On this week’s episode of On the Money With Secure Money, Brian Quaranta shares 5 effective ways to protect your retirement savings from rising inflation rates.

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Radio Show Transcript

Announcer 00:00

Three investment advisory services are offered through foundation investment advisors, LLC. an SEC registered investment advisor Brian Quaranta and his guests provide general information not individually targeted, personalized advice and are not liable for the usage of information discussed. Exposure to ideas and financial vehicles should not be considered investment advice or recommendation to buy or sell any of these financial vehicles. This information should also not be considered tax or legal advice. As performance is not a guarantee of future results, investments will fluctuate and when redeemed may be worth more or less than when originally invested. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products, they do not refer in any way to securities or investment advisory products, fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company.

Brian Quaranta 00:39

The economy’s reopening, we’re seeing higher inflation. On today’s show, we’re going to outline how this could impact your financial security and retirement and offer some potential solutions when we come right back On the Money with Secure Money. And now On the Money. Any good retirement plans starts with the foundation,

Announcer 01:00

asset protection, tax reduction holistic planning,

Brian Quaranta 01:03

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

Announcer 01:07

Retirement doesn’t have to be complicated.

Brian Quaranta 01:10

You think that’s the difficult part. That’s just getting started.

Announcer 01:14

And now On the Money with Secure Money.

Steve 01:21

Hey, everybody, welcome in. This is On the Money with Secure Money. Brian Quaranta. Here, Brian, of course, is the President CEO of secure money advisors. I’m consumer advocate Steve. And this is again, one of those shows where I mean, we talked about this, it seems all the time, but by the way, how are

Brian Quaranta 01:35

you? Hey, you know, these are the shows that always remind us of the importance of having a plan, right? Of course, planning, planning, planning, planning. Remember folks, a basket of investments, a 401k plan, an IRA plan, a Roth IRA plan that has some stocks, bonds and mutual funds in there, that is not a retirement plan. Remember, a retirement plan has five key areas cashflow planning is number one, because when the paycheck stops, bills and taxes are not. And of course, if you want to retire, you’re gonna need the money to do all the things you said you were gonna do. And don’t forget that in retirement every day is Saturday. Right, Steve? Absolutely. Number two is taxes. So, as you’re building out your model for retirement planning, whether that’s going to be an early retirement, or retirement later on in life, you want to make sure that you’re going to pay the least tax possible, right. So, the best tax rate that you can have in retirement, folks, is zero. Is that possible? Yes, it is. With proper planning, you could actually Pay Zero Taxes in retirement, but you got to learn how to go from taxable money in tax free money. The third thing is having the proper investments, the investments that you use during your accumulation years, which are the years that you’re building up your wealth, accumulating the money that you need for retirement, those are not the same investment strategies and techniques that you’re going to use during your retirement years are better known as your distribution years, we’ve got 85 to 90% out there today, not retirement with a pension, employers replace guaranteed pensions with 401k plans. And so now I call this the yoyo retirement plan you are on your own, you better figure out how you’re going to create this pension for the rest of your life. 10 out of 10 advisors, nine out of 10 advisors because Secure Money Advisors only focuses on the distribution phase, we teach you how to take the money that you’ve accumulated over 3540 years and put it to work for you actually get your money to start working for you. Did you know if you asked 1000 people, according to AARP, what they fear most, Steve, AARP said: Do you fear death or running out of money more? Do you think the money said it’s money? It’s the money? Sure, it’s the money? It’s very simple. So planning, planning, planning, planning, right? So, third is investments. Fourth is a healthcare strategy. Because if you do have a health event, heart attack, stroke, dementia, any type of health event, how are you going to pay for that care? Are you going to come out of your own pocket, because I can tell you right now skilled care is going to cost you over $10,000 A Month in the state of Pennsylvania. And if you think you want the state to pay for you think again, because there are laws out there that will allow the state to come back and recoup money from your beneficiaries. That’s right, they’re gonna go after your kids’ money to pay for the time that you spent in care. And of course, fifth, and most importantly, is when the good Lord decides to take you home probably better that you make your family, your charities and the people you love the beneficiaries of that money and not the IRS. So, let’s talk about these rising inflation rate. Steve, what do you do? Because it definitely going to be meaning that people need a lot more money. I know, it’s a lot more expensive to go to the gas pump right now. That’s for sure.

Steve 04:38

Oh, my gosh, yeah. Well, in the grocery store, too. I mean, everywhere. And it seems to be on everyone’s mind as well. And I think that is cause for concern. But again, if I’m a client of yours, Brian, I don’t need to be in panic mode because you’re taking care of

Brian Quaranta 04:51

Well, we’d like to think so. And we do a pretty good job at it. 22 years of doing this as a fiduciary Our job is to build you a plan. Our job is not to sell you investments, we don’t work off a commission off, we can build you a plan. That is what you should be looking for not purchasing investments. Now, investments are important because they are the means of actually making the plan work. But too many people out there are just buying investments before they have a plan. And that’s a little bit backwards. Because at the end of the day, we should be defining what the plan needs to do. And then the financial industry has created specific financial products to help you achieve specific goals that you’re aiming for when it comes to your retirement strategy. But let’s talk about the need for income, Steve, because that’s what makes it work. Well, yeah, I mean, if you needed, let’s say, $60,000, for your first year, retirement, 20 years and 20 years, you’d need $108,000 A year to match today’s purchasing power of 60,000. Wow. But another? Yeah, another way to look at it is at a 3% annual inflation rate. That’s initial 60,000 would be worth 33,000. In 20 years, right? That’s a drop shipper reality, there it is. And most people don’t take into account inflation in their portfolio. And the problem is, it was a lot easier 3040 years ago, because when you shifted into retirement, the idea was you wanted to prove your principle and not risk what you’ve accumulated over a 30- or 40-year retirement. And you used to be able to do that by going to cash instruments, you’d be able to do things like CDs, bonds and stuff like that. But there’s bank CDs don’t pay any interest anymore. I remember the days they were paying between 10 and 15%, do you remember those days?

Steve 06:35

I do remember those days. I think my father was happy.

Brian Quaranta 06:38

Yeah, so was my grandfather, I think even got a toaster when you actually went to in. So, but cash isn’t paying anything, and money markets don’t pay anything anymore. I mean, at one point money markets were paying about four to 7%. And we just can’t make money in cash. So, what has that caused? It’s caused the reality that people have to use the stock market to actually keep pace with inflation. And that’s a very, very scary thing to do, especially if they’re using old strategies and techniques like individual mutual funds. That is a dying strategy. That’s like using a flip phone. Could you imagine trying to operate your life from a flip phone? Now some of you listeners out there might be thinking yourself. Well, I do, and things are a lot easier. But in the world we live in today, folks, the market is no longer a flip phone, it’s a smartphone. And if you don’t have a smartphone working for you, and what I’m talking about is tactically manage low-cost ETFs that you can get access to that truly will help you protect yourself on the downside, get a be able to maximize yourself on the upside, but more importantly mitigate that risk that you need as you’re building income. And this is why we have created the right track retirement system. Because the number one question I’ve gotten for 22 years is Brian, I want to know if I’m on the right track, Am I doing the right things. If you were not on the right track, when would be a good time to know, if you come to secure money advisors, we can help you determine that we focus on five key areas income, taxes, investments, health care and legacy planning. We are a full-service financial firm, whether you need accounting services, estate planning services, financial planning services, Medicare planning services, we can handle it all for you we truly are going to for the next 10 callers give you a complimentary portfolio analysis that will determine whether or not you’re in need of a full-blown financial plan. We do it at no cost for you. We truly take the mystery out of financial planning, but you got to do your part. You got to pick up the phone. We know the process of seeing a financial advisor can be intimidating, but it’s secure money advisors, we’ve made that process very simple and easy to understand, Steve, why don’t you tell them how they can call in today and take advantage of the opportunity.

Steve 08:37

It would be my pleasure, Brian, it’s a simple phone call 800-656-8616 So you get the ball rolling, you’re going to be able to get that comprehensive financial review and you’re going to see where you are today. But more importantly, you’ll find that you walk out the door with a roadmap that will help get you to where you need to be when it comes to retirement. Make that call today while you’re thinking about it 800-656-8616 Again 800-656-8616

Brian Quaranta 09:02

There’s no question life can be stressful at times managing it is key though when we come back, we’ll show you how to diagnose and treat your financial portfolio stress when we come right back with On the Money with Secure Money

Announcer 09:23

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

Steve 10:03

We are back On the Money with Secure Money. Brian Quaranta is here, Brian, of course President CEO of secure money advisors on consumer advocate Steve having a great conversation. We talked about inflation, we talked about making sure that that income continues. But now let’s talk about stress testing our portfolio. And that’s something that you do, Brian, but I mean, we’re I mean, there’s a lot of stress, just in general getting to retirement, don’t you think?

Brian Quaranta 10:27

Well, there is. And let’s talk about stress testing, because people need to understand that when you’re building a retirement strategy, it’s completely different than building an investment strategy. Right? During the accumulation years, it’s very simple. You need a key ingredient, that’s part of your financial formula during your accumulation years. And that key ingredient that we all need to be successful with our investments is time. Now, let’s talk about that for a moment. Because if any of you have ever out there have lost money in the stock market, and you called your financial advisor, the number one thing that every one of you will be heard before is that financial advisors say to you, don’t worry about it, hang in there, you’re in it for the long haul. It’s just a paper loss. It’s just a paper loss. Steve, you know this right? Because we’ve all heard them. So why does the industry say this? Well, to a certain degree, it’s true, because we do know that if you just give your money time, it will rebound. The question is how long will it take to rebound? But let’s talk about retirement for a moment. Because that cookie cutter phrase does not apply to those that are close to retirement, or in that are in retirement. So how are you going to be able to not worry about anything and just hang in there, stay in it for the long haul, if you need your money right now to live off of. So, think about it. We just talked about this, on the first segment, 85 95% of the people are not getting a pension. So, what does that mean? That means they have to use their 401k, their 403 B, their 457 plan, some type of retirement account that they’ve built up for themselves. So now they’re tasked with having to generate income, okay, from a portfolio that probably is diversified in different risk investments within the market. So now what happens is, let’s say you need $20,000 A year of income, and the market doesn’t cooperate that year, and it goes down. And let’s say that you lose $50,000 That your market corrects. But you now have to take your income because you need it because Social Security is not going to be enough. So, you need that extra 20,000 to pay the bills and do the things that you want to do. So, you just lost 50,000 Because of the market, but you took 20,000 out in income. Now you’re down $70,000 on the year. This is compounding your loss and locking into your loss. It’s also known as also known in the industry as sequencing risk. Nobody’s talking about this though, this will destroy your portfolio. Look at the math on sequencing risk. This is the concept of receiving an unfavorable order of returns when you’re generating income and retirement. It can be devastating to portfolio. And this is why the Wall Street Journal came out not too long ago and said, if you’re trying to generate money, income, write monthly income from a risk investment. Depending on the return depending on where the markets at you have up to a 57% chance that you could fail, meaning you could 57% chance that you could run out of money before you die. Now, I don’t know about you, Steve, but I’m not comfortable building a plan that does not have a high probability of success. No, that doesn’t sound good at all. I mean, could you imagine leaving your financial advisors office after you just signed away on the dotted line for them to handle your money, and all they’re going to do is what nine out of 10 financial advisors do? They’re going to put your money in a diversified portfolio in the stock market. Right? And when it goes down, they’re gonna tell you not to worry about it hang in there. But they don’t tell you about sequencing risks. They don’t tell you about compounding losses, locking into losses and how that can impact you. They don’t tell you that the probability of getting the wrong returns at the at the wrong time could result in having a 57% chance of failure. If they did. I want to know how many people would sign on the dotted line? Because I know I wouldn’t, would you know?

Steve 14:21

Of course not.

Brian Quaranta 14:22

So how do you mitigate that risk? How do you build a portfolio that used to be very simple to build, right? Because you could use bond instruments cash instruments to create some safety problem is safe, money doesn’t pay anything. And as a fiduciary, I know that my clients cannot risk 100% of their life savings. So, what we have to do is we’ve got to use what we call a bucketing approach. So if you can visualize three buckets of money, we need now money, soon money and later money. The now money needs to be accessible that we can get income from it. The sooner bucket needs to be the next accessible and the later bucket needs to be 15 years on. What this does by segregating the money into different buckets is that allows us to get something back that we don’t have in retirement when we’re growing our money. And that’s called time. But by having a bucketing strategy are essentially buying time back and giving your portfolio the room that it needs to breathe and do what it needs to do. And this is why I created the right track retirement system. We spent years developing this system to make it simple and easy to understand. Because if you ask people, you know, if going to a financial advisors, officers an easy thing to do, they’ll tell you know, it’s very intimidating process, you know, all of a sudden, they’re going to, you know, bring all their statements, and they’re going to open up, you know, 35-40 years’ worth of savings, and they’re afraid of being criticized. That is one guarantee I’ll give you when you come into secure money visors, you will not be criticized on what you’ve done. My job and my team’s job is really to listen and understand what’s been going on up into this point. Where are you at right now. And where do you need to go and essentially, is where you’re at right now and how you’re invested actually going to get you where you need to go. But this is what the right track Retirement System will do. So, for the next 10 callers who call in right now, we are going to give you a complimentary portfolio analysis known as our right track retirement. Now this system has been developed to help you understand and maximize the five key areas of your planning model. Number one, most importantly is your income strategy to his taxes. Three is your investments, health care and legacy planning. We will literally help you take the mystery out of financial planning will help give you turn by turn directions, we’ll show you how to potentially reduce your taxes, we can show you how to potentially reduce your risk while maximizing returns. But at the end of the day, getting yourself a second opinion is very important as you shift into retirement take advantage of it. We know the process sometimes can be intimidating, but we’ve created it here at secure money advisors so that it’s not so again for the next 10 callers. It’s a complimentary right track retirement review.

Steve 17:07

Hey, that sounds great. Brian, folks take advantage of what Brian’s offering here. It’s a phone call away 800-656-8616 Take a lot of that complex financial world, break it down, make it clear, easy to understand. It’s a practical financial review. And if you’ve never done it before, there’s no time like the present a lot of you’re looking for a second opinion. Yes, now’s the time to make that call 800-656-8616 10 callers right now gets that comprehensive financial review that Brian just described, plus all the extras that go along with it. And when you walk out the door, you will have in your hand the roadmap that we talked about that will guide you that will help get you to where you need to be when it comes to retirement 800-656-8616 Again, 800-656-8616. When

Brian Quaranta 17:50

we come back, we’re going to continue to talk about how to diagnose and treat your financial portfolio right here with On the Money with Secure Money.

Announcer 18:04

He’s letting the clock run out on his social security to age 70 for maximum benefits. And here comes the Roth conversion. He’s got some outstanding coaching with that lifetime income plan. He’s created his own pension as well. And it looks like he’s going to go All! The! Way!

Play your best retirement game call Brian Q 800-656-8616. Or text Brian Q to 800-656-8616 Call or text Brian Q to 800-656-8616.

Steve 18:40

We’re back On the Money with Secure Money. And Brian Quaranta consumer advocate Steve having a great conversation today covering some ground, Brian, I like it. We were talking about inflation. And then we talk about stress testing your portfolio understanding how to take that stress out of your portfolio and importantly, out of your life when it comes to retirement. What do you think, Brian?

Brian Quaranta 18:59

I do a lot to it. Isn’t there is? I know. Well. I know. We’ve got some quite a few questions. Well,

Steve 19:07

yeah. You were talking about stress test. And we talked about stress in your plan. I used to work for a guy who would say, You know what stress is? Well, yeah. You know what the absence of stress is? What’s that? Death?

Brian Quaranta 19:25

Right. Yeah, as long as we’re, as long as we’re alive, there’s going to be stress.

Steve 19:29

Exactly. I can help ease that a little bit. And yeah, tons of questions. So, Brian, let’s jump in while we still got some time, I guess. And we hear from Ron. He says I just turned 52 been working for the same company but 21 years. I came in at the tail end of pensions and was then converted to a 401k have never met with an advisor think it’s time. What should I be looking for and how should I prepare? I like that question.

Brian Quaranta 19:55

Very common these days, where we’ll see people that have been working for employers. is where they got in on the tail end of the pension, the pension was cut off, they now converted to a 401 K plan. So here you’ve got Ron who’s going to be retiring, he’ll probably get Social Security. On top of that, he’ll probably get a small pension because the pension at some point was stopped to go to the 401 K plan. But he’ll also have the balance of the 401 K plan, that he’ll be able to generate some cash flow from it if he needs it. But you know, Ron is exactly like everybody as they’re shifting to retirement, what Ron should be looking for, and what he should be preparing for. And more importantly, is his income strategy in retirement. Remember, folks, the driving force behind the retirement plan is the income strategy. Because when you stop working, the paycheck is going to stop, but bills, taxes and all the things that you want to do, that’s not going to stop. So, we have to have a way to replace that. You know, and Ron’s probably never sat down with anybody that focuses on the distribution phase, he’s probably, you know, so focused on just accumulating money, he doesn’t know how to actually take the money that he’s been putting away and has an all these different plans and organize it in a way where he can see, hey, if I retire at 62, I’m going to be fine. If I retire at 60, I’ll be fine. And that’s part of our job here at secure money advisors is to show you number one, could you retire earlier than you thought? And what would be the benefits of waiting so but the five key areas is what he should be preparing for income taxes, investments, health care and legacy planning. Folks, I promise you, if you focus on those five key areas, you make sure every i is dotted and every T is crossed, you’re going to have a great retirement.

Steve 21:39

I like the sound of it. Brian 800-656-8616. Ron, if you’d like to go sit down with Brian. Sharon is wondering, she says, I’ve seen a lot of commercials recently for ETFs. But I don’t really understand how they work. Can you explain and then do you find them to be a good or a bad investment? That’s a good question.

Brian Quaranta 21:59

Yeah, well, again, flip phone versus smartphone. Right. So, think of your mutual funds, right? Everybody knows pretty much, you know, what a traditional mutual fund is, it’s a basket of managed stocks. So if you were to look at, let’s say, a growth fund from any specific fund family, you’re gonna see maybe 50 to 100 stocks, within that, within that mutual fund, and those stocks are managed, they’re not very tax efficient, they can generate a lot of turnover, which in turn, could have the client pay more taxes than necessary ETFs have come into the marketplace, which provide a higher level of diversification much, much, much lower and cost, they trade at a real stock value, meaning I can buy an ETF at 1pm, sell it at 130. And I can get a buy price and a sell price. Whereas with my mutual fund, if I want to put a sell in in the morning and the mutual funds up, I don’t get the sale price until the end of the day known as the nav or net asset value. And my that could have gone over and down over time. So, you’re gonna find that mutual funds are slowly started to become kind of the dinosaurs of the industry. I don’t think they’re ever going to go away because there’s trillions of dollars in mutual funds, companies have invested their entire strategy into mutual funds. But moving forward, you’re going to see lots of people moving towards ETFs, a lot much lot more flexibility, lower cost can be managed actively, much better and much more tax efficiently that we’re seeing with any other investments. So, I personally use ETFs. Sharon, if that means anything to you of how I feel about them. But the main difference is the fact that highly diversified lower fees, and you get a real share price.

Steve 23:47

All right. Well, let’s see. We have time for one more. I’m going to go to Ernie. He’s wondering about Social Security benefits being withheld because of excess earnings. He’s wondering if they’re returned to you in monthly installments once you hit full retirement age.

Brian Quaranta 24:00

Gee, Steve, I don’t know the answer that one.

Steve 24:02

It’s right below there.

Brian Quaranta 24:04

Oh, ahaha! All right. Let’s ask the question again.

Steve 24:09

Okay, here we go. And we’ve got time for one more. Let’s go to Ernie as he’s wondering about a Social Security benefits being withheld because of excess earnings. What he’s wondering is if those months if those earnings are returned to you in monthly installments when you reach full retirement age?

Brian Quaranta 24:24

Yeah, good question. So, after you reach full retirement age, Ernie, here’s basically what they’re going to do. We will recalculate your benefit amount to give you a credit for any month in which you did not receive a benefit because of your earnings. They’ll send you a letter telling you about it any increase and your benefit amount. Keep in mind it’s actually really divided out over a longer period of time. So, you get it back, but it takes a long time to get it back.

Steve 24:49

So, there’s no lump slash deal going on there.

Brian Quaranta 24:51

No lump sum deal. No lump sum deal. But again, Steve, this is why we offer the right track retirement because everybody wants to know if You’re on the right track. And if you are listening to us today, and you want help getting on the right track, reach out to us schedule a time for the next 10 callers. We’re going to give you a complimentary right track retirement review. It’s going to help you go over those five key areas income taxes, investments, health care and legacy planning. It’s truly going to take the mystery out of financial planning. It’ll give you a peace of mind and security that you deserve going into retirement, knowing you have a full written plan and that you’ve executed on everything that you need to execute on. But you got to do your job. You got to pick up the phone and call us today to schedule that time. Hey, that

Steve 25:33

sounds fantastic. Folks, here it is last opportunity today to give us a call 800-656-8616 You heard Brian 10 callers right now get that comprehensive financial review. You’ll see where you stand today. But what’s more important as you’ll find you’ve got a roadmap a guide, it’s going to help get you to where you need to be when it comes to retirement 800-656-8616 Again 800-656-8616 Brian is always a pleasure to be here with you and again such great information for everybody today.

Brian Quaranta 26:03

Thanks a lot Steve. And folks, we will see you again here next week with On the Money with Secure Money have a great week.

Announcer 26:17

Investment Advisory services are offered through foundation investment advisors, LLC, an SEC registered investment advisor Brian Quaranta and his guests provide general information not individually targeted, personalized advice and are not liable for the use of drip information. Discuss exposure to ideas and financial vehicles should not be considered investment advice or recommendations, buy or sell any of these financial vehicles. This information should also not be considered tax or legal advice. Past performance is not a guarantee of future results. investments will fluctuate and when redeemed may be worth more or less than when originally invested. Any comments regarding safe and secure investments and guaranteed income stream for only two fixed insurance products did not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company.

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