Episode 98 – Six Retirement Planning Mistakes to Avoid in Your Sixties

Brian Quaranta explains how to measure and minimize risk by using the ‘Rule of 100’ in order to protect your retirement portfolio in your sixties.

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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, Listed Planning

featuring Pittsburgh’s wealth financial and income coach Brian Quaranta.

Steve 00:38

Everybody welcome in this is retirement you radio increasing your financial IQ with BrianQ. I’m consumer advocate Steve’s at all and well, let’s just say I’m 60. And I know that over the next decade, at some point, I’m gonna call it quits and gonna retire. The question is, how do I get there? And how do I not make any mistakes? That’s just part of what we’re going to talk about today. Hey, Brian, what’s going on?

Brian Quaranta 00:58

Well, part of it and a whole lot more. And you know, most of us want to retire sometime in our 60s. And on today’s show, we’re going to outline six retirement planning mistakes you want to avoid in your 60s.

Steve 01:09

I like the sound of that. And again, if you’d like to get a head start, folks, give us a call. It’s 800-656-8616. That’s 800-656-8616 Or do what everybody’s doing today. That is texting. BrianQ all one-word BrianQ to 21000 we get started right after this Everybody welcome in this is retirement you radio increasing your financial IQ with BrianQ. We’re talking Brian Quaranta, of course. I’m consumer advocate Steve. Brian is President and CEO of Secure Money Advisors. He is a fiduciary and independent and all-around good guy. Hey, Brian, what’s going on?

Brian Quaranta 01:51

Steve, how are you doing today?

Steve 01:53

Very, very well. I like the topic here. Let’s just assume I’m 60. I know that over the next decade, I’m going to retire at some point. And I want to make sure I get there in one piece, so to speak. And I know that as you get older, one of the things that you always say is, you know, we’ve got to reduce the risk in our portfolio, we’ve got to reduce the risk. So, does that mean, I need to get out of the stock market entirely?

Brian Quaranta 02:16

No, it just means we’ve got to reduce the risk. All right, so how do we do that and stay and stay in the market? Yeah, well, I mean, there’s a rule of thumb that can be used to determine how much risk you should have and how much safety habits a very simple rule called the rule of 100. And basically, the rule of 100 was, was put out there as just a tool to be able to measure risk versus safety. So very simple rule, you take 100 minus your age. So, if you’re 60 years old, you would say 100 minus 60 equals 40, which means 60% of your money should be in some type of safer type of investment. And 40% of your money can still be invested in the stock market, that’s kind of the approach you want to take, as you reach different milestones, so, as you get to 70 you do it again, right? 70-30 split, 80, 80-20 split, very, very, very simple concept with the rule of 100.

Steve 03:05

That’s a rule of thumb that you guys use today.

Brian Quaranta 03:09

Yeah, you know, and that’s the key to really build an A plan is you’ve got to stick to some basic fundamentals, the rule of 100 is one of them. You know, I think that’s a good starting point. Now, you know, it depends on your own personal risk level, because you might start with a rule of 100. But somebody might say, you know, I get it, you know, but you know, having 40% of my money still in the stock market and rolling the dice with that money. It’s just not for me, you know, I’m more of a conservative person, I’d like to have things more protected. And that’s okay, too. But the rule of 100, I think is a good starting point or benchmark to use to determine where you should be at what point in time in your life,

Steve 03:45

And that, again, as we were talking about things to avoid, mistakes to avoid, and we talk about spending too much?

Brian Quaranta 03:52

You see that a lot. And, you know, you want to make sure that you do it the appropriate way, because you certainly don’t want to take too much money out of retirement too early on to where, you know, later on in retirement, you potentially run out of money. I mean, as retirement nears, you’ll want to make sure that you’re maximizing your 401k or your Individual Retirement Account contributions and decreasing your debt and spending. I mean, but that is a big one. You know, a lot of people that we meet today still have some sort of debt in their life, you know, typically the most common is still having a mortgage. Getting a mortgage paid down, is very beneficial because it picks up quite a bit of cash flow once it’s paid off. I mean, you got to figure if you’re paying $1,000 or more a month for a mortgage. You know, in some cases even more if I see people paying three $4,000 a month in a mortgage. But if you get that paid off, you pick that up in additional cash flow on retirement. So, what’s better? You know, let’s say you’re three to five years out from retirement. Do you continue to maximize your contributions to your 401K? Or do you use that money? and put it to use and in a better way, one strategy that can be used, which is very helpful for a lot of people is reducing your 401 K contributions down to what the company is going to match you. So, whatever that would be, and taking the extra money that you were putting in a 401k and accelerating paying off the debt. Now, why would you do that? Well, you know, if you’ve got $1000 or $2,000 a month mortgage, and we can get that paid off in the next three to five years, you know, where’s the probability of success higher in picking up an additional $1000 to $2,000 in monthly cash flow? Well, we know that if we pay the debt off, we’re guaranteed to pick that up and additional cashflow. We don’t know if we continue to put money into the market, if we’re going to be able to generate an additional $1000-$2,000 a month in cash flow, because it’s going to be based on the performance of the underlying investments.

Steve 05:48

Right. So, as we start to look at this, and I mean, that’s to me, one of the main reasons why we sit down with an advisor like you an independent fiduciary, and just kind of open it up and say, “What do you think?” And I like the fact that you give us options. It’s not “here do this” Nope, it’s “Here. Here’s some choices for you.”

Brian Quaranta 06:07

Well, as a fiduciary, our job is to work for the client. And not everybody’s situation’s the same. I mean, everybody’s situation is truly different. You’ve got people that are retiring without pensions, you have people retiring with pensions. And so, you really have to understand each person’s situation to customize a strategy that works for them. And because we’re a fiduciary, that means we work for the client, and we don’t work for any specific company. So we’re able to once we understand, you know, what their concerns are, what their goals are, you know, what their current financial situation looks like, now, we can go out there, and we can appropriately guide them to the right companies and write products that help really kind of supercharge their retirement, and get them on even a better track than what they are. And there’s five key areas that we all have to be concerned about when we get into retirement. First is income because when we stop working, the paycheck is going to stop. But the bills, taxes and you know, the money that you need to do all the things you want to do in retirement, that’s not going to stop. So, making sure that we get your income as high as we can, as quickly as it can, as safely as we can is going to allow you to enjoy the retirement that you deserve. Number two is investments with investments, we want to make sure just like we talked about here in the beginning, Steve, you know, we don’t want to be taking too much risk. But we certainly want to make sure that we’re taking in enough risk to be able to keep pace with inflation, and hopefully still grow our money, even if we’re taking money out of our portfolio. And the third is taxes. Now, that’s a big one. I mean, ask yourself this, do you think taxes are gonna go up or down in the future based on what’s going on in this economy up way, right? Yeah, way up, way up. So, you better make sure that you’re focused on some tax strategies, whether that be now or in the future. Because if you’re planning for retirement, the sooner you start planning for your retirement, the better you can do in tax planning, and really get your income almost 100% tax-free if you do it the right way. And of course, health care, that’s a big topic, we still don’t know, you know how that’s all going to shake out over the next, you know, few years. But right now, you have to budget at least 1000 to $1,200 a month for health care, especially if you want to retire before the age of 65. And you’re going to need to pick a health plan up for the next 10 callers, we are going to give you some clarity with some of the most vital issues in your financial life. I talk about it all the time. There’s five key areas, it’s income, investments, taxes, health care, and legacy planning those five key areas, folks, if you have a plan for each of those five key areas, that means you have every i dotted every T cross when it comes to retirement planning, we are going to do an analysis for you. We’re gonna build a plan right there with you. In our office, we’re going to run what if scenarios right there with you in our office, and we’re going to do a number of things, we’re going to do a forensic fee analysis, we’re going to do a financial X-ray, we’re going to do an MRI of volatility index, you’re also going to receive our hot off the press for our radio listeners only our 401K Modern rollover Guide, which is super beneficial. It’s going to tell you how to save on taxes best allocate your 401k. But most importantly, we’re going to help you take the guesswork out of financial planning. And again, folks, that’s for the next 10 callers. We’re going to give you this comprehensive one-page review. We’re going to build a real plan with you right here in our office when you come in. And that’s going to really help you get the financial clarity that we talked about. And again, folks that’s complimentary with no obligation.

Steve 09:19

800-656-8616 You heard Brian the next 10 callers get that comprehensive financial review, plus all the extras that he just talked about. And you find out yes, this is where you are today. But most importantly, when you walk out, you’re going to have in your hand that roadmap that guide that can help get you to where you need to be when it comes to retirement 800-656-8616 Again, that’s 800-656-8616 or just text BrianQ that’s all one word. BrianQ to 21000, text BrianQ to 21000.

Brian Quaranta 09:52

When we come back some tax planning tips that could make a difference in your retirement.

Steve 10:05

We are back on retirement, you radio increasing your financial IQ with BrianQ, I’m consumer advocate, Steve, Brian Quaranta, of course is here. He’s president, CEO of Secure Money Advisors, a fiduciary, all of those things that really make for a great advisor and a great team of folks, you got some good folks around you there, Brian.

Brian Quaranta 10:23

We do, we got a great team. And that’s really what makes the culture here really different and Secure Money Advisors. So, you know, they’re very, very passionate group of people, very caring group of people. And you know, when you come into the office, you’re going to feel that you should feel like you’re walking into your own home. Because that’s kind of the environment that we’ve set up. So, I appreciate the compliment. Steve,

Steve 10:41

Do you have cookies?

Brian Quaranta 10:42

We don’t have cookies; we’ve got great coffee.

Steve 10:45

Perfect. Just text BrianQ to 21000. That’s BrianQ to 21000. That’s all one word. So, let’s do taxes. We were talking about taxes at the end of the last segment, that’s the number three thing on your five things that you do income, investment, taxes, health care, and legacy. So, let’s talk taxes. And in retirement, boy, it makes such a big difference. What you do and how you position yourself from a tax standpoint?

Brian Quaranta 11:12

Well, yeah, taxes play a big deal in planning. And, you know, most people don’t think about that, where they’re not having the conversations about taxes. You know, like I’ve said many times, I mean, you know, when you retire, the paycheck stops, but taxes and bills don’t. And, you know, having a solid tax planning strategy in retirement is key, let’s take a look at some of the things your advisor could do to possibly mitigate some taxation in retirement. Number one, they could help you manage your tax bracket.

Steve 11:41

Well, that’s really important right now, because tax brackets right now are as low as they’ve been in years.

Brian Quaranta 11:46

That’s right. And remember, we’re in marginal tax brackets, so you’re gonna go through different tax brackets at certain levels. So, some of your money is going to be taxed at 10%, some of your money’s going to be taxed at 12%, so on and so forth. So, managing those tax brackets and working with an advisor, take a look at the potential taxable income for the year, in years where your income might be lower than other years, it can make sense to accelerate some income and take advantage of taking some extra income without kicking yourself into the next tax bracket.

Steve 12:16

Right. But that’s what you can do. I mean, you see the big picture, and you take the emotion out of it and make sure that, you know, we’re headed down the right path.

Brian Quaranta 12:24

You know, in today’s world, we have the advantage of just having really, really powerful software that can look at these things and make very detailed decisions of what to do and how to take advantage of it, you know, Roth conversions, Steve is another one, Roth conversions are getting a lot of tension as a strategy to consider in 2020, due to the required minimum distribution waivers, and of course, the Cares Act, and our historical low tax rates in 2020. Now, remember, a good Roth conversion strategy starts way before retirement, I mean, if you really want to take advantage of building a tax-free retirement, it’s going to start at least 10 years out from retirement in order to accomplish that, because keep in mind, every time we convert, we have to pay the taxes on the money that we’re converting. And so, when you have a time before you need that money, it allows the account to rebuild and recoup what it had to pay out in taxation. Unless, of course, you have money in non-IRA accounts that you can pay the taxes with, but most people don’t. So, for myself, every year, I like to convert a little bit of my money. Why? Because as I convert money from my taxable accounts to my tax-free accounts, by the time that I get to retirement, all of my money will be tax free. So, this means that the income that I’m taking in retirement is going to be 100% tax-free The challenge with the retirement plans that most people have whether it’s a 401K, a TSP account, a 403B is that for every dollar that comes out of there, it’s going to count as income, and you have to pay income taxes on it. But the IRS does gives us the opportunity to buy them out sooner than later. And this way, when we reach retirement, we will have tax free income. Good strategy.

Steve 14:12

Well, it is and that’s also, you know, you were alluding to this at the end of the last segment about the about the secure act and what that did to the stretch IRA. So really, that Roth conversion is one of the ways that you can leave legacy.

Brian Quaranta 14:26

That’s right, tax free, and what’s better than tax free, right. But the legacy part, yeah, that’s a big component of leaving tax free money to your family. Now, if you haven’t done planning, and you’re sitting there thinking, wow, I wish I would have done some type of conversion a long time ago because this would make sense. There are still ways that you can create tax free money for your family. So some things you might not think about that a lot of people don’t take advantage of is with the new law, you’re allowed to give charities like your churches and other organizations, rather than taking that required minimum distribution and halfing accounted as income, you can actually redirect that required minimum distribution and give it to a charity of your choice and not pay any taxes on it at all. Now, why would that make sense? Well, there’s no reason to pay the charity out of your checking account or savings account when you can redirect a required minimum distribution, and it’s all tax-free tax free to you tax free to the charity, the other thing that you can do to leave a lot of tax-free money to your family members is the utilization of life insurance. Now, when we think about life insurance, we typically think about life insurance as something that we own when we’re younger, because we haven’t had the time to accumulate a certain amount of assets yet. And so, we’ve always been told that if you die, you need something there to take care of your family. And so, a lot of people, when they get older, they start to look to get rid of their life insurance policies, because they feel that at this point in their life, they’ve saved enough, and they’re not going to need life insurance anymore if they die. But in reality, they’re actually making a very big mistake. Because if they have a large Ira balance, let’s say I’ve got somebody with a million-dollar IRA balance, and they die, and they want to leave that money to their kids, you’re talking three to $400,000, that those kids are going to have to pay in taxes. Well, if they had a life insurance policy of two, three or $400,000, that life insurance policy pays out tax free to the family. And the kids could use that money to actually pay and settle the estate in from the taxes and preserve 100% Of all the million dollars, it’s in the retirement account. So, we want to be smart about how we’re building strategies, because we want to leverage every dollar that we have, and we want to maximize what we’ve done. So again, for the next 10 callers, we are going to give you some clarity with some of the most vital issues in your financial life. I talk about it all the time, there’s five key areas, it’s income, investments, taxes, health care, and legacy planning those five key areas, folks, if you have a plan for each of those five key areas, that means you have every i dotted every T cross when it comes to retirement planning, we are going to do an analysis for you. We’re going to build a plan right there with you. In our office, we’re gonna run what if scenarios right there with you in our office, and we’re going to do a number of things, we’re going to do a forensic fee analysis, we’re going to do a financial X ray, we’re going to do an MRI of volatility index, you’re also going to receive our hot off the press for our radio listeners only our 401k Modern rollover Guide, which is super beneficial, it’s going to tell you how to save on taxes best allocate your 401k. But most importantly, we’re going to help you take the guesswork out of financial planning. And again, folks, that’s for the next 10 callers, we’re going to give you this comprehensive one-page review, we’re going to build a real plan with you right here in our office when you come in. And that’s going to really help you get the financial clarity that we talked about. And again, folks that’s complimentary with no obligation.

Steve 17:46

800-656-8616 You heard Brian the next 10 callers get that comprehensive financial review; you find out where you are today. But most importantly, it does become 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. BrianQ all one word to 21000 That’s Brian Q to 21000

Brian Quaranta 18:13

Millions of over 50 Americans have found themselves out of a job due to the pandemic. If that’s you stick around, we’ve got some tips on what you can do perhaps successfully retire early and originally plan.

Steve 18:35

Hey, we’re back on retirement, you radio increasing your financial IQ with BrianQ on consumer advocate Steve. Brian Quaranta, of course is here. He is an author, he’s President CEO of Secure Money Advisors, a fiduciary all of those good things that you want. And you know, again, I mean, so many folks are, you know, finding themselves in their 50s, maybe late 50s. You know, out of work and that you know, they weren’t really planning on that. But all is not lost. You know, I mean, again, I got some friends in the media business that were furloughed way back in April or May. And they just found out that furlough becomes “Okay, now you’re done. And right. And so how do we do that? How can we, you know, dig in and, you know, not freak out completely?”

Brian Quaranta 19:22

Well, first off, I mean, see if you can retire, we’ve retired a lot of people early. For those people that have been in those situations that are in their 50s, sometimes looking at the numbers and looking at the math, you might be surprised that actually retirement is very doable. Or maybe you don’t have to go back to work full-time. Maybe you could, you know, build a strategy where you go back part-time. I think, just evaluating where you are, in figuring that out can really help you take the next step of where you need to go. So rather than just, you know, running off to the next job, figure out if you can do it early retirement. That’s not a bad idea, right?

Steve 19:59

No, of course. Not and doesn’t want to retire?

Brian Quaranta 20:01

Oh, yes, you love your job I have, you know, we have a lot of people that we work with that love their jobs. I don’t think they’ll ever retire. You know, but the good majority of people that we meet, they tell me, you know if you could get me out now, I’d like that.

Steve 20:14

So, if someone finds themselves in, let’s say they’re not yet 65. So not Medicare eligible, we got to talk health care. And what do we do?

Brian Quaranta 20:24

Well, yeah, health insurance. I mean, that’s the most pressing concern for someone who’s close to retirement, but suddenly unemployed, is ensuring there is no gap in their health insurance coverage, I mean, options for you might include Cobra, the ACA could be another option. So, you know, obviously, going to the marketplace can be an option. So, these are things that obviously need to be addressed, because health insurance is definitely a cost in retirement. Social Security, right. I mean, if you lose your job at 62 or older, you might be tempted to enroll in Social Security. But you might want to tread carefully there, the sooner recipients take their benefits. Keep in mind, the lower your benefit is going to be so would delaying your benefit be beneficial to you, even retirees who think that they’ve calculated the benefits of enrolling early often make serious errors, such as omitting tax consequences, or ignoring the long-term impact of their spouses benefit,

Steve 21:26

too, isn’t it? I mean, if you’re a couple, you shouldn’t independently decide when to take Social Security that needs to be a decision made together.

Brian Quaranta 21:35

It’s a decision that needs to be made together and a decision that needs to be made. After you look at what if scenarios, what do I mean by what if scenarios? Well, when you’re looking at building out a cash flow model, we have to look at all the income sources that you have coming in. And then what we have to do is we have to look at what happens if your husband dies first. What would be the drop in income? And then we have to see what would happen if your spouse dies. First, what would be that drop in income, it’s very important to understand what that drop in income is going to be. Here’s why tells you a number of things. Number one the most obviously, is it’s going to tell you how much income you’ve lost. Now, according to AARP, the average loss of income for a married couple is about 40%. That’s a lot of incomes a lot especially Yeah, especially if your spouse dies, you know, within the first two or three years of retirement. Now you could be living the next 25-30 years on 40% less income. So now, how do you solve that problem? Well, do you have assets, like investments, retirement accounts, if you do, that would require that you start to take more out of those accounts earlier than what you expected? So how much money would have to come out of those? What would the dollar amount need to be? Now once you start taking that dollar amount out, you got to look at what the impact of those withdrawals are going to do to the balance of those accounts. Not only that, but once you understand what withdrawal is going to need to be taken, now you can determine what interest rate you’re actually going to need, in order for that account to maintain principal, or what interest rate you’ll need in order to grow that money. So, these are very, very important, what if scenarios, and again, this is why we offer the complimentary view, Steve, because we get well not shoulder to shoulder anymore. But you know, we really roll up our sleeves. And we really build a plan with people right there very quickly. And we want to show people the value of having a plan. And you know, unfortunately, in today’s marketplace, you don’t see a whole lot of people, you know, getting the advice with a real plan. Typically, people are just being sold investments and products and things along those lines. So, but when you really roll up your sleeves, and you start to look at these numbers, and you know what, what if scenarios to look at, you know what numbers to look at? You know, a lot of times, you just don’t know what you don’t know. But you know, working with a financial advisor, that’s a fiduciary, you know, we’ve been trained for these things we’ve studied for these things, we have the license to do this. And we know what the best practices are when it comes to planning. So, we can take all the guesswork out of it and make sure that all the i’s are dotted, and t’s are crossed.

Steve 24:21

Sure, but and that starts with a phone call or a text. In fact, you really folks, if this is interesting to you, if that sounds like something you should do, you owe it to yourself to just text BrianQ to 21000. That’s BrianQ to 21000. And Brian, once again up against the clock. Let’s go ahead and invite folks to call or text and get on your calendar while there’s still some time available.

Brian Quaranta 24:43

And for the next 10 callers. We are going to give you some clarity with some of the most vital issues in your financial life. I talk about it all the time. There’s five key areas. It’s income, investments, taxes, health care, and legacy planning those five key areas folks if you have a plan and for each of those five key areas, that means you have every i dotted, every T crossed when it comes to retirement planning, we are going to do an analysis for you, we’re going to build a plan right there with you. In our office, we’re going to run what if scenarios right there with you in our office, and we’re going to do a number of things, we’re going to do a forensic fee analysis, we’re going to do a financial X-ray, we’re going to do an MRI of volatility index, you’re also going to receive our hot off the press for our radio listeners only our 401K Modern rollover Guide, which is super beneficial, it’s going to tell you how to save on taxes best allocate your 401K. But most importantly, we’re going to help you take the guesswork out of financial planning. And again, folks, that’s for the next 10 callers, we’re going to give you this comprehensive one-page review, we’re going to build a real plan with you right here in our office when you come in. And that’s going to really help you get the financial clarity that we talked about. And again, folks that’s complimentary with no obligation.

Steve 25:53

Hey, that sounds great. Brian. Folks here is an opportunity to sit down, put a financial roadmap together, let Brian and the team at Secure Money Advisors help translate that complex financial world. I mean, the things we’ve just been talking about, yes, it can get pretty complicated. But the good news is they can smooth it out, make it clear, make it easy to understand. It’s 800-656-8616. You heard Brian the next 10 callers are going to get that comprehensive financial review. You find out where you are today. But most importantly, when you walk out, you’re going to have in your hand that roadmap, the guide that’s going to help get you to where you need to be and where you want to be when it comes to retirement. 10 callers or texters. 800-656-8616 again, 800-656-8616, or just text Brian Q to 21000. That’s BrianQ all one word to 21000.

Brian Quaranta 26:46

Listeners have questions. And I have answers. It’s next, right here on Retirement You Radio.

Steve 27:03

We’re back everybody. This is Retirement You Radio increasing your financial IQ with BrianQ, Brian Quaranta, of course, who we’re talking about. And you’re seeing folks in person, right?

Brian Quaranta 27:12

Yeah. I mean, we’ve got a combination of both. Yeah, I mean, people are feeling more and more comfortable. I mean, you know, obviously, we’re following all the guidelines that we need to follow, you know, wearing masks, and you know, we’ve got a big conference room. So, we’re more than six feet apart. But yeah, we’re finding more and more people enjoy coming in. And, you know, we’re open for them to come in.

Steve 27:32

Well, I mean, it’s kind of nice. It’s sort of refreshing. It feels like, you know, maybe we’re just kind of inching back to something that resembles normal. I don’t know.

Brian Quaranta 27:39

Yeah. Well, we need to get back to normal.

Steve 27:42

Yeah, I completely agree.

Brian Quaranta 27:44

You know, I think everybody’s kind of just over this at this point. Oh, yeah. I mean, I think everybody still wants to be cautious to a certain degree, but it’d be nice to have our lives back.

Steve 27:53

It would indeed.

Brian Quaranta 27:54

Don’t get me started on that.

Steve 27:56

I won’t. So, here’s what we can get folks started doing though, is texting BrianQ all one word, BrianQ to 21000. That’s a good idea to do that. And by the way, your show is available on podcast, it’s on Apple podcasts. I know because I subscribe. And that’s what you should do to folks.

Brian Quaranta 28:14

The easiest way to do it, though, is they can go right to securemoneyadvisors.com. And if they go to securemoneyadvisors.com they’re going to go right on the front page, you’ll see a radio tab and that radio tab will bring you right to all those podcasts. So not only that, but they can also watch our TV shows. All of our past TV shows there.

Steve 28:33

Oh, that’s cool.

Brian Quaranta 28:34

Yeah. So, it’s a nice little library of stuff that they have access to.

Steve 28:40

Well, all right, so good to know securemoneyadvisors.com. And again, if you miss them on the show, it’s always a good idea. And again, if you subscribe, but you know, on Apple or iTunes or wherever you wherever you get your podcast, then it’ll get delivered to your phone every week. That’s right, every week, every week, just like that. Alright, let’s jump into a couple of questions. While we’ve got some time here. Kenny Chilton. Kenny says, I just retired and have to decide if I should leave my money in my 401K with my previous employer or move it to an IRA. I know that the IRA gives me more investment options, but do I really need them? And I also need to decide if I should put those funds in a target date fund or allow my portfolio to be actively managed.

Brian Quaranta 29:22

Yeah. All good questions. Well, first off, I’d be nice to know how old Kenny is because if he might, I don’t know what that means. Yeah, well, hey, you know, I just retired a guy the other day, and he’s 51. But there might be options for Kenny to actually keep the money in the 401K. If he is retired, and he is, you know, younger than 59 ½. If he leaves it in the 401k. He gets a 55 rule on that which allows him to take money out of the 401k without incurring that 10% penalty. So that’s a nice one to think of it is typically the experts are going to tell you that moving the money Out of the 401k and into an IRA is going to allow you to have much better investment options and access to much quality, much more quality, private wealth management. So, you know, in his regards to his question about the target date fund, I don’t know what target date fund he’s talking about, you know, but target date funds, for those of you that don’t know about them, they were really brought into the marketplace to kind of make retirement planning a little bit easier. For those that don’t specialize in this, that you would just pick a date that you’re going to retire. So, a target date fund might be 2035 funds, so you pick a target date fund of 2035. And every year that when a year goes by and gets closer to that date, the portfolio is going to become more and more conservative. Now, what you won’t find in 401k plans is really good quality, privately actively managed portfolios. And there are advantages with those, especially in the marketplace today, because a lot of those private wealth managers today are using very sophisticated algorithms to manage the portfolio at very high speeds. And they’re also using very cost-effective ETFs rather than traditional retail mutual funds to build these portfolios, which really helps potentially maximize returns and potentially reduce risk.

Steve 31:21

And again, that’s, that’s a great, great way to look at that 800-656-8616. Kenny, if you want to get in. Let’s see, we got time. For more. Let’s go to Daniel. Daniel says my wife started working at a pharmaceutical company that gave her several $1,000 worth of company stock now in the last year, that stock has doubled in value, should we sell it and realize those gains or buy more and hope it keeps going up? He says we’re both 55?

Brian Quaranta 31:46

That’s great question. I mean, again, they’re both 55. The company gave him stock, hey, they might actually be qualified for something called net unrealized appreciation. This is the difference between the original cost basis and the current VARC market value of employer stock. The IRS offers provisions that allow for more favorable capital gains tax rates on any QA of employer stock upon distribution, after certain qualifying events. So, you may want to look into that Daniel. And you know, whether you buy more or, you know, that all depends on the quality of stock, I would have a stock analysts look at that to determine whether or not buying more, but again, if you decide to sell it look into anyway and see if you qualify for that. And see if you would qualify for this favorable capital gains tax rate through the the IRS.

Steve 32:38

Wow. I mean, it’s so that’s a that was a really good question. I wonder if there’s I mean, I’m sure there’s other folks in similar situations. So, Daniel, again, give us a call at 800-656-8616. Or you can just text BrianQ to 21000. And Brian, once again, where the Time goes by so fast. We are up against the clock. Let’s open up the lines one last time today.

Brian Quaranta 32:58

And for the next 10 callers, we are going to give you some clarity with some of the most vital issues in your financial life. I talk about it all the time, there’s five key areas, it’s income, investments, taxes, health care, and legacy planning those five key areas, folks, if you have a plan for each of those five key areas, that means you have every i dotted every t crossed when it comes to retirement planning, we are going to do an analysis for you. We’re going to build a plan right there with you. In our office, we’re going to run what if scenarios right there with you in our office. And we’re going to do a number of things, we’re going to do a forensic fee analysis, we’re going to do a financial X ray, we’re going to do an MRI of volatility index, you’re also going to receive our hot off the press for our radio listeners only our 401k Modern rollover Guide, which is super beneficial, it’s going to tell you how to save on taxes best allocate your 401k. But most importantly, we’re going to help you take the guesswork out of financial planning. And again, folks, that’s for the next 10 callers. We’re going to give you this comprehensive one-page review. We’re gonna build a real plan with you right here in our office when you come in. And that’s going to really help you get the financial clarity that we talked about. And again, folks that’s complimentary with no obligation.

Steve 34:05

Hey, folks,that is a great opportunity to sit down and put that financial roadmap together with Brian and the team at secure money advisors. There’s the last time today that you’re going to get a chance to call, it’s just a chance for you to get a true practical financial review. And it does start with a phone call. It’s 800-656-8616 you heard Brian the next 10 callers are going to get that comprehensive financial review. When you find out where you are today, of course, but more importantly, you end up with that roadmap, that guide that can really help get you to where you need to be and where you want to be when it comes to retirement. 800-656-8616 Again, that’s 800-656-8616 or text BrianQ, BrianQ, all one word, to 21000 BrianQ to 21000. Brian, as always, it’s a pleasure to hang out and you know talk retirement and listen to some music.

Brian Quaranta 34:56

Steve, always great to see you and thank you to all the listeners. Thank you for all the questions we get, and we look forward to seeing you again 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.

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