On this week’s episode of On the Money with Secure Money, Brian Quaranta discusses common financial concerns from a recent Kiplinger study and how to address inflation and a potential recession in order to protect your retirement.
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Radio Show Transcript
Announcer 00:00
These 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
Hey, welcome, everybody. This is On the Money with Secure Money. Brian Quaranta is here on consumer advocate students at all. And coming up today, a recent listener theme poll is shedding some light on the latest data regarding the financial concerns of retirees and pre retirees all in the wake of all of this stuff going on inflation and all of that and a potential recession. Yep, they were gonna break down the numbers break down the statistics. Brian, I know you are a statistic guy and you like some of these numbers.
Brian Quaranta 01:07
I do, Steve and some of the numbers don’t look too great. But when we come back, boy, do we dive into these and we’re gonna get into a big time today on the money with secure money. We’ll come right back.
Announcer 01:20
And now on the money.
Brian Quaranta 01:25
Any good retirement plans starts with the foundation,
Announcer 01:26
asset protection, tax reduction, holistic planning,
Brian Quaranta 01:30
these are the things that start to move you towards having a retirement plan.
Announcer 01:34
Retirement doesn’t have to be complicated.
Brian Quaranta 01:37
You think that’s the difficult part. That’s just getting started. And now
Announcer 01:42
on the money with secure money.
Steve 01:48
Hey, welcome, everybody. This is on the money with secure money. Brian Quaranta is here of course president and CEO of Secure Money Advisors. He is well he’s an independent, he’s a fiduciary. He’s all of those things, and so much more. And a good dad. Hey, Brian, what’s going on?
Brian Quaranta 02:04
That dad things are busy. It’s a busy job.
Steve 02:06
Oh, it is a full-time gig right there.
Brian Quaranta 02:08
It is a full-time gig especially with a three-year-old and a five month old. I’ve got my hands full. I’ve got my hands full. But it’s a new type of fall, right? Yeah, here I am at 45-46 starting a family; didn’t think I was ever going to start a family. But that’s the greatest thing I ever did. And you know, of course. So now life is definitely different in the evenings. You know, I was so I was so naive to a certain point, because I remember asking my brother-in-law one time. I said, because I was, I’m a workaholic, you know? Yeah, definitely have no problem admitting that. But I definitely have learned to create boundaries now to create time for family. But my brother-in-law has four boys. And I remember asking him this was a few years ago before I had kids. And I said to him, I said, hey, I said, what do you do at night, man? I said, do you ever get bored? And he goes, Brian, are you kidding me? He’s like, I have four kids. There’s like no time to do anything. You know, and here I am sitting into my home like you know, working till eight, nine o’clock at night then thinking to myself, Okay, well, what news program I can watch now or, you know, what show am I going to watch? Now I have none of that, right? I mean, none of the minute I walked at the minute I walked through the door around 5:36 It’s playtime, wrestle time, dinner time, bath time, and bedtime, where I’m reading books or, you know, watching a story or something. So, life has changed, but so has life for retirees. Because Kiplinger survey was conducted in June of this year asking just over 800 Americans, their thoughts on retirement, which I like to do every day, and we’re always asking people,
Steve 03:48
Yeah, exactly. Well, and again, and this, what I didn’t include there was that 800 were all people over 50. Yeah, yeah. So that puts a little more context to it.
Brian Quaranta 03:57
Yes, it does. Yes, it does. So retirees, on the outlook of their financial future here, here’s what this this survey had showed. So, 70% expect to have enough income to live comfortably. That was great. 66% are confident, they will not run out of money in retirement, and not run out of money in retirement. Now, here’s what’s interesting, you know, AARP, this study, this was a few years ago, and they polled 1000 people, and they said, what do you fear most? running out of money or death? And, you know, 90% of those people said they fear running out of money more than they fear death alone. Sure. And here we have 66% of the people are confident they’re not going to run out of money.
Steve 04:37
So those numbers, does those numbers seem low to you, Brian, I mean, are high to you that 70% expected to have enough income to live comfortably. Is that? Is that a bit of a pipe dream? For some? Uh,
Brian Quaranta 04:47
well, I just don’t see it in my practice, because, you know, look, we’re seeing probably 35-40 brand new people every single week that are reaching out to us. And when you ask them what their number one concern is, they say, well, we don’t know if we’re gonna have enough income. So, I mean, and we’re talking eight out of 10. People, you know, that I talked with don’t think they’re going to have enough income. So, there’s something going on here because, you know, this survey shows these numbers being relatively positive. But in practice, Steve, and I’m meeting with, you know, the everyday person, right. So, I’m just not seeing that when people are sharing their concerns. And the bigger concern, though, is, people don’t know how long their money is going to last. They do have uncertainty around that. And, you know, one of the things that we’ve done really well at secure money advisors, is because we focus on the distribution phase of retirement. You know, everybody thinks that financial advisors are all created equal, and we’re not, I mean, you know, it’s no different than a doctor. I mean, doctors specialize in different things. And, you know, so we, we specialize in retirement, it’s much different than growing your money, because retirement has to do with the distribution of your assets, the taking of that money now, where you were accumulated and saving money, and you had time on your side to no longer having time on your side to needing a monthly paycheck, because pensions have gone away. So, we have focused for 20 plus years in that area. And there’s certain strategies and techniques that you use to make sure that you’re going to have enough income and to make sure that you don’t run out. Matter of fact, I write about it in my book, right track your retirement, I put together a simple planning strategy to help you reduce risks, build income and provide peace of mind. As a matter of fact, by one chapter, I actually talked about chapter two is I start to teach people to think like a pensioner and not a gambler, we’ve got to get away from rolling the dice, we have to get away from thinking that we can continue to take large amounts of risk with our money, it’s just not worth it. And in chapter three, I show you how to leverage the power of a two-bucket strategy that literally can change the way that you’re viewing your money and how it’s working for you to show you how to maximize the income you’re receiving. Still get the growth that you need, but also give you some protection along the way. And again, if you go to right track your retirement.com That’s right track your retirement.com, you can get a copy of my book, and that’s a free copy. I even pay for shipping and handling. And you can read all about how to do it and right track your retirement.
Steve 07:16
It’s free. I don’t know you’re doing it for free. It’s a free book, right track your retirement.com.
Brian Quaranta 07:22
That’s right. It’s that simple. That’s right. That’s right. So, but, you know, stock market volatility is also a concern right now. And we got 49% of retirees responding, that having concerns about the stock market volatility, and potentially creating serious economic troubles and retirements and 64% of pre retirees now, this is a big deal, because volatility will cause you to have to delay retirement, or for some people, it’s going to cause them to have to come out of retirement, because they didn’t get the returns that they expected to stay in retirement. Now. This is why in my book, right track your retirement, I talked about this two-bucket strategy, because if you’re going to need distributions from your plan, you have to be able to absorb volatility. So, if you’re taking money out of your plan, and the market goes down, and you lose 50,000, but then you take 30,000 out on top of it, you’re locking in those losses and compounding those losses. And that’s called sequencing risk, which in my book, right track retirement, we talked about it there. Again, you can get a free copy of this book at right track your retirement.com. And we come back I want to talk a little bit more about how people are feeling about Social Security. But Steve, I also want to offer the listeners to take advantage of our right track retirement review where we go with five key areas with your income taxes, investments, health care and legacy planning. We’ll teach you how to build a plan from start to finish give you the clarity that you need, and the peace of mind that you deserve. If you call today. You can schedule that appointment with us. It’s about a 45-minute appointment. When you walk out you will have clarity and peace of mind that you don’t have right now. And that’s my promise to you
Steve 08:50
800-656-8616 800-656-8616 You’re going to get that comprehensive financial review, and you’ll see where you are today. But what’s more important, you’ve got a map to put you on the road to retirement and you’ve got nothing to lose just give us a call. It’s 800-656-8616, 800-656-8616
Brian Quaranta 09:12
Just what is a safe withdrawal rate of your retirement dollars? Well, it depends it depends on how much you saved on the rate of inflation, a coupled with interest rates in the stock market and much more and we come back we’re gonna dive into what is a safe withdrawal rate and how people feel about the income that they can generate from their plans and retirement we come right back with on the money with secure money
Announcer 09:36
hurricanes, tornadoes, and fire. These are serious situations we plan in advance for the volatility of the market can be just as devastating. When a market correction does occur. There are strategies you can employ to bounce back. Call Brian Quaranta and his team is secure money advisors at 800-656-8616 or text keyword Ryan Q two 800-656-8616. We’ve made it easy, folks, all you have to do is call or text the keyword BrianQ to 800-656-8616.
Steve 10:16
And we are back on the money with secure money. And Brian Quaranta is here. Of course, I’m consumer advocate, Steve, Brian, President, CEO of secure money advisors. He’s a fiduciary, independent, all of those things. And so, Brian, we were breaking down these, this recent poll, and I know we kind of glossed over some of it. But I want to go back and talk about a little bit of Social Security and what people are thinking about that. And then I want to pick your brain about what you’re thinking about it.
Brian Quaranta 10:41
Yeah, well, 83% of retirees reported that they have already claimed Social Security benefits. The mean, claiming age of social security benefits was 63. So, question, do I take it now? Or do I take it later, right? This is why when you come in and you sit down with us for a complimentary right track retirement review, we’re going to run a Social Security and income maximization report for you, that’s going to give you the understanding of what is going to be the best age for you to collect your Social Security. And when you schedule that appointment, it is complimentary. And again, you’ll get that Social Security income maximization report, when you come in 43% of the aforementioned respondents of the survey, explain it Social Security provides 50% or more of their annual retirement income. Now Social Security was only designed to provide about 40 per replace about 40% of your income of your gross income. Now, what they’re saying here is that for most people, that 40% that they’re getting, right, the 40% of their income is enough to cover about 50% or more of their annual retirement income for their expenses. However, beyond social security, you’re going to need other stable sources of income. That can provide you with cash flow, you know, like an employer pension or income from bonds, or something I really like dividend paying stocks, CDs, savings accounts, and even annuities, especially annuities right now, where you’re looking at, you know, a new entity, dividends paying over 4%, right. So, these are other ways to generate cash flow. But this leads into the bigger problem. And that is, if you have saved money, like most people have, in some type of 401 K or 403, B or 457 plan, what is going to be your safe withdrawal rate. And you know, most people have never taken the time to figure this out. In my book though, Steve, right track your retirement, I actually talk about the three rates of returns that you absolutely must know, before you’re retired. And if you are retired, you need to know about these three rates of returns, because it’ll truly give you the direction that you’re looking for, of how to properly invest your money. But let’s talk about the old conventional wisdom of this safe withdrawal rate, which, you know, basically used to be this thing called the 4% rule. Right? So right,
Steve 13:05
and that’s a good starting point, the starting point, but it goes well beyond that today,
Brian Quaranta 13:08
it does. So, a safe withdrawal rate represents basically the maximum percentage of the retirement funds retiree may take from an investment portfolio on an annual basis without depleting the investment account too soon. Now, here’s the problem with what I just said. It’s, what rate of return can be taken from the investment portfolio? Well, let’s talk about the investment portfolio. Because if your investment portfolio is down 15% 20% 25% 30%, and you’re taking income out, all you’re going to do is compound those losses, you’re going to lock into those losses. And you are now going to accelerate the pace in which that account depletes itself. And the problem with taking money from an investment portfolio that you cannot control. The value of the account is that you are dealing with unknowns. So how do you build? How do you build more guarantees or more constants into your plan. That’s what we want to do. And when you come into Secure Money Advisors, we’re going to teach you how to leverage a two-bucket approach to where you’re going to be able to get the cash flow you need, but still keep your money invested in the market to get the returns that you need to keep pace with the out of control inflation that we’re dealing with right now. So, and these are very important things that people need to understand how to do because I see so many people Steve doing it wrong. So many people are doing it wrong.
Steve 14:31
Right. Well, I mean, that’s the point. I think we’ve got for a lot of us so many when we’re younger, we’re kind of do it yourselfers, or we’re just on set it and forget it. But boy, once we get to be 50 years old or so then things begin to come into perspective and realize we gotta I gotta get to retirement. I got to make this thing happen. That’s when the panic sets in. Right?
Brian Quaranta 14:48
Yeah. And there’s pros and cons, two of these safe withdrawal rate strategies. I mean, you know, like any investment management strategy, the safe withdrawal rate has its upsides and downsides. I mean, the main benefit of a safe withdrawal rate is, it’s pretty simple to understand and it doesn’t help control expenses, you know, and stick to a budget. The biggest downside is that everybody had their own definition of what a safe withdrawal rate is. And that was why I say in my book, right track your retirement, I’m going to teach you the proper withdrawal rate, because you have to understand the three rates of returns first. And those three rates of returns are very important understand you have your drawdown rate, you have your preservation rate, you have your legacy rate. Once you get an average of those three rates, now you can start to figure out what does my portfolio actually need to earn each and every year? What level of volatility could I handle within my plan, based on the cashflow that I needed to generate? And how am I going to position that money so that when the markets down, I have some type of buffer account that I can pull the money from, so I don’t compound the losses. And in right track your retirement, where I teach you how to build this income strategy that truly is going to provide you with peace of mind. Again, I talked about in chapter two, how to start thinking like a pensioner and not a gambler, and how to build yourself your own private pension. And you don’t have to use annuities to do that. You could use annuities. But there’s other ways to build yourself your own private pension, too. So again, if you want a copy of this book, it’s complimentary. I’m giving it away this weekend for free. That’s right. I said free fr EE, okay. People say, well, nothing’s free, I pay for the shipping and handling, all you have to do is go to right track your retirement.com and get a copy of right track your retirement. It’s a simple planning strategy that’s going to help you reduce risk of build income and provide peace of mind. And I’ll tell you, Steve, so many people have said I wish I would have read this book 10 years ago, because it would have changed the way that I thought about my retirement. But also folks, you can also call us today and get a complimentary right track retirement review, where I’m going to give you three reports when you come in, I’m going to give you a Social Security and income maximization report. I’m also going to provide you with a risk analysis report. And we’re also going to provide you with a tax report. These three reports are going to give you the clarity and understanding of where you are and where you need to go. Helping give you turn by turn directions, the best thing you could find out when you come in is that you are on the right track, and you don’t need to do anything. So, call us today and schedule that complimentary right track retirement review
Steve 17:13
800-656-8616. And you’re going to get your own financial roadmap put together. And this is something that will help you get on the road to retirement, I mean again, or right track your retirement Yes, you can be there as well. 800-656-8616, you’re going to have that comprehensive financial review and see where you are today. But what’s important is you will then get a roadmap, just what we’ve been talking about. And it’s going to help guide you help get you to where you need to be when it comes to retirement 800-656-8616. Again, 800-656-8616,
Brian Quaranta 17:46
it’s easy to forget that all that money saved in the 401 k or IRA is going to be taxed on the way out, thanks to the required minimum distribution. When we come back, we’re gonna talk about RMD mistakes to avoid, so you don’t wind up owing the IRS 50% or more will come right back with on the money with secure money.
Announcer 18:07
He’s letting the clock run out on his social security to age 70 For maximum benefits. And here comes the Roth conversion. He’s got some outstanding coaching with that lifetime income plan. He’s created his own pension as well. And it looks like he’s going to go All! The! Way!
Play your best retirement game call BrianQ 800-656-8616. Or text BrianQ to 800-656-8616. Call or text BrianQ to 800-656-8616.
Steve 18:40
Then we’re back on the money with secure money segment four. And that means we have questions from listeners. I’m consumer advocate Steve, Brian Quaranta is here to answer those questions for you that many of you have sent in. Brian, of course President CEO of secure money advisors, and this is this is a good segment. Brian, I know that you enjoy hearing from the listeners, right?
Brian Quaranta 19:01
I do. Yeah, I do. And we hear a lot from the listeners these days. And we try to get we try to answer as many questions as we get. And my team is usually very busy doing that. So, whatever we can do to help we’d like to do
Steve 19:12
Sure. All right. Well, let’s dive in. Before we run out of time. I think we got some good questions this week. Brian Daniels up first. He says call me a nerd. But I’ve always had a fun. I’ve always had fun researching and buying and selling stocks as a hobby. However, my wife isn’t so thrilled about me continuing this hobby as we get into retirement, which is only a couple of years away. Any advice on a way for us to find some middle ground here?
Brian Quaranta 19:37
My first question is why is your wife not so thrilled about you continuing this hobby? Daniel, do you not have a good track record? Oh, I don’t know. You know, here here’s what I have found in almost my 25 years of doing this is that women tend to be much more risk adverse than what men are. And I have a lot of clients that we decided, after getting together, that they would manage the portion of money that was at risk. But what gave their wife peace of mind was knowing that they protected a portion of the money that provided them the income, they need to maintain their lifestyle. So, I’ll give you a great example. I just retired some folks. Last week, he was retiring from a corporation here in Pittsburgh, and, you know, probably about $800,000 or so in his 401k. And, you know, and he wanted to manage the money that he had in the market, and, and he showed me what he was doing. And I thought, based on what he shared with me, I thought he was doing a good job. And I’m not the type of person that says that you need to put all of your money with us to work with us, we’re here to provide a service that helps provide and give you more peace of mind. And for his wife, it was all about generating the cash flow they needed. So, he was kind of a growth and dividend investor. And I just showed him a way to get a little over a 4% dividend without risking the principal. So when I showed him how to get a 4% dividend without risking the principal, you know, I showed him how to generate the $20,000, a year that he needed, we put roughly about $700,000, or I’m sorry, we put roughly about $500,000, into that portfolio, and we’re going to generate him the cash flow he needs and it’s going to continue to generate it without ever his principal being at risk. So, the other monies, the other $300,000, that he has, he’s going to continue to invest and but actually, by doing the plan, the way that we did, it actually gave him more confidence to go out there and take a little bit more risk because he has time with that money. Now he doesn’t have to worry about you know, making a mistake and not being able to generate the income that they’re gonna need on a monthly basis. And his wife’s very happy because she could care less what he’s buying with that, that money now because she knows that the money that they need to travel and see the grandkids and, you know, do the vacations that they have scheduled over the next few years with their friends. They know that that’s taken care of. And so, for them that worked. And, and that would be the way to do it is make sure that your income is taken care of first. And I think you’ll find that your wife will come around and feel more confident about you continuing this hobby.
Steve 22:36
I like it. That seems like a great, great answer. 800-656-8616. Daniel, if you’d like to learn a little bit more, and All right, let’s move on. Barbara is here it says I’m retiring from the federal government in 2022. My wife is retiring at the same time. Our savings are comprised of my thrift savings plan her 403 B and 401k. We also have shared money outside our workplace savings in Roth retirement accounts, taxable investment accounts and taxable mutual funds. Who should I consult to ensure my drawdown strategy is optimized to minimize taxes? Brian Quaranta? Yeah, well, I like an answer.
Brian Quaranta 23:15
Well, I like I liked the way Barbara is thinking in regards to ensuring that the drawdown strategy is optimized because she’s speaking my language there, right, we’re talking about two phases of retirement accumulation and distribution. Again, work with somebody that’s a distribution specialist. I think secure money advisors the best out there at it, I might be a little bit biased. But I would tell you to start off Barbara by getting a copy of my book at right track your retirement.com. It’s a complimentary copy of my book, where you can learn about a strategy on how to optimize your drawdown strategy and minimize taxes because I talk about how to build a strategy that helps you reduce risk, build income, provide peace of mind, and that includes tax maximization, right? We want to make sure that we’re withdrawing the right money at the right time, because all these different accounts that you’ve just named to me have different tax consequences for taxes are going up, folks, I hate to tell you, but they are going up, I can guarantee you that. But you better make sure that you have a plan to avoid taxation in the future by considering some type of conversion strategy where we can go from taxable the tax free now, some of you out there might be thinking yourself, geez, that sounds great. Let me go from taxable to tax free, but it might be too late. Folks. Call today for the next 10 callers who call in right now we are going to give you a complimentary right track retirement review where we’re going to go over five key areas. I’m going to give you three reports. When you come in, I’m going to give you an income and Social Security Maximization report. I’m going to give you a risk maximization report so we can see how much risk you’re taking and how much return you’re getting, how much fees you’re paying. And I’m also going to show you a way to save in taxes. We’ll go through five areas with your income taxes, investments, health care and legacy planning. We truly will show you a strategy to help you reduce risk, build income and provide you peace of mind. And more importantly, if you go out to write track your retirement.com, you can get a copy of my book. And I want you to read chapter two in chapter three, where I teach you to think like a pensioner, not a gambler. And I want to show you in this book, where you can read how to leverage a power of a two-bucket approach, folks, go to right track your retirement.com, get a complimentary copy of my book, but also call us today and schedule that complimentary appointment. What do you have to lose a second opinion is one of the best things you can get.
Steve 25:32
I completely agree Brian, folks take advantage of that 800-656-8616. That’s the number to call. It’s a chance for you to get that financial roadmap put together and to sit down and get that comprehensive financial review. And if you’ve got questions, if you’re wondering if you’re wondering what this whole inflation thing, what about potential recession? What about interest rates? All of those questions can be answered. Brian is there for you 800-656-8616. Again, it’s 800-656-8616. Brian, as always, a pleasure to be here and to have these conversations. I love what I learn every week.
Brian Quaranta 26:06
Steve it’s great being with you folks. We’ll see you again next weekend take care.
Announcer 26:17
Investment Advisory services are offered through foundation investment advisors, LLC, an SEC registered investment advisor Brian Quaranta and his guests provide general information not individually targeted, personalized advice and are not liable for the use of drip information. Discuss exposure to ideas and financial vehicles should not be considered investment advice or recommendations, 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 stream for only two fixed insurance products did not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company.
