Episode 202 – Making The Right Choices In Retirement

This week on On the Money with Secure Money, Brian Quaranta discusses pension options, investment strategies, and the impact of risk in your portfolio.

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 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.

 

Steve 00:39

Welcome, everybody. This is On the Money with Secure Money and Brian Quaranta. I’m consumer advocate Steve. And you know, we’re talking about retirement and being in jeopardy, is it? We’re gonna find out. Senator from the Health Education Labor and Pensions Committee is speaking up about the troubling number of retirees being forced to return to the workforce. Now the catalyst inflation. Does this impact you and your retirement? We are going to quiz Brian Quaranta next. Hey, Brian, we’re gonna quiz you. You ready?

 

Brian Quaranta 01:10

Yeah, that’s right, Steve, hey, listen, this all comes down to one thing, it’s all about having a written plan because inflation should be part of that planning process. And I’m a show we got lots of ways to show you how to make sure that when you retire, you stay retired when we come right back with On the Money with Secure Money.

 

Announcer 01:31

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. Call Brian Quaranta and his team this secure money advisors 800-656-8616 800-656-8616. And now, On the Money,

 

Brian Quaranta 02:03

Any good retirement plans starts with the foundation.

 

Announcer 02:09

Asset protection, tax reduction, holistic planning,

 

Brian Quaranta 02:13

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

 

Announcer 02:14

Retirement doesn’t have to be complicated.

 

Brian Quaranta 02:16

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

 

Announcer 02:20

And now On the Money with Secure Money.

 

Steve 02:31

Welcome everybody On the Money with Secure Money. I’m consumer advocate. Steve, and Brian Quaranta here, he is On the Money with Secure Money. He’s all of those things. Hey, Brian, how are you?

 

Brian Quaranta 02:41

Steve, good to see you again my friend.

 

Steve 02:43

Yes! Well, you know, you. I mean, again, you’re really, you’ve wrote the book called Right Track Your Retirement a Simple Planning Strategy to Help You Reduce Risk, Build Income and Provide Peace of Mind. And that really is kind of what we’re talking about here. When we talk about the various stuff, you know, things going on and things that can impact on retirement.

 

Brian Quaranta 03:01

Well, 43% of retirees considering returning to go back to the workforce, I don’t call that peace of mind. Can you imagine, you know, here you are retired, maybe you’re a couple years into retirement and you’re saying geez, wow, you know, things are a little bit financially tighter than I thought. And now I’ve got to consider potentially going back and getting a job. And that’s just not a good feeling for anybody. Nobody wants to retire and have to potentially go back to work. I mean, I’ve always said retirement is not a dress rehearsal, we don’t get a second chance at it. There’s a lot of things that you got to think about. That’s why I wrote the book. There’s five key areas, there’s income taxes, investments, your healthcare strategy, and your estate planning strategy, if you go to righttrackyourretirement.com, you can get my book there. And you can read about strategies to keep you retired when you do retire. But I know that Mike, the Senator Mike Braun, he’s got a lot to say about some of this stuff.

 

Steve 03:50

Well, he does. And in this first clip, he’s just kind of laying it out there. What do you think?

 

Senator Mike Braun 03:56

And, yes, retirement is now in jeopardy. Not only that, look at ESG, where they’re trying to direct you into something other than the best return. Yeah, it’s bringing people back into the workforce, because they’re uncertain about what the future looks like.

 

Steve 04:12

And again, I, you know, yeah, he paints a, he paints a pretty bleak picture there. Brian, are you that pessimistic?

 

Brian Quaranta 04:19

Look, you know, my biggest concern is really what happens if we go into another period of time where we are dealing with what we would consider the last decade, remember 2000 to 2009, there was literally no growth because market volatility was so high that over a 10-year period, nobody had made any money. So, if you’re a retiree and you’re trying to live off of your retirement savings, then you’re not getting growth and you’re having to take more and more money out because inflation isn’t a factor. Now we get into a retirement savings spend down and of course, I’ve always said the worst day of retirement is not the day you actually run out of money. The worst day of retirements the day you figure out you’re going to run out of money. Yeah. There’s not a whole lot you can do to stop it. So, we have to make sure that we plan for worst case scenario. And this is why I believe a written plan, and having some guarantees built into the plan are very important. And a lot of people don’t take the time to do that a lot of people are still taking the advice of Wall Street where they feel that they’re going to be able to generate the income they need from dividends or market growth. And as long as the markets are going up and cooperating that might be possible. But what happens when things are bad right now, this is why I believe in simply just using some guaranteed accounts, that can provide you with a private pension or like an income annuity. I had a 60-year-old woman come in the other day, and we took some of her money about $250,000 of her money. And we positioned it into this income annuity. And in five years, this account’s going to generate her over $25,000 a year in income. That’s a 10% yield on her original deposit amount. I mean, that’s incredible. Oh, by the way, since the guarantee, and she’s ensured her income, if her account balance ever goes to zero, she’s going to continue to get that income, she’s never going to run out. And this is the type of stuff people need to think about. Because we insure everything in our lives, we insure our cars, our homes, our, our health, but we never take the time to insure the most important thing. And that’s our retirement, right. I mean, the people that are going back to work, probably were relying on investments to generate the income that they need. And now that the investments are performing, things are getting scary, and they’re saying, geez, I’m not going to take the money, I thought, I’m not going to take more money out to keep up with inflation. And these are the things we want to try to avoid. We want to, we don’t want to build a plan, that when bad things happen, you know, one of the options is to go back to work. We really want to try to keep you retired and stay retired.

 

Steve 06:38

Well, that will be the goal. And I mean, the senator Braun, he’s got one more thing, one more thought on this. He’s talking about what we what folks that should begin to brace for

 

Senator Mike Braun 06:48

The Medicare trust fund goes broke in four years. Security discretionary spending domestic and defense takes a sad picture. Yeah.

 

Steve 06:59

I’m gonna disagree with him. I don’t think it goes broke, does it? I mean, I understand there could be some changes, but I don’t think that’s ever gonna happen, is it?

 

Brian Quaranta 07:05

Well, look, I mean, if, if you’re talking about, you know, Medicare and Social Security going broke, I mean, you’re talking about tanks being in the street, because you’re talking about the greatest generation ever to live, and the largest generation ever, that were promised benefits that they’ve paid into their entire life, and you’re going to tell them now that they’re not going to get it, I just don’t see any politician allowing that to happen. We got to, you know, look, people are gonna, you know, feel different ways when I say what I’m about to say, but, you know, we print money out of thin air right now. So, if we can find trillions of dollars for a pandemic, we’ll find ways to make Medicare and Social Security whole we have to, it’ll destroy the country if you don’t. So, you know, we have to understand that, you know, our government today, it takes measures to, to bail, bail people out, look what they did with Silicon Valley Bank, I mean, they bailed everybody out on that one. So, I can’t imagine them not bailing out the retirees it would be devastating to the country. But it is scary, because we shouldn’t be printing money out of thin air to fix problems, we should be running a good fiscal policy to make sure that these things don’t happen. But, you know, this is why folks, I would tell you go to righttrackyourretirement.com. Because if you want to understand how to truly build a retirement strategy, one that can help protect you from market volatility, from a Social Security or Medicare system, not going in the right direction, what happens if you don’t get it cost of living adjustments and Social Security, what happens if benefits did stay flat because they couldn’t afford to pay them out. You got to have solutions and my book, Right Track Your Retirement talks about these solutions. And this is the stuff that type of stuff that’s going to give you the clarity that you need to build the type of retirement that’s going to give you the peace of mind that we all deserve when we retire. Because when you retire, the paychecks gonna stop, but bills and taxes and all the things that you want to do, you’re still going to need money to do those things. So, let’s learn how to do that again, righttrackyourretirement.com you can go there, you can get the book, I send it to you absolutely free. And by the way, when you’re there, you can schedule a Right Track Retirement meeting, where you can come in, and we can sit down with you. And we can walk through your situation and find out if there are ways that you can improve and make things a little bit better. If you’re on the right track, we’ll let you know, we’ll let you know you’re doing all the right things. We’ll shake hands, we’ll tell you to keep doing what you’re doing. My promise to you. As always, though, is if you come to my office, nobody from my team is ever going to try to sell you anything. They’re never going to press you to do anything. So again, that’s righttrackyourretirement.com

 

Steve 09:22

Sounds great. Brian, folks, give us a call 800-656-8616 There’s a direct line, you’re gonna get that comprehensive financial review that Brian just described, you’re going to get everything that goes along with it. There’s no cost, there’s no obligation, simply make that phone call today. 800-656-8616 800-656-8616.

 

Brian Quaranta 09:42

When we come back we have our retirement preparedness checklist outlining what to do and when to do it. If you’re within that financial red zone and preparing to retire stay tuned when we 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 and Brian Quaranta time consumer advocate, Steve said all Brian, of course is President and CEO of secure money advisors. He’s an IRA specialist. He is an independent fiduciary advisor. Well, your whole firm is a fiduciary firm you guys look out for us no matter what. And of course, Brian wrote the book on retirement called Right Track Your Retirement a Simple Planning Strategy to Help You Reduce Risk, Build Income and Provide Peace of Mind available to you. No cost, that’s right, no charge, you can get the book. And it’s a darn nice one, too.

 

Brian Quaranta 10:42

It is a nice one.

 

Steve 10:43

It’s super easy to read. It goes quick. And there’s great tips. There’s some great information in there. You know, it’s kind of like, like hacks, you know, they talk about all the life hacks, but you got some gifts in there to help with retirement.

 

Brian Quaranta 10:55

Yeah, you look, it’s, it’s, it’s, it’s, you know, it’s unconventional thinking, right? I mean, so if you take conventional wisdom out there on how to retire, we’re just in a different time period than we’ve ever been before. And just like technology changes, you know, so does the way that we manage our money and, and how things evolve in the financial space. And so, you know, a lot of the ways that we’ve retired people in the past are not the best ways to do it anymore, because it leaves too much exposure to risk still. And in Right Track Your Retirement, I show people how to go about building a retirement around safety. I still think the market is great for long term investments. But we have to understand that if you are going to invest in the stock market, you have to be a long-term investor. The worst mistake people make over and over and over again, Steve, is that they retire, they roll their 401 K over, they diversified amongst different stocks, bonds, mutual funds, but every dollar they have is still at risk. There’s no guarantee of income, everything needs to go right in order for it to work. And if we were in different times, and we didn’t have the market volatility we did, we didn’t have some of the economic challenges we did, and we didn’t have some of the product designs that we have today. That might still be the best way. But you know, you think about how phones have evolved, think about what the cell phone looked like back in the 80s. Think about the size of a small car, right, and then think about what it looked like as we progress through the 90s into the early 2000s, you know, became a flip phone. And now look at it. I mean, it’s computer in our back pocket, you can check your bank account, you can trade stocks on it, I mean, you don’t even need a computer anymore, it’s you’re walking around with it in your hand, imagine where they’re going to be in another 20 years, another 10 years, and the financial space has evolved just as much. But you still have a lot of people out there that still believe in the old way. And the old way is great. And when I say the old way, I’m talking stocks and bonds, but you got to have time on your side. And the one thing a retiree does not have is time because if you look at what’s happening today, when people retire is that 85 to 90% of them retire without pensions. And that’s a problem. I mean, you know, you go back 30-40 years ago, when you retired, you had social security and you had a pension check. So, you didn’t have to worry about the money that you had invested in the market. Because you know, it was just going to be for supplemental income, it wasn’t going to pay your basic bills. Now people don’t have anything, the only thing they have is Social Security. And you talked to most people, well, almost everybody I’ve talked to will tell you, Social Security is not going to be enough for them to live off of. So, we got to think about things differently. And Right Track Your Retirement, I teach you about all these things again, go to Right Track Retirement, righttrackyourretirement.com. And you get a copy of the book there we send it to your absolutely free of charge we pay for the shipping and handling. And by the way, when you get it I want you to read chapter three, chapter three is to start thinking like a pensioner and not a gambler. And for you baseball fans, I’ve got a great story about Babe Ruth that I talked about, about how he got through the Great Depression, at a time when Major League Baseball couldn’t sell any tickets. Because everything was while we were going through the Depression. So anyway, but again, righttrackyourretirement.com. And when you’re there schedule a time to come in, sit down with the team, go through your situation with us. I know that coming to a financial advisor’s office could probably be an intimidating thing for some people, I would tell you not to be intimidated by it, because nobody in my office is here to sell yet. As Steve said, we are a fiduciary firm, which means that we don’t charge commissions, we get paid a fee to manage money. But you don’t have to worry about us trying to pressure you to do anything. We’re here to truly help you solve problems. And if there are no problems to solve, then that means you have a good solution already. So, but there are lots of people out there and you’re probably one of them listening right now, that may not feel that you have a good solid plan in place. And if that’s you, take the time to come in. It never hurts to get a second opinion. And remember, you can’t get a second opinion from the person that gave you the first opinion. So again, righttrackyourretirement.com

 

Steve 14:53

Well, and Brian, here’s the thing in your 20 plus years helping people getting to and through retirement this time right now Like you said, this is the time that none of us have really experienced before. But how confident are you that based on what you know that we’re gonna be able to get through this?

 

Brian Quaranta 15:08

Well, here’s why I feel very confident about my clients. And I can’t speak of other people well, right. But, but here’s why I feel very confident, because when, when we build a plan for our clients, what we want to do is we want to set enough money aside and use the right type of accounts, to generate the immediate income that somebody needs for at least 10 to 20 years, if I can get 15 to 20, I’m even happier. So, in a typical planning model, it’s going to look like this, I essentially use a strategy called the income equation, where we’re using two separate types of accounts, to basically do what we call a split funding concept, this split funding concept generates income for 15 to 20 years, with the first round of money, okay? That gives the second round of money 15 to 20 years to grow. And this is why I encourage people to come in and learn about it so that you can have a better understanding of how to build a retirement that you can rely on that’s going to give you a peace of mind and security that we all deserve going into retirement.

 

Steve 16:07

Well. And again, I know you mentioned before, it might be a little intimidating. And I’ll tell you what, folks to sit down with Brian and his team, you’ve got such good people around there. I mean, you know, I’ve had a chance to, to meet a couple of them. But Neil, for one who’s done some shows here, again, these people are just super laid back and very interested in helping.

 

Brian Quaranta 16:27

Yeah, well, look, you know, I, when I started the business 25 years ago, you know, it was a, it was a, it was a culture that I didn’t really connect with. And, you know, I think what people need today more than anything, is someone that’s going to take the time to help educate them and help them understand why they need to do what they need to, do not try to speak over their head or use terminology that that is meaningless to them. And that’s typically what the industry does is it likes to speak over people’s head and use terminology they don’t understand. And so, people leave their advisors office very confused, and they don’t feel like they have a plan. A lot of people have a stack of statements, but they don’t actually have a written plan, all of our clients get a financial written plan, it goes into a physical binder where they can actually pull it out, touch it, feel it, look at it. And that’s important in the world we live in today. So and we and we service that every year with it with the clients also. So again, getting retirement right is so important. And making sure that you make all the right steps is very important. And remember, retirement is, isn’t about a diversified portfolio of investments. It’s about five key areas income, taxes, investments, your healthcare strategy or estate planning strategy. So again, folks, go to righttrackyourretirement.com take advantage of getting a copy of my book absolutely free and schedule a Right Track Review where you can come in, sit down with a team and go through your current situation, and determine whether or not there’s some things that can be done to help you get to retirement, stay retired. And more importantly, maybe you haven’t had a better retirement better understanding of what you’re doing right now.

 

Steve 17:56

righttrackyourretirement.com righttrackyourretirement.com super easy, just fill out the information and you’re gonna get the book and you can schedule that appointment. 800-656-8616 That’s 800-656-8616 it’s a comprehensive financial review, take advantage of it 800-656-8616 800-656-8616 Another quick break, but we’re back we’ve got more here On the Money with Secure Money and Brian Quaranta.

 

Announcer 18:31

And now On the Money with Secure Money

 

Steve 18:38

Welcome back, everybody. This is the final segment On the Money with Secure Money. And Brian Quaranta I’m consumer advocate Steve. Hey, Brian, this is again, we’ve got some great questions from listeners, lots of, lots of curiosity this week. And this first one is from Arty. Arty is wondering, you said do loan repayments count toward contribution amounts in 401k calculations?

 

Brian Quaranta 19:04

That’s an easy one. See if that is: no.

 

Steve 19:06

No, just that simple.

Brian Quaranta 19:08

It is that simple.

 

Steve 19:08

All right. But again, well, I can I think that’s a fair question. Because it makes I mean, again, if you happen to have a loan out on your 401 K, is that gonna take away anything that, you know, from the future? And the answer’s no.

 

Brian Quaranta 19:18

Yeah, yeah, it’s good. I mean, it’s good to know, I think it’s a fair question. But that yeah, they do not. So you can still make your other contributions that you’re making your employer’s making, it’s just a repayment of something that you promised would be paid back.

 

Steve 19:28

Sure. All right, already. There you go. 800-656-8616. Gerald is wondering, he says, my wife’s father passed, and she was left quite a bit of stock. All of the stock is in a single company that is a standard bearer. We don’t need access to the funds and plan to leave the principal to grow. Is there a better way to grow the money right now? As opposed to leaving it all in stock?

 

Brian Quaranta 19:55

Yeah. Well, I mean, there’s a lot of things. I have additional questions on here. Yeah, I mean, is it in a qualified account or non-qualified account, it’s in a non-qualified account, good for them, you know, they’ll get a step up in cost basis, you know, in the in on the date of the father’s passing. But I mean, this also is a good time to explain concentration risk. I mean, if this is all in one single company, depending on the amount of money that’s in there, you may want to diversify out a little bit. I’ve seen so many people hurt that have a concentration risk in one individual stock. Better ways to grow the money. I don’t know what stock it is, I don’t know what the history of the stock is. So, it depends on what your parent, you know, comparing it to? Are you trying to grow it with the same, you know, risk levels that the stock is are you trying to grow it with less risk levels? So, there’s a lot of questions that I have here. But overall, I think my big takeaway from this question is really spend some time thinking about whether or not you want an entire lot of money in one individual company stock, that’s usually not the best course of action.

 

Steve 21:20

Okay, well, that makes sense as well. And so, Gerald again, give us a call. We’d love to hear from you. 800-656-8616 is the number. Let’s see, we got time for another one. Let’s go to Lacey. Lacey says, retiring in about a month at the age of 62. Good for her, I have a small pension after 22 years of employment, they moved us all into a portable pension, I was grandfathered into the original plan. So, in addition to that pension, I was offered a lump sum of which I could roll into an IRA. Or I could get monthly installments for life. What’s my play here? Lump sum or monthly installments?

 

Brian Quaranta 22:01

Yeah, well, the best thing to do is to figure out what percentage withdrawal rate they’re given you. So, for example, you know, you got to compare that to the lump sum amount. So, you know, you go okay, well, if they’re given me a lump sum of, you know, let’s say, a million dollars, and, you know, I’m going to be able to generate $40,000, a year off of that, the question now becomes, how much would they give me every single year, if I were to stay there, let’s say what they were going to give you 70 or $80,000 a year, well, that’s a seven to 8% withdrawal rate on a million dollars, you might be better off leaving it there versus taking it out. Because now, in order for you to generate, you know, 70 to $80,000 a year, you’re going to need a 7-8% rate of return. That’s going to be tough to kind of, you know, remake in the in the private marketplace. So, figuring out what your withdrawal rate is, is the key to figuring out whether or not you take a lump sum, or you, or you leave it there and take the pension. Some other things might be what, what is your family situation? Like? You know, do you have money that you want to leave the kid because maybe, maybe they’re off and you’re really high withdrawal rate, but if you die, you know, the pension dies with you have you got no, you know, they’re not going to pay the remaining balance out as a lump sum. And maybe you’d have some kids that you want to leave money to. So maybe you forfeit the higher payments, because now you can get a hold of a million dollars. And if you die, you know, there’s a lot of money there that can be passed on to the kid. So, there’s a lot that goes into determining whether or not to take the lump sum pension, or to keep it there. And you know, over the last 25 years of me planning, there’s been many cases that I can remember where we calculated the benefit of the lump sum versus the payments that would come directly from the company. And there are many cases where not taking the lump sum was the better option. Everybody thinks taking lump sums, the best option is just it’s just not you really have to spend time calculating the math. And then of course, you also have to take into account what is the industry that you’re in? I mean, if you’re in the car industry, or you’re in the financial industry, meaning like if you work for a bank, or you work for like a Ford or a GM, you know, what’s the stability of those companies long term? Could they potentially reduce their pensions because their pensions go away. So, these are all things that need to be weighed. And these are the important things that need to be considered. And this is why working with a fiduciary financial firm, like secure money advisors is so important because we have the tools that can help you solve these more complicated questions and get a really clear picture of what to do. And if you go to righttrackyourretirement.com, get a copy of my book, I talk about the different options for pensions in my book, what to think about, how to handle that. And the also there while you’re there, you can schedule a time to come in and take advantage of a right track review with the team where we can answer some of these questions for you or answer any questions that you have about your specific financial situation. And one promise we always make is nobody’s going to sell you anything. When you come in. We’re here to truly help. If we can help or share with you what we can do. If we can’t help, we’ll let you know, keep doing what you’re doing. You’re on the right track. But how good would it feel to know that you’re on the right track? If you are and if you’re not, I always say when would you want to know so again, righttrackyourretirement.com get a copy of the book and you can schedule a time to come in.

 

Steve 25:42

Fantastic. It’s 800-656-8616 do take advantage of the opportunity folks. A comprehensive financial review is in the offing. There’s no cost, there’s no obligation. All it takes is a phone call to get things started 800-656-8616 Again, 800-656-8616. So Brian, as always a pleasure to talk with you and I love the information.

 

Brian Quaranta 26:04

Steve another great show and folks we’ll see you again next weekend. Same time right here with On the Money with Secure Money have a great week.

 

Announcer 26:17

Investment Advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment advisor. The content provided is intended for informational and educational purposes only the views statements and opinions expressed herein are those of the individual speakers and not necessarily those foundations and its affiliates. The information contained here and does not constitute an offer to sell any securities or represent an express or implied opinion or endorsement of any specific opportunity offering or issuer. Any discussion of performance or returns is not indicative of future results. Each individual investor situation is different and any ideas provided may not be appropriate for your particular circumstances. Foundations only transact business in states where it is properly registered or excluded or exempted from registration requirements. Registration as an investment advisor is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. No legal or tax advice is provided. Always consult with a tax professional. All rights reserved.

 

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