On the Money with Secure Money: Episode 55

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Video Transcript

Cynthia de Fazio – 00:20

And welcome to On The money with secure money. My name is Cynthia De Fazio and I’m joined today by Brian Quaranta. He is president and founder of secure money advisors, as well as Neil Major, senior investment advisor. Brian, how’re you doing?

Brian Quaranta – 00:33

Great, good to see you as always.

Cynthia de Fazio – 00:35

so good to see you. I love seeing you and smiling and you’re happy. And there’s always so much to talk about. Neil, how are you?

Neil Major – 00:42

I’m well Cynthia. How are you today?

Cynthia de Fazio – 00:43

I’m fantastic. I love having both of you in the studio. Because obviously, we have so many things to talk about today. And they all circle back to the most important thing, planning for retirement. So Brian, I should ask you, what has life been like for you lately in the office? Has it been extremely busy? What are people asking?

Brian Quaranta – 01:00

Well, you know, I thought when I started having kids, I would actually get my schedule to be a little bit shorter throughout the week and throughout the days. But we’re so busy that I feel like I live at the office right now. All for good reason. I mean, there’s a lot of people that need a lot of help. And most of it is because they need a plan. Most people that we meet do not have a plan, they typically have a pile of stuff, right? Guys a POS, right? The pile of stuff, all the statements they have, but they don’t have a plan. And I think when people hear us on TV, and they hear the radio show, and they understand that financial planning really is about having a well structured written plan that I can touch feel, it’s mathematically calculated versus just a bunch of investments. People go, Wait, I don’t have that. And I probably need to have that, especially as you’re going into retirement, it’s a little different during your working years, you can kind of get away with being a little less organized, if you will, sure. Because you’re just working and putting money away, and you’ve got your head down and you’re focused on your family, your career. But as you approach retirement and you get into retirement, there is real work that needs to be done. And you know, what we always talk about at our office is the planning having five key areas, which is income, taxes, investments, health care, and of course, your estate planning. And that’s what makes up a really good plan.

Cynthia de Fazio – 02:23

Most definitely, Brian, Neil, I should ask you how detrimental is it to someone to have a good constructive retirement plan if they’re entering into the retirement years? And they don’t have one in place currently?

Neil Major – 02:34

Well, yeah, it’s absolutely essential. I mean, as Brian said, you want to focus on those five key areas. And what we see a lot of times, people coming into our offices, maybe they’re only focused on one of those areas, and that areas, typically just the investment side, and they’re not really factored in, you know, if they do retire, how will they generate income, you know, because when that paycheck stops, that gets very real very quickly. Sure. And so we have to solve, you know, all five areas to make sure that we have a key plan, because if we only solve one, chances are that we make little mistakes, and what we always say little mistakes cause big headaches. So you really want to have a well designed, written plan that that’s all encompassing, and very comprehensive.

Brian Quaranta – 03:19

And, you know, he makes a great point, because I’ll give you an example. I had some folks come in. And he him and his wife wanted to retire, but they wanted to move to Wyoming of all places they want to move to Wyoming usually I hear Florida. Yeah, you know, North Carolina, California, but Wyoming, but it’s becoming quite a big place to retire to, by the way. Okay. So, but they said, you know, we have a financial advisor, but we’ve heard you on the radio, we’ve heard you on TV, talking about a plan. And every time we sit down with our advisor, yes, he goes over our investments with us. But we have no game plan of how we’re gonna actually retire. And there’s no help and how are we going to make this move? How are we going to build the new house? And so when I sat down with him, it was more about helping them understand. Okay, if we’re going to stop working, as Neil mentioned, the paychecks gonna stop, yeah, most people coming in the office don’t have a pension, they have a 401k. Right. And for those of you that, remember the pensions, that’s something that paid on a monthly basis, unfortunately, that doesn’t exist a whole lot anymore. People have these 401k plans and, and just you know that that was their situation. So they had retirement accounts, where they go, how do we use them now? Yeah, how do we generate the money that we’re going to need to make this move? What if we take money out to build the house? Is that going to have an impact on how long our money is gonna last us later on down the road? And if we do all this, and one of us get sick, are we still going to be okay, yeah. And by building out the model that we built out for them, you know, and this is why we built our right track retirement system because it helps give you the clarity and peace of mind that you need to make these bigger decisions in life. You know, a lot of people want to do a lot of things in retirement, sure, but what we find out is that don’t do them, because nobody ever shows them how to get their money actually working for them. So they can do these things with peace of mind. And most people say, Well, I’m not doing this stuff, because what happens if the market goes down? What happens if taxes go up? What happens? And so most people never wind up doing anything that they’ve promised themselves, they were gonna do in retirement, and then they die. And then the kids inherit the money, and they do all the fun stuff with it.

Cynthia de Fazio – 05:23

Yeah. Right. It’s like, no, no, you want to enjoy it, you’ve worked so hard,

Brian Quaranta – 05:27

you’ve worked very, very hard for it. And I think that’s one of the things that we do really well is teaching people how to have that peace of mind in in utilizing their money. Yeah, I

Neil Major – 05:36

mean, we could probably tell, you know, hundreds, if not 1000s, of different stories just like that. Yes. Yeah. And that’s what typically, so often, I see, when I tell you that people focus on the investment side, you know, I just had a couple come in last week. And, you know, they had been with their broker for a long, long time. And his cash flow distribution plan was, use your savings account money, and let me know when that money runs out. provide any peace of mind to them. And you could tell, you know, him in particular, you know, that cat that that cash they had in the bank was kind of the way that they felt, you know, what was the 30 bracket? Yeah. And it just felt, you know,

Brian Quaranta – 06:17

that wasn’t a point to Right, yeah. So, you know, we’ll all see this a lot, too, at the office, where somebody says, well, they just said to us our money in the bank first, and then we would have come up with it, we’ll grow your money. First off, first off, the reason why we have retirement accounts is for that exact reason to retire off of not only that, but you know, the fundamental problem with using your savings account, to pay your bills in your initial phase of retirement is a terrible idea. Because one, that money is all been you’ve paid taxes on all that money to it’s probably not earning a whole lot, your retirement money that you have, okay, that’s the money you want to use first shots, the money you want to distribute from, because remember, most likely, you don’t have a 401k, or you don’t have a pension plan, your 401k plan your IRA, that is your pension. So use it that way. Don’t use your cash, you know, first because what happens if tax rates go up, and you’ve spent all of the money that was very tax efficient in the bank, and now you got to go into your IRA accounts, and pull money out at high tax rates, it just is not an efficient way to do it. But these are the stories we’ll

Neil Major – 07:25

hear all of a sudden, your turn 72, you’re forced to take distributions, and now might be way more than you wanted. That’s talking about tax planning. And yeah, and here, we go into a higher tax bracket, or we increase our Medicare premiums, things like that. So

Brian Quaranta – 07:39

you know, one of the things that we do really well is creating simplicity around what we do. And we bring three people through a very discipline process, we’ve got good systems at the office to help drive this clarity, because a lot of times people are intimidated by the fact of coming in and seeing a financial advice, right. But it doesn’t have to be intimidating, because it’s actually relatively an easy process with us. But the first thing we like to lay out for somebody is an income strategy. We want to know what are your sources of income and retirement? Okay, and how much does that add up to? Once we know how much that adds up to? Then we need to look at different scenarios. Like, what happens if the wife dies? First? What happens if the husband dies first? Because there will be a drop in income? Sure, the question is going to be how much is your dropping income going to be? Because everybody’s a little bit different. So you know, according to AARP, the average drop in income for a married couple is about 40%. That’s a lot of money to lose. And that’s why having a financial plan does give you peace of mind. Because when you solve these things on paper, right, we’re able to figure out what strategies need to be put in place so that when it does happen, and it will, the question is when, when it does happen, we actually have a plan to execute on. So the whole point in doing an income strategy first is because that drives your decisions of what to do with the actual money itself. Yeah, right. So yeah. Well,

Cynthia de Fazio – 09:00

Brian, I know that you and Neil have a very special offer to present to the viewers at home today. Let’s talk about what that is, and then open the phone lines. Yeah. So

Brian Quaranta – 09:06

you know, a couple years ago, what we did was we created a right track retirement system. And the reason why is is that we realize that most people usually have one or two areas handled a lot of times people think they have a retirement plan just because they have a 401k. But the reality is, as Neil said earlier, there’s lots of different areas of retirement planning that need to be handled number one, and most importantly as your income because the paychecks gonna stop, but bills, taxes and all the things that you want to do that’s not going to stop, then you have to take care of your taxes, right? If you’re going to take money out in retirement, you want to make sure you’re in the lowest tax possible. Of course, having good investments is number three, health care strategy, and of course, your estate planning. So for the next 10 callers that call in right now, we’re going to give you a complimentary right track retirement review. Take advantage of it. It’s not very often that you get the opportunity to come in sit down with me With a fiduciary and go through a complimentary strategy, we are going to do it complimentary to you. And we’re going to do a full analysis of where you are currently this way you understand where you are, and where you need to go, we’ll we will give you turn by turn directions of how to get to where you want to go, what your goals are, and how to accomplish them. But you’ve got to take action today, you’ve got to pick up the phone and call us the number is 1-888-382-1298 to schedule your right track retirement review.

Cynthia de Fazio – 10:31

Brian, thank you so much, Neil, thank you so much. To the viewers at home, the phone number to call is on your screen, that number is 888-382-1298 Are you on the right track for retirement. And if you’re not, when you want to know today, all you have to do is pick up the phone and call 88838 to 1298, we have to take a very short commercial break, but don’t go anywhere. When we come back with Brian and Neil, I’m going to talk a little bit about inflation and how that may impact your retirement. Stay tuned.

Brian Quaranta – 10:59

So 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.

Neil Major – 11:13

The last thing you want to do is have a really good job and your 60s retire, be looking for work again in the late 70s.

Brian Quaranta – 11:21

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,

Neil Major – 11:36

which were not just product pickers here, what we do best here as we build retirement plans,

Brian Quaranta – 11:41

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,

Neil Major – 11:52

people you know can actually see a vision once we start to really build out their plan.

Brian Quaranta – 11:57

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 manage the risk, build the income and give you the retirement withdrawal.

Cynthia de Fazio – 12:30

And welcome back to on the money with secure money. My name is Cynthia De Fazio and I’m joined today by Brian Covanta. He is president and founder of secure money advisors as well as Neil, major senior investment advisor, gentlemen, a wonderful show that we’re having today talking about the importance of course of proper planning for retirement. But wow, the buzzword right now the elephant in the room, let’s talk about inflation. What is going on with inflation? And how can that impact a retiree? Brian, let me start with you. Yeah, well,

Brian Quaranta – 12:58

a lot of retirees are on fixed income. So if you’re on fixed income, and it’s costing me more to go to the grocery store, it’s cost me more at the gas pump, it becomes a little bit more difficult to have that extra money to do things, right, maybe you’re not going to do as much maybe you’re not going to go out to eat as much, maybe you’re not going to take that vacation that you had planned this year. So those are the things that you do see what a good plan should be able to address any level of inflation, yes, six and a half 7% inflation wherever the numbers at right now. It is a large jump. But with a good plan, you should be able to absorb that inflation rate, at least temporarily. You know, let’s just hope that we don’t see 7%, year after year after year after year, I think we’ll all have more challenges than what we can anticipate right now. Sure. But you know, that’s part of the income planning process. We always talk about the distribution, part of retirement planning, and secure money advisors. What really separates us what makes us different is the fact that we focus on distribution planning. Well, what does that mean? Well, there’s two phases of that we all go through with our money, we go through the accumulation phase, which everybody understands. I mean, that’s, you know, we see that every day, right, that people are coming in, they’ve worked for 2530 years, but not a whole lot of thought that went into accumulation. I mean, you when you got paid, you made contributions into your retirement plan. And you had a very valuable asset on your side, which was time. Yeah, right. So between your contributions, the market going up and down in time, you should have a nice nest egg. But now what, you know, your mindset needs to change as we shift into retirement, because the strategy completely changes. It’s no longer about accumulating money. It’s about protecting what you have, and now making sure that it can generate income for you for the rest of your life. And the biggest fear of most retirees is running out of money. And I would say when people come in, we say you know, share with us your goals and your concerns. That So, you know, we’re really uncertain of how long our money’s really going to last. Yeah, we’re not sure. You know, if we take this much money out, are we eventually going to run out? Sure. So building a strategy around income includes taking into account an inflationary environment like we’re in right now. And the number one key to protecting yourself from inflation is to not lose money. Yeah. Okay. Because, I mean, if you have $500,000, and now 500,000 goes to 250,000. Yeah, I don’t care what rate of return you get, you’re not going to keep pace with inflation. As a matter of fact, Warren Buffett says the number one way to keep pace with inflation is not to lose money, just like I mentioned. And his number two rule for not for keeping pace with inflation is don’t forget rule number one, right? There you go. So this is why we have to think about when we shift in retirement about protecting a portion of our money, and it doesn’t mean we put it under the mattress, we don’t earn any interest. There are financial vehicles out there like annuities that can be used, where you can get a reasonable rate of return, still protect the principle still have access to your money, you can take income from it, but it does protect it from market volatility, but it helps keep pace with inflation. And it becomes a great way to drive income and retirement to not suitable for everybody. Right. But for a lot of people, it’s a great way to provide yourself with your own private pension. That’s kind of what an annuity is.

Cynthia de Fazio – 16:26

Yeah. Yeah. That makes sense. Thank you, Brian. Neil, are you having a lot of people coming in specifically right now talking to you about their fear of inflation? Because it is all over the news? And if so, what kind of guidance? Are you giving your clients? Yeah,

Neil Major – 16:38

it’s definitely a conversation of almost every meeting. Yeah. Brian said it best. You know, as people get into retirement, they’re on a fixed income. And these higher prices, you know, cause concern, you know, I was at the grocery store with my wife recently. And, you know, just being that, you know, I’m so focused on numbers all the time, I’m seeing the increase in prices throughout the store. And, you know, we’re dealing with it at the gas pump, you know, all different areas, we’re dealing with higher higher prices, right. Yeah. And but Brian said it best is it’s really about laying out a plan and a foundation and determining what is our cashflow strategy first, right. Now, when we when we build out a plan, we have to have an income strategy that’s built around safe money. But that also means like Brian just said, we can’t put it all in a bank CD, when they call those certificates

Brian Quaranta – 17:29

of depreciation certificate.

Neil Major – 17:30

You know, we can’t get point two 5% of our money. But when we build out a real income strategy, we make sure that we solve to deal with the cost of goods going up over time, because we know that they will, you know, people are living longer these days. So we know that we have to build out their retirement plan for 30 35 40 years. And we better have a strategy in place. That’s going to look at all areas.

Cynthia de Fazio – 18:01

Thank you, Neil. And Brian, they’re very customized, aren’t they to each individual that comes into the office. It’s not a cookie cutter approach that you have where a one size fits all retirees. Yeah, let’s talk about how customized they are. Why it

Brian Quaranta – 18:12

takes a lot of time. Yeah, you know, I mean, you know, we spend a lot of time with these folks getting to know them, understanding what their goals are understanding what their concerns are. Because we’re a fiduciary, you know, we have a responsibility to do what’s in their best interest and guide them in the right direction, based on the financial vehicles that are available in the marketplace today. You really don’t know what financial vehicles are going to solve some of these problems until you understand what their concerns are sure. You know, someone that someone that’s retiring today, and they’ve got adequate income might not benefit from, let’s say, the use of an annuity, like somebody that doesn’t have income on their time, right, maybe their goal is they just want to grow their money, you know, as quickly and as fast as fast as they can. And they’re they don’t have any concern about risk because they have no need for that money. And maybe their goal is they want to pass a lot of money on to their family members, and they want to avoid taxation. So maybe the use of a life insurance policy because of its tax free benefits would be good. But every financial vehicle out there serves a purpose. The question is which one is going to best solve the problems that you have and you are very specific situation. And that’s our job as being a full service financial firm, that focuses on those five key areas of planning, building out the income, addressing taxes, making sure the investments are structured correctly, taken care of have a strategy if a health event were to take place and more importantly, having estate planning documents in place so that if you have a health event, and your spouse, your children need to make decisions, you have those powers of attorney in place so that they can make decisions on your half or more importantly, maybe a trust is in place to avoid unnecessary taxation to your estate. And again, these are The things that have to be focused on, and we and that’s why we spend such a hard a lot of time building this out and getting to know them because it is so customizable to their situation. And everybody’s situation is so different. You know, I hate to be so cliche, but it is everybody’s gonna see that

Neil Major – 20:15

all the time, because you will see folks come in and they’ll say, hey, my brother just bought an annuity or my brother bought this stock or mutual fund. And I wanted to and it might not apply to their situation, right? My brother did a Roth conversion. Yeah, it can be a really good strategy and a really good idea. But you know, the one size does not fit all right. And like Brian says fiduciaries, we really have to make sure that you know, what we’re doing is very specific to that person. And that plan is going to work, how we

Brian Quaranta – 20:44

And that plan is going to work, how we have, you know, the stories we hear all, my neighbor just bought this financial vehicle that if the stock market goes up, they make money, but if the stock market goes down, they don’t lose any money. Should I be buying something like that? Well, maybe, you know, maybe the question is, let’s talk about your situation person. And that’s, that’s what I really pride ourselves on. We pride ourselves on that secure money advisors is really taking that time to understand each person’s situation so that they do get a customized plan based on their own concerns and needs. So

Cynthia de Fazio – 21:15

perfect. Well, gentlemen, I’m going to reopen the phone lines, would that be okay? The Right Track retirement

Brian Quaranta – 21:19

review, folks, you have to take advantage of it, it’s not very often that you get the opportunity to sit down with a fiduciary and have a complimentary analysis done, we will take you through the five steps of retirement planning when you come in, we’ll talk about your income, we’ll talk about taxes, we’ll talk about the proper structure of investments, how to handle a health event, and most importantly, the best way to set up your estate. So for the next 10 callers who call in right now, again, that’s a complimentary right track retirement review. But you got to do your part, you’ve got to pick up the phone, this is not the time you want to procrastinate. So put down a cup of coffee or whatever you’re doing, and schedule a time to come in. It’s not an intimidating process, you’ll truly enjoy the process of coming in and meeting with us. Don’t worry about what to bring or what questions to ask. We’ll have all of that there for you. And we’ll guide you through the process. But all you need to do today right now is pick up the phone and call 1-888-382-1298 and schedule your complimentary right track retirement review.

Cynthia de Fazio – 22:19

Gentlemen, thank you so very much to the viewers at home, the phone number to call is on your screen. That number is 888-382-1298. We have to take a very short commercial break, but don’t go anywhere. When we come back. I have a couple of viewer questions for Brian and Neil. So stay tuned.

Brian Quaranta – 22:34

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 you 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.

Cynthia de Fazio – 23:06

And welcome back to on the money with secure money. My name is Cynthia De Fazio and I’m joined today by Brian quanta. He is president and founder of secure money advisors as well as Neil, major senior investment advisor, gentlemen, a wonderful show that we’re having today. And obviously again, talking about such an important topic planning for retirement. But this is my favorite part of the show. We have viewer questions to go through. So I know you have no idea what I’m going to ask Are you okay, if I just throw some at you?

Brian Quaranta – 23:31

Yeah, I’m really shocked with all the questions that we’re getting anymore between radio and TV. Right? And by the way, folks, if you haven’t listened to our radio show, go to our website, you can listen to us on W DVE. You can listen to this on 390 4.53 Ws, and you can also find out where we’re going to have our educational events. So, questions. Let’s do it.

Cynthia de Fazio – 23:51

Okay, sounds good. Well, Neil, this first question is for you. And this is a caller actually from cranberry. They would like to know, Neil, I just actually booked one of the complimentary consultations, what can I expect when I first come into the office?

Brian Quaranta – 24:04

Well tell them it’s gonna smell like cookies. And it’s gonna feel like mom’s house. Because that stuff so cheesy. Bring me in.

Neil Major – 24:15

We really look forward to meeting you. So we can’t wait to have you up. You know, like we had talked about earlier in the show. It’s really a stress-free environment. We’re not there to sell you anything. We’re there to have an open conversation and learn about what your goals are, what your dreams are, what your hopes are. And you know what’s currently causing you concern what’s giving you some sleepless nights. And if we can solve it for you, we’ll lay out some steps and what we’re going to do in order to take the next steps in order to try and start to build out the piece of the puzzle. Now we just ask that you get prepared as possible to come to the meeting. If you can gather any financial statements Social Security information, pension, pension information. That will be a big help, we want to maximize our time together. So as the more prepared you are, the more prepared will be to spend our hour together and make sure that you get a lot out of the meeting.

Brian Quaranta – 25:09

And our job really is to identify problems and help solve those problems. Now, a lot of times people just don’t know what they don’t know, show no. And a lot of times will say, well, here’s option A, B, and C that you could do to solve this and they go, I didn’t even know about option B and C, I didn’t even know that existed had I known that existed, I would have done things so differently. Because that’s, that’s more in line with who I am and what I’m trying to accomplish. So that’s kind of the whole focus when they come in.

Cynthia de Fazio – 25:38

I love that. This is a great question. This is actually from Pittsburgh, Brian, what kind of cookies do you bake at the office?

Brian Quaranta – 25:44

No cookies at the office?

Neil Major – 25:49

There usually is cookie. Yeah, unfortunately, there Yeah.

Brian Quaranta – 25:55

Selection of snacks and graves.

Cynthia de Fazio – 26:00

Oh, yeah. It was fun. But actually, what they’re asking Brian is Brian, I am five years away from retirement, I have been told that I should be paying down my debt. If so what debt? Should I start paying down? First?

Brian Quaranta – 26:10

Every bit of it? Okay. Yeah, I’m totally in agreement with this. And a lot of advisors will fight me on this. Because they’ll say, well, we should increase contributions to retirement accounts. Really, what happens if the market doesn’t cooperate, the market goes down. So now I’ve put all this money and that could have been going to pay off debt. And you know, the real, the real thing that happens when you pay the debt off is you actually pick up additional cash flow in retirement. So let me use this example. Matter of fact, I had a husband and wife come in, they became clients, they had about $60,000, still in debt, I had both of them stop making contributions to the retirement accounts. All right. And you might think that’s crazy. But if I get the debt paid off, the time they retire,