Episode 180 – Investing in Retirement

In this episode of On the Money with Secure Money, Brian Quaranta discusses about the importance of investing a portion of your money into more stable investments.

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Radio Show Transcript

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 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 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.

Steve 00:39

Hey, welcome everybody. This is On the Money with Secure Money Brian Quaranta’s here, I’m Steve and you know, last year record breaking inflation, volatile markets, all of that added to our anxiety and our you know, unsure of what’s going on secure act 2.0 opened up some other doors for us. What we’re going to do today is talk a little bit about that and get back the get the background from Brian Quaranta. Brian, Hey, how are you?

Brian Quaranta 01:04

Steve, I am doing great. And it’s great to be back with you. It’s great to have my family healthy. I’m excited about today’s show. And I would say that most people would agree that 2022 was a rough road. The good news, though, is that there are some strategies matter of fact, I’ve laid out five strategies that can help you boost your retirement savings going into 2023. And we’ve got a lot of details, we come back next with On the Money with Secure Money.

Announcer 01:33

And now On the Money.

Brian Quaranta 01:36

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 01:54

And now On the Money with Secure Money.

Steve 02:00

And welcome everybody this is on the money with secure money. Brian Quaranta is here. Brian, of course is President CEO of Secure Money Advisors. He is a fiduciary independent, and he’s an author, right track your retirement a simple planning strategy to help you reduce risk, build income and provide peace of mind. I will always say the title once in the show. Otherwise, I’m just gonna just brief it down to Right Track Your Retirement, huh, Brian?

Brian Quaranta 02:24

Yeah, yeah. And don’t forget, you can go to righttrackyourretirement.com and get a copy of that book absolutely free, we pay for the shipping and handling too. And it truly is I mean, I worked on that book, I put my heart and soul into it, laid it out from A to Z, how to how to think about retirement, how to do it in a simple, very easy, effective strategy that provides a lot of principle protection to and I think when people get this in their hands, they’re going to be pleasantly surprised to realize that they don’t have to have the anxieties and worries that they do when dealing with the stock market. Although I believe in the stock market, I just think people are risking money they can’t afford to lose. So righttrackyourretirement.com you go there, get a copy of the book and also schedule a right track review, meeting with our advisors, which is about an hour meeting. And it really is about an hour that will change the next 30 years of your life if you take advantage of it. So do that, folks, righttrackyourretirement.com

Steve 03:18

Sounds like a plan. And that’s what it’s all about, the plan, Brian. And so again, you know, inflation and the stock market. And the good news, though, as you said, is we’ve got some things, you’ve come up with some things that can maybe help us recover a little bit of what we lost last year. One of the things has nothing to do with Secure Act, just has to do with the IRS and rearranging the income brackets and withholdings.

Brian Quaranta 03:45

Yeah, that’s right. And you may already be benefiting from one of the IRS’s biggest changes. If you’ve noticed a bump in your net pay after January 1, there’s a good chance. It’s probably connected to the package of adjustments made to the federal income tax brackets and standard deductions by the tax agencies. So, the tax tables adjusted by the IRS establish how much employers should withhold in federal taxes. So, the increased brackets mean withholding should go down, which incidentally should result in workers getting a bump in their take-home pay.

Steve 04:17

Well, I noticed it. It was just a bump. It wasn’t much, but it was enough to notice.

Brian Quaranta 04:20

We’ll take the bump.

Steve 04:21

I’ll take, absolutely. So, one of the other things. So that’s a way that we you know, start kind of take some of the pressure off. But one of the other things that’s happening, however, not until 2024, is that right? Yeah. And that’s the tax deductions are going up. I like that.

Brian Quaranta 04:39

Yeah, this is a great thing. So standard deductions are going up. So, though the effect again, like you said, I mean, it’s probably not going to be felt until you file your 2023 taxes earlier next year. But taxpayers are gonna get some relief. I mean, married couples that are filing jointly will see their standard deduction of 27,700, Um, which is up about $1,800. And single taxpayers will also see their standard deduction raise about $900 to about 13,850.

Steve 05:09

Okay, well, and again, every year, October, November, the IRS comes out with the contribution limits for the 401K, the IRA, the Roth, and again, it went way up for this year.

Brian Quaranta 05:21

Well, this is the one I really liked seeing is because we need to be able to have people save more money for retirement. And these contribution limits really just they need to go up even higher than what they’ve gone up recently here. But the good news is for retirement savers contribution limits are higher caps for employees participating in 401 Ks, or a 403B or even a 457 plan and federal government, Thrift Savings Plans, also known as your TSP are up by $2,000. So they’re going about $22,500. So that’s a nice little bump and additional. And then, of course, annual contribution limits on IRAs also increased to 6500. And contributions for people that are 50 and older jumped to about 7500. So again, all good things here, things that everybody should be taking advantage of, because 85 to 90% of the people retiring today are not retiring with pensions. So, it is your job to fund your retirement and figure out how you’re going to be able to retire and enjoy the lifestyle that you want to retire. And that all comes with you being able to save enough money, and most importantly, generate enough income on a monthly basis for you to be able to stop working and continue the lifestyle that you want to continue. And this is why I wrote, Right Track Your Retirement because everybody wants to know, am I on the right track? Am I doing the right thing? Am I making all the right moves? And there’s really five key areas to retirement planning. There’s the income component, there’s taxes, there’s investments, there’s the health care component, and there’s the estate planning component, the three that you absolutely must get dialed in in retirement is income taxes and investments because when you want to retire, and if you don’t have a pension, like 85-90% of people retiring today, when you retire, the paycheck is going to stop. So, the question you have to ask yourself is how are you going to replace your paycheck? Now, according to Social Security, Social Security Administration says that Social Security was only meant to cover about 40% of your current income, which means you’re going to have additional income that you’re probably going to need. The question is where are you going to get that income? And how are you going to do it? Are you going to take from your IRA accounts first, you gonna take from your savings accounts first, you’re going to take from your Roth IRA account, you have to get the sequence of which you withdraw money, right, you cannot get this wrong, folks. And in right track your retirement, I talk about the best ways to generate income in retirement, all you got to do is go to righttrackyourretirement.com, you’ll be able to schedule a right track review there with my team, you can schedule with them. And it’s about an hour appointment that truly will give you insights and change the next 30 years of your retirement. And it’s not a sales pitch. We’re not there to sell you anything. It’s truly there to help you. And we’ll tell you the best practices when it comes to income taxes and investments.

Steve 08:01

Well, again, it’s all about the plan and understanding and educating. And that’s what you do so well. You and the team, at Secure Money Advisors is, you know, one of your mantras, if you will, is education teaching folks the right thing about retirement.

Brian Quaranta 08:14

it is and you know, it’s why we do the radio show, we do the TV show we do you know, probably 80 Plus educational events every single year, because we’re out there to educate people on the right ways to do it. Look, retirement was a lot easier 30-40 years ago, because when you retired, you did get a pension. So, you had a pension check and a Social Security check. People didn’t need to worry about where their income was coming from. Today they do. And that’s why every week Steve, we leave at least 10 spots open every single week on our calendars for our radio listeners. So, for the next 10 callers who call in right now, we’re going to give you a complimentary Right Track Retirement Review. And if you call the number, you can get it immediately. So our complimentary right track review is going to go through three key areas with your retirement income, it’ll go through your taxes, it’ll go through your investments, right and it’ll tell you how much you’re paying in fees, how much you’re taking in risk, and it will tell you what the probability of success will be if you were to retire or if you’re already retired. If you’re going to run the potential of running out of money, take advantage of this folks. This is definitely in this economic environment, not something you want to kick the can down the road on. So, Steve, tell them how they can take advantage of that.

Steve 09:20

My pleasure, Brian, it’s a phone call away. 800-656-8616 take advantage of what Brian is offering here. It’s a way for you to really get ahead of the curve when it comes to retirement 800-656-8616, 800-656-8616

Brian Quaranta 09:37

A successful retirement plan has multiple income streams. There are plenty of strategies to achieve cash flow you need in retirement. One way’s an annuity, love them or despise them. They are a solid tool of the retirement toolbox. We’ll unpack annuities pros and cons we’ll come right back with On the Money with Secure Money.

Announcer 10:01

And now On the Money with Secure Money.

Steve 10:08

We are back On the Money with Secure Money. I’m consumer advocate, Steve, Brian Quaranta is here, Brian is President CEO of Secure Money Advisors, fiduciary or fiduciary firm. You’ve got a great team there. I’ve had the pleasure of working with a couple of them. Brian, Neil Majer, of course, Mike Diulus, as well. I mean, again, you just got some very talented people around you. And that, that really gives you a great edge for success.

Brian Quaranta 10:31

Yeah, I mean, we’ve got, you know, a team of 15 people here, and, you know, we’ve got Michael, we’ve got Neil, we’ve got Maggie, we’ve got myself, we got a whole group of people. So very, very talented group. And, you know, we’ve care very much about, you know, people’s retirement future. And look, I’ve been in the business for almost 25 years, and I’ve seen the good, the bad and the ugly. And, you know, I think I’m, you know, well versed at this point in my career to understand the big mistakes that people make. And unfortunately, we still see people making these mistakes, you know, risking money, they can’t afford to lose, buying into the cookie cutter phrases of staying in the market, when they should be getting out of the market. Like, don’t worry about it, hang in there. You’re in it for the long haul. It’s just a paper loss. You know, I mean, you got to ask yourself, folks, when does the long haul ever end. And, you know, if you talk to a financial advisor, they’ll tell you, you know, if you’re going to be investing money, be in it for the long haul. You know, I heard somebody say the other day, you know, if you have at least 20 years, before you need the money, you know, go ahead and put your money in the market. So, my question is, when that 20-year, clock ticks by and you reach the 20th year, what do you do, then you don’t go back into another 20 years. But that’s what people do all the time. And I don’t mind people being in the market, but they’re taking risks with money they can’t afford to lose. And so, people have to think about how they’re going to retire and how they’re going to generate the income. And that’s where annuities can be a smart investment for the right person.

Steve 11:59

Sure. Well, again, let’s dig into it. Because, you know, there are very strong feelings about annuities. And I certainly in the time that we’ve been working together, I have learned a lot about annuities from you, and what makes sense for people, and sometimes it makes sense. Sometimes it doesn’t. So, let’s talk about them.

Brian Quaranta 12:17

Yeah, well, let’s first understand that there’s no perfect investment out there, right? And there’s pros and cons to everything we do. Whether I’m buying a treasury bill, or I’m buying an individual stock, or I’m buying, you know, a mutual fund, there’s pros and cons to it all. So, the real question you have to ask is, number one “is an annuity right for me?” So, the annuities draw criticism from some, and they get praise from a lot of others. You know, both are sometimes the reserve deserved, and you know, if we dig into what annuities are and what they aren’t, they aren’t for everyone. But you might want to consider one, especially if you’re going into retirement and median income. So, one of the criticisms that annuities get is they come with high fees. And this is just disingenuous, though, because there are different types of annuities and just how high the fees are vary between annuity to annuity. So, for example, a fixed annuity has no fees at all. Matter of fact, it works exactly like a bank CD. The only difference is, your money is with a financial institution, like an insurance company versus the bank. The other big difference is that when I buy a bank CD, the bank doesn’t allow me to withdrawal any type of income from that CD, I’ve got to wait for that CD to mature before I can touch it where an annuity, you can put money in and you can start withdrawing money on a monthly basis to supplement your income needs. And so, you know, a perfect example of that is, you know, we had somebody come in, as it’s going back about four months ago. And they were getting, you know, on $400,000. At the bank, they were getting roughly about $1,000 a year in interest. And all we did was move that money from the bank to a fixed annuity paying over 4%. And now they’re getting 15-$16,000 a year in interest that they’re using to supplement their income, no fees, complete liquidity. If they die, the family keeps the money. You know, so a lot of people are very misled. They think that when you put money with these insurance companies and these annuities that when you die, the insurance company keeps the money and it’s all locked up. And this is just all incorrect information.

Steve 14:41

Well, I mean, there was a time when it was like that and certainly over the last 10, but really even the last five years, the insurance industry has risen to the occasion because they need to stay in business too. And they have come up with some pretty innovative ways to use annuities that help us all through retirement.

Brian Quaranta 14:55

Yeah, the way I look at purchasing an annuity and I personally own it myself, is, you know, if you think about it, you know, an annuity is just a form of insurance. It’s an insurance of your monthly income. So, we insure a lot of things in our lives, we insure our cars, we insure our homes. We insure our health, right? Because if something happens when we have a heart attack or we get sick, and we go to the hospital, we have insurance that pays for that. Same thing with a car, right? The reason I have insurance on my vehicle is because if I leave the radio studio and I get T boned by a tractor trailer, you know, my car can be fixed, but also my medical bills can be taken care of. Annuities guarantee and protect your income. They basically insure your income. And so, my question always is, wait a minute. We insure everything in our lives that are important, but the one thing we don’t insure is our retirement income. And my question is why? Well, because Wall Street’s done a really good job marketing to people that annuities are a bad thing. I mean, look, you’ve got people out there like Ken Fisher that say annuities, I hate annuities, and you should too, or, you know, Suze Orman who hates annuities. And, you know, there, they might be talking about a very specific type of annuity, like maybe a variable annuity or something. But it’s unfair to, you know, to say that about all annuities because they serve a purpose, they truly provide peace of mind and security. For a lot of people, there’s a lot of people out there that do not want to take risk with the money they’ve worked hard for. And they would rather put their money someplace that they can guarantee and protect the principal. And they can get a guaranteed income just like they would from a pension for the rest of their lives. And if they die, if they’re married, their spouse continues to get that income for the rest of their lives. And by the way, if they both die, any money that’s left in the annuity pays out to the family members. So, it’s very hard for me to debate any financial advisor and say, why is it that why would you hate an account that guarantees and protects your principal and provides you with guaranteed monthly income? How could you hate an account like that? The other big thing that you know are they get a rub on Steve is the fact that they pay these high commissions to financial advisors. Again, Steve, this is why every single week we leave at least 10 spots open on our calendar for people to take advantage of our complimentary Right Track Review. And if you call the number, we are going to give you a complimentary Right Track Retirement Review where we’re going to evaluate three key areas of retirement planning, the first area is your income, and then your taxes and then your risk. So, it’s important that you understand that income is the most important thing that you’re absolutely going to need of retirement. And we can do this so you eliminate the fears and possibility of running out of money. So, you can constantly do all the things you want to do in retirement. But if we’re going to generate income retirement, we got to make sure it’s tax efficient. And we need to make sure we own the right investments also. So, take advantage today of our Right Track Review. It’s complimentary, it’s no cost to you. It’s about an hour appointment with our team scheduled today.

Steve 18:04

800-656-8616 800-656-8616

Brian Quaranta 18:10

Most experts agree making major financial decisions after the loss of a spouse is not a good idea. Let your emotions settle down then meet with your advisor and you can avoid costly mistakes. We’ll talk more about this when we come back with On the Money with Secure Money.

Announcer 18:31

And now On the Money with Secure Money

Steve 18:38

We are back with another segment here On the Money with Secure Money. Brian Quaranta’s here, I’m Steve and we have been having a great show today, we’ve covered everything from touching on the secure act and talking about taxes. Talking about annuities. I mean, again, you cover it all Brian and the beauty is that Secure Money Advisors, you guys are that one stop shop. So whether we’re talking estate planning, whether we’re talking Social Security, certainly investments, our overall retirement plan, you got it all covered?

Brian Quaranta 19:06

We do. Yeah, I mean, that was a mission of mine, when we built Secure Money Advisors was I wanted to make it a place that people could come and make sure that all their needs were handled. Because all of it ties together. I mean, you know, a lot of our clients that are retiring, you know, they’re retiring before the age of 65. But then eventually, when they hit 65, they’ve got to do Medicare, and we do all their Medicare work for them and, you know, educate them on the best ways to file for Medicare and what programs that are gonna be best based on how many times they see the doctor or what medications are on. And then we’ve got tax professionals that help us build out the best tax strategies. We’ve got estate planning attorneys that helped us build up with us estate strategies. So, And what’s really nice as it all takes place here at secure money advisors. And, you know, I think people have really appreciated that rather than trying to go from one place to the next to the next. And what happens when you do that you’ve got a splintered plan. And when you have a splintered plan, you know, the left-hand doesn’t know what the right hand is doing, and sometimes mistakes are made. So, to avoid that, we like to have a one-stop shop, essentially one-stop shop. Right? Help keep all that organized. So yeah, it’s very beneficial to the client.

Steve 20:17

800-656-8616. That’s the number to call, folks. All right, let’s jump into some of these questions here. Brian. Michael’s up first, he says a coworker recently used the phrase, mega backdoor Roth IRA. And I pretended to understand but in reality I was completely confused. Now, I’ve heard you talk about Roth conversions on the show, but a mega backdoor Roth IRA? Is that even a thing?

Brian Quaranta 20:41

Yeah, well, you know, I think these names are made up for show. But yes, the backdoor Roth is very simple. I mean, you know, let’s take myself for example. So, you know, you know, for some people, they might be in an income tax bracket where they can’t contribute to a Roth IRA. But they might be able to contribute to maybe a SEP, or a traditional, or a 401k. And one of the things that they can do, you know, for myself, one of the things I like to do is, you know, is you can invest, I can invest a large sum of money, let’s say, into a SEP IRA, where I get a tax deduction. And in the year that I make that contribution and get the tax deduction, at the same time, it can turn around, you know, a couple of days later, and remove that money from the IRA and convert it to a Roth IRA. And the reason why it’s called a mega backdoor is because if you were just to contribute to a Roth IRA, your contribution limits is going to be anywhere from 6 to $7,500 a year. And with a mega backdoor, you can put money into let’s say, a solo 401K, or a SEP or any of these higher contributed plans, and then turn around and do a conversion because there’s no limit on conversion. So, it can be a great strategy. We’ve done it before, for folks that you know, it’s the right thing for and this is why seeking out the right financial firm really can open your eyes up to strategies that you might not even know about.

Steve 22:10

All right, Michael, there you go. Some great thoughts on that. 800-656-8616. All right, and he’s ready. And he’s wondering, he says I’m 50 years old make 65,000 a year, my company does not offer a 401K plan. But I recently opened a Roth IRA with a contribution of 10% of my paycheck now, is this a good investment for me? And how much can I expect to make in 10 years when I’m planning to retire?

Brian Quaranta 22:36

Yeah, I mean, it may be I mean, if that’s all he can put money into it, it may be the best thing for him. I don’t know there’s a, there’s a lot that goes into figuring out whether or not something like that is great. And in regards to how much can he expect to make in 10 years? I mean, that really depends on how he’s investing the money. The question is, how much do you need to make? Right? Not how much will you make? Because this is another thing that I think people get wrong is that they need to work backwards and say, Okay, well, let’s say you need, you know, a million dollars by the time they retire. Well, you got to back into those numbers and figure out, okay, if I save X amount a year, let’s say you can only save so much a year, okay? Let’s say you can only put away $20,000 a year, but you want to be at a million dollars by the time you retire. The next question is okay, well, what rate of return are you going to need? And these are the simple math problems that people don’t take the time to figure out or, and what happens is, they’re basically shooting in the dark. And I can tell you, you know, if you aim at nothing, it’s amazing how accurate you’ll be. You know, so you want to make sure that you’re figuring out exactly how much money you need to save. But more importantly, what rate of return are you going to need, because the rate of return that you need is also going to drive the types of investments you may choose to use.

Steve 23:57

Perfect. Andy, there you go. 800-656-8616. Let’s see, we got time for another one here. Janet has a question about her mother-in-law. Janet says her mother-in-law is 61 years old, and she has savings, but nothing invested in a way of employer plans like IRAs. The initial plan has been to live within her means and rely on Social Security. Now, could she invest in bonds or maybe an index fund or is there a structured plan you would recommend?

Brian Quaranta 24:29

Yeah, that’s, that’s tough. I mean, you know, there’s bigger questions that go into that. I mean, I would tell you get together with a, you know, a firm that’s a fiduciary and put together a plan because there’s a lot that goes into figuring out what’s going to be best for her, you know, before you can even risk any money, you have to ask yourself, What’s the purpose of the money and that’s another thing I don’t think people take the time to do is define the purpose of their money. You know, and there’s really only four things your money can do for you. It can provide you with income, it can be safe, it can be liquid, or you can take risk with it and grow it I write about A lot of this stuff in my book right track your retirement and if you go to righttrackyourretirement.com, you can get a copy of my free book. But you can also call the number today and schedule a complimentary Right Track Retirement Review right now with us. And during our complimentary review, we’ll go through the five key areas with you that we talked about every week on the show income taxes, investments, health care and estate planning. Take advantage of it, folks. Our right track retirement review is not a sales pitch. We’re not selling anything, leave your checkbooks at home when you come in. We’re truly there to help you identify problems and see if there’s ways that we can help you improve your situation. If you’re already doing the right things will shake your hands will part is friends. And you will just feel better that you’re doing all the right things, but if you’re not, it might be a good time for you to find that out sooner than later. So call the number today schedule your Right Track Retirement Review or go to righttrackyourretirement.com get a copy of my free book and schedule there.

Steve 25:55

Also give us a call 800-656-8616, 800-656-8616 Brian as always a pleasure to catch up with you. The show is always fun and so fast-paced.

Brian Quaranta 26:06

Yes, Eve and we’ll see you again next week. Folks, thanks for being with us. Until we come back with on the money with secure money have a great week.

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 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 maybe worth more or less than when originally invested. Any comments regarding safe and secure investments and guaranteed income stream for all winter fixed insurance products 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.

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