats, you know, dividend aristocrats are-

Steve 11:26

Tell me about those, what a fun thing to say. A dividend aristocrat.

Brian Quaranta 11:30

Aristocrat, right. Yeah. I mean, they’re, you know, the dividend aristocrats are a good place to start if you’re willing to take the risk of owning individual stocks. So, in order to qualify as a dividend aristocrat a company now, think about this, you know, you have to qualify to get this. You know, let’s call it this category of stock, right? It’s a company that must have paid and raised their dividends consistently for at least 25 consecutive years.

Steve 11:59

Well, that’s a pretty elite bunch.

Brian Quaranta 12:01

Yeah. Because the risk that you take in buying dividends, and people don’t realize this, they think dividends are, you know, the answer to everything. And they’re not. And this is why diversification is so important. And you know, we were talking about annuities, but we’d like to use dividends in the portfolio too because dividends are another way to get income, it’s just a different approach. But you got to be very careful when you’re buying dividend paying stocks, because those dividends are not guaranteed, I mean, they could go away, they could be reduced, the company could decide not to pay a dividend, so but you are also subjected to the fluctuation of the stock price. So, for example, let’s just say that we were to buy, ABC Company, and ABC Company was paying a 7% dividend, which is pretty simple to find these days, a relatively high dividend. But let’s say you put $100,000 into that, to that, to that stock, well, you’re gonna get $7,000 a year, regardless of whether that $100,000 is worth $50,000, or $150,000, you’re gonna get $7,000 off of the original investment unless you’re reinvesting dividends and mine, you know, more as you get to dividends, right, but, but at the end of the day, just understand that the income that you get is not going to be affected by the ups and downs of the stock price. You’re gonna the dividend is based on the number of shares that you receive when you buy it.

Steve 13:19

Uh-huh. Okay, so I mean, it’s, it’s certainly something to have a discussion about, and like you said, it is a way to generate income. A great story. And again, I think that would be an interesting conversation to have when you sit down with somebody to just sort of break that all down American. Because again, I don’t think people are as informed as they think they might be.

Brian Quaranta 13:37

Well, this is why we offer the complimentary Right Track Review, because these are the things that we go over, we give the individual that comes in, we go over three main areas with you, we go over your income strategy, your tax strategy, and your investment strategy. And we provide you with two reports, a Morningstar report, and a Riskalyze report prepared by a certified financial planner. And those reports are invaluable because they’re going to tell you the fees that you’re paying the risk that you’re taking, what the probability of your plan is, whether or not it’s going to work. I mean, these reports in the software, so powerful, Steve, that will have a comeback. And based on what a client is trying to do with their money, it might say, hey, this client here, you know, based on what they’re trying to do, if they don’t do anything, and they leave this investment exactly the way it is, this portfolio only has a 60% chance of getting them through retirement. My gosh, I mean, you know, that’s so valuable to know, you know, whether or not your plan is going to be successful or not. And the great thing about it is, these are not opinions, this is black-and-white data aggregated within the software and all we’re doing is delivering that information to the individual so that they can make an informed decision.

Steve 14:45

Well, that’s true. And you know, you talk about an informed decision. I just like the fact that you give us options. You say all right, here are some things that we think might work for you and here’s- your take your choice.

Brian Quaranta 14:57

Here’s another option for you. How about treasury securities, right?

Steve 14:57

Let’s talk about that because that’s- I’m hearing a lot about treasuries these days.

Brian Quaranta 15:04

Yeah, especially treasury bills where they’re short-term. I mean, right now, as you and I speak, I mean, a three-month treasury’s about 4.7%. We do buy those for our clients, you know, and again, I mean, everybody’s situation is different. So, we customize the plan based on what that individual is trying to accomplish. But treasuries can be an effective place to put money right now. And, you know, the other big thing that is, you know, right now is probably not the time to go out and purchase a bunch, but certainly something investors should keep their eye on. That’s real estate, real estate rentals, commercial properties, things along those lines that can generate income, again, you look at anybody that is very successful with their money, what you’ll find is that they usually have two or three sources of monies that provide them with income, they might have- a really good investor will have income coming from annuities, income coming from dividend stocks and income coming from some type of real estate. And those individuals, when you look at their income and retirements very high, you’re talking $250,000-$300,000 In guaranteed income coming in during the retirement years. But that’s because they’ve placed it in the right spots.

Steve 16:18

This is a great opportunity folks to give us a call. I mean, Brian opens up some spots on the calendar every week.

Brian Quaranta 16:25

Yeah, go to righttrackyourretirement.com. Not only can you schedule your appointment there, but you can also get a copy of my book absolutely free. And for the next 10 callers who call in right now, we will give you a complimentary Right Track Retirement Review, there’s absolutely no pressure, nobody will try to sell you anything, leave your checkbook at home, the appointment will be very eye-opening and very informative. It’ll go over three main areas with you: your income, we’ll teach you how to maximize your income, to talk to you about ways to get your income as high as we can as quickly as we can as safely as we can, and provide you a strategy so you don’t have the possibility of running out of money. Second is a tax strategy. Let’s pay the least amount of taxes as possible. Or better yet, let’s build a strategy that can give you tax-free money. And third, the risk analysis the reports that we’ll build the Morningstar reports the Riskalyze reports, those reports are invaluable, prepared by a certified financial planner that will give you not only the risk-reward that you’re receiving from your portfolio, but the fees that you’re paying, and more importantly, what the probability of success is that your plan will actually work. So, you gotta do your part though, go to righttrackyourretirement.com, you can schedule there and get a copy of the book, or you can call 800-656-8616.

Steve 17:42

800-656-8616, 800-656-8616

Brian Quaranta 17:44

We covered all the places you should be putting your money in retirement. And now it’s time to talk about some places you shouldn’t keep your money plus, we’ll answer some common questions pre retirees are asking today. Stay tuned. And we’ll come right back with On the Money with Secure Money.

Announcer 18:04

Are you fighting for financial knowledge? Don’t let that advice be a punch in the gut to your retirement. Take advantage of a complimentary no cost, no obligation consultation with a local trusted financial coach called Brian Quaranta and his team at Secure Money Advisors 800-656-8616, 800-656-8616.

And now On the Money with Secure Money.

Steve 18:50

We are back On the Money with Secure Money. Brian Quaranta’s here, Brian, of course is the President and CEO of Secure Money Advisors, and the author of the book called Right Track Your Retirement, the whole title is Right Track Your Retirement, a Simple Planning Strategy to Help You Reduce Risk, Build Income and Provide Peace of Mind. That describes retirement. Brian, I’ll tell you.

Brian Quaranta 19:06

I couldn’t find it. I couldn’t find a shorter way to say it.

Steve 19:08

Oh, but that’s it, it just it just creates this great image.

Brian Quaranta 19:12

Look, at the end of the day, the most important thing we all want going into retirement is peace of mind. Right? Nobody wants to be worried about having to come out of retirement. You know, or delay retirement. I mean, who wants to go through that? I mean that, you know, you saw people having to do that in 2007-2008 was devastating for people. You know, and most people are some of those people have to have to work for the rest of their lives. So anyway, but we got questions, Ben. I know.

Steve 19:39

Then Ben is anxious. Yes. He’s checked in and said, I keep hearing it’s such a great time to invest in bonds. Did I miss the boat on that or is this still true with the market and economic climate today? Well, look,

Brian Quaranta 19:53

you and I were just talking about, you know, treasury bills, right. I mean, the yield curve right now is showing better rates at short term than They are long term. So, you know, T bills are good, you know, corporate bonds, you know, some corporate bonds can be good. But remember, I mean, bonds have risk associated with them, right. So, if interest rates continue to go up, which is likely it could happen, because, you know, we saw recently from the last report that, you know, looked like, inflation was kind of leveling off, not really getting any better. And, you know, that’s kind of getting to get the green light that the Fed is to continue to probably raise rates. And if that’s the case, we might see bond rates continue to go up. And that means if you buy some bonds, right, now, the value of that might go down. So, you know, keep that in mind, especially with bond mutual funds. So just be careful, because bonds have risk, you know, principal risk associated with them, just like a stock or bond. There’s, there’s also, you know, bond can be callable, so you could buy a bond, and it could be called in and, you know, and called early, so just, you know, keep that in mind T bills aren’t bad right now, because you can get them for 4.7% for three months. So, there’s not a whole lot of risk with buying a T bill. But, you know, so you got to evaluate it for his situation. And you know, if it makes sense, go for it. But you know, everybody’s situation a little bit different.

Steve 21:08

It is 800-656-8616. Ben, go ahead, give us a call. come on and talk with Brian. All right. Lisa has a question. She says My husband has an IRA rolled over from a prior 401k. Now, recently, we were made aware of the- we were made aware that he can combine that with his current 401k. What are the pros, if any, and cons to taking that path? Interesting.

Brian Quaranta 21:32

Yeah, that’s an issue as well, it’s an issue question. And it’s a very common question, right? Because when people when people leave one employer or get downsized from employer, and they go to another employer, sometimes the new employer will say, hey, you know, if you have another 401k out there, just keep in mind, you can roll right over here. I’m not a big fan of it solely for the fact that one, I understand the advantages between a self-directed IRA and a 401 K. So you know, when you have a 401k, if you’re you know, terminated from your employer or laid off or downsized doesn’t matter, the IRS will allow you to roll that to a self-directed IRA, no taxes, no penalties, you could roll it to your new employer’s 401k. But the problem with doing that is number one, you’re limited to options, you’re going to be, you know, you’re going to be subjected to the 59 1/2 rule, obviously, when you’re there. But usually, it’s just the limitation of options that are going to, you know, not be as advantageous to the individual situation. So, I like having if I’m in a situation where I got downsized, I would rather have a self-directed IRA, where I’ve got the freedom to put my money where I want, I don’t have to choose from a menu of investments. That would just make better sense to me. But, you know, for some people, it’s more about convenience than anything else. But you’ll definitely get a lot more leverage if you do a self-directed IRA over a 401k.

Steve 22:53

All right, Lisa, give us a call. 800-656-8616 Brian could break that down even further for you. All right, let’s keep going here. Daniel has a call. He says my parents ages 64 and 57. We’re talking about life insurance. And I read on Reddit, that it’s a scam. Are there benefits? I’m not considering I just want to protect them? Well,

Brian Quaranta 23:15

well, then I must. I was gonna say, Daniel, I must have just got scammed then because I just bought a big life insurance policy on my father. And I’ll explain to you why I did it and how it works. So first off, people need to understand I think there’s confusion of when to own life insurance and when not to own life insurance. So first, most people, you know, when they go to retire, say, Well, you know, “do I need life insurance anymore?” Because, you know, I’m older now the kids are out the house is paid for? Well, life insurance actually plays a really large role in retirement planning. And here’s why. So let’s take my father, for example. My father is 74. I recently bought a $500,000 life insurance policy on him, it costs me about $13,000 a year. I am the owner of the life insurance policy, my dad is the insured. So, I do make the premium payments on there. The reason why it was purchased was very simple. If something were to happen to my dad, he would have to go into some type of skilled care or anything. I know the assets, we would have to use assets to pay for that care. When he died, those- any cost that was paid out by his assets would be replenished by the tax-free life insurance policy that would pay. Let’s say my dad just dies of natural causes and doesn’t get sick and go into a nursing home. But now there is a loss of income to my mother, that $500,000 can be used as a way to supplement my mother’s income to help her continue to get through retirement. And then let’s say they just both die of natural causes. Right then, my brother, my sister and I have a $500,000 life insurance policy. that helps pay for settling the estate.

Steve 25:07

We are about out of time here, Brian, we need to wrap this thing up.

Brian Quaranta 25:11

Folks go to righttrackyourretirement.com. Take advantage of our complimentary Right Track Review. That review is going to give you a number of reports. It’s going to give you a Morningstar report a Riskalyze report prepared by a certified financial planner, we’ll go over that with you. It’s going to evaluate your income, we’ll show you ways to get your income as high as we can, as quickly as it can, as safely as it can. We’ll evaluate your tax strategy show you how to reduce taxes, possibly even make everything tax free. And we’ll also show you the risk that you’re taking with your portfolio, the probability of success of your portfolio, take advantage of this. There’s no pressure, there’s no sales pitch, keep your checkbook at home, come in, sit down with us. It’ll be very eye-opening and very informative. Go to righttrackyourretirement.com you can schedule there, get a copy of the book, or Steve, they can call the number, right?

Steve 25:55

800-656-8616 It is that simple. That’s the goal here at the show is to help you make the best decisions possible for you. So, if you’ve got questions about what we’re talking about today, maybe how you can apply it in your own situation. As Brian says, give us a call 800-656-8616, 800-656-8616. Brian, as always, a pleasure to be here and have these conversations. It’s so much fun and really good stuff.

Brian Quaranta 26:14

Yes, Steve, we’ll see you again next week. Thank you again.

Announcer 26:21

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 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 what originally invested. Any comments regarding safe and secure investments and guaranteed income streams refer only to 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.

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