Brian Quaranta discusses retirement planning mistakes to avoid to ensure you don’t run out of money in 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.
Steve 00:38
Hey, welcome, everybody. This is Retirement You Radio, increasing your financial IQ with BrianQ on today’s show, we’ve got good news and bad news. The good news is we’re living longer. The bad news is we’re living longer. The story here is we’re going to have to plan for a longer retirement, we’ve got some tips to help you do just that along the way. Today, give us a call to get started. 800-656-8616. That’s 800-656-8616 Or don’t forget, you can just text BrianQ all one word, BrianQ to 21000. Speaking of BrianQ, he’s here what’s going on?
Brian Quaranta 01:10
Steve? That’s right, we are living longer. And in retirement that means saving more before we get there. On today’s show some retirement planning mistakes to avoid to help ensure we don’t run out of money when we come right back.
Announcer 01:30
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 BrianQ 800-656-8616 or text BrianQ to 800-656-8616. Call or text BrianQ to 800-656-8616
Steve 02:05
Welcome, everybody, this is retirement, you radio increasing your financial IQ with BrianQ. I’m consumer advocate Steve and of course, Brian Quaranta, who we’re talking about Brian is an author. He’s president and CEO of Secure Money Advisors. He’s a fiduciary 21 years in the business and so much more. Hey, Brian, what’s going on?
Brian Quaranta 02:24
Good morning, Steve. How you doing today?
Steve 02:25
Doing well. Thank you. This should be a fun show. You know, good news, bad news.
Brian Quaranta 02:29
It always is. It always is. Yeah. I mean, that’s true. Especially with what we have coming up at the beginning of next week. You know, I mean, oh, yeah. Very, very, very interesting week for the entire country. So, but yeah, so how about this living longer? We’ve known this for a while, though, that people are living longer.
Steve 02:50
But matter of fact- go ahead. No-, I was just gonna say and we are but are we ready for that? I mean, are we planning for that?
Brian Quaranta 02:57
I don’t think so. And I’ll tell you why. Because AARP did a study a couple years ago, and they surveyed about 1000 people and they said, What do you fear most in retirement, death, or running out of money? 90% of those people said they fear running out of money more than they fear death. Now, I would probably- I don’t know. How do you feel about that?
Steve 03:20
You know, I mean, you start to think about it, and you go well, yeah, that kind of makes sense.
Brian Quaranta 03:24
It would be terrible to run out of money.
Steve 03:25
Oh, gosh, yes. Horrible.
Brian Quaranta 03:26
And, you know, unfortunately, it happens. Because, you know, one, there’s a there’s a risk that that people don’t realize that exists within their investment accounts, which is called sequencing risk. Matter of fact, you can Google that, folks, I mean, Google sequencing risk, it’s a major, major, major risk. And unfortunately, if you’re trying to build an income strategy out of a stock portfolio, and you do not understand sequencing risk, you may be okay, you may not be okay, as a matter of fact, there’s also another rule that goes along with that Steve called the 4% rule. Are you familiar with that? One? I have heard of the 4% rule? Sure. Yeah. So basically, what they say is that, you know, if you’ve saved a million dollars in retirement, in the first year, you could take out 4%. So that would be 40,000. And then for every year after that, you could increase those withdrawals by 3% a year to keep pace with inflation. Now, that rule came about probably, oh, let’s say back in the early 90s. All right. Now, you think about the 90s. Right, think about the stock market in the 90s a little bit different than the stock market is different today than it was then. Yeah, yeah, much, much different. So as a matter of fact, the Wall Street Journal did an article and said because of the markets being so different today, compared to the early 90s. The 4% rule really doesn’t work as well as what it used to because of market volatility and people living longer and what they have found is that if you follow this 4% rule, right, and you’re trying to generate income from your retirement portfolio, which for a lot of people, Steve, that’s what they have to do in retirement because when they retire, most people are not getting pensions anymore, right? Yeah. And so, therefore, they’re going to need income from their retirement accounts. And according to the Wall Street Journal, if they follow this, this conventional wisdom of the 4% rule, and they don’t understand sequencing risk, there’s up to a 56% chance that the portfolio will fail, they’ll run out of money before they die. Now think about that for a moment, my gosh, I mean, if the job of building a retirement plan, by your planner is to help you mitigate risk in retirement, and they are using antiquated conventional wisdom, like the 4% rule, and not talking about sequencing risk, that exposes you to some degree of failure with the portfolio. Now, you know, if I were to build you a portfolio, Steve, let’s say I were to build you, you come to me, I build out your retirement portfolio, what percentage of failure would you be willing to accept? Within the portfolio? next to none? Yeah, I mean, that’s what most people will say next to none. You know, fortunately, for us, you know, we’ve got a very, very powerful software that will actually show the probability of success of a portfolio. So, you know, I was actually met with a gentleman at the beginning of the week, husband and wife, and when I put, when I put their portfolio through our software system, you know, it came back that there was only like a 30% chance that the plant actually works. Can you believe that 30% chance, I mean, you know, and one, I mean, because I don’t think people really take the time to get an MRI, right and on their portfolio, and you got to do that, you got to have that portfolio x-ray, that takes a deep look at what’s really going on. And when you start to run these Monte Carlo scenarios, and you start to trust stress test the portfolio, what you come to find is that, you know, a lot of these portfolios have a high probability to failure. But you don’t know that until you actually do the work, to have that information, to be able to see that, you know, it’s, it’s no different than, you know, if you go to a chiropractor, you know, and you have some back pain, the chiropractor really doesn’t know what’s going on until that x-ray is done. And it’s no different. I mean, you know, any doctor needs to do some type of testing to figure out what’s going on. And that’s what we do here at Secure Money Advisors. That’s why we offer the complimentary reviews. And matter of fact, for the next 10 callers who call in right now, we’re going to create a one-page financial review that really will indicate whether or not you’re in need of a full-blown financial plan. Now we’ve seen others charge up to $1,000 or more for these features. But we’re going to give this review away at no cost for the next 10 callers. Now, what it’s going to consist of is number one, and most importantly, it’s really going to take the mystery out of financial planning for you by mapping out where you are right now and where you need to go. So, we’ll also run a free report to help you untangle what working with your current plan or advisor is costing you and see if by simply protecting your retirement investments, you could experience dramatic growth potential, then we’re going to do a tax analysis, determine what you might be paying in taxes, if there’s ways to reduce that taxation. And more importantly, we’re going to show you actually how to build reliable cash flow in retirement. So again, for the next 10 callers, that’s a comprehensive financial review, that we’re going to give away complimentary with no obligation you call in right now and you’re one of the next 10 callers not only will you get the financial review and second opinion package that we’ve seen others charge up to $1,000 or more for, but you’re also going to get the hot off the press 401K Modern rollover guide. Now keep in mind, folks, we’ve seen people charge up to $1,000 or more for these reviews, but the report is invaluable. It could save you hundreds of thousands of dollars in retirement.
Steve 09:01
Hey, that sounds fantastic. Brian, folks, here it is. It’s an opportunity to sit down, get that financial roadmap put together once and for all. Brian and the team at Secure Money Advisors are there for you. They can take that complex financial world, turn it into something that just makes sense. It’s an opportunity to get a true practical Financial Review. 800-656-8616 That’s 800-656-8616 you’re going to get that comprehensive financial review. You see where you are today. Yes, but most importantly, it does become that roadmap that can help get you to where you need to be and where you want to be when it comes to retirement. 800-656-8616 that’s 800-656-8616 or just text BrianQ That’s right. All one word, BrianQ to 21000.
Brian Quaranta 09:47
It’s often the little things we can do that can have a major impact. And we come back we’re going to talk about some technology that you can use in today’s marketplace to give you a little bit more of a competitive edge.
Steve 10:05
We’re back on the retirement you radio increasing your financial IQ with BrianQ. And I’m consumer advocate Steve. Brian is President CEO of Secure Money Advisors all around good guy and okay, I’m intrigued. Let’s, let’s jump into this. Tell me about technology,
Brian Quaranta 10:22
Technology. How about algorithms? Running today’s marketplace?
Steve 10:27
They really do.
Brian Quaranta 10:28
They really do. They rule the social media world, they rule the news world, they rule the markets world. As a matter of fact, there’s probably the reasonable guess right now is that probably about 90% of the trades today are executed by computer investment algorithms. And you know, what, 90%. And by the way, that actually comes from a reliable source online, from a website called Seeking Alpha. And for you traders out there, you know, what Seeking Alpha means, right? We’re trying to, we’re trying to get an alpha, which is better a better return than its peers. But so, let’s talk about algorithms for a minute, why can algorithms give you a competitive edge in the marketplace? Well, because algorithms are much smarter than human beings. It’s machine learning. And I’ll use a great example. So, let’s use Facebook, for example. Okay. Steve, you use Facebook? Right? Of course. Yeah. Do you ever think it’s watching you or I always watching? I’m not, you know, you know, Facebook’s algorithm is so good that, you know, you could be talking about something and tomorrow it shows up in your Facebook. Oh, yeah. So, let’s talk about how that happens. So, with Facebook, the algorithm works in a number of different ways. So, the first is scrolling or inertia, right, the speed in which you scroll, and the pace in which you scroll. So, if you’re scrolling through Facebook, and everybody has a, a, let’s say, a baseline pace, right, that they scroll, scroll, scroll, scroll, and then you start to slow down because something caught your eye, but you didn’t stop, you just slowed. Well, that that that data point gets recorded by Facebook, and it notices that you slow down and it’s going to capture whatever data is there on that page. And it’s going to start to build that into the algorithm. So, what if you stop though, what if you completely stop? Well, that’s another data points. What if you click that’s another data point, what if you purchase that’s another data point, right? And as it continues to get these data points, guess what happens? You start to live in your own bubble, more and more of what you like, starts to show up in your Facebook feed. The other one is, is YouTube YouTube’s a great example of algorithms, right? I have a client of mine that he loves running, okay, and he’s always researching the best ways to stretch, you know, the best form to run when he goes to his YouTube page. You know, all the suggested videos are about running. Okay, now I like to fly model airplanes. That’s a little secret. Most people don’t know about me know that. You didn’t know that. Right? I like to fly model airplanes. And so, a lot of times, I’m looking for different ways to construct certain airframes or I might be looking for ways to wire in different technology, especially, you know, things called point of view cameras, where we can actually from the ground see what the plane is seen up in the air, which is really neat stuff. But anytime I hop on YouTube, guess what all my suggested videos are, it’s all on its own constructing airplane airframes, or on technology of how to wire these air aircrafts. And so those are algorithms working now. Take that same concept and bring that into the market. Right? How do you know what asset class is going to be the best at any given time? You don’t? Okay, not in today’s world. And, you know, the, if you look at just how they’re we’ve got flash crashes. I mean, the pandemic is a great one, you know, the average person lost, you know, you know, 25-30% in March, utilizing an algorithm, our portfolio lost less than, less than 10. Why? Because the algorithm can get us in and out of asset classes very, very quickly. Because it’s constantly making trades. Now, you would think that that would be a very expensive way of investing. But remember, you know, Charles Schwab, who bought TD Ameritrade and all these platforms, got rid of all their commissions. So, it’s actually a very effective way to trade. But these algorithms can definitely give you a competitive edge in the marketplace. And quite frankly, according to Seeking Alpha, if you are not considering using our algorithm in your portfolio, you actually run the risk of being left behind in today’s marketplace because again, technologies change changing but if you look at the majority of advice out there, Steve, it’s still the antiquated advice of, you know, using a diversified portfolio of mutual funds right and mutual fund Just don’t move as quickly as a very dynamic algorithm driven portfolio.
Steve 15:05
Sure. Well, and again, folks, if this is interesting to you, I would say you owe it to yourself to text BrianQ to 21000. That’s BrianQ all one word to 21000. So, one question. So, you talk about these algorithms and how they move the market is that why if you if you happen to be watching, you know, like, maybe market watch or something like that, where they’ve got an active ticker going, and you see these big ups or big downs is that what’s happening behind exactly
Brian Quaranta 15:32
What’s happening, it’s, you know, the other thing you’ll hear it referred to is, you know, is high frequency trading, right. But institutions continue to use capital to their advantage. I mean, today, that means they build algorithms to gain the edge, which they call alpha, this also allows institutions to access new information, while individual investors still cannot. And consequently, the individual investor experiences frustration, confusion, fear, because they’re never going to outpace an algorithm that makes 1000s and 1000s of decisions every second, right? So, these, you know, avoiding these uncomfortable feelings is why it’s so important to work with investment advisors who use algorithms in the end, that’s the answer to the Old Tools and the New World predicament right? Yeah, got it got to focus on that stuff, got to focus on that. And if you’re not, if you’re not having those conversations, you know, quite frankly, you’re just not staying up with technology. And that’s why we always offer these no-cost consultations. And matter of fact, for the next 10 callers who call in right now, we’re going to create a one-page financial review that really will indicate whether or not you’re in need of a full-blown financial plan. Now we’ve seen others charge up to $1,000 or more for these features. But we’re going to give this review away at no cost for the next 10 callers. Now, what it’s going to consist of is number one, and most importantly, it’s really going to take the mystery out of financial planning for you by mapping out where you are right now and where you need to go. So, we’ll also run a fee report to help you untangle what working with your current plan or advisor is costing you and see if by simply protecting your retirement investments, you could experience dramatic growth potential, then we’re going to do a tax analysis, determine what you might be paying in taxes, if there’s ways to reduce that taxation. And more importantly, we’re going to show you actually how to build reliable cash flow and retirement. So again, for the next 10 callers, that’s a comprehensive financial review, that we’re going to give away complimentary with no obligation you call in right now and you’re one of the next 10 callers not only will you get the financial review and second opinion package that we’ve seen others charge up to $1,000 or more for, but you’re also going to get the hot off the press 401k Modern rollover guide. Now keep in mind, folks, we’ve seen people charge up to $1,000 or more for these reviews, but the report is invaluable, it could save you hundreds of 1000s of dollars in retirement
Steve 17:52
800-656-8616 You’re gonna get that comprehensive financial review, plus all the extras that go along with it. And when you walk out the door, you’ll have in your hand that roadmap that we talked about that can help get you to where you need to be when it comes to retirement, call us. 800-656-8616 that’s 800-656-8616 or text BrianQ all one word, BrianQ to 21000.
Brian Quaranta 18:18
When we come back, we’re gonna be getting back to basics. And remember basic fundamentals are the key to having a great retirement when we come right back.
Steve 18:35
We’re back on retirement, you radio increasing your financial IQ with BrianQ. I’m consumer advocate Steve, BrianQ is Brian Quaranta. He is president and CEO of Secure Money Advisors and so much more. Okay, Brian, back to basics. Sometimes it’s important to really just take things take a step back and just look at the big picture and begin to put those pieces together.
Brian Quaranta 18:56
Yeah, getting back to basics are focusing on fundamentals like taxes. Taxes. Taxes. Steve, do you think taxes are going up or down in the future?
Steve 19:05
Yeah, they’re going up. I say that with almost certainty.
Brian Quaranta 19:09
What do you think the biggest eroder of wealth is? Do you think it’s lack of stock market performance? People taking too much money out of their plans or taxation?
Steve 19:18
Well, it’s gotta be taxes.
Brian Quaranta 19:20
Of course. I gave you an easy one there. But the taxes are the biggest eroders of wealth. And, you know, unfortunately, it’s not a really big focus for a lot of people which they’re missing if they’re not having conversations about taxation. So, you know, I had a guy come in this week that looks like he’s probably doing some of his own investing. I think he gets some advice from a guy at a country club. And what he doesn’t realize is that he has so much exposure to not only risks because he’s not using the algorithms to his advantage, but he’s also not focusing on taxation. So, you know, this is an individual that really doesn’t need the money. right away, meaning that you know that when they retire, they’re not going to need to take income right away. Well, if you’re in that situation, and let’s say you’ve got a half a million dollars saved, and you don’t need to take income from your portfolio right away, you better be buying out the IRS right now at lower tax rates. And what I mean by that is, you know, let’s say you’ve got a half a million dollars right now. Okay, well, let’s say that that half a million dollars from the age of 62 to 72, grows to eight or 900,000. Well, what happens at the age of 72? Well, the IRS is going to force you to start taking distributions out known as your required minimum distribution, on about eight or 900,000, they’re gonna force you to take out about $35,000 and pay taxes on it. And you’re gonna have to take it out, because if you don’t, it’s a 50%. Penalty. Yeah, but look at let’s look at, let’s look at some even more simple math here. Okay. Let’s say I’ve got somebody taking $10,000 a month out of the retirement plan, and tax rates are at 20%. Well, after they pay the taxes, they’re going to net out $8,000. Okay, let’s say that their investments are positioned well enough that they’re getting enough growth to keep pace with, you know, the rising cost of living, inflation, and things along those lines. All right. But now that same $10,000, that they’re taken out, isn’t hit with a 20% tax rate, it’s hit with a 40% tax rate. So now, their net income goes from 8000, down to 6000. That’s a huge loss of income, not to the not to inflation, not to the cost of living, but the taxation. And that’s what people don’t realize with these retirement accounts is that your biggest risk in that portfolio in your retirement account is not the stock market. It’s the IRS, right? It’s the IRS. And most people are not taking the time to build a strategy around getting that money from taxable money to tax-free money. Right. So, if I’ve got somebody that comes in, and we’ve got some time, and this is why folks planning is so important, because you know, if you’re planning five or 10 years out, these are strategies that you can use. So you know, if I can, if I can take that $500,000 and start to convert little by little each year and pay taxes at today’s tax rate. And now every bit of growth that I get on that money is 100%, tax free, and every withdrawal that I take is tax free. Oh, and by the way, when you die to be tax free to your kids, oh, and by the way, you don’t have to take required minimum distributions. That’s a big game changing event for your wealth. Because if you don’t do anything, the IRS is going to force you to take the money out of 72. And on top of it, they’re going to force your kids into distribution when you die, and by the way, those distribution rules have changed. At the end of 2019, something called the secure Act was signed into law. And the IRS is making the kids spend that money down the money that they inherit, they’re forcing them to take that money out over a very short period of time compared to their life expectancy. And what people don’t realize is that the IRS becomes their biggest risk in retirement for not keeping pace with the cost of living and inflation because of taxation. And number two, the biggest risk to their wealth is the IRS at death because the IRS winds up becoming the biggest beneficiary. So, tax planning folks is very, very important. And again, this is why we offer the complimentary consultations at secure money advisors, where we can go through these things, we can look at the- we can look at how to maximize tax or maximize, or I should say minimize the taxes on the portfolio. But we’ll also look at maximizing returns and things along those lines. So, taxes are very important, Steve, and that’s, you know, it’s like do I Roth, the fi or not no retirement savers, you know, who have traditional IRAs to supplement savings in our 401K’s or who have rolled over amounts from 401K’s to IRAs, face that tough decision, if you convert into a traditional IRA to a Roth IRA. You know, again, we’re talking about tax-free money in the future. How is anybody not focused on giving themselves tax-free money?
Steve 24:08
Right, exactly. And it’s not like we’re trying to avoid the taxes, we’re gonna pay what we owe, but we don’t need to pay any more than that.
Brian Quaranta 24:14
Yeah, hey, listen, you know, you don’t want to be like the United States government. Don’t kick the can down the road, don’t procrastinate. It’s the biggest risk to your portfolio. And, you know, in order to make changes, you gotta, you gotta get up and you got to take action. You go, you pick up the phone, you call in the secure money advisors call the 800 number that we’re going to give you schedule a time to come in and take advantage of it. It’s not very often that you get to sit down with a fiduciary and start going through these things. Remember, folks, you cannot get a second opinion from the people that gave you the first opinion. And we understand that coming in and seeing advisors sometimes can be an intimidating process, but not at Secure Money Advisors. We’re truly here to make a difference. We’re truly here to help. But people come to secure money advisors, not the shop. They come to secure money advisors to make changes that benefit themselves and their family. Yes, Steve. And that’s why we always offer these no-cost consultations. And matter of fact, for the next 10 callers who call in right now, we’re going to create a one-page financial review that really will indicate whether or not you’re in need of a full-blown financial plan. Now, we’ve seen others charge up to $1,000 or more for these features. But we’re going to give this review away at no cost for the next 10 callers. Now, what it’s going to consist of is number one, and most importantly, it’s really going to take the mystery out of financial planning for you by mapping out where you are right now and where you need to go. So, we’ll also run a fee report to help you untangle what working with your current plan or advisor is costing you and see if by simply protecting your retirement investments, you could experience dramatic growth potential, then we’re going to do a tax analysis, determine what you might be paying in taxes, if there’s ways to reduce that taxation, and more importantly, we’re going to show you actually how to build reliable cash flow and retirement. So again, for the next 10 callers, that’s a comprehensive financial review, that we’re going to give away complimentary with no obligation you call in right now and you’re one of the next 10 callers not only will you get the financial review and second opinion package that we’ve seen others charge up to $1,000 or more for, but you’re also going to get the hot off the press 401k Modern rollover guide. Now keep in mind, folks, we’ve seen people charge up to $1,000 or more for these reviews, but the report is invaluable. It could save you hundreds of 1000s of dollars in retirement.
Steve 26:22
800-656-8616 You’ll get that comprehensive financial review, that D will show you where you are today, of course, but most importantly, it does become that roadmap that can get you to where you need to be when it comes to retirement 800-656-8616 Again, 800-656-8616 or just text BrianQ all one-word text BrianQ to 21000.
Brian Quaranta 26:47
We’ve got questions from listeners coming up next. That and more right after this.
Steve 27:03
We’re back on Retirement You Radio increasing your financial IQ with BrianQ. I’m consumer advocate, Steve and of course, BrianQ is Brian Quaranta at Secure Money Advisors having a great conversation today, Brian, and really, I think, to kind of just the overview of everything that you’ve gone through today, man, it’s pretty impressive. And the fact that you’re offering folks that review that consultation for free, I mean, it’s a heck of a deal.
Brian Quaranta 27:32
Well, Steve, it’s, you know, it’s no different, right? It was like, I’m trying to get people to understand to, you know, you don’t need to continue to use the flip phone anymore. You know, there’s a lot better technology out there today, like the iPhone or an Android phone. But you know, in the investing world, a lot of times people are still using the old flip phone. And I want people to realize that you know that technology has changed. The problem is we still have big, large institutions out there that want to sell you the flip phone. And, you know, if you continue down that road, you might have some success with it. But that’s not really where the industry is going. I mean, you know, for myself, it doesn’t matter what industry it is, I want to stay on the cutting edge of it, because I want to take full advantage of you know, of anything that’s going to give me a competitive edge in the marketplace. And you know, today we talked about the algorithms, and you know how 90% of the market is being traded by algorithms. We talked about how algorithms take the data points, and, you know, these algorithms, you know, are looking at things like interest rates, stock, market volatility, money supply things along those lines. And based on that data, it’s been able to take the portfolio and move it to the best asset class based on that economic scene, you know, are we in a contraction? Are we in an expansion? Are we at the peak? Are we at the trough, and there’s different economic scenes for those specifics? You know, the, for those specific areas of the economic cycle, and you know, rather than a human being trying to do that, and think about this for a minute, folks, think about how much of a disadvantage you are at if you’re relying on your financial advisor to make changes in a very high-speed marketplace. So, let’s just say your financial advisor has 100 clients, heck, let’s say they’ve got 25 clients, how many times do you think they’re going to be able to get into those people’s accounts every single day or every single week and make changes to maximize the asset allocation of that portfolio? Not done? You’re not very good. Yeah, you couldn’t do it. You couldn’t do it. And because the markets so dynamic, and it moves so fast, you’re just at it, you’re just at a competitive disadvantage. So, you know, I’m obviously very passionate about it because we see it work. And you know, I don’t think anybody’s really talking about this and people need to know this stuff exists. So again, you know, people are coming to secure money advisors not to shop. You don’t come to secure money advisors to shop. You come to secure money advisors because you want help, and you want to make changes. That’s it. So, when you call in, you schedule your appointment, you’re coming in because you want to make changes. And it’s time for you to make changes. But the only way that you’re going to be able to make changes and make a difference in your life and your family’s life is to actually take action. Get up, pick up the phone, schedule the appointment, that’s how you do things. Other than that, all you’re going to do is kick the can down the road. And next year, you’re going to be the same situation you were the year before. And I know it can be scary. Because at the end of the day, if you’ve been working with somebody for a long time, and you trust that person, as a big decision to make to go to go make changes. But at the end of the day, remember you cannot get a second opinion from the person that gave you the first opinion. It just doesn’t work. Right.
Steve 30:39
Right then folks, if that’s interesting to you, then text BrianQ to 21000. All one word, BrianQ to 21000. Let’s jump into a couple of questions here. While we have some time, Clinton checked in he says, “Should I elect to put my bonus into my 401k? I’ve heard conflicting advice, but I don’t understand the downside.”
Brian Quaranta 30:58
Well, again, we were talking about the downside today, right, taxation. So, if I have if I’m getting a $20,000 bonus, and I put that into my 401K rather than paying the taxes on it, right, so, you know, let’s say you get $20,000. And Clinton says, well, geez, I don’t want to pay taxes on $20,000. Because that could cost me $4,000. Okay, right. Well, Clinton, if you put that money into your 401K plan, and that 20,000 grows to 100,000? Are you going to want to pay taxes on 100,000? Or are you going to want to pay taxes on 20,000? Yeah, most people it’s right, there’s your answer, right?
Steve 31:31
That is the answer.
Brian Quaranta 31:33
So, 20% on 20,000 is only $4,000. 20% on 100,000 is $20,000. That’s a big difference. You’re talking about a 300% increase in taxation on that money. Because you don’t want to pay the taxes. Now, most people need to realize that it’s better to rip the band-aid off, pay the taxes and take that money and be able to grow it more tax efficiently.
Steve 31:55
Absolutely. So, 800-656-8616 Clinton, if you want to have a conversation with Brian. And let’s see, we got time for one more quick one. Let’s go to Sarah. She says “I heard you talk about a new kind of life insurance. That’s also long-term care. Can you explain what that means and how I can take advantage of it?”
Brian Quaranta 32:11
What you can do now is you can buy these hybrid policies that basically will pay out as a life insurance death benefit, or it will pay for the cost of care for long-term care facilities. So, you know, let’s say you buy a benefit worth $500,000. And let’s say that you go into a nursing home, and you’re in there for two years, and you wind up using $250,000 of the 500,000. And then you die. Well, $250,000 got spent on the long-term care facility to pay the cost of that care. But you didn’t use all 500,000. So, when you die, the other 250,000 pays out as a death benefit tax-free to your family. If you don’t go into a nursing home at all, and you died, you would give $500,000 tax-free to your family so little, you know, these policies are a little bit more expensive. But a lot of people like them because it’s not a use it or lose it proposition, you know that it’s going to be guaranteed to pay one way or the other.
Steve 33:10
Well, that’s fantastic. And Brian one more time, why don’t we invite folks to give us a call.
Brian Quaranta 33:14
For the next 10 callers who call in right now, we’re going to create a one-page financial review that really will indicate whether or not you’re in need of a full-blown financial plan. Now we’ve seen others charge up to $1,000 or more for these features. But we’re going to give this review away at no cost for the next 10 callers. Now what it’s going to consist of is number one, and most importantly, it’s really going to take the mystery out of financial planning for you by mapping out where you are right now and where you need to go. So, we’ll also run a free report to help you untangle what working with your current plan or advisor is costing you and see if by simply protecting your retirement investments, you could experience dramatic growth potential, then we’re going to do a tax analysis determine what you might be paying in taxes, if there’s ways to reduce that taxation, and more importantly, we’re going to show you actually how to build reliable cash flow and retirement. So again, for the next 10 callers. That’s a comprehensive financial review, that we’re going to give away complimentary with no obligation you call in right now and you’re one of the next 10 callers not only will you get the financial review and second opinion package that we’ve seen others charge up to $1,000 or more for, but you’re also going to get the hot off the press 401k Modern rollover guide. Now keep in mind, folks, we’ve seen people charge up to $1,000 or more for these reviews, but the report is invaluable. It could save you hundreds of 1000s of dollars in retirement
Steve 34:30
800-656-8616 You’re going to get that comprehensive financial review. You see where you are today but most importantly you end up with the roadmap that can really help get you to where you need to be when it comes to retirement 800-656-8616 Again 800-656-8616 or just text BrianQ all one word, BrianQ to 21000. Brian, as always, a pleasure to hang out with you and as always great information.
Brian Quaranta 34:57
Steve. Always great seeing you folks. Thank You so much for listening. We look forward to seeing you next week right here on Retirement You Radio.
Announcer 35:10
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.
