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Video Transcript
Randy Major – 00:21
Hello, and welcome to On The money with secure money. My name is Randy major. And joining me today is president and founder of secure money advisors, Brian Quaranta. Hello, Brian, good to see you.
Brian Quaranta – 00:33
Thanks for having me. As always,
Randy Major – 00:35
I’m excited for our show today, we are going to give the viewers so much helpful, helpful information, we’re going to open the phone lines, and you’re going to give them a very special offer and just a little bit.
Brian Quaranta – 00:45
That’s the goal. The goal.
Randy Major – 00:47
Let’s just jump right in. I’d like to talk a little bit about taxes. It’s something that’s on everybody’s mind right now. What do you think?
Brian Quaranta – 00:55
Well, if you ask most people, if taxes are going up or down in the future, most people will say they’re probably going up. And so with that in mind, you know, tax planning becomes a very important part of the planning process. It’s actually probably the most overlooked part of planning. Because in order to do really good tax planning, one, you have to work with a firm that has that focus. And time helps you actually put together a good tax plan, right? I mean, the more time you have to execute on certain strategies that financial planning allows us to execute on, the better your plan is going to be from a tax perspective long term.
Randy Major – 01:40
Okay, yeah. Now, can you reduce someone’s overall tax situation?
Brian Quaranta – 01:45
Sure, depending on where they’re at in life, I mean, let’s just talk, I’ll use myself as an example. Okay. So as the years have gone on, I accumulate wealth, through various investment accounts, and different types of investment strategies, IRAs, Roth, IRAs, SEP IRAs. But let’s talk about my SEP IRAs. So that’s a self employment IRA, that you can utilize, that has a higher contribution limit than a traditional IRA. But when I make a contribution to that plan, I get a tax deduction when I make that contribution, which is nice if you’re trying to reduce your tax bill right now. But let’s just use this example. Let’s just say I make a $50,000 investment to the SEP IRA, I get a tax deduction right now, which just basically means it comes off of my gross income, right? So if your gross income is $100,000, and you make a $50,000 set contribution, you’re only going to pay taxes on $50,000. That year, rather than $100,000. However, the $50,000 that goes into the SEP IRA now grows tax deferred, most people are familiar with that word tax deferred. So what does that mean that 50,000 goes to 60,000 60,000 goes to 70,000, and maybe eventually reaches $100,000? Well, let’s say I want to take all that $100,000 out of that account. Well, that means I’ve got to pay taxes on every dollar that comes out every dollar, right, my deposit that I made, plus all of the growth. Now let’s compare that to making a contribution to a Roth. So let’s say that I convert my SEP IRA of $50,000, to a Roth IRA. Okay, now, for most of you watching the show, if you know anything about Roth IRAs, they only limit your they limit your contributions, depending on your age, but typically, it could be around $7,000, if you’re over the age of 50. However, on a conversion, they don’t limit you on how much you can convert, which is a big advantage. So if I want to convert 50,000, to a Roth IRA, now that 50,000 grows tax free. So that means if that 50,000 grows from 50,000 to 60,000, to 70,000 200,000. And I want to take out all $100,000, I pay zero in taxes. And so this is the advantage of tax planning, because the sooner I can get the tax man out of the picture, and all the money that I accumulate, and all the growth on my money is tax free, the better retirements going to be for me, because I’m going to pay less than income taxes, I’m going to pay less than Medicare premium, I’m going to pay less than Social Security tax. And the list goes on and on of the benefits you get when you do that type of planning. Some people just wait too long and never have those conversations and miss out on some huge opportunities.
Randy Major – 04:52
Very good to know. Very good to know. Thank you for that. Now, what about RMDs? Is there any way to defer taxes there?
Brian Quaranta – 04:59
Yeah, well RMD are a big problem. So for those listeners that aren’t not familiar with RMDs, that’s called the required minimum distribution. If you own an IRA account, the IRS says that now at the age of 72, you’re going to be required to take money out of your IRA account, whether you want to or not. So let’s just say you have a half a million dollars sitting in a IRA account, you’re not taking any money out of it, when you turn 72, the IRS is going to tell you that you need to start withdrawing money. Now there’s a calculation to determine the amount, but it’s roughly going to be a little over $20,000, that you’d have to pull out of that $500,000, that $20,000 That you take out, is going to count as income, which means you’re going to pay income taxes on it. But here’s what else it’s going to do, it’s going to cause you to potentially go into a higher tax bracket, it’s going to cause you to maybe pay more and your Medicare premium. And it could cause you to pay more on your Social Security tax. So to avoid taxes on, on RMDs. If you have not done any tax planning, there are strategies that are available today like QC DS, that stands for qualified charitable distributions. Now, for most of us were charitable in one way or the other. And we typically will give to a charity, whatever that is for you. Everybody typically likes to give the charity Well, if you’re of the age of 72 or older, rather than writing a check to your charity out of your bank account each year, you could give the charity, your required minimum distribution or a part of your required minimum distribution each year, and avoid paying taxes on that. And again, there’s other ways to do it, like the Roth conversion strategy I was talking about, because if you convert all of your IRA money to Roth IRA, you don’t even have to take RMDs. So there’s lots of different ways to do it. But Randy, this is why it’s secure money advisors, we’ve spent so much time building out the right track retirement system, because what if, what if I could help you pay less in taxes? What if I could show you a way to potentially maximize your returns? Reduce your risk? Would that be worth 45 minutes to an hour to come in? What if we could improve your situation? What if you weren’t on the right track? When would you want to know that? Most people, if you ask them, when they want to know that they’d say, I’m not on the right track, I need to know now. So I can make the adjustments that I need to make. And for you to have the opportunity to sit down with a licensed fiduciary and go through the right track retirement analysis that we do in the five key areas of income, taxes, investments, health care and legacy planning, at no cost to you, is a huge opportunity for you to take advantage of. But you’ve got to do your part. And I don’t want you to be intimidated by picking up the phone and calling us. I want you to know that when you come in to secure money advisors, it’s going to be a good experience for you. You’re not going to be pressured to do anything, we’re going to have a nice conversation, and you’re going to truly understand where you are and where you need to go. So pick up the phone, call us. It’s the right track retirement view complimentary to you. It’s 1-888-382-1298. Again, 18883821298.
Randy Major – 08:29
Brian, you’re providing the viewers at home today with such great information. Viewers at home. Imagine if you came in and met with Brian and his team, how much more knowledge you’ll gain to create your perfect stress free environment, you’ve absolutely nothing to lose today. Because the first 10 callers are getting a complimentary portfolio analysis. Pick up the phone now call us at 8883821298. We’re going to take a quick commercial break, but we will be back with Brian and more. So
Commercial Break – 09:01
everybody can tell you how to invest your money. There’s not a lot of people out there and a lot of firms that can teach you how to use your money. Most people also tell you that they’re scared. And the reason they’re scared is because they’re afraid of running out of money. The last thing you want to do is have a really good job and your 60s retire, be looking for work again in their late 70s. The average person might say Well, a good portfolio would be a good mix of stocks, bonds, mutual funds, none of them. A good portfolio is all designed around the five key areas income, taxes, investments, health care and legacy planning. There’s we’re not just product pickers here. What we do best here as we build retirement plans, nine out of 10 people when they walk through the door would ask us we just want to know if we’re on the right track. And I always say if you’re not on the right track, when would be a good time to know it. Probably now, people you know can actually see a vision once we start to really build out their plan. This is about you If you’re not getting what you need, and you feel that when you walk out of the advisors office, it’s time to get a second opinion. And you can’t get a second opinion from the person that gave you the first. The difference at secure money advisors, as a fiduciary firm, we help you managed to risk, build the income and give you the retirement withdrawal.
Randy Major – 10:30
Again, I’m your host, Randy major, and I’m talking today with founder and president of secure money advisors, Brian Quaranta. Brian, I want to talk a little bit about when a new client comes in to see you, they may have a portfolio all in place. And you get in you start diving in, what do you find in terms of fees that content a surprise
Brian Quaranta – 10:51
fees? Yeah. The ugly word that we hate? You know, look, I’m not opposed to fees, because we charge fees, but our hope is that the clients getting the value for the fees that they’re paying, right. And they do. But what you’ll typically see is that people are not aware of how much they’re paying, you’ll see a lot of high fees on certain products, annuity is one of them. You know, a lot of times you’ll see people come in with annuities, specifically variable annuities, we’ve seen fees as high as four and a half percent on those, they average between two and a half and 4%, which is very, very high. We had a guy come in not too long ago, that said, you know, I don’t believe on paying my advisor any fees. You know, and we called the company that he had the money with, we have a series of questions that we go through with the companies to get the fee structure. And, you know, when you don’t know what you’re looking for, you can’t find them. Right for us. We know what we’re looking for in that fine print, and come to add up that he was paying about 3.8% and fees, which was about $42,000 a year that he was paying a year in fees. And I had said to him, you know, had you known this going into it? Had you known that this is what it was going to cost you? Would you ever sign the paperwork to do it, he says absolutely not, I would have never done it. Because he really wasn’t getting the performance, he was not getting the value. And there wasn’t many benefits to what he had. So fees are in relation that you know that there, they should be in relation to what you’re actually receiving, right? So you got people out there that are overpaying in fees that, you know, don’t see their advisors, right, they’re not being serviced by their advisors, they’re not giving them advice. In the five key areas that we talk about, you know, at secure money advisors, if we’re going to charge a fee, there’s going to be a lot of value attached to that there’s going to be there’s going to be a written plan that’s received well, first, there’s the analysis, right, which is complimentary for people that call the show. Oh, so that’s a big cost out of the way right there. But, you know, we design a plan. So they actually get a real written plan in a nice little binder, which is a tangible plan. And that’s very important, because when I asked people to see their plans, they don’t have one, they have their POS, which we talked about that stands for their pile of stuff, but they don’t have the plan. And so but more importantly, is the ongoing servicing. You know, we take a lot of pride in the servicing that we provide it secure money advisors, the continued monitoring, and the continued the reviews, our client appreciation months where, you know, we get together with our clients for different types of events. And we do a lot of fun events, we do shredding events, we do movie events, we do. You know, our favorite one that we do is we celebrate Veterans Day for all of our clients. And we have hundreds of clients that are veterans. And, you know, these are really special things that we do to engage with our clients on an annual basis that when you ask folks whether or not they’re getting that level of service at their current firms, most of them will say no, they’re not. And people just want to be treated. Well. You know, that was my father. My father had a GM rewards catalog store when I was growing up. My grandfather had a Kirby vacuum cleaner store. And one of the things that they told me is they said, Brian, you can always deliver a product but the most important thing, if you want lifelong clients is to deliver great service. And everything we’ve done at secure money advisors has been built around the culture of service and giving the clients that onboard with us a dedicated team of people to continue to service them throughout the year. And I think people really feel that when they do on board and become part of our family.
Randy Major – 14:53
Absolutely. I mean, retirement planning is such a personal thing. So I love that it’s personal to you Yeah, to give that experience to your clients?
Brian Quaranta – 15:03
Yeah, well, you know, I would want my mom and dad to be treated that way. You know, I would want to make sure that, you know, if I didn’t do this for a living, I would want to make sure that my parents were working with somebody that they were getting the very best advice. And that’s, that’s kind of always our test at the office when we’re building a plan. Would we do this for mom and dad? Right? We do this for mom and dad. And the answer for Michael Hanson for me is, yeah, because what I do, and the portfolios, I design, my dad’s working with those portfolios, I’m working with those portfolios, right, most advisors that I meet, they don’t even own what they’re recommending their clients to own, which is just mind blowing to me, because think about it as a financial advisor, I still have to grow my money, I still have to plan my retirement. So wouldn’t I follow my own advice? Of course, I would.
Randy Major – 15:56
I love your passion. Where did it come from? Your passion does not come from?
Brian Quaranta – 16:01
You know, it’s, it’s, it’s a great question. Because this business found me I didn’t find it. I really wasn’t sure what I wanted to do. And I was very fortunate to have a friend that got into the financial industry, and, and I had some, you know, some financial courses in college, I enjoyed it. But I didn’t think I would want to make a career out of it, let alone in Pittsburgh, I mean, I was born and raised in New Jersey. So, you know, coming to Pittsburgh was a big step away from home for me. But you know, there’s there was when I was growing up in this business, because I started when I was literally 21-22 years old. You know, I was I was worked for a lot of big firms in the beginning. And there was a lot of things I saw that I didn’t like. And so I just felt that there was a better approach. And you’re seeing that today in a lot of different industries. I mean, look at the medical community, right, you’re seeing more and more younger doctors open up what we call functional medicine type facilities, where they’re getting away from that mainstream, and they’re saying, hey, maybe there’s a better way to do this through fundamentals based around better health. Right, better exercise stands alone, I think we’re seeing a change in a lot of industries. And it’s the same thing in the financial industry. There’s a group small group right now, but growing, that take a lot of pride in truly delivering an experience to the client that that not only is in having the best product, but also in having the best service because as an independent fiduciary, we’re not beholden to any specific company, we work for our client, if the investment managers that we’re working with are not getting the job done, I fire them for my clients. Now, fortunately, we haven’t had to do that, because we’ve taken a lot of time to do the due diligence to find what we feel are the very best. But that’s why we’re there is to make sure that we manage that and monitor that for our clients.
Randy Major – 17:59
Brian, I’m sure the folks watching at home would love to come in and meet with you and your team after seeing how passionate you are, and how much knowledge you have. So if you’re watching at home, Brian has a great offer for you. Let’s remind the viewer of that
Brian Quaranta – 18:12
it’s the right track Retirement System. Randy, we talked about it every week on the show, call in take advantage of our right track retirement review, it truly will be helpful to you and your future in helping you understand all the key areas of financial planning, it’s going to dive deep on helping you understand your income, your tax situation, the proper investment structure, how to plan for a health event, if you’re if one of you gets sick, especially if you’re a married couple. And then of course, when the good Lord takes you home, which is going to happen to all of us, we just want to make sure and you should want to make sure that the money that you’ve worked all your life for goes to the your family, to your charities and the people you love, versus making mistakes that we can make and giving most of the money to the IRS and to the states. So call us today take advantage of it. My promise to you is you’ll have a great experience. But you’ve got to do your part. You’ve got to pick up the phone. So pick up the phone right now called 1-888-382-1298. Again, it’s 1-888-382-1298.
Randy Major – 19:24
Well, you have absolutely nothing to lose and only about 45 minutes to an hour of your time to meet with Brian and his team and see if your retirement is on the right track. Call the number on your screen now. It’s 88838 to 1298. After this quick commercial break, we’re going to be taking some more viewer questions so please stay tuned.
Brian Quaranta – 19:45
If I could help you increase your income. If I could help you pay less taxes if I could help you potentially maximize the returns of your investments while reducing risk reducing fees if I could help you prepare for a health event or more importantly, when the good Lord decides to Take it home to make sure that the money you’ve accumulated over your lifetime goes to your family and to your charities rather than the IRS. Would that be worth the time to come in and get a second opinion?
Randy Major – 20:15
And we’re back and it’s time to take some viewer questions. The phone lines are ringing and they’re coming in. They’re on my desk, Brian. Here, they are ready to answer some more.
Brian Quaranta – 20:26
Let’s do it. Let’s provide as much help as weekend for folks. Let’s
Randy Major – 20:29
do it. Okay. Skipping Pittsburgh. Yeah. Next year 2022. He is required to take required minimum distributions. RMDs from an IRA. Yeah. 401 K and a 457. Plan. He says, I don’t need the money. And I don’t want to deal with the tax obligations. Should I consider a Roth IRA?
Brian Quaranta – 20:50
Well, we were just talking about Yeah, right. This is, again, what he’s thinking about there is proper tax planning, because he doesn’t want to deal with the RMDs. So if you don’t want to deal with the RMDs, and again, let’s take me for example. Over the years, I’ve made contributions to traditional tax deferred retirement plans, like IRAs, Sep, IRAs, 401, K’s Well, slowly over time, and I’m spreading the tax bill out over time, right? slowly over time, I’m converting from taxable money to tax free money. Why is that? Well, for a lot of reasons, one, my income in the future will all be tax free. But number two, I don’t have to deal with the required minimum distributions, which become a problem later on in life. So what he’s talking about there is exactly what we were talking about on the last episode, or on the last segment, we were talking about tax planning to avoid those RMDs. So I see it to be a good idea if he wants to do something like that. If he can handle that conversion himself, go for it, if not seek the advice of a professional.
Randy Major – 21:46
And that’s what you’re there for. That’s right. All right. Let’s take another one. Thank you. Brian. Mara in Washington says My mom is 79 and doesn’t have tolerance for risk in her nest egg. She has more income than she’ll ever need. Because of my dad’s military pensions that she’s now getting. I think she should consider an annuity, not because she’ll need the income but as a way to protect the principle good idea or not?
Brian Quaranta – 22:09
Yeah, well, this is a good question because annuities do play a role in retirement planning, depending on the situation. So let’s think about her situation for a minute. Okay, based on the question, she has stated that her mother is 79 years old. She has it sounds like she’s got her dad’s military pension, probably has sole security needs no money from the account, because she’s got plenty between social security and dad’s military pension. So in this case, an annuity may potentially be the right thing. Now, why an annuity? Well, if you’re looking to protect money 3040 years ago, we could have went down to the banks and bought a CD. The problem is, most of you know that if you buy a CD today, you’re probably going to get less than a 1% rate of return. With inflation, where it’s at right now you’re going to lose just to inflation. So with annuities, right? Yeah, if especially if this is the key here, you got to be careful, because there are limitations on how much money you can take out of annuities once you purchase it. But the new types of annuities that are out there in the marketplace today, allow for a lot of flexibility, meaning you can take money out. So if you deposit money, you can take money out up to a certain amount, typically 10%. So if somebody invested $250,000, and they need $25,000, they can take it out, right 10% Of what they deposited. Now, the reason why you may not use an annuity is is if you needed money, a lot of money, okay, but in this case, she doesn’t need it, so she could protect it. And she could use two types of annuities to protect that principle, she could use a guaranteed annuity, which can pay between three and 4%, depending on what company you decide to work with. And then she could also use a hybrid annuity called an indexed annuity. Now, these are really nice. I personally own one myself, what’s nice about it is I can have a sum of money that I don’t want to take risk with. But I still want to achieve a reasonable rate of return. So when the market goes up, in an indexed annuity, I can make money, but when the market goes down, I don’t lose money. So let’s take that example a little bit further. Let’s say I deposit $100,000 into an indexed annuity. Let’s say my index is the s&p 500 and it goes up 10%. Well, the catch with this is they’re not going to give you 100% of the gains. They’re only going to give you some of it. So let’s suppose they give you only 50% of what the market does. So that means I invest 100,000 the market just went up 10% But I’m only going to get 50% of that or half so I’m only going to get 5% So my 100,000 goes to 105,000 Add now becomes my new guaranteed balance, it’s locked in, it can never go down. That means next year, if the market goes down 50%, when I look at my account balance, I’m still gonna have $105,000, these accounts typically will average between maybe a four to 6% rate of return, again, depending on the companies that you choose. But these are great strategies and alternatives to what used to be very easy to do with the CD market. These have now become the new age type CDs. Again, everybody’s situation is different. So what’s in her best interest? Might not be in somebody else’s best interest?
Randy Major – 25:43
Yeah, this is exactly this is a perfect example why it’s so important. Everyone’s situation is different. And there’s so many, you know, it’s like a giant puzzle. It is, well,
Brian Quaranta – 25:52
it’s the thing I love about our job the most, you know, we really are engineering a puzzle every single day, you know, the first appointment walks in, it’s a puzzle, the second of woman walks in, it’s a puzzle, the time that 10th appointment gets there, we got 10 puzzles that look the same, right? None of them look the same. So you say how do I create the retirement vision or picture that these people want based on the pieces of the puzzle that they have? And you may say, Well, this piece can stay. But this piece has to go and we can replace it with this piece in order to get you the vision that you need, and achieve the goals you want to achieve. And again,
Randy Major – 26:30
this is why it’s so important to come and meet with you and your team, a fiduciary who knows the ins and outs of something you might be missing with your plan that you currently have. So Brian, let’s remind everyone of the amazing offer you have today. Yeah.
Brian Quaranta – 26:45
And I got I’m glad you said that because the plan is the key. Right? It really is designed, you know, we’re designing a plan. And that’s different than purchasing investments. I think what most people have done over the years, to the fault of my industry, my industry has done a great job selling product, they have not done a great job creating plans. Again, there’s a small group, very small group of people out there now in the financial community that are taking the time to tried real value and provide real plans. So the next 10 callers complimentary right track retirement view. Don’t miss it. Folks. Pick up the phone today call us. It’s not very often you get to sit down with a licensed fiduciary and go through your portfolio at no cost. Call us today. It’s 1-888-382-1298 again, 1-888-382-1298.
Randy Major – 27:38
Brian, thank you again for all the wonderful information to the viewers at home. Thank you so much for watching. Call the number on your screen now and we’ll see you again next week.