On this week’s episode of On the Money with Secure Money, Brian Quaranta provides answers to common questions about taxes and retirement.

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Radio Transcript

Announcer 00:00

Three investment advisory services are offered through foundation investment advisors, LLC. an SEC registered investment advisor Brian Carranza 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.

Brian Quaranta 00:39

The right tax plan and retirement rates right up there with the right income plan. And on today’s show, we’re going to answer some common questions about taxes and retirement when we come right back with on the money with secure money. And now on the money. Any good retirement plans starts with the foundation,

Announcer 00:58

asset protection, tax reduction, listing planning,

Brian Quaranta 01:02

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

Announcer 01:06

Retirement doesn’t have to be complicated. You think that’s the difficult part. That’s just getting started. And now on the money with secure money.

Steve 01:19

Hey, welcome, everybody. This is On the Money with Secure Money. I’m consumer advocate, Steve, Brian Quaranta is here of course, Brian is President and CEO of Secure Money Advisors. He’s a fiduciary and independent, over 20 years’ experience helping folks get to and through retirement and getting you on the right track to retirement is one of his major goals. Hi, Brian, how are you?

Brian Quaranta 01:42

I’m doing great, Steve. And yeah, being on the right track is what we do here and help people with that secure money advisors. And being on the right track also means having the right tax plan, right. And, you know, as you know, we talk about it on every show, we handle five key areas here at secure money advisors, we help you build an income plan, which is very important because the day you want to retire, the paycheck is gonna stop, but bills, taxes and the fun money you need to do the things you want to do in retirement, you’re still going to need income to do that. Number two is taxes. Because for most people today, their number one savings plan is probably a employee sponsored retirement plan like a 401 K. And when you start taking money out of those accounts to generate income to live off of you forgot to pay taxes. And so, it’s a big deal, because the two things that will erode your wealth faster than anything is taxes and inflation. And right now, we’ve got a double whammy in front of us here with inflation being at where it’s at right now six and a half 7%. And if I asked most people, do you think taxes are going up or down in the future, most people will agree that taxes are most likely going to go up. So having a good tax strategy is important. Number three is making sure you have a good investments plan. Number four is making sure you have a plan for a health event taking place. And then of course, when the good Lord decides to take you home, you want to make sure that your estate planning documents are in place. So that your family is the largest beneficiary of your money and Uncle Sam. Sure.

Steve 03:15

Well, again, that just makes sense. And one of the things you already kind of highlighted this one is we all think taxes are gonna go higher. And I think people wrongly assume sometimes the taxes are going to be lower once they retire. And that is not necessarily the case.

Brian Quaranta 03:30

No, I mean, it depends. I mean, many people make their retirement plans with the assumption that they’ll fall into a lower tax bracket once they retire. 24 years of doing this, Steve, I have not seen that. I mean, people either are in the same tax bracket, or they actually go into higher tax brackets. So, you’ve got to have a plan regardless, because one thing you can’t control is death and taxes. But what we can control is the strategies that we use to mitigate those taxes. So, you know, retirees typically no longer have all the deductions they once had, you know, their homes are typically paid off. So, there’s no mortgage interest deduction. There’s also no kids to claim as dependents or annual tax, deferred 401 K contributions to reduce income, so almost all of the income becomes taxable in retirement. So, what do you do? Well, this is why it’s so important to have a written plan, why it’s so important to sit down with a firm that focuses on helping you build a plan around the fundamentals of retirement, folks, you know, I’m here to tell you that if you have a 401 K, or you have a diversified portfolio of investments, that’s great, good for you, but that’s an investment strategy. That’s not a retirement strategy. A retirement strategy takes into account the five key areas. Number one is income to his taxes. Three is investments for his health care, and five is estate planning. So, it’s important that you think about the tax planning that you can do prior to retirement. What do I mean by that? Well, I’ll use myself as the example. So, I make contributions to our secure money advisors, employer sponsored 401 K plan. And then I also make contributions to a SEP IRA. And then what I do is throughout the course of the year, is I do conversions from taxable accounts to tax free accounts known as Roth IRAs. So many of you higher income earners out there might know that you might be making too much money. And you might not be able to take advantage of making a contribution to a tax-free retirement account like a Roth IRA. But the IRS does not prevent you from doing a conversion from a traditional retirement account to a tax-free retirement account. And these are the things that you have to do with time on your side, because the more time you have in implementing these strategies, the better it’s going to look come retirement. So why do I convert from taxable to tax free? Well, when I retire, I will need a stream of income just like everybody else does. But my stream of income will be about 85 to 90%, tax free, because of the tax planning that I’m doing right now, throughout my working years, and I would highly recommend that people take advantage of sitting down with someone that can help them put together a good tax strategy.

Steve 06:19

And again, that’s what that’s what it’s all about it. I know, we’re sort of in the throes of tax season, but But planning for retirement, or planning for taxes in retirement is like a year round thing. And one of the other pieces that we have to consider is taxes on Social Security. I think most people are a lot of people believe well, that that isn’t going to happen, but it does happen.

Brian Quaranta 06:39

It sure does, Steve and depending on your provisional income, most people have never heard that before. But when you go to collect social security, you’ll start hearing about the provisional income tax formula, up to 85% of your Social Security benefits are subject to federal income taxes. So, to determine your provisional income, you can take your modified gross adjusted income, add half of your Social Security benefits and add up all your tax exempt interest. Oh, and don’t forget that state taxes. In most states, Social Security benefits are tax free. But there are still a handful of states that tax Social Security benefits, at least at some extent. So again, folks, I think you understand the tone of the message here, make sure you’re doing good tax planning. So, we always keep a few openings on our calendar each week. For our listeners, we’d love to hear from those folks who have seen recent market volatility, want good tax strategies, and just want a financial planner that truly is going to deliver a real written plan, you have the opportunity right now to sit down and have a conversation with a fiduciary financial advisor who can guide you and possibly help you improve your situation. So, for the next 10 callers, who call in right now we’re going to perform a complimentary right track retirement review, it’s easy to understand, it’s simple. It’s a review that’s really going to indicate if you’re in need of a comprehensive financial plan. We’ll do an analysis and look at how much your fees your pain, how much risk you’re taking will help you recognize any unnecessary losses in your portfolio. And simply by protecting your retirement investments, you could experience a dramatic growth potential Second, we’ll perform a tax analysis will reveal how much you could possibly reduce your taxes by we’re also going to develop a customized income plan for you utilizing proven strategies which can strengthen your retirement income. And again, folks, I’ve seen other people charge up to $1,500 or more, we’re going to do this complimentary. That’s right. You heard it; the risk is truly on us. Because when you come to our office and we build you a complimentary strategy, the idea is we want to show you a better way to do it. The hope is maybe you hire us someday. But if you don’t, you just got a complimentary plan that would normally cost you about $1,500 So again for the next 10 callers that’s a complimentary right track retirement review.

Steve 08:48

800-656-8616 you heard Brian 10 callers right now, we’ll get that comprehensive financial review plus all the extras that he just talked about. There’s no cost, there’s no obligation and when you walk out the door you will have in your hand that roadmap that we talked about that can help get you to where you need to be 800-656-8616 again 800-656-8616

Brian Quaranta 09:11

When we come back, we’re gonna continue this conversation about taxes right here with on the money with secure money

Announcer 09:23

do you ever feel like you’re fighting for financial knowledge? Don’t let bad advice be a punch in the gut your retirement and take advantage of a complimentary no cost no obligation consultation with a local trusted financial coach. Call Brian Quaranta host of retirement you radio 800-656-8616 or text Brian Q to 800-656-8616 we’ve made it easy for you to take advantage of this fantastic offer. All you have to do is call or text Brian Q to 800-656-8616

Steve 10:00

And we are back on the money with secure money. Brian Khorana, serum consumer advocate Steve’s at all having a great conversation about everybody’s favorite topic. It’s called taxes. And the thick of it is Brian topping. Yeah, well, I mean, we’ve talked about this many times, but how important tax planning is in retirement specifically, not important for anybody else. But again, you can get blindsided so quickly, so easily. And the beauty of working with you and your team at secure money advisors, you know, your fiduciary is you’re independent, you know, you’ve got a lot of experience, you understand how that whole piece works?

Brian Quaranta 10:37

Yeah. And not only that piece, but the four other pieces that go along with it, right? Sure. Is it the income strategy, the tax strategy, the investment strategy, the healthcare strategy, the estate planning strategies, these are all very important things, you know, to making sure that you’re on the right track, and a lot of people come to our office wanting to know, Hey, Am I doing the right things? For most people that walk through the door, they’re not doing the right things. And here’s why. Most people typically have some type of rich, you know, investment account, like a 401 K or an IRA 457 plan, whatever it might be, but they have no clue how they’re going to take that money, and actually build the retirement strategy around it. And if you think that you’re just going to start pulling money out of your retirement accounts, when you retire, think again, matter of fact, the Wall Street Journal did an article not too long ago explaining the risk of pulling money out of your retirement accounts. When you retire without a strategy. You know, they talked about this thing called the 4% rule where you could withdraw 4% of your retirement savings each year and increase that withdrawal by 3%. And here’s what they found out, depending on when you retire. So, for those of you that retire at the top of a bull market, and the market starts to go down, in the years that you retire, immediately, you have a higher probability of running out of money than those that retire in a bear market, and the market goes up in their first few years of retirement. So, these are the things that you really have to think about. Because when it comes to building a retirement plan, it’s more than just about the investments, it really, you really have to focus on those five key areas, which I preach all the time. And the one we’re talking about right now is taxes. So, let’s continue down that path. Let’s suppose that you retire, and you’re going to need an extra $1,000 a month from your retirement plan. Okay, so you’ve done no tax planning, and now you need to start withdrawals. Okay, well, what does that look like? So maybe you are a married couple, and maybe between your Social Security, your spouse’s Social Security, maybe you’re getting 50 $60,000 A year from Social Security, but you need an extra $1,000 A month above and beyond that, so we need an extra 12,000 a year. So now we’re going to start taking withdrawals from retirement accounts. And when we take those withdrawals, every dollar we take out impacts how much we pay in taxes, every dollar becomes taxable. So, let’s say you’re in a 20% tax bracket, that means you take out $1,000, you’re not going to get $1,000 in your bank account, because you’re going to have to pay 20% First in taxes, which means you’re only going to net $100. Well, what happens when tax rates go up? What happens next, now you’re all of a sudden paying 30% of that. So now you have a net deposit into your account of 700,000, right? 1000, our gross withdrawal minus 30% in taxes $700. This is a problem when you add inflation to it because you’re losing purchasing power. And that’s the big concern that we have for people is the purchasing power of their money. And it really comes down to how much purchasing power you’re going to have. So, think about the individual that took the time to do the tax planning. And the $1,000 that they’re taking out of their retirement plan is all coming out tax free, they have much greater purchasing power free than then you do because they don’t have to pay the taxes on that. But they took the time to seek out professional help to help with a strategy of putting something like this together. And these are the important things, right? I mean, you know, too many people kick the can down the road and delay taking action on building a plan. And because they think they’re just going to take care of it once they arrive at retirement. Now, you know, if you are close to retirement, so be it, there’s still a lot of things that you can do, but it is absolutely critical to your retirement to account for taxation, and inflation. You know, otherwise, you could find yourself on the end of the spectrum where you become a statistic where you’ve run out of money before you’ve died. And that’s not a fun place to be.

Steve 14:38

Not at all. So let me ask you this. So, we’re talking about taking money out of our IRA, if after we retire, let’s say we’re working part time, can I still contribute to an IRA?

Brian Quaranta 14:48

Yeah, as long as you have earned income, you can absolutely you can absolutely contribute. The other good thing to point out here too, is most people know that. You know, there was this thing we had to start doing at the age of 70 and a half called the require of minimum distribution, right? So, for those of you that have traditional retirement accounts, the IRS said, hey, you know, we don’t care whether you need money out of these accounts or not at 70 and a half, we’re gonna force you to start taking money out. Well, let’s suppose that you’re still working, by the way that age has been changed to 72. It’s no longer 70 and a half, it’s been changed to 72. But let’s say you’re working, and you have your employer sponsored plan, as long as you’re still working, they don’t even require you to take money out. So, for those of you that are going to work beyond the age of 72, you know, it’s a thing to take into consideration is that if your employer sponsored plan, you’re not going to have to take a required minimum distribution, which is pretty nice. The other nice thing about tax planning, though, Steve, is that if you convert money from traditional retirement accounts to tax free retirement accounts, they don’t require you to take an RMD out of a tax free retirement accounts. So now, for those of you that may never need, maybe you’re fortunate, where you’ve got enough income coming in between social security and pensions, and you’re never going to need to take a withdrawal from your retirement accounts, you’re a good candidate to potentially look at conversion, because when you turn 72, they’re not going to force you to take any money out of it. So, your money can just stay in your accounts and continue to grow. And we know that the longer you leave your money in your accounts, and you allow compounding to work interest to work in your favor, the bigger your accounts will get. So, some pretty basic stuff here. But oh, stuff that a lot of people just don’t think about Steve. But taxes are very important. And that’s why we always leave a few openings on our calendar each and every week for our listeners. And we really want to talk to those people and hear from those folks that who have experienced recent market volatility and are concerned about it. And if you are concerned about it right now you have an opportunity to sit down and have a conversation with a fiduciary advisor who can guide you and possibly help you improve your situation. So, for the next 10 callers who call in right now, we’re going to perform a complimentary right track retirement review. And that review is going to indicate if you’re in need of a comprehensive financial plan. We’ll do an analysis and include a fee report a risk assessment help you recognize unnecessary losses in your portfolio and see if, by simply protecting your retirement investments, you could experience dramatic growth potential. Second, we’ll perform a tax analysis will reveal how much you could possibly reduce your taxes by, and we’ll also develop a customized income plan utilizing proven strategies, which could strengthen your retirement income. So again, for the next kind of callers, that’s a comprehensive right track retirement review, no cost complimentary to you

Steve 17:43

800-656-8616 10 callers right now make that call while you’re thinking about it 800-656-8616.

Brian Quaranta 17:51

There are a lot of reasons to be saving for retirement using a Roth IRA. When we come back, we’re going to outline the number one reason to start saving and a Roth right now when we come right back with on the money with secure money.

Announcer 18:07

He’s letting the clock run out on his social security at 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 Brian Q 800-656-8616. Or text Brian Q to 800-656-8616 Call or text Brian Q to 800-656-8616.

Steve 18:43

We are back on the money with Secure Money and Brian Quaranta. Secure Money Advisors is the company, securemoneyadvisors.com is the website I encourage you to check that out to see behind the scenes, so to speak. But also, you get updated on a whole lot of great information that you guys do you just do a good job of keeping that website fresh.

Brian Quaranta 19:06

Yeah, not only but not only that, they can listen to the radio shows there. So, we’ve got the radio shows that have been archived for your listening. So, there’s a lot of information in depth information that, you know, if you’re trying to find answers to certain questions, whether it be about income taxes, investments, health care strategies, estate planning strategies, there’s probably some shows on there that will help answer those additional questions you have. We also have all the TV shows uploaded on there. So, for those of you that don’t know, but we do a TV show every single week on KDK. Right now, we’re on Saturday nights, I believe we come on at 1130. You can check your guide, it’s on the money with secure money. And then we’ll be coming on April 10 on Ktk on Sundays, and that will be airing I believe around 12 or 1230 on Sundays and then you can also find us On a few Fox channels, the 22 to the point, it’s all on our website, all the different showtimes. So, but yeah, listen to them. And then also go to our website and find out where our upcoming educational events are going to be. You know, we try to teach some educational events, at least four to five times a month. Most of the times we’re at universities, libraries. But with COVID restrictions, that’s been a little bit tough. So right now we’ve been using our city winery, Jackson’s restaurant, cranberry library, LaRoche College, Slippery Rock, so check us out. And there’s a lot of places for you to find us. But our job, we feel it secure money advisors is to be an asset to the community. And truly give people the advice that they deserve. And what we do so differently here at secure money advisor, Steve, is that we provide people with the black and white information that they need to make an informed decision, we’re not here to give them our opinion, the world we live in today allows us through technology, to very easily show people where they currently are at with their current portfolio by looking at a few data points. And where they could go by making a few changes. The importance of that is that we keep our opinions out of it, and you’re truly making decision based on numbers. And that puts you the client in a position of strength because you don’t have to worry about being sold anything here at secure money advisors, we truly are problem solvers. We identify the problems, and then we help you solve the problem. Should you want to hire us to help implement and solve those problems for you. We’re more than happy for you to hire us. If you take advantage of one of our complimentary right track retirement views. And you didn’t want to hire us. That’s fine, too. We shake hands we part as friends.

Steve 21:48

I got one. I’m gonna pose this to you, Brian. The so I know you get a lot of questions. And let me how often do you get this one? After you’ve explained things, after you’ve helped them put together a plan: I can do that?

Brian Quaranta 22:04

Well, how about this one? This is the one we get a lot. I wish I would have met you 10 years ago. Ah, all right. Even better. Yeah, I wish I would have met you 10 years ago. And, and that speaks volumes. And usually, you know, we’re competing. Typically between, you know, the client typically is you know, going out and maybe seeing two or three different advisors who are typically competing with quite a lot of different firms. And we win, we win about 98% of that business. So, you know, and that’s and the feedback that I get when I ask people, why did you choose us over? You know, the other company is they’ll say, you know, you guys are the ones that really took the time to understand our situation, you took the time to really explain where we were at you gave us the data and the metrics to look at to to make an informed decision. And then not only did you show us a way to solve the problem, but you showed us in black and white numbers, how our retirement would actually look. And we’re not doing that through fancy charts and graphs, and you know, retirement planning software, we have a very simple approach through what we call our bucketing strategy, where we bring people through our blue, green, red bucketing strategy. And so all of our clients start to think about their money in buckets. So, but yeah, that’s what we typically hear Steve

Steve 23:18

800-656-8616. Let’s see, we have time for one. Well, yeah, one question probably is all we got. Let me go to Pamela. She says, I’m a physician with my own practice and for employees. Right now, I have a set plan that I’m contributing to, but I’ve been told that a defined benefit plan would be better. Can you explain to me how these work and whether or not you recommend them for someone like me?

Brian Quaranta 23:41

Yeah, so having your own practice would be like me having my own financial practice with employees. So when I first started, I had a set plan too, which is a self-employment retirement plan. And it allows for higher contribution amounts, you can contribute up to about $50,000 A year into a SEP, but the defined benefit plan would be better solely for the fact that you would now be providing a really nice benefits package to your employees make yourself a more attractive employer to be able to attract a better and more talent. But this is why we keep the openings on our calendar, Steve each week, I mean, for our listeners, and you know, these are the things that we exactly the types of things that we help people solve. I mean, if you bring a problem to our table, we will have a solution because we’ve connected and have a network of probably 50 to 60 professionals in all different industries that we lean on, to really help give you the best advice at all times. And you have the opportunity right now to sit down and have a conversation with a fiduciary advisor who can guide you and possibly help you improve your situation. So, for the next 10 callers, who call in right now we will perform a complimentary right track retirement review, which again is going to indicate whether or not you’re in need of a full blown comprehensive plan. It’s an analysis that’s going to run a fee report for you a risk assessment. It’s going to help you recognize any unnecessary losses in your portfolio and see if by simply protecting your retirement investments, you could experience dramatic growth potential. Second, we’re going to perform a tax analysis. And then we’ll also help you develop a customized income plan utilizing proven strategies, which could turbocharge your retirement income. So again, for the next 10 callers, is a complimentary Right Track Retirement review,

Steve 25:30

And make that phone call to get your right track retirement review at 800-656-8616. You heard Brian 10 callers right now get that comprehensive financial review, you’ll see where you are today. But more importantly, you’ll find that you now have a comprehensive review. And then you’ve got a roadmap that can help get you to where you need to be so in short, you’ve got nothing to lose. Call right away. 800-656-8616 again, 800-656-8616 Brian, as always, a pleasure. These shows go by so quickly, but the information is so important.

Brian Quaranta 26:04

That’s right, Steve, we’ll be back again next week with more On the Money with Secure Money have a great week folks.

Announcer 26:17

Investment Advisory services are offered through foundation investment advisors, LLC, an SEC registered investment advisor Brian Carranza 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 streams refer only to 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.

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