I’ve Got No Problem With People Taking Risks, Steve, but the Problem That They Tend to Forget Is That the Markets Will Be Volatile. They’ll Be Rapidly Volatile. Sometimes They’ll Take Big Hits Very Quickly, and You Better Have the Time to Be Able to Recover.
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*A Roth conversion may not be suitable for your situation. The primary goal in converting retirement assets into a Roth IRA is to reduce the future tax liability on the distributions you take in retirement, or on the distributions of your beneficiaries. The information provided is to help you determine whether or not a Roth IRA conversion may be appropriate for your particular circumstances. Please review your retirement savings, tax, and legacy planning strategies with your legal/tax advisor to be sure a Roth IRA conversion fits into your planning strategies. All rights reserved.
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. 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 00:45
Hey everybody, welcome in. This is On the Money with Secure Money. My name is Steve Sedall. Brian Quaranta is here. Big show planned today. We’re protecting your retirement portfolio from potential market crashes in 2025. Comes down to about balancing risk reward while keeping a long term perspective. Sounds easy enough. We’ve got some strategies to help you in an easy to follow way when we come right back On the Money with Secure Money. Brian, what’s going on?
Brian Quaranta 01:09
Steve? How are you? We’ve got a good show, and I’m excited, and I can’t wait to get back to it.
Announcer 01:32
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.
Steve 01:59
We are back On the Money with Secure Money. Brian Quaranta’s here, my name is Steve Sedall, having a fun time already, and we haven’t even started. Brian, what’s going on?
Brian Quaranta 02:07
I know Steve, lots of stuff going on, lots of stuff in the news. I mean, how about this administration, huh? It’s like drinking from a fire hose with how much they’re making happen.
Steve 02:16
Absolutely. It just keeps coming and coming. And then, you know, you’ve got this whole thing last week, which was bizarre. Happened the beginning of the week last week, the whole AI thing and all, what the heck. I know, Nvidia suddenly didn’t look so good. Now it looks good again.
Brian Quaranta 02:31
I know. And you know what? This is why it’s so important to make sure that the fundamentals of your plan are in place. Because if you are taking risk with some of your money, or you’re taking risk with all of your money, let Nvidia, right, the staple AI stock, you know, that was the king in everybody’s portfolio, how quickly something can just, poof, go down so rapidly. I mean, you know, think about that. They were talking about, what? A day, two days that that stock took a hit. Oh, yeah. One, yeah. I mean, it’s, it’s unbelievable. Before you can even get out, the damage has been done. And this was, I’ve said for a long time, the market moves so quick these days, so quick that the money that you do have at risk, it better not be money that you need within the next five years. And this is why it’s critical that you have an approach where you’re allocating your portfolio to some portion being what’s going to replace your paycheck, and the other portion, which is more longer term, which is going to be your risk money. I’ve got no problem with people taking risks, Steve, but the problem that they tend to forget, is that the markets will be volatile. They’ll be rapidly volatile. Sometimes they’ll take big hits very quickly, and you better have the time to be able to recover. Now, most people that we talk to will tell us that if, if they lose a good portion of their money, that that would be a problem, because they just don’t have the time to recover well, by structuring things the way that we structured it, Secure Money Advisors, even if your portfolio will lose 30% you still should be able to not only retire, but stay retired.
Steve 04:09
That’s the goal, right? You only want to retire once. We don’t need to go back to work. No, you don’t want to go back to work. So, let’s talk about this. We’re talking about, you know, protecting our retirement. So, what does this mean? Invest in funds that have an intelligent approach to risk management. I like the way that sounds. What does it mean?
Brian Quaranta 04:27
Yeah, well, not all funds handle risk the same way. I mean, some are built with strategies to limit downside losses while still participating in market growth. I mean, that’s very similar to an indexed annuity, where you know, if the market goes up, you make some money. If the market goes down, you don’t lose any money. I mean, the catch with that is that when the market goes up, there’s a cap on how much you can earn. So, for example, if there’s a 10% cap and the market goes up 15% you get 10 of the 15, however, if the market goes down 20%, the tradeoff is that you don’t lose any money. Matter of fact, you keep the earnings that you made the year prior and you don’t lose any of it. So, if you invested 100,000 and the market went up 15% and you were capped at 10 Okay, well, your 100,000 now went to 110,000 and that’s your new guaranteed locked in balance. It can never go lower than that. So now, if the next year the market loses 20% you still have 110,000 whereas the person that was in the market would have less than 100,000 and they would have to recover, right? To get back to that 110 high point. And so, by utilizing more intelligent approaches to risk management, these are the things that you can do, participate in growth without participating in the losses.
Steve 05:44
Sure, well, and again, I mean, again, accomplishing that, that is why we work with an independent fiduciary advisor with a lot of experience like you and the team at Secure Money Advisors. And I mean, we want to invest in funds that provide a hedge against large equity losses. Of course, we do. How do we create that hedge and that’s- we’re not talking about hedge funds here.
Brian Quaranta 06:04
Yeah, no. Hedging risk is simply by having non-correlated assets. So, what I mean by that is, for example, let’s say, you know, look, I had a gentleman retire in from a very well-known company in Pittsburgh. He had a little over a million dollars in his 401(k), and he had mentioned that he was going to need about $30,000 of additional income. All right now he had two options. Option number one was he could follow the traditional Wall Street advice where he would roll that 401 K over to a self-directed IRA, and he would probably be advised to diversify that million dollars amongst different types of asset classes, maybe some bonds, some growth stocks, some value stocks, some technology sectors. And they would use something called the 4% rule. So, 4% of a million dollars is roughly about 40,000 and they would say, Okay, well, you can take out roughly about 4% a year of your Million Dollar Portfolio, and that should provide you with the income that you need for the rest of your life. The problem is, if the market goes down, that entire portfolio, since it’s invested at risk in the market, is going to be exposed to those losses, and not only are they going to be exposed to losses, but it’s also going to be exposed to the withdrawal rate that you’re taking out. So, let’s just say that the market went down and you lost 20% of that million dollars, that would be a $200,000 loss. But then on top of that, you need income. So now on top of it, you take out 30 or $40,000 of income, and now you’ve just compounded that loss. This is, this is the mistake that people are making by following that traditional Wall Street advice. So, what we guided him to do was to hedge that risk, and the way that we do that is we carved off 300,000 of the million dollars we used a really strong, big, strong, safe company to buy an income annuity, which is just an insurance policy to ensure the income. And Steve, I mean, here’s the truth. I mean, the biggest threat to all of us in retirement is uncertainty, and that’s why I wrote the book. Right Track Your Retirement. And if you haven’t gotten a copy of it yet, please do, we send it out to you absolutely free. We pay for the shipping and handling, you get a physical copy of the book, and it’s designed to help give you a road map, to help you reduce risk, build income, and, most importantly, provide you with peace of mind. And if you’re feeling uneasy, like most people that we talk to about the future, now is the time to act and get a copy of the book. And many people who come in share the same concerns. They tell us they can’t afford to take the risk because they don’t have the time to recover because, you know they’re going into retirement, they’re already retired, or they’re unsure when to take their Social Security. They’re not sure how taxes are going to impact them. And there’s five key areas in retirement. There’s your income strategy, your investment strategy, tax strategy, health care and estate planning, and these are all real human concerns, and that’s exactly why I wrote the book. It’s not just about the numbers, it’s about security, clarity, confidence, and with Right Track Your Retirement, you’re going to learn how to take control of your financial future and reduce the unnecessary risk, and most importantly, feel confident about being in retirement and staying retired. So go to RightTrackYourRetirement.com and get a copy of the book.
Steve 09:26
Do take advantage of it. 800-656-8616 now’s the time to give Brian and the team a call. It’s 800-656-8616, 800-656-8616, quick break. We’re back lots more On the Money with Secure Money and Brian Quaranta right after this.
Brian Quaranta 09:40
Coming up. Have you ever wanted to know about Bitcoin, but we’re too afraid to ask? Stick with us and we’ll explain everything about cryptocurrency, how it works, how you get it, and how it can help you retire faster. 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’re back On the Money with Secure Money. And Brian Quaranta Here, my name’s Steve Sedall, Brian, of course, is, well, he’s an author. We’re talking about it every week. The Right Track Your Retirement book, I would say, visit RightTrackYourRetirement.com, learn more. Get your copy on the way to you, do it before you- before you forget about it. Brian, I mean, this is an important first step, I think, for a lot of folks.
Brian Quaranta 10:26
Absolutely. I mean, look, you get an opportunity to read about our philosophy and how we work, and you know how we’re going to guide you when you come in. And folks, what I’m going to tell you is the most important thing you can do, whether you decide to work with Secure Money Advisors or another firm, you know, find people that share in the same money beliefs that you do. We’re not risk takers at Secure Money Advisors. I don’t like taking a lot of risk with my own money. I don’t want to do it with my client’s money. And there’s a lot of people I talk to that say, you know, Brian, I’ve been with my advisor for 20 years. I never liked the advice I was getting or the risk that they were telling me to take. And you know, when I read your book, it just made sense, and it gives me a lot more peace of mind to know that I’m structured the way that I am now, in the way that you guys recommend, by splitting the assets in the two buckets, it just makes a lot more sense, and I sleep a heck of a lot better at night. Well, that’s got to be encouraging to hear it. Well, it is, yeah, and it also tells us, it tells us that we’re on the right track with our messaging and right we’re not the right fit for everybody, and we know that. And when people come in and they tell us what their goals are, and they tell us what they’re trying to accomplish, if we feel that we’re not going to be the team of people that can help them get there and accomplish those goals, we’re going to be very upfront with them and shake their hands and tell them to keep doing what they’re doing. And if anything changes, you know, circle back in a couple years.
Steve 11:44
Absolutely, 800-656-8616, so, let’s get into some of this crypto stuff. Brian, I know it’s certainly, you know, on a lot of people’s minds. There’s so much that we don’t know about crypto. There’s- you talked about, you talked about risk. And, boy, there is not much riskier than Bitcoin, or is there. And, I mean, again, you know, I know that you’re you know, you’ve certainly dabbled, and you certainly understand it, probably better than most of us. So, let’s, let’s dig in. Let’s find out what it’s all about.
Brian Quaranta 12:08
Well, first off, let’s just say this. I mean, you have to look at Bitcoin, and the money that you’re gonna put into bitcoin almost like the money that you’re gonna take down to the local casino when you
Steve 12:18
Okay, fair enough.
Brian Quaranta 12:19
You know, when you walk into that local casino with a couple hundred bucks in your pocket, you have to go in with the mindset that if you lose that money, you’re okay losing it, right? And that’s the way you better be thinking about the money that you’re putting into crypto now, you know, I personally own it myself, but I also have the fundamentals of my plan taken care of, meaning I’ve got good cash reserves for emergencies I am investing in Roth IRAs and traditional 401(k)s and Roth 401(k)s. I’ve got adequate life insurance, so the fundamentals are taken care of before I take that risk. Okay? And so that’s what you want to make sure that you do first, once your plan is in place with the fundamentals. Now you can start to look at alternatives like that. And typically, you don’t really want to put any more than one to maybe a maximum of 5% of your portfolio in there.
Steve 13:09
So, as we look at this, you know, we talk about Bitcoin, and so what is it? It’s, it’s, it doesn’t exist, right? I mean, it exists, but it doesn’t exist. It’s not like a tangible coin. It’s, it’s out there. How do we, how do we get our head around that?
Brian Quaranta 13:26
Yeah, well, all right, well, well, first off, Bitcoin is digital money, all right, and so it lets you send and receive payments directly, without needing a bank or a middleman. So, think of it like cash, but for the Internet, when you hand somebody, let’s say a $10 bill. The transaction is instant. So, if I hand you a $10 bill, that transaction is instant. It’s private. It’s private. Nobody knows I gave you that $10 and it doesn’t require approval from a third party. And Bitcoin works the same way, but it’s digital, and it uses a decentralized network, meaning there’s 1000s of computers around the world that track the transactions instead of the single of a single bank. So, in that system, everybody’s heard of it, but they’re not really sure what it means that system that 1000s of computers that keep track of these transactions, that’s called the blockchain, and it’s secure, it’s unchangeable, and it records the transaction of every Bitcoin. So, unlike traditional money, Bitcoin is also limited, meaning there’s only 21 million coins that will ever be in existence, making it resistant to inflation. It’s fast, it’s borderless, it’s secure, making it revolutionary way to store and transfer value worldwide. I mean, think about it, Bitcoin and gold are a store of value. They’re there to store value, meaning I can put money in there, and I know with a high degree of certainty that that money should still be there, and it should still grow. Now, bitcoins on a heck of a run, compared to, let’s say, gold, but here’s what makes Bitcoin very attractive, and I’m going to use a very extreme. Example here. But Steve, if we tried to put a million dollars of gold in your front pocket, do you think it would fit? I don’t think it would fit. I bet you $50,000 of gold wouldn’t fit in your No, I don’t think I could lift it. Yeah, you know, have you ever, have you ever looked at like $5,000 worth of gold? Because I bought $5,000 worth of gold bars, and it came in the mail and it was very heavy. But, you know, I could have a trillion dollars of Bitcoin right in my front pocket. I wouldn’t even feel it right, you wouldn’t know. So, it’s much easier to transport. You know, if you had to pay a, you know, a few million dollars, could you imagine making a, you know, a $50 million purchase of some building in a third world country, and you got to make that purchase in the form of gold. Yeah. I mean, you would need ships to transport that gold, so, you know. But again, Bitcoin is not something you just want to go out and start investing in until your fundamentals are taken care of, right and, you know, speaking of fundamentals, go to RightTrackYourRetirement.com. Get a copy of my book, and you can read about how to put together the fundamentals and put together a strategy. The book that I wrote is truly a guide to just help you understand how to piece together retirement. You’re going to see that it’s different than any Wall Street advice that you’ve ever gotten before. And most importantly, it’s going to help you understand how to do the most important thing, and that’s replace the paycheck that you’re no longer going to get when you retire.
Steve 16:25
How do we spend crypto? I mean, I know I’ve read, you know, I remember back, this is a few years ago, overstock.com was accepting bitcoin. Okay, how does that work?
Brian Quaranta 16:34
Yeah, well, Bitcoin, you’re going to keep in either a personal wallet that has a security key, or you’re going to keep it on some type of exchange, like Coinbase, right? Coinbase is a good example of an exchange. A lot of people use Coinbase, and so to exchange it, you know, you can exchange it from your wallet to somebody else’s wallet if they have a Bitcoin wallet, okay? Or you can exchange money on the exchange itself. Now, the hardcore bit, core enthusiast, will say, don’t use an exchange. Use a wallet with your own key, but if you lose that key, which is your security key, you might as well kiss it goodbye. I mean, there’s look out of the 21 million Bitcoins that will be in existence, and they’re not all mined yet, but the 21 million that will be in existence, there’s a lot of them that are missing. I mean, there’s stories of people that bought 10,000 Bitcoins for a couple cents a piece, and they threw out the computer that those bitcoins were on. And, you know, now, there’s stories of people trying to, you know, spend money to uncover this treasure in a land mine, because it could be worth billions. So anyway, go to RightTrackYourRetirement.com, get a copy of my book, and don’t be invested in Bitcoin until you get your fundamentals taking care of people, and you can learn how to do that by getting a copy of my book.
Steve 17:47
Absolutely. And again, there’s no cost, there’s no obligation to help you get a better handle on your financial situation. And again, it’s an opportunity to get a financial roadmap put together. And again, it’s a phone call away. 800-656-8616, 800-656-8616, quick break. Lots more On the Money with Secure Money and Brian Quaranta coming up.
Brian Quaranta 18:05
What if you could retire without worrying about taxes on your income? It’s possible with the right strategy. Today, we’re breaking down the best ways to generate tax free retirement income, how to avoid costly mistakes and the steps to secure financial freedom. Oh, those are words that I love to hear, Steve, when we come right back with On the Money, with Secure Money.
Speaker 4 18:31
Do you ever feel like you are fighting for financial knowledge? Don’t let bad 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 at 800-656-8616 or text, Brian Q to 800-656-8616, that’s 800-656-8616 or text Brian Q to 800-656-8616, 800-656-8616
Announcer 19:05
And now On the Money with Secure Money.
Steve 19:11
Hey, we are back On the Money with Secure Money. Brian Quaranta is here. My name is Steve Sedall, having a fun show. Boy, we got through crypto. We got through some other kinds of, you know, risk-taking, and now we’re talking about taxes in retirement and how to minimize them. My favorite, I love this, Snoopy the dog who once wrote Dear IRS, I’m writing to you to cancel my subscription. Please remove my name from your mailing list. I don’t think that works.
Brian Quaranta 19:38
Yeah, we wish it was that easy, right? Well, taxes are a big deal in retirement, and you got to know how to handle them.
Steve 19:46
Well, and again, that’s the beauty of what you guys do at Secure Money Advisors, is that you help us understand taxes, how we can minimize taxes. We’re going to pay what we owe, but we don’t want to pay more than that.
Brian Quaranta 19:56
Yeah, and I want people to understand there’s a difference. Between the taxes that you get done at the end of the year, when you’re submitting your information to your tax accountant, and that type of conversation is, here’s what I made, here’s what I spent, here’s what we think the expenses are. And a tax accountant puts it in their software, and they come back, and they say, okay, great, you’re getting a refund, or here’s how much you owe, whatever it might be, but tax strategies in retirement plan are completely different. These are things that you don’t do in April. These are things that you do throughout the course of the year, such as tax loss to harvesting, where you’re looking at the end of the year and saying, Did I take any losses in my portfolio that I could write off against gains. Or should I start considering converting some of my traditional IRA or 401 K, money to a Roth IRA or Roth 401, K? Why is that important? Because Roth accounts are 100% tax free. So, I’ll give you an example. Let’s say you had a traditional IRA with $10,000 in it, and then you had a Roth IRA with $10,000 in it, all right, so let’s say the traditional IRA grows to 100,000 and let’s say the Roth IRA grows to 100,000 so when you look at your statements, everything looks equal until you withdraw the money, when you withdraw the money from the traditional IRA. And let’s just for this example, say that we’re going to withdraw 100% of the money, so we’re going to take $100,000 out of the traditional IRA. Well, that’s going to trigger a taxable event. All $100,000 that you took out of the traditional IRA is going to count as income to you. So, if you’re already making, let’s say, $100,000 and then on top of it, you take all that money out of your traditional IRA, now you’re going to be paying taxes on $200,000 so that could put you very easily in a 25 to 30% you know, marginal bracket. So that means on that $100,000 at a 30% tax bracket, you’re paying, I’m sorry, you’re paying on that $100,000 you know, at 30% you’re paying $30,000 in taxes to get that 100,000 whereas the Roth IRA, Steve, if we withdraw that money, it doesn’t count as income, it’s all tax free. It doesn’t put us in a higher tax bracket. And you could get to keep all $100,000 so at the end of the day after withdraws your traditional IRA amount that you have in your hands is 70,000 and with your Roth IRA, what you have in hand is $100,000 now you tell me which one you’d rather have? Yeah.
Steve 22:38
Roth, hello. 100 grand, and I want- I want it all.
Brian Quaranta 22:42
That’s right, that’s right. And, you know, and there’s other, there’s bonds that can help with, you know, tax strategies such as municipal bonds, right? You know, the municiple bond interest income from most municipal bonds is federally tax free, and often state tax-free health savings accounts used for medical expenses. HSAs offer triple tax benefits, tax free contributions, tax free growth and tax-free withdrawals. So, if you have access to an HSA, you might want to consider funding that. And then, of course, the last one, which is very overlooked, is life insurance. Life Insurance, in my opinion, is probably one of the best tools that a family can use to preserve wealth and even create wealth out of thin air, because life insurance is one of the only financial tools out there that, when received, is 100% tax free. So, let’s just say you had a million dollar life insurance policy and you died, your family would get that $1 million without paying a dime in taxes. But what else is great about life insurance is the cash value within the life insurance can be tax free, and once you understand how all of these different financial tools work, now you can start to customize a strategy to maximize and optimize your taxable situation in retirement. And this is when it gets really fun, because once you start to understand how to utilize these tools, now you’re utilizing, legally, the tools that we have to essentially beat the IRS because we’re using the tax code to our favor.
Steve 24:22
So, and again, building the tax-free retirement, that is something that you have really sort of mastered over time. That’s kind of one of the reasons you wrote the book, or one of the inspirations to write the book was to help get us through retirement, you know, with taxes in mind and to work in our favor.
Brian Quaranta 24:37
Yeah, look, I mean, I wrote the book because I want people to understand that there’s a different approach out there than the traditional, antiquated Wall Street advice. And I want you to reimagine retirement, and I want you to reimagine what it can really look like. And that’s what Right Track Your Retirement does, and it really helps you with the biggest threat that we’re. All going to deal with, and that’s uncertainty. And as human beings, the one thing we crave more than anything is a level of certainty, especially when it comes to our money. And so Right Track Your Retirement. It’s a simple yet powerful guide to help you reduce risk and build income, because the number one job that you have when you go to retire is, how are you going to replace your paycheck? Because the majority of Americans today, the only guaranteed source of income that they’re going to have is Social Security. Nobody’s getting pensions anymore, so you better understand how to create one for yourself. And we work with you at Secure Money Advisors. We’re on the same team. We’re not there to high pressure you and to try to sell you anything. We’re there to work together to identify any problems or any things that can be improved in your portfolio. We address that with you. We share with you, if you made those improvements, what it would look like. And if you would want to take the next step in working with us, we can talk about what that looks like, but first, I would tell you, go to RightTrackYourRetirement.com, get a copy of my book so you can read about how we approach retirement planning, and you’ll have a good understanding of what our philosophy is. So again, RightTrackYourRetirement.com.
Steve 26:09
800-656-8616, that is the number giving you an opportunity to review your individual circumstances. Again, no cost, no obligation, you can find out things like how much risk you’re taking, just what even talking about? How about red flags that could pop up down the line. Do you really know what you’re paying in fees or commission? Tax liabilities, always part of the discussion. And of course, a lifetime retirement income plan that includes maximizing that very important social security benefit. Take advantage of this complimentary review by calling us right now 800-656-8616, 800-656-8616, quick break, back with another segment to go here On the Money with Secure Money and Brian Quaranta.
Brian Quaranta 26:45
When we come back, we’re gonna tackle this week’s batch of listener questions when we come right back with On the Money with Secure Money.
Announcer 27:01
And now On the Money with Secure Money.
Steve 27:08
Hey, we’re back On the Money with Secure Money. Brian Quaranta Here, Brian, of course, President of Secure Money Advisors. SecureMoneyAdvisors.com is the website. Check that out. Also, RightTrackYourRetirement.com, that really is the first stop, isn’t it, Brian, to get the book, get it on the way, get yourself a little background in, then come on in and sit down and talk about it.
Brian Quaranta 27:26
Yeah, look, and our team is standing by right now to take your call and get you scheduled to come in for a complimentary meeting. And you know, when you come into Secure Money Advisors, we’re not going to sell you anything. That’s my promise to you. We don’t sell anything at Secure Money Advisors, we’re there to truly listen to what your concerns are, help identify any problems, and if there are any problems, address them with you and what can be done to improve them. Now it’s up to you of whether or not you’d want to take the next step. We’ll at least share with you what could be done to optimize what you’re currently doing.
Steve 27:56
Absolutely and again, SecureMoneyAdvisors.com is though, is where you can get started and All right, so we’ve got some questions here from listeners, as we usually do here. We’ve got a retired school administrator. They’ve got 300,000 in a 403B, and they’re thinking of rolling it over to an IRA now. They’re worrying about losing access to 403B creditor protections. What protections differ between 403B and Ira?
Brian Quaranta 28:24
Well, I mean, this is a really good question. So, if the 403 B plan is going to be subjected to ERISA rules, and I’ll explain here in a minute what ERISA is, but it receives really strong federal protections against creditors and bankruptcy and non-bankruptcy situations like lawsuits or judgments. But the ERISA stands for the Employee Retirement Income Security Act, and it is state specific laws governing IRAs and retirement accounts. So, ERISA covered plans include 403B’s and 403B’s are typically offered by private tax exempt employers, such as schools, hospitals, nonprofits, etc. You know, some churches and governments have four or three B’s, but you know, traditional IRAs, by the way, are not covered by ERISA, so they do- You know, they’re not going to receive the same level of federal protection against creditors outside of bankruptcy. But in bankruptcy, IRAs are protected, and they do have a federal limit of about 1.5 million. Now that’s as of 2024 under the Bankruptcy Abuse Prevention and Consumer Protection Act. And I know (indistinct)
Steve 29:36
Easy for you to say.
Brian Quaranta 29:37
Right. But outside of bankruptcy, IRA creditor protections depends on state laws, is really what it comes down to.
Steve 29:46
800-656-8616, and we have now a retiree has been offered a bonus, and I put that in quotes, a bonus annuity that promises a higher initial balance if they sign up now. They’re curious about how this affects their income, and if there are any drops. Drawbacks to consider, what should they investigate before committing? Oh, that’s a great question.
Brian Quaranta 30:05
It’s an excellent question. And Steve, as you know, I mean, I am not shy to telling the listeners every single weekend how much I personally like annuities. But here’s, this is a great question, because this really is an opportunity for me to explain that there’s lots of different types of annuities. Typically, what I talk about is your income annuity, because we’re using it as a way to hedge against risk and replace the loss of your paycheck. Now these bonus annuities, you have got to be very careful with them. I remember somebody coming to me a couple months ago telling me about a seminar that they went to where someone was recommending an annuity that gave, I believe, a 25 or 30% bonus. And although that might sound exciting when you think about it and how much money they’re going to give you for putting that money in the annuity, it comes with a lot of strings attached, so you better understand what those strings are. Nobody’s going to give you 20 or 30% bonus without adding strings to it. And what, what I meant by the strings was this person was under the impression that all of that bonus money was theirs right away. So, in this case, this guy was looking to put a million dollars into this annuity and get a 30% bonus. So that meant he was going to have $300,000 added to his account immediately. And I said, Well, what if I told you that you would never be able to take that money as a lump sum? And he says, well, that’s not what I was told. He said I was told that I would have access to that money. And I said, Well, it’s true, you do have access to it, but you got to take it out over your lifetime. So, you know, that’s not how I think of interest. So, if I’m going, if someone’s going to give me interest, you know, or a bonus. That should mean that at the end of the year, I should be able to go in there and take out all $300,000 of that bonus money, right? Or whatever the bonus amount would be. Oh, yeah, sure. So, you’ve got to be really careful, because this is where I get very upset about the people that do sell annuities because they’re not using them the right way. Annuities are a tool designed to ensure the loss of your paycheck, you know. And this is where, this is where you got to be really aware that, you know, there’s a lot of different types of annuities, and not every annuity’s created equal. And there’s and not every annuity do I condone. I mean, there’s a lot of annuities I personally don’t like. So go to RightTrackYourRetirement.com, get a copy of book, read about the types of annuities that I recommend, because, again, your number one job and our number one job together working with you, is to help you replace the loss of your paycheck, but more importantly, give you the certainty that you’re going to be able to stay retired, keep pace with inflation, and, most importantly, not run out of money. And if you’re like most people that we talk to, and you’re not sure how much risk you can take because you don’t have the time to recover, or you’re the only source of income you’re going to get is Social Security. We’ve got strategies for you that I want you to learn about. And what’s the worst that can happen? You schedule an appointment, you come in, you sit down, and we tell you, Hey, you’re doing everything right. Keep doing everything you’re doing. If anything changes. Circle back in a few years. But if you’re not on the right track, when would you want to know that? So again, go to RightTrackYourRetirement.com, get a copy of the book, and my team is standing by to also take your call and get you scheduled for a complimentary meeting.
Steve 33:13
800-656-8616, that is the number. 800-656-8616 make that call today while you’re thinking of it in the meantime. Hey Brian, what a fun show, really fast paced. Good stuff.
Brian Quaranta 33:22
Always fast paced, and Steve we’ll see you again next week with another episode of On the Money with Secure Money.
Announcer 33:32
Investment Advisory services are offered through Foundations Investment Advisors, LLC, an SEC registered investment advisor. The content provided is intended for information on educational purposes only the views, statements, and opinions expressed herein are those of the individual speakers and are not necessarily those of Foundations and its affiliates. The information contained herein does not constitute an offer to sell any securities or represent an express or implied opinion or endorsement of any specific investment opportunity offering or issuer. Any discussion of performance or returns is not indicative of future results. Any discussions of specific strategies are for informational purposes only, and have been provided to help determine whether they may be appropriate for your specific situation. If applicable. The primary goal in converting retirement assets into a Roth IRA is to reduce the future tax liability on the distributions you take in retirement or on the distributions of your beneficiaries. Each individual investor situation is different, and any ideas provided may not be appropriate for your particular circumstances. Comments regarding a particular client’s experience may or may not be the same as another client’s experience and is not an indication that any client or prospective client will experience the same or a higher level of future success or performance. Foundations only transacts business in states where it is properly registered or is 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 advisor has achieved a specific level of skill or ability. Nothing here in constitutes a recommendation that any security portfolio of securities or investment strategy is suitable for any specific person, no legal or tax advice is provided. Please review your retirement tax and legacy planning strategies with a legal or tax professional before transacting or implementing any strategy discussed herein. 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 investment advisory products, rates and. Guarantees provided by insurance products and annuities are subject to the financial strength of the issuing company, not guaranteed by any bank or the FDIC. This is not endorsed or affiliated with the Social Security Administration any federal Medicare program, nor any US government agency. If applicable, we do not offer every plan in your area, and contacting us at the phone numbers provided herein will direct you to a licensed insurance agent. Any information we provide is limited to those plans we do offer in your area, please contact medicare.gov or one 800 Medicare to get information on all of your options. All rights reserved.
Outro 35:27
Coach P Radio.
