Episode 117 – How to Create a Happy Retirement Plan

On this week’s episode of Retirement You Radio, Neil Mager shares strategies on how to identify and leverage guaranteed sources of income to ensure a happy retirement.

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Radio Show Transcript

Announcer 00:00

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

Asset protection, tax reduction, holistic planning

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

Neil Mager 00:38

We know we need a retirement plan and an income plan. What about a plan for happiness? It’s possible we’ll explore some options on today’s show.

Steve 00:52

Welcome everybody, this is retirement you radio increasing your financial IQ with prime QM consumer advocate Steve, except Brian Quaranta is not here today taking a little break. But in his stead is Neil Mager. We’ve talked before with Neil and Neil is a senior advisor at secure money advisors. He is also a fiduciary part of that fiduciary team at secure money advisors. Hi, Neil. What’s going on?

Neil Mager 01:14

Hey, Steve, not too much. How’s your summer going? So far? Yeah, no,

Steve 01:18

sounds just good. Right? Feels like summer. It’s hot. It’s sticky. It’s all the things that summer should be I guess.

Neil Mager 01:25

It’s definitely been hot and sticky. For sure. I mean, I’m one of those few strange people that I like the heat. So I kind of enjoy this weather.

Steve 01:33

Oh, I’m right there with you. You know, I, you know, I grew up in Minnesota, I’ve had my fill of cold.

Neil Mager 01:41

We only get so many sunny days here in Pittsburgh, too. So, I’ll take all the ones I can get. And I like the I like this time of yours. Yeah, I’m definitely enjoying it.

Steve 01:50

Absolutely. I love how you set this up. You talked about a happy plan? You know, and is that? Is that possible? And what does that mean? When you talk about having a happy plan or a worry-free retirement? What does that mean?

Neil Mager 02:05

Well, I think really, you know, a happy plan really starts with focusing on your income planning. And what I mean by that is just really identifying, first of all, what are your guaranteed sources of income that are going to be available to you in retirement? Do you have a pension at secure money advisors, the bulk of the people that we see coming into the office nowadays, I’d probably say about 85%, they’re no longer entitled to a pension. So, you know, they have to figure out ways to generate cash flow and income planning. And really, the income really drives the ability to do all the fun things that you promised yourself, you would do in retirement. So, you know, the happy plan really starts and focuses on the income. So how do you generate cash flow? How do you get the income to where you are able to go do the things that you want to do travel, go see the kids and the grandkids? Join the country club, buy the fishing boat? By the hunting camp, whatever it is that that you enjoy doing? It really starts with income,

Steve 03:08

for sure. And one of the ways to make sure our income is robust, as they say, We’ve got to get into retirement, we got to tie up those loose ends, we’ve got to get out of debt if we can.

Neil Mager 03:18

Yeah, that’s definitely another way of freeing up cash flow, right. So, a lot of retirees have a strong desire to pay off their home. Before retirement, it’s not always the most mathematically sound decision, you know, we have to understand the impact if there’s a significant amount on the mortgage, the impact of taxation, right, and if you’re pulling money out of pretax accounts, what that’s going to look like for your situation. But any debt that we can reduce, it frees up cash flow, so the mortgage, cars, student debt, whether it’s your own or your children’s, it’s best to pay off any and all debt before retiring. Now, sometimes unfortunately, that could mean delaying the big day for a year or two. But it’s also going to help you save more as you continue to work and put more money away. It’s also going to enable you to most likely delay Social Security. So, you’d be entitled to a higher monthly check. So, you know, at times this patience can really pay off. But the goal is always how do we generate, get the income as high as we can as quickly as we can. Because really in retirement? The best years of your life should be familiar retirement to about age 80. Because that’s going to be when you’re really focused on doing all the fun stuff you promised you would do. Because you no longer have to get up and go to trade your time for money.

Steve 04:48

Folks, if you’d like to send that it’s 800-656-8616. And one of the biggest fears, Brian goes over this about every week talking about the biggest fear is running out of money even more than death. People are scared of running out of money. How do you reassure folks that their plan will help them not run out of money?

Neil Mager 05:08

Yeah, a repeated a study that said, you know, people fear most running out of money more than death. Right? I mean, that’s pretty, pretty significant. And, you know, really our planning is all focused on having a really strategic plan that focuses on the five key areas. Now, the five key areas are investment planning, you know, what rate of return? Do we need to get in order for this plan to work? The income? That’s number two? How do we figure out exactly what we need get people the right amount? Now, the third one, and probably maybe the most important is tax planning. So as tax rates go up, you know, how do we make sure that we’re going to be continued to have the lifestyle that we’re accustomed to? The other two are health care planning. So, what is it going to cost in health care expenses on a monthly basis? And the fifth and final is legacy planning. So, after we do all this good work, you know, how do we get the money and transfer it to the children in the most tax efficient way possible. So, it all starts with fundamentals, and really building that base, to make sure that we’re never gonna have to apologize for things not working out.

Steve 06:17

Right. And again, those are the kinds of things that sitting down with an advisor like you, you’re a fiduciary, you’re independent, you’ve got a lot of experience. To me, those are three key things to have an advisor that can really help get us where we need to be and where we want to be. And again, generating that income that we keep talking about.

Neil Mager 06:37

Here, they always talk about, you know, if you don’t use an advisor in retirement, typically one or two things occur. One, you spend the money like it’s a checking account, and you blow through the money very, very quickly, or to the complete opposite, where you continue to save it for a rainy day, you don’t end up spending any money, you’re worried about long term health care costs, you’re worried about market loss, so you don’t end up spending any money. So, when you sit down with somebody who likes secure money advisors focuses on retirement planning, and you’re able to see a plan, a true written retirement income plan. You know, people feel pretty good when they leave our office, right?

Steve 07:18

And again, so here’s the thing, we are up against the clock already, Neil. And so why don’t we invite folks to call right now get on the calendar and have that conversation.

Neil Mager 07:28

Yesterday for the next 10 callers who call in right now we’re offering the right track retirement Financial Review. During this meeting, we’ll find out if you are on the right track in those five key areas of retirement planning, which once again, investment planning, income planning, tax planning, health care planning, and legacy planning. We’ve seen other firms charge over $1,000. For the review, we’re offering at no cost, no obligation for the next 10 callers who pick up the phone and schedule a complimentary consultation, this review will really take the mystery out of financial planning and let you know if you are on the right track. If you weren’t on the right track, Steve, I would want to know, when would you want to know to know now take advantage of that call now to take advantage of the complimentary rate track Financial Review.

Steve 08:14

Hey, that sounds fantastic. Neil, folks, take advantage of what we’re offering here today. It is that opportunity to get that Right Track retirement review. And Neil on the team and Brian, Secure Money Advisors can take a lot of the complex financial world and really turn it into something that makes sense. It’s a true practical financial review, and it’s a phone call away 800-656-8616. You heard Neil the next 10 callers are going to get that comprehensive financial review. You’ll see where you are today. But most importantly, you’ll find it’s a roadmap that can help get you to where you need to be when it comes to retirement. 800-656-8616 10 callers right now 800-656-8616

Neil Mager 08:56

We know we have to save for retirement. How much should we save? What kind of account do I need? How much should I save every year? All great questions and in this segment, we’ll get straight to the facts, some basic

Announcer 09:11

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

Steve 09:52

We are back on Retirement You Radio increasing your financial IQ with Brian Q, Brian Quaranta off this week, but in his place, of course is Neil Mager. Neil is no stranger to the program. He’s a senior advisor at Secure Money Advisors, he is a fiduciary part of that team at secure money advisors. You guys got a great team there, by the way?

Neil Mager 10:11

Yeah, we really do. And I think, you know, part of what Brian’s assembled here is that we work so well as a team. And, you know, behind the scenes, when you’re working well, as a team, it’s reflected in the type of service that you’re providing to the client. So, I think you know, as a team, that’s probably what we’re most proud of, is we hear so often about, you know, how much they appreciate working with each and every one of us. So, yeah, definitely a good team that Brian’s assembled here.

Steve 10:36

And again, so one of this what we’re talking about here, you talked about the questions, how much should we save? What kind of an account do I need? Those are the questions you must be inundated with every day. But I think one of the other questions is got to be so what’s the number? How much do I really need? And is the answer just That depends?

Neil Mager 10:54

Absolutely, it depends. You know that question is very, very common. I hear it each and every day, how much do I need for retirement, my brother-in-law says I need a million dollars. My sister says, I need 500,000. My cousin says I need 2 million.

Steve 11:09

And my ex-wife says you need it all.

Neil Mager 11:13

But you know, it’s different for each and every situation. You know, I’ve seen people come in here with $300,000. And that’s more than enough for them to retire. I’ve seen people come in with 3 million is not quite enough. So really, you know, wealth is really about how much do you need on a monthly basis to pay your bills. And you know, when you have really reasonable monthly expenses, that really helps you in retirement, if you still need $20,000-$25,000 A month in retirement, well, you better have saved a pretty significant chunk of money. Because like I said in segment one, about only about 15% of people are coming into our office with guaranteed monthly pensions nowadays. So Social Security is really only designed to replace 30 to 40% of your income. So, the 401 K, the 403 B, whatever your retirement accounts called, that needs to generate the cash flow that you’re going to need. So, what we really need to do is sit down and understand what you’re currently taking home from your paycheck. What’s your net take home? Are you saving off of that net, take home pay? What are your monthly expenses? And what’s the income gap? And then we can go ahead and solve to see if you’re ready for retirement and what your true number is.

Steve 12:30

Okay. Well, I mean, I think you made a great point there, Neil, in that you said, sometimes people have 300,000, sometimes people have 3 million. And again, I’m sure everything in between, but whatever that number is, they’re rich, you know what I mean? For them, they’re rich.

Neil Mager 12:45

That’s exactly it. That’s exactly it. You know, I met with some folks this morning, and they have over a million dollars saved. They have a very small pension $500 a month. But, you know, their goal for planning was their social security and that small pension, their monthly expenses are so reasonable, that they’re able to live very, very comfortably on that money. So, they’re focused more on tax planning and legacy planning to set up their children for success, that even if those folks had $300,000 would be more than enough for them?

Steve 13:19

Sure. I can. That’s an interesting, you know. So, I guess what I’m getting at is it doesn’t matter how much money you have, at this moment. I mean, it’s good to sit down with someone like you and begin to map it out. And if you need to work longer than you need to work longer if you need to punch up the 401k then then do that, right?

Neil Mager 13:39

Yeah, for sure. Like I said, in the offer that we made, you know, if you weren’t on the right track, when would you want to know, right? You’d want to know right now, as soon as possible to do the stuff that you just mentioned, do we need to save more? Do we need to pay off debt? What gives us the greatest chance of success? And sitting down with a firm like ours who’s specifically focused on retirement planning and Cash Flow Planning, you know, gives you a really good idea if you are on the right track

Steve 14:07

800-656-8616 that can get you started, folks, one of the areas that has to be discussed and I know people don’t want to it’s kind of the elephant in the room, and that is health care costs. Yeah,

Neil Mager 14:20

I mean, the average couple needs $300,000 in assets to cover health care costs in retirement. I mean, out of pocket, medical, medical expenses, they’re going to differ for each and every person. But it’s common to incur most of these costs in your older years. So, you know, obviously Medicare provides partial coverage, but you’re still on the hook for a lot of those bills. So, you know, when you’re planning and you’re sitting down with your planner, you know, you got to make sure that you don’t front load things too much, and that you have the ability to pay for some of these costs in the future.

Steve 14:55

Right. And as we do that, and as you put those plans together, it becomes just part of that conversation, like you said. And we have to also take keep in mind that the word that seems to be becoming very, very front-page kind of thing is inflation. Because it’s back, isn’t it?

Neil Mager 15:17

It’s scary back, isn’t it? Really?

Steve 15:20

Yeah. Go to the grocery store. Holy crap. Yeah.

Neil Mager 15:22

Yeah. I mean, each and everything. I mean, we’re all experiencing inflation. And my understanding is inflation is sitting right around 5% right now. So, think about that. If you had $100,000, sitting in a bank account, and not earning any interest. I mean, you’re losing money safely there at about a 5% clip right now. I mean, that’s pretty scary to think about. Yeah. So, inflation is a major threat to your retirement plan. I mean, obviously, the US dollar loses buying power over time. Over the past 20 years, it’s been close to 2%. But really, based on the COVID 19 pandemic, were significantly higher that we’re all feeling that Well, folks,

Steve 16:01

I’ll tell you what, if you need to have that conversation, if it’s time to start getting you on the right track for retirement, now’s the time to give Neil a call and get on the calendar.

Neil Mager 16:09

Yes, Steve for the next 10 callers who call in right now we’re offering our right track retirement Financial Review. During this meeting, we’ll find out if you are on the right track in the five key areas of retirement planning, which are investment planning, income planning, tax planning, health care planning and legacy planning. We’ve seen other firms charge over $1,000 for the review, that we’re offering an absolutely no cost and no obligation for the next 10 callers who pick up the phone and schedule a complimentary consultation right now. This review will really take the mystery out of financial planning and let you know if you are on the right track. We always say if you weren’t on the right track, when exactly would you want to know. So, folks, take advantage of this complimentary offer. Pick up the phone right now.

Steve 16:53

Hey, that sounds great. Yes, do what I mean? Again, that’s great advice from Neil who says, Call Us 800-656-8616. If you want to help and dual perhaps begin to get your retirement on the right track. Now’s the time to do just that. You know, Neil and the team that helps secure money advisors can take that complex financial world, break it down into something that really just makes sense. Here’s your chance to get a true practical Financial Review. 800-656-8616 you heard Neil the next 10 callers are going to get that comprehensive financial review. You will see where you are today. Yes, of course. But more importantly, you’ll walk out with that roadmap that can help get you on the right track. You’ve got nothing to lose 10 callers right now. 800-656-8616 again 800-656-8616

Neil Mager 17:45

One question nearly everyone asked is when can I retire on today’s show? Some signs you may be ready to retire; even retire early. Details are next.

Announcer 17:58

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

Steve 18:39

Welcome back, everybody. This is retirement you radio increasing your financial IQ with Brian Q. Brian Quaranta is taking a well-deserved break, Neil Mager sitting in today. Neil, Senior Advisor at Secure Money Advisors, he is a fiduciary. He’s got some experience behind him. And he’s ready to answer some questions. Let me ask you this. Neil first. So, you guys, I know do a lot of seminars, are you back to doing live seminars? Again?

Neil Mager 19:04

We are we’ve we are back out there in the public, you know, educating people on the important aspects of retirement planning. We typically right now have been doing just one a month in the summer months, we’re really looking forward to the fall. And getting back out there. You know, typically what we really like to do them are at the local colleges and universities, community centers, libraries, things like that. So, you know, we’re eager to get back out there and do those. I think in September, we’re really going to get aggressive with, you know, being back out in the public. We did do one at Narcissi winery last month, and we have one coming up in July. Folks can check our website for more information but we’re going to do another one towards the end of July at Narcissi Winery.

Steve 19:55

All right sounds good, boy, little retirement talk and wine. Can’t get any better than that.

Neil Mager 19:59

And good food.

Steve 20:00

And good food even better.

Neil Mager 20:02

Yeah, it makes- wine I think makes people listen a little better from what I’ve heard.

Steve 20:07

I think you’re right. 800-656-8616. So again, those are the kinds of things I mean, again, the seminars this fall, I would guess we’ll get the whole schedule when it rolls out. Right?

Neil Mager 20:18

Yeah, we’re, we’re definitely looking forward to, you know, because of the pandemic, we weren’t able to do a lot of the, the educational events in those types of places over the past year. And, you know, it seems like right now, people are really comfortable getting back out there being in a restaurant setting, sure, being, you know, a college or a university. So yeah, we’re, we’ll definitely make you all aware, when we’re back out there in the public eye. Because, you know, it’s a great way to, you know, like we talked about sometimes last time, a one-on-one can be a tad intimidating for some, well, this gives you a good idea. One, you can gather some great information to, you can get a good feel for the firm, right? In the person that you’d be meeting with. So, you might say, Well, this guy seems like he’s okay. He doesn’t seem like he’s going to be a high-pressured salesperson or anything like that. So maybe take advantage of his offer.

Steve 21:11

Right. And, folks, if you want to know more, the website, I would recommend you visit securemoneyadvisors.com That’s securemoneyadvisors.com. That website, it’s constantly changing. I mean, I go there frequently. And there’s always something new, there’s always something different. I mean, it’s what we call robust.

Neil Mager 21:31

Yeah, we do a good job of keeping up with it, it gives you a good idea of the, you know, current team members at the office, so you can understand what each and every person here at the office does. It gives you a good understanding of, you know, what our philosophies are, and how we approach retirement planning. And so, you can get a good feel and vibe to see if you know, we’re the right fit for you.

Steve 21:53

Right? Well, I’m again, that’s important. 800-656-8616 securemoneyadvisors.com. All right, let’s jump into a couple of these questions here. While we still have some time, George has checked in, he says, I have to start taking my required minimum distributions this year, I have three different IRAs. Should I take some money from each account? Or take it all from one?

Neil Mager 22:15

That’s a great question, George. And, you know, we’ve heard that question frequently. So I’m glad you asked. Now, the IRS has a number that you need to withdrawal from your accounts. Okay. Now, that calculation needs to be done, and you got to make sure that you get the number pulled out correctly, or George, you would face a 50% penalty. What I mean by that is, out of all three accounts, George, if you had to pull out $20,000, and you didn’t do it, for some reason, you would owe the IRS a $10,000. Penalty. So, you got to make sure that you get the calculation correct. But the answer your question, no, you do not need to take it from each of the three accounts. If you wanted to pull it just from the one and satisfy the RMD. From all three, you’re able to do that. Now at secure money advisors, what we do and how we set things up is we typically have a now, soon, later; three buckets of money now, soon, and later. Now, the soon bucket is typically our 1 to 15-year money. And that’s how we generate cashflow, and income. So, our RMDs would come from that account, the other buckets are going to be more focused on growth, and they’re going to have more risk. So those buckets we don’t want to be pulling money from So great question. You can satisfy your RMD just from one IRA, you just got to make sure you get the calculation, correct.

Steve 23:43

Well at Secure Money Advisors, if I’m your client, and I need to start taking RMDs you just take care of that for me, don’t you? You make sure that it comes out on time-

Neil Mager 23:53

Yeah, George won’t have to worry if he was a client of Secure Money Advisors, because we’re going to take care of that for him. And we’re going to make sure that, you know, we’ve identified what the correct amount is from all of his accounts, how he wants to take it, does he want to take it on a monthly basis as cashflow? Does he want to take it as a lump sum at the end of the year? And we’re just really, you know, on top of those things to make sure that, you know, he would never accrue any penalties. Yeah,

Steve 24:17

again, that’s, there’s a comfort in that. And folks, it starts with a phone call. 800-656-8616. Let’s see we got time for one more quick one. Let’s go to Penny. She’s asking are social security benefits withheld because of excess earnings returned to you in monthly installments when you reach full retirement age? That’s good question too.

Neil Mager 24:38

That is a great question. And yes, they are Penny. Now they’re gonna just pay you back in tiny, tiny increments. So, it’s not a lump sum. That’s not a lump sum.

Steve 24:50

Well, hey, Neil, let’s go ahead and invite folks to call one last time today. What do you think?

Neil Mager 24:55

Yeah, folks, we’d love to see you in the office for the next 10 callers who call in right now. We’re offering our right track retirement Financial Review. During this meeting, we’ll find out if you’re on the right track and the five key areas of retirement planning, which are focused on investment planning, income planning, tax planning, health care planning and legacy planning. We’ve seen other firms; other firms charge over $1,000. For the review, we’re offering an absolutely no cost and no obligation for the next 10 callers who pick up the phone and schedule. This review will really take the mystery out of financial planning and let you know if you’re on the right track. If you weren’t on the right track, when exactly would you want to know pick up the phone give us a call the complimentary right track Financial Review.

Steve 25:37

Hey, that’s great opportunity. This is the last time today folks, we’re opening up the lines inviting you to call 800-656-8616 That right track retirement review. Now’s the time to make that call. Don’t procrastinate. Don’t put it off another day. Take advantage of this way for you to get a true practical Financial Review. 10 callers get that comprehensive financial review, you’re going to see where you are today. Yes, of course. But more importantly, you’ll end up with a roadmap that’s going to help get you to where you need to be when it comes to retirement. 800-656-8616 again, 800-656-8616 Neil, as always, a pleasure to talk with you and just great information today. And always fun.

Neil Mager 26:19

Yeah, my pleasure, Steve, thanks for having me. We’ll let BQ take a rest today. So-

Steve 26:25

All right, a well-deserved rest folks, we want to thank you for listening we really do appreciate it and we’re gonna be back again next week new topics new questions and more right here on retirement you radio.

Announcer 26:39

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

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