Episode 120 – Retirement Planning Tips for Baby Boomers

Did you know that roughly 10,000 baby boomers retire each day? On this episode of Retirement You Radio, Brian Quaranta provides tips on how to help them make the transition to retirement.

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Radio Show Transcript

Announcer 00:00

Information provided is for illustrative purposes only and does not constitute investment tax or legal advice. Information has been obtained from sources that are deemed to be reliable, but their accuracy and completeness cannot be guaranteed. Neither Brian Quaranta nor his guests are liable for the usage of information discussed always consult with a qualified investment legal or tax professional before taking any action.

And now, Retirement You Radio

Asset protection, tax reduction, holistic planning

Featuring Pittsburgh’s wealth, financial, and income coach: Brian Quaranta

Brian Quaranta 00:37

Roughly 10,000 baby boomers retire every day. Everyone’s story is different. But there are some things that apply to all of us. Stick around. We’ve got some great tips to help that ease that transition.

Steve 00:53

And welcome, everybody. This is Retirement You Radio, increasing your financial IQ with Brian Q, Brian Quaranta, of course, is who we’re talking about. Brian is an author. He’s president and CEO of Secure Money Advisors. He is a fiduciary and independent, all of those fun things that you look for in an advisor, Brian, Hi, how are you? What’s new?

Brian Quaranta 01:13

Steve, how are you, very busy. As always.

Steve 01:15

You are a busy, busy guy.

Brian Quaranta 01:17

A lot of people retiring, a lot of people retiring, you know, little baby

Steve 01:22

boom thing where it’s a staggering number. When you think about 10,000 Baby Boomers a day are retiring, and there’s no end in sight.

Brian Quaranta 01:29

I just did an interview called Great resignation about how many people are resigning due to COVID. And I know that I’ve talked to a number of advisors across the country, they’re seeing the same thing. Sure, people. They’re getting called back to work, and they’ve been home for so long. They don’t want to go back to work.

Steve 01:47

Yeeeaah, let me think about that. No.

Brian Quaranta 01:49

Yeah, right. That’s exactly what’s happening. You know, we had people you know that the big clients that we’ve had on a kind of a five-year track, getting ready to retire, we’re getting phone calls often have people saying, Hey, I’d like to go earlier, which is great. I mean, when you have a written plan, these are the things that can be done. I mean, that’s the one thing that I really love about what we do here at Secure Money Advisors is when we develop the plan for each individual, it’s customized to their situation, it’s based around their math. And that’s important because your retirement plan should be based around math, not hypotheticals, and math that is reliable. But because it’s based around good solid math retiring earlier can be a something that is sometimes easily done and accomplished. But yes, there’s plenty that we need to discuss when it comes to all of this good stuff. How about the big universal decision?

Steve 02:41

Well, that’s the thing. And I think that’s where you can really help us because you, you know what those what those milestones are, if you will, and making those decisions, it’s life changing, oftentimes, for people?

Brian Quaranta 02:54

Well, it is, you know, you don’t get a dress rehearsal at this thing. So, you got to get it right, right out of the gates. And the way that you do that is you’ve got to be thoughtful about your choices and try out different scenarios. And that’s the one great thing about having a written plan is that we can look at a number of different scenarios in the model, we can look at what delaying the start of Social Security can do. I mean, in some cases, you know, delaying Social Security could add, you know, $100,000 to your bottom line. You know, the majority of people do claim Social Security at 62. Because, you know, the one problem with Social Security, and some of the delaying strategies is, we just don’t know the day you’re gonna die. If we, if we knew the day you were gonna die, we could actually figure things out a little bit easier. But you know, your breakeven points for Social Security are pretty far out there, too. You know, it doesn’t matter whether you click at 62, or your full retirement age, your breakevens at 78. And then if you wait till age, there’s a difference between your full retirement age, which for some people is 66, some at 67. But between your full retirement age and your max retirement age, which is 70. Your breakeven is beyond 80. So, you know, according to AARP, the average life expectancy I believe, is around 78 years old. So,

Steve 04:10

folks are living a lot longer than that these days.

Brian Quaranta 04:13

Yeah, if you I believe the latest statistics that I read that, you know, if you’re 60 years old, or today that you have like a 50% chance of one living till age 95 or something like that. So, you know, people are living longer. It’s one of the big challenges in retirement is that, you know, most people are retiring. And we’re going to be in retirement potentially, as long as we were working. I mean, you know, just as many years some, some say you could be retired longer than what you were working. I mean, think about the monumental task at hand with that, because most Americans are not retiring with pensions. So, they have to they have to learn to create their own private pension in retirement, and most people are just not being taught how to do that. Most people retire with some type of retirement plan like a 401 K, maybe an IRA Maybe a 403 B plan. And those retirement accounts are typically invested in risk investments, which I don’t have a problem with. But if you’re going to need to take withdrawals from those investments, you better make sure that everything goes right. Because if you get a little bit of volatility, especially early on in retirement, this is where people run the risk of running out of money. As a matter of fact, there’s a rule of thumb that they use to determine the amount of money you can withdrawal from a retirement plan. It’s something called the 4% rule. We’ve talked about it about it a number of times, Steve, and what they found is that if people use this 4% withdrawal rule, there’s up to a 56% chance the plan could fail. I mean, that’s, that’s incredible. I mean, think about that. Let’s say that you and I were about to get on an airplane tonight. And that airplane was headed for Hawaii. And right before we’re about to back out of the gates, the captain gets on the intercom. And he says, Hey, folks, I want you to know, there’s a 56% chance we may crash into the ocean. Before we get to Hawaii. I mean, how many people hold them no rain? Yeah, well, you know, these are the things that we’ve got to keep in check as we move. But there’s other things we’ve got to think about, right? I mean, you may want to work a little bit longer, there is a hybrid strategies where we can collect social security, and you can still work. But we’ve got to be careful when we do that, because Social Security only lets you make so much money per year. But a lot of people don’t realize that if you’re up your full retirement age, which again, could be 66, or 67. For those that are listening, you can actually work and make as much money as you want. You only have to be careful of how much money you make when you’re 62. And on, right. So, but once you turn your full retirement age, Social Security says, Hey, you can go out there and work and make as much money as you want. A lot of people say, Hey, I’d like to retire. But I don’t want to I don’t want to pay these penalties that Social Security is going to hit me with well, as long as you make less than 18,000 bucks, social security isn’t going to penalize you if you collect before your full retirement age. And if you are your full retirement age, they aren’t going to care, you can collect as much you can make as much money as you want. And that works really well for those that haven’t done a really good job savings. Or maybe they’ve been taking care of family, or their kids or putting kids through school or whatever it is and are a little bit behind on their retirement savings. This is where we can really leverage social security. Because imagine going to work every single day and collecting your full social security check. Wow, that’s a lot of money that you can put away and save. And this is the way that we can really accelerate retirement, make retirement even better. Create strategies that get you tax free income come retirement time. This is why we always offer the Right Track Retirement. And, folks, if you want to get your retirement on track, call us because that’s exactly what we do. We help get you on track, we make sure you’re on the right track. Let me ask you this. And it’s a very serious question. If you were not on the right track, when would you want to know that day before yesterday? Day before yesterday? Right? You know, if you are on the right track, when would you want to know that? So, these are That’s right. So, the analysis that will do for you is complimentary. There is no cost, there’s no obligation to it. We take the risk, yes, we take the risk, there is no catch. The catch is that you come in you sit down with us. We help you look at your retirement strategy. When we help you determine whether or not you’re on the right track. How do we do that we focus on five key areas we focus on income, taxes, investments, health care, and legacy. Those are the five key areas of retirement planning; retirement planning goes beyond your investment strategy. There’s five key areas that you have to focus on. Have you ever thought to yourself, maybe you know, when would be the best time to click soul security? Or maybe you thought to yourself, hey, I’m at a point in my life where I can’t afford to lose money because I don’t have the time to make it back or I’m not going to have a pension. I mean, I need to create one myself. These are the things that we can teach you how to do so for the next 10 cars. That’s a complimentary Right Track Retirement analysis at no cost or no obligation

Steve 08:42

800-656-8616 You’ll get the comprehensive financial review showing you where you are today. But more importantly, you will find that you’ve now got a roadmap that can help get you to where you need to be when it comes to retirement. 800-656-8616 again 800-656-8616

Brian Quaranta 08:59

We’re living longer so logic would show we’re saving even more for retirement The reality is not so much when we come back some surprising truths about retirement in America, come back right here on Retirement You Radio.

Announcer 09:13

When should I take my Social Security? How much risk can I tolerate? I’m afraid I’m overpaying my taxes? Did I save enough? I can’t keep up with all these rules. There are a lot of components to your retirement planning, and it can seem overwhelming. It’s time to establish a partnership with a professional who can provide you with a written plan the proper strategies and then be there with you along the way. Call Brian Q 800-656-8616 or text Brian Q two 800-656-8616 Call or text Brian Q to 800-656-8616

Steve 09:54

We are back on retirement you radio increasing your financial IQ with Brian Q, Brian Quaranta is here Brian’s President and CEO of Secure Money Advisors, He is an author. And I can say that now because you were telling me last week, you know, the book is coming out.

Brian Quaranta 10:08

Yes, we are in the final edit. I know, I think we should actually have a physical copy of the book here September, which we’re going to do for our radio listeners, we’re going to do a book offer coming up, probably in the next 30 days. All right, keep an eye out for that,

Steve 10:23

I’ll look forward to that.

Brian Quaranta 10:25

I give away all my secrets, Steve. I give away all my secrets,

Steve 10:29

Oh, not all of them, I’m sure. So, you know, you bring up a good point. And I guess what made me think of the book is, you know, because we are living longer, we do need to save more. And you know, the sad part is, most of us aren’t, and we have to be ready. And that’s, that’s one of the advantages, I think of working with somebody like you, Brian, and Secure Money Advisors, you know, your fiduciary firm, you’re independent, you see things, you take the emotion out of it, and help us get to where we need to be based on the math. And I like that.

Brian Quaranta 10:59

Well, look, I mean, there’s a lot of great financial advisors out there. And I’ve got a lot of colleagues across the country that do a lot of great planning. And you know, doing this now for almost 22 years, you learn a lot over those 22-year period, and you’d learn what good planning looks like you learn what not good planning looks like. And I think where people are really missing, the concept of planning is that they don’t have a written plan, people will typically have a basket of investments, but they don’t have any plan that goes along with that. Now, my industry has done a really, really poor job in explaining what a retirement plan really looks like. And I think people are confused. They think if they have a 401K plan, that they’re investing in making contributions, that they have a retirement plan, folks, that’s not a retirement plan. It’s an investment strategy that you’re using to accumulate money,

Steve 11:48

That’s lump sum time bomb, is what that is,

Brian Quaranta 11:51

That’s a good one, Steve, a lump sum time bomb, right? Because it at the end of the day, accumulation, right, there’s two phases that we all go through, there’s accumulation, and there’s distribution, the accumulation phase, everybody goes through the accumulation phase, it’s the process in which you’re, you’re contributing money for a future use down the line, right. So, we want to contribute money to some type of retirement strategy, an IRA, 401k, a Roth IRA, a 403, B 457, plan, whatever it might be, so that you do have a lump sum there. When you’re ready to retire. See, back in the day, you didn’t have to worry about really putting too much money away, because your company probably took money out of your paycheck and put it away for you in the form of a pension. But they got rid of those, you know, I mean, retirement looks so different today, because they replace guaranteed pensions, with 401k plans. And so, retirement planning is very misunderstood, because people always will talk very loosely: Well, my retirement plan at work, you mean the 401k, you mean the investment account that you’re accumulating money in a tell me how that’s gonna get you retired? What’s going to be your plan? Well, when I retire, I’m just going to start withdrawing money, right? Wrong. That’s not how it works. That’s not how it works. Because if you withdraw money from that plan, and you don’t get the order of returns, or the right rate of returns at the right time, this is where we run the risk of running out of money. Look it up. It’s called sequencing risk. Google it, yes, you can Google sequenceing risk, it’s a big risk. As a matter of fact, you have a higher probability of running out of money if we retire at the top of a bull market. Where are we right now could be at the top of the bull market. So, for those of you that are close to retirement or getting ready to retire, your odds are your chances of running out of money are much greater than those that would retire in a bear market. That’s what all the research shows. And the problem is, is that retirement could last a long time the average American will retire at the age of 66. Live until nearly 79. But for a lot of us retirement will last longer than 13 years. That’s because the number of individuals who die relatively young skew the numbers, consider this. Let’s say a 65-year-old woman has a 50% chance of making it to age 85 and a 65-year-old man has a 50% chance of reaching age 82. That’s why younger workers need to plan for two decades or more of income and retirement and for current retirees, an ultra-conservative portfolio comprised solely of bonds may not provide enough growth, especially with interest rates, still near historic lows. The other problem is this. People as they get older typically will shift more their portfolios to bonds. That’s usually by the advice of their advisers. That’s been advice that’s been given for the last 2530 years. I challenge that advice because we’re in a low interest rate environment. So, you tell me if I’m in a low interest rate environment, and I want to make my portfolio more conservative and my move that the bonds steep what happens when interest rates go up? What happens to bonds, bond rates go down, they go down, which means you lose money. So, tell me how you’re going to make somebody’s portfolio more conservative by moving into bonds in a low interest. Free environments with a high probability of interest rates going up. And now bond prices go down and they lose money, not a good plan, much better ways to do it. Our Right Track retirement system looks at all of these things in our retirement planning model. Remember, retirement planning is five key areas. It’s income, taxes, investments, health care, and legacy planning. That’s what makes up a retirement plan. Not a 401k, not an IRA, not a Roth IRA. Those are components to a bigger picture. And these are the things that we need to take care of. Remember, Social Security falls short, most people, you know, Social Security is designed to replace about 40% of their income. That’s it. So, for most people that have what we call an income gap, that means they’re going to get to Social Security checks if you’re a married couple, and they’re going to need money above and beyond that, how are you going to generate that income without the risk of running out of money? So, if you need an extra 2530 $40,000 a year, and you’re going to start withdrawing that from your investments? How are you going to do that, because if you follow the 4% withdrawal rule, according to all the experts today, 56% chance of failure. So, you better have alternative ways to do that. That’s what our Right Track Retirement System is all about. We help you look at the most modern ways of planning for retirement, that gives you the highest probability of success and give you a portfolio that’s based around protection guarantees, and good solid math. So, for the next 10 callers who call in right now, we’re going to give you a complimentary Right Track analysis, we’re going to cover those five key areas that I always talk about income, taxes, investments, health care and legacy planning. So again, that’s a Right Track retirement analysis, no cost, no obligation, take advantage of it, folks, if you ever thought to yourself, when would be the best time to take social security? Or maybe you thought to yourself, I’m getting ready to retire and I can’t afford to lose the money that I accumulated? Or do you even have enough money to retire? That’s what you’ll find out when you come in and take advantage of our Right Track Retirement Analysis.

Steve 17:03

Hey, that sounds fantastic. Folks, don’t miss this opportunity. It is a good one, to be able to take that complex financial world and really break it down and make it something that that makes sense for you. It’s a chance to get a true practical financial review. And it’s a phone call away 800-656-8616. You’ll get that comprehensive financial review that Right Track Retirement Review, and it will show you where you are today, of course, but more importantly, you’ll find that you’ve got a roadmap, a guide that’s going to help get you to where you need to be when it comes to retirement. 800-656-8616 again, 800-656-8616

Brian Quaranta 17:43

Most Americans elect to claim Social Security at 62. Is that the best time? When we come back, four questions you need to answer before taking that big step.

Announcer 17:55

You see a doctor for your health, sometimes a specialist, a mechanic for car problems. Anyone under 20 for your smartphone; “well, duh,” you need to look at retirement that way. You need help setting up a plan that avoids pitfalls and provides lifetime income. You need a retirement that you can enjoy without the worries. You need someone who can help take the mystery out of retirement. You need Brian Q. Call 800-656-8616 or text Brian Q to 800-656-8616 Call or text Brian Q to 800-656-8616.

Steve 18:37

And welcome back, everybody. This is Retirement You Radio increasing your financial IQ with Brian Q. I’m consumer advocate Steve and Brian is President and CEO of Secure Money Advisors got a great team of folks that works with him. And you know what mean, again, I’ve had a chance to meet several of them there. It’s just all good folks.

Brian Quaranta 18:56

Yeah, yeah, I’m very proud of the team that we put together. I mean, that, you know, they’ve all been handpicked. And, you know, they’re very passionate about the work that they do. And most importantly, they believe in service. And that’s the number one priority here at Secure Money Advisors is, you know, it’s not only to build a great plan, but also to service you over the years, and try to give you that high-quality service that I think is lacking in the world that we live in today.

Steve 19:19

Well, that and the education that you provide is second to none.

Brian Quaranta 19:23

Well, the education you know, I’m very passionate about that. As you know, Steve, I mean, I’ve got you know, I’ve got multiple radio shows that air I’ve got multiple TV shows that air, you know, you know, we’re we’ve got the educational events that, that right now we’re doing every Friday at the narcissi winery, although I believe that the next coming weekend, I don’t believe we’re there but if you go to WWF, Secure Money Advisors, you can look on the website and look at our upcoming events. And yeah, we’re out there really educating the people on the retirement fundamentals and the basics and what my passion has been really just kind of taking the confusion out of retirement planning, because there’s so much noise in the marketplace, as you know, and there’s so much noise period, it doesn’t matter whether you’re doing retirement planning, or you’ve got some medical situation going on, or you’re trying to build a home, you know, everybody’s got an opinion of how to do it, and Google, and all your search engines make it even worse, because, you know, if you have a question about something, you know, you know, let’s take, you know, financial planning, for example, Hey, what’s the best time to collect social security, you know, you’re probably going to get about 10 different opinions. And the problem with that, is that I’m sure there’s a reason why those 10 different opinions are being given. But the variable that’s missing when you read these articles, or you hear certain things is your situation, that’s the biggest part of the equation. So, you know, they their talents, you know, given an example or an opinion on something might deal with that person’s situation, but it certainly is not going to apply to yours. So, taking the noise out of all of this, and simplifying it, and making it easy for people to understand, you know, is my biggest passion. And we hear it all the time. And people say, you know, I wish we would have bet you 10 years ago, 15 years ago, because things would have been a lot simpler. And that’s my promise to you folks, when you come in is that number one, meeting with myself and my team is not an intimidating process, we make it very simple and easy to understand. And we’re using real tools here that really are going to give you real visuals, real math, black and white information for you to make a very, very informed decision of how to best get what you need, from the dollars that you’ve accumulated over your hard work in yours.

Steve 21:33

800-656-8616. That’s how you can get the ball rolling. And as far as questions goes, let’s get the ball rolling with Michelle. She writes and says my husband and I are raising our grandchildren, their parents passed away years ago, we were both retired back then, although I have since gone back to work part time, we’re now in our mid-70s, with two teenagers who will want to go to college in the next few years. Our retirement plan obviously never considered this as a possibility. Is it too late to turn it around? Wow, what a situation.

Brian Quaranta 22:06

Yeah, you know, this is where we really were I lean on, you know, other experts, you know, we’ve we have an individual that solely focuses on college planning, and he’s outstanding with it. And, and he knows, he knows that the process in a way that, you know, most people don’t, and that makes it simple, you know, turn it around, I’m not really sure what she means by turn it around. But I can say this, you know, what I’ve learned in 21 years of practicing and building financial plans, is that there’s always a way, it’s just a matter of having access to the right information to the right contacts to the right resources. And once you get that figured out, everything else becomes pretty simple.

Steve 22:49

800-656-8616. If you’d like to get a head start, let’s go to Barbara. Barbara says My mother wants to give me her IRA. She’s in an assisted living community. She asked me to watch it for her. I’ve been keeping up on her RMDs. She told me last week she just wants me to have it. I’m not sure how that works. Does that work?

Brian Quaranta 23:09

Yeah. Well, I mean, she could have it. I mean, but were we talking? You know, while mom’s still living or are we talking when mom dies? Because, you know, there’s two problems that we have here. Number one, she can certainly take the IRA while she’s living, but she would have to- her mom would have to cash in the IRA, which would create a taxable event for her mom. And then Mom would have to pay all the taxes on the IRA, and then Mom would have to somehow gift it to her daughter. That’s probably the least efficient way to do it. Because the better way to do it is obviously at death. If Barbara is left as the primary beneficiary, under current rules for IRAs, Barbara could actually inherit mom’s IRA and not pay any taxes on it. Now, the new rules, according to the Secure Act is that Barbara does have to take a little bit of money out of that account each year. And she has to take it out over a 10-year period, which is a really nice strategy because number one, Barbara receives all of the money in mom’s IRA. She doesn’t owe a dime in taxes, and she could wait 10 years till she takes any withdrawals, or she could start taking little withdrawals over time. And most people don’t really understand the benefit of utilizing the inherited IRA. It’s a great way to stretch out the tax liability. And it’s a great way to receive money from you know, anybody. I mean, if you can fog a mirror, you can inherit an IRA. And there’s some great tax advantages with the inherited IRA. I think where people get confused is that they think that this inherited IRA is something that they go out and set up right now and it’s not number one, the beneficiary form needs to be set up properly in order to take advantage of the inherited IRA because the proper people need to be listed. And number two, the inherited IRA is a specific type of account structure, but that’s why we do the compound and reviews right and for the next 10 callers who call in right now we’re going to create the one page financial review, folks take advantage of it, don’t kick the can down the road, this isn’t a time to procrastinate, come into the office meet with myself and my team, it’s very simple, very easy to understand, we’re going to take the mystery of the complications out of financial planning, it’s not very often that you get the opportunity to sit down with a group that’s a fiduciary at no cost. So please take advantage of it. We’re going to run a free report for you. We’ll show you what it’s costing to work with your current advisors. I’ll show you how much you’re paying in taxes, how much you could actually save. How about a customized income plan, show you how to maximize the amount of money that you can actually get in retirement without running out of money. And I’m going to teach you about three interest rates that you need to know number one is your spin down rate, your preservation rate, your legacy rate, these are the most important rates that will give you the direction that you need to go with your portfolio. Going to take all the guesswork out of it for you. Most importantly, so for the next 10 callers, that’s a comprehensive financial review that we’re going to give away complimentary with no obligation

Steve 25:56

800-656-8616 you heard Brian; the next 10 callers are going to get a comprehensive financial review. You’ll see where you are today. But more importantly, you’ll end up with that roadmap that we talked about that can help get you to where you need to be when it comes to retirement 800-656-8616 Again 800-656-8616 or simply text BrianQ all one word, BrianQ to 21000 Brian, as always, a pleasure. And again, such great information that in education that you put out.

Brian Quaranta 26:27

Yes, Steve, always a great time and folks, thanks so much for Listen, we appreciate you. We’ll see you again next weekend right here on Retirement You Radio.

Announcer 26:39

Information provided this for illustrative purposes only and does not constitute investment, tax, or legal advice. Information has been obtained from sources that are deemed to be reliable, but their accuracy and completeness cannot be guaranteed. Neither Brian Quaranta nor his guests are liable for the usage of information discussed. Always consult with a qualified investment legal or tax professional before taking any action.

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