Brian Quaranta discusses the five major factors that impact the strength of your portfolio, the rules of Roth IRAs, and more on this week’s episode of Retirement You Radio.
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Radio Show Transcript
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
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Featuring Pittsburgh’s wealth, financial, and income coach Brian Quaranta
Welcome everybody, this is Retirement You Radio increasing your financial IQ with BrianQ great show lined up today with Brian Quaranta, you know making decisions about that could impact your income and the tried and true we’re gonna shake it up a little bit and talk about some other viewpoints and then we’re gonna dig into Roth IRAs. What are they what are the rules we’ve never really talked about that before that is on the agenda and you can get started right away by making a phone call 800-656-8616. And Brian, what do you think? You up for this?
Brian Quaranta 01:10
That’s right Steve, steady monthly income is the key to successful retirement on today’s show five factors to know about your retirement income stream when we come right back right here on Retirement You Radio.
Hey, welcome, everybody. This is Retirement You Radio increasing your financial IQ with BrianQ. I’m consumer advocate Steve. And as always, Brian Quaranta is here. Brian is President and CEO of Secure Money Advisors. He’s got over 20 years of the business, a fiduciary, all the good stuff. Hey, Brian, what is going on today?
Brian Quaranta 01:55
Steve, how are you? Yeah, big decisions, huh? How about, I’ve always said that the biggest erode or of your wealth is not going to be inflation, it’s going to be taxation, you know, and that leads right into this steady monthly income that we’re talking about? Because look, if you look at retirement planning 30-40 years ago, it was really simple. I mean, when you retired, you got a pension. Remember those?
Oh, yeah. Not personally, but yeah.
Brian Quaranta 02:20
Well, right. Yeah. And then you got a Social Security check. And for most people, that was typically enough income for them to maintain the quality of life that they wanted to maintain during the retirement years. But you know, you look at retirement planning today, it is so different, because number 1. 85% to 90% of the people retiring today just are not retiring with pensions. They’re retiring with 401k plans. And if you think about the 401 K plan, I mean, it’s not designed to give you, you know, guaranteed monthly income, it was an investment portfolio, it was designed for accumulation. And so now you go into this distribution phase, and, and that’s a whole new set of rules in regards to how you’re going to start distributing that money. And taxation becomes a big topic of conversation, because for every dollar you take out of these retirement accounts, you got to pay taxes. So, think about it like this. I mean, let’s suppose that somebody, I’m just going to use an extreme example here, just to illustrate a point to the listeners. But let’s suppose that somebody needs $10,000 a month in income, and let’s suppose that the tax rates at 20%. So, they take the $10,000 out of the retirement account, they pay the 20% in taxes, and now they’re netting $8,000, okay. Well, what happens when tax rates go up? Now, let me ask you this, do you think taxes are going up or down in the future?
I would, I would, and with no doubt they’re going up.
Brian Quaranta 03:47
That’s what everybody tells me, you know, and we do these educational events every Friday at the Narcissi winery. And when I asked that question-
Brian Quaranta 03:56
I know, it’s fun. It’s a lot of fun.
I’m gonna join you.
Brian Quaranta 04:01
Yeah, matter of fact, for the listeners, if you go to www.securemoneyadvisors.com you can see where our events, our upcoming events are going to be. But you should come out and join us for an educational event at the narcissi winery. So, but getting back to this, let’s suppose, every time I asked this question, you know, if you think taxes are going up or down, people will tell me, you know, I feel they’re going up, and it’s hard not to believe that they’re not going up. So, let’s suppose that example, right, somebody’s taken $10,000 out of retirement accounts are paying 20% in taxes, they’re netting $1,000. Well, what happens when tax rates go to 40%? That same $10,000 now is only going to net your $6,000. So, the erosion of your wealth will not just come from inflation, it’s going to come from taxation, and this is why Roth IRA conversions are so important to look at. As you approach retirement and with good planning, we can create that tax-free bucket of money so we’re going from taxable money to tax-free money. And that’s really nice. because now every withdrawal, if we’re taking it from a Roth IRA, take that same example, you’re taking $10,000 a month out, and let’s say you’re in a 20% tax bracket. Well, with a Roth IRA, when you withdraw 10,000 hours, your net $10,000, let’s say tax rates go to 40%, you take $10,000, out your net $10,000. That’s a pretty good deal, right? But you have a ways to go, it’s a good ways to go. And that’s why conversions are so important during your retirement window. And you really got to evaluate whether it makes sense for you to periodically convert the money to a Roth IRA from a 401k. You know, there was a gentleman, you know, at the educational event a couple of weeks ago. And, matter of fact, he wound up becoming a client and was retiring from a local company here in town. And he’s sitting with about $600,000 in interest 401k plan. Now this is, you know, he doesn’t have a pension, he’s got the $600,000 sitting in a 401k. Plan. And, and he just turned 59 and a half, which is a big day. Do you know what happens at 59 and a half, Steve?
Penalties go away. The penalties on withdrawals from your 401 k or IRA go away.
Brian Quaranta 06:11
You got it. That’s exactly right. But the bigger thing, even though the penalties go away, the bigger thing is, it also allows you to do something called an in service withdrawal. So, this gentleman sitting with about $600,000, in a 401 K plan at his employer, and because he just turned 59 and a half, we can call the 401k company, and we can say, hey, we’d like to do an in service withdrawal. And we’re able to roll that money out, no taxes, no penalties, it keeps the 401k open, because keep in mind this, this individual that we’re doing this for, he’s not gonna retire for another two years. But yet, his 401k really doesn’t give him many options for converting from taxable to tax-free, okay. And it doesn’t give them very many options to set the portfolio up correctly for distribution. It’s designed for accumulation. So, we’re able to remove the money from the 401k, no taxes, no penalties, we’re legally allowed to do that. And now we’re able to position that money so that in the next two years, when we arrive at that retirement date, not only can we not only have a portion of that money to be tax-free when we’re taking it but we can also make sure that it’s set up properly for growth and distribution.
For the next 10 callers who call in right now, we’re going to create a one-page financial review, that’s going to indicate whether or not you’re in need of a full-blown financial plan. Now, I’ve seen others charge up to $1,000 or more. For these reviews, we’re going to do this complimentary at no cost for the next 10 callers. Now, here’s what it’s going to consist of number one, and most importantly, it’s going to take the mystery of the confusion out of financial plan, and it’s going to help you map out where you are right now and where you need to go. We’re literally going to give you turn-by-turn directions. So, we’re going to run a fee report for you too. You know, people don’t realize that fees will reduce your gains, and they will compound your losses. So, we’re going to help you untangle what working with your current planner advisor is actually costing you and see if by simply protecting your retirement investments, you could experience better growth potential. Now the most important thing is we’re going to run a tax analysis to reveal how you could possibly reduce taxes. And I’m going to show you how to create a customized income plan, utilizing proven strategies, something called a bucketing technique, which can literally turbocharge your retirement income and take the worry out of living too long. The number one fear of most retirees is running out of money. We’re going to show you how to avoid that by creating these bucketing strategies. And short most importantly is we’re gonna help take the guesswork out of all of this and make it a very simple and easy-to-understand process. So for the next 10 callers, that’s a comprehensive financial review that’s going to we’re going to give away complimentary at no obligation and if you call in and you are one of the next 10 callers not only we’re going to give that financial review and second opinion package that we’ve seen others charge up to $1,000 for but we’re also going to get you a copy of the brand new hot off the press guide that we’ve released just for radio listeners only called the 401k monitor rollover guide. Now keep in mind, folks, we’ve seen others offer these review charges up to $1,000 or more for similar features. But the report it’s invaluable. It could save you hundreds of 1000s of dollars in taxes
800-656-8616 That’s 800-656-8616 you’re heard Brian the next 10 callers are going to get that comprehensive financial review. You’ll see where you are today. Yes, but more importantly, you’ll end up with that roadmap that can help get you to where you need to be when it comes to retirement. 800-656-8616 again 800-656-8616 or you can text BrianQ all one-word text, BrianQ to 21000. The Roth
Brian Quaranta 09:44
IRA is something we often talk about on the show. In this segment, we’re going to break down the five-year rule and how it could trigger taxes and penalties if you’re not careful. We’ll come right back right here on Retirement You Radio
We are back on Retirement You Radio, I’m consumer advocate Steve, and of course, Retirement You Radio is increasing your financial IQ with Brian Quaranta we’re talking about Brian Quaranta. Of course, Brian is an author. He’s president and CEO of Secure Money Advisors. He is a fiduciary. He’s an independent and does so much more. And I had to have a little fun with this one, Brian, and harken back to my high school days of reading Hamlet. So, it’s to Roth or not to Roth. That is the question whether tis nobler in the mind to suffer of never-ending taxes that erode your retirement accounts? Or should you take charge of your money against a sea of never-ending taxes? The idea of whether it is better to Roth or IRA, what do you think?
Brian Quaranta 10:47
That’s what we’re talking about? I would pay to come see you in a place. Yeah, the Roth IRA is probably one of the most underutilized accounts out there. It was established back in 1997 and has been around that logo surprised when I saw that no matter of fact, the individual that created the Roth IRA was an individual by the name of William Roth, Senator William Roth, by the way. My understanding is, and I could butcher this a little bit, but my understanding is that Mr. Roth, the creator of the Roth IRA, did not take his own advice. And when he died, there was quite the taxable event at his death to his estate. But we could do a whole show on that. But yeah, I think if you Google, Senator William Roth and read about, you know, his estate, it was quite the taxable event is my understanding. So, but the Roth IRA going back, I mean, established in 97. And again, the drawl is that it grows tax-free, and the withdrawals are tax-free in retirement, if you follow the Roth IRA, five-year rule, and applies to investment earnings, not initial contributions. It could trigger taxes and penalties on early withdrawals of investment earnings, and it applies to all account owners, regardless of age. So, what is the Roth IRA, five-year rule?
Well, these are things that we don’t talk about.
Brian Quaranta 12:19
No, we don’t so here’s what it is. So, after opening, and contributing to a Roth IRA, you’ll need to wait five years to begin tax-free withdrawals of investment earnings, you’ll also need to be 59 and a half or older to qualify for the three-withdrawal sort or I should say tax-free withdrawals. So, let’s talk about this five-year timeframe a little bit more. So, the five-year timeframe is calculated based on tax years. So, the IRS determines a tax year as running from January 1 to December 31. So, the deadline for contributions coincides with the deadline for filing taxes. So, look at it this way, if you fund a Roth IRA in April 2021, for the calendar year of 2020, the five year starts as of January 1, 2020. Okay, so you could begin withdrawing earnings from the account on January 1, 2025. I know that’s a lot. You know, but I want people to understand that there’s some rules here, when establishing these Roth IRAs. And we also have to think about the five-year rule, most importantly, because what we’re doing most of Steve is not so much contributions, but we’re doing conversions, right? And the rules are a little bit different. They are different. Yeah, they are different. So, you know it as opposed to waiting five years after your initial contribution, each conversion has its own five-year waiting period. Right? So, right, this is why early planning is so important. So, if you convert $20,000, to a Roth IRA in 2021, you’ll need to wait until 2026, to be eligible to take qualified distributions. If you convert another $20,000, in let’s say, in 2022, you’ll need to fulfill another five-year rule and wait till 2027 to make qualified distributions. So again, this is why planning is so important. And it really does come down to having a well thought out plan and tax planning as part of it. When I, when I started to really, you know, create what we call the Right Track Retirement System. It really is a guide to help people just make sure that they’re on the right track. And it really deals in five key areas. Number one, and most importantly, is income. And the reason why number one is income is because you’ve got 85 to 90% of the people retiring without pensions, they’re retiring with retirement accounts, like 401k is for three B’s 457 plans. But those accounts are not designed for income. They’re designed for growth and accumulation. So, you know, the strategies and techniques that got you to where you are today are not the same strategies and techniques that are going to get you through the next 25-30 years of retirement, the game changes a little bit. The second thing that we focus on is investments because the investments have to be properly positioned for distribution, you know, we still want a degree of accumulation to keep pace with inflation, but distribution becomes the name of the game as we transition into retirement. And the reason is, is because look, Social Security for most people is just not going to be enough money. You know, we see that all the time. Steve, right. Absolutely. So, you know, you’re gonna need to generate cash flow on a monthly basis. And there’s a right way to do it and a wrong way to do it. So do it the right way. Because there’s people out there like secure money advisors that specializes in that. Number three is taxes. Why? Because when we take those distributions, I’d like to pay Uncle Sam the least amount of money possible. I think everybody feels the same way about that. Yes. Number four is health care. So, you know, what’s what, what good is it to do all of this planning and get your distribution set up and get the appropriate mix of investments to make sure that you’re, you’re not going to run out of money, and that you’re distributed the proper amount of cash flow, and that you’re still growing the portfolio. If when you get sick, you’re 100%, exposed to nursing home spend down. So, there’s got to be ways to protect for healthcare and there is, so you know, the Right Track Retirement System is all built around those five key areas. And when you come in for a complimentary meeting, you know, over the hour with that we’ll spend together, we’ll go through those five key areas. And there’s a lot that we do for you at no cost. And I think that people just need to understand that the process of coming in for a second opinion, should not be intimidated, not coming to Secure Money Advisors, because we truly do have your best interest in mind. We’re not here to give you a sales pitch. We’re truly here as a fiduciary to help you solve problems and give advice. Should we decide that you wanted to make changes to improve your situation, we can talk about what that looks like. But you’re coming in ultimately, to just see if you could be doing better from where you are to where you need to go. So again, folks, for the next 10 callers who call in right now that we’re going to create a one-page financial review that will indicate if you’re in need of a full-blown financial plan. That’s the Right Track Retirement System. And I’ve seen other people charge $1,000 or more for these types of reviews, we’re not going to charge you that it’s complimentary. What it’s going to consist of most importantly, is it’s going to simplify, it’s going to take the mystery and the complication out of financial planning. Financial Planning should be a very simple process, we’re going to run a fee report for you see how much you’re paying in fees, I’ll show you how to save on taxes, I’ll create a customized income plan to show you how to maximize the amount of money you get on a monthly basis without running the risk of running out of money. And I’m going to show you the three most important interest rates that you need to be prepared for in retirement. Number one is your spend down rate, your preservation rate, and your legacy rate. All when you come in and again, that’s complimentary at no cost for the next 10 callers who call in right now. A comprehensive financial review that we’re going to give away complimentary with no obligation.
800-656-8616 You heard Brian the next 10 callers are going to get that comprehensive financial review. You’ll see where you are today. But more importantly, you’ll get that roadmap that we talked about that can get you to where you need to be when it comes to retirement 800-656-8616 Again, 800-656-8616
Brian Quaranta 18:13
One size fits all. Well, maybe not. I mean, that may work for bathrobes but certainly not for retirement when we come back, we’ll break down what works and what might not in your unique situation right here on Retirement You Radio
We’re back on Retirement You Radio I’m consumer advocate Steve and of course Retirement You Radio is increasing your financial IQ with a BrianQ. Brian Quaranta. the President CEO of Secure Money Advisors and so much more than that. And yeah, the whole thing, one size fits all, or not so much. And again, that really is the case in retirement. And you’ve said this many times Brian, that every plan is different everyone is unique, obviously, but so are their retirement plans, so are their ideas, so is how they want to get there.
Brian Quaranta 19:06
Yeah, I mean, you know, I’ll tell you, and that’s why we’ve we have such a large team of people here because it really does take a village to help people customize these plans. Because there’s so many moving parts. I mean, you know, some people get health care through their employer when they retire. Some people don’t some people get health care, but their spouse doesn’t. Some people are getting pensions or small pensions other people get none. Some people have saved enough money other people haven’t. You know, some people have tax-free money ready. Other people don’t. Some people have underperforming investments. Some people have good investments. Some people you know haven’t decided to establish a good estate plan yet other people have and so everybody’s situation is just all over the board. And that’s why, you know, coming in and sitting down with a fiduciary, that truly is here to give advice not to sell something, you know, is the way you really want to go when you’re looking to build a plan, you know, we have a vested interest in, in helping people, because ultimately we don’t get paid for a transaction like a broker does. So, our job really, is to make sure that number one, and most importantly, we listen to what’s going on, we start to understand where you are, we understand what your goals are, and then we start to analyze where you’re at right now, is it really in line with what you’re trying to do? Is it not? You know, are you actually getting the returns, that you should be for the risk that you’re taking, I can’t tell you how many people that we sit down with that, you know, are taking more risk, and just not seeing the returns that they should be for the amount of risk that they’re taking, or the amount of fees that they’re paying. And unfortunately, a lot of those fees are hidden, especially in mutual funds and variable annuities, the fees can be very, very high, and they’re not transparent or disclosed on you know, any of the statements. So, one size doesn’t always fit. You know, and that I think, is just when it comes to retirement planning, that’s the world that we’re in right now is that you really have to, you know, we look at ourselves as more coaches and counselors and understanding the situation and then kind of taking, okay, what do we have? That’s really good right now. And what do we have that needs improvement, and then that’s how we move forward with the plan. And we want to have a written plan in retirement, we have to have a written plan. This isn’t about, you know, stocks, bonds, mutual funds, annuities, it really is about having a written plan in place, only once we understand what it is that we actually need the plan to do for us, then we can go out and we can shop the marketplace and find the right investment tools to actually get the job done. You know, too many people are just saying, hey, I need a hammer. No, you don’t you need a saw, you know, and you need a chisel, you don’t need a hammer right now, the hammer you might have needed in your earlier years. But right now, there’s a little bit more surgical approach to this than just kind of just rolling the dice. Sure.
Like that plays out as well. And, you know, again, one of the questions that people have is, you know, do you pay off the mortgage? Or do not pay off the mortgage? And again, I think the answer is that depends.
Brian Quaranta 22:27
It does depend, you know, quite frankly, you know, with mortgage rates, you know, going as low as they are right now, it’s hard to make the argument to actually pay something off, where you can have a positive arbitrage What I mean is, you know, I was just talking to my dad about this, my dad’s had a number of different businesses, you know, throughout his lifetime, and, you know, he’s consolidated, some mortgages that were on some buildings that he had, and, you know, those mortgages are being consolidated at less than 2% right now. And right now, I mean, I can buy a guaranteed fixed rate at three and a half percent. So, if I’m getting a mortgage at 1.9, and I can invest my money at a guarantee of three and a half, I’ve got a positive arbitrage there, I’m actually making money by not paying off the mortgage. So, you know, but everybody’s different. You know, we’ve all you know, everybody’s been taught, pay your mortgage off, pay your mortgage off, pay your mortgage off? Well, you know, a lot of that came from what at the times when interest rates on mortgages were 1214 18%. You know, when you’re talking mortgage rates below 2%? Boy, it really starts to, you know, you start to look at and go, “does it even make sense because it’s about as same as cash here?” So, but it depends on the situation. So, if getting rid of the mortgage truly frees up that much cash flow, because for you know, for every dollar, I get rid of a mortgage, I pick that dollar up as additional cash flow. So, if somebody was paying $1,500 A month and a monthly mortgage, and we can wipe that out. And we’re not using too much of the retirement savings to have to do that. It can be a benefit, because now we just picked up an additional $1,500 a month in cash flow that we didn’t have to invest to get, right. And this is the other big thing, too is you go, Okay, well, I’m getting closer to retirement. My mortgage is $1,500 a month, I still owe about $80,000 on it. What should I do? Should I pay it off? Well, a lot of times when we look at the math, Steve, sometimes it makes sense to actually stop even making 401k contributions and start directing those contributions to paying off the mortgage. Now, some people might be like, “Wow, that’s crazy that I’m not getting free money.” Yeah, but here’s the thing if your mortgage is $1,500 a month, and we can accelerate the payoff so that when you’re retired, it’s gone. Let’s ask yourself this, how much money would it take you investing in that 401k to generate that $1500 a month in additional income that you’re going to pick up immediately when that debt’s paid off, it’s going to take a lot of investment dollars to actually generate $1500 a month. And you don’t even know if you’re gonna get it because the investments have to perform in order for you to be able to get that $1500 a month, whereas you can pay off the mortgage and get it guaranteed. So again, but the Right Track Retirement System that we’ve created really is all about looking at all these different things. And Steve, for the next 10 callers who call in right now we’re going to create that one-page financial review. And it’s going to indicate whether or not you’re in need of a full-blown financial plan. And as I’ve said, I’ve seen other people charge $1,000 or more for similar features. But we’re going to do the review at no cost, no obligation, it’s truly going to take the complications, the confusion, and the mystery out of financial planning. We’re going to run a fee report, see what it’s costing to work with your advisor, I’ll show you how to save on taxes by doing a tax analysis. I’ll even show you how to maximize your income using what we call a bucketing technique that creates a customized income plan that literally can turbocharge your retirement. So again, for the next 10 cars, that’s a comprehensive financial review that we’re going to give away complimentary with no obligation.
What a fantastic opportunity, folks don’t let it slip by it’s a chance to sit down with Brian and his team and really begin to put together a financial roadmap. It’s a true practical financial review. And it’s a phone call away at 800-656-8616. You heard Brian the next 10 callers are going to get that comprehensive financial review. You’re going to see where you are today, of course, but more importantly, you’ll end up with that roadmap, a guide that’s going to help get you to where you need to be when it comes to retirement 10 callers right now. 800-656-8616 that’s 800-656-8616 or you can simply text BrianQ text BrianQ all one word to 21000. That’s BrianQ to 21000.
Brian Quaranta 26:47
Listeners have been busy asking plenty of questions. When we come back. I’ll answer as many as time allows.
They welcome back everybody. This is Retirement You Radio with increasing your financial IQ with BrianQ. I’m consumer advocate, Steve, and Brian is President and CEO of Secure Money Advisors got a great team of folks that works with him. And, you know, I mean, again, I’ve had a chance to meet several of them there. It’s just all good folks.
Brian Quaranta 27:23
Yeah, yeah, I’m very proud of the team that we put together. I mean, that, you know, they’ve all been hand-picked. And, you know, they’re very passionate about the work that they do. And most importantly, they believe in service. And that’s the number one priority here at secure money advisors is, you know, it’s not only to build a great plan, but also to service you over the years, and try to give you that high-quality service that I think is lacking in the world that we live in today. Well, that
and the education that you provide is second to none.
Brian Quaranta 27:51
Well, the education, you know, I’m very passionate about that, as you know, Steve, I mean, I’ve got you know, I’ve got multiple radio shows that air, I’ve got multiple TV shows that air, you know, you know, we’ve got the educational events that, that right now we’re doing every Friday at the Narcissi winery, although I believe that the next coming weekend, I don’t believe we’re there. But if you go to www.securemoneyadvisors, you can look on the website and look at our upcoming events. And yeah, we’re out there, really educating the people on the retirement fundamentals and the basics. And what my passion has been really just kind of taking the confusion out of retirement planning, because there’s so much noise in the marketplace, as you know, and there’s so much noise period, it doesn’t matter whether you’re doing retirement planning, or you’ve got some medical situation going on, or you’re trying to build a home, you know, everybody’s got an opinion of how to do it, and Google and all your search engines make it even worse. Because, you know, if you have a question about something, you know, you know, let’s take, you know, financial planning, for example, hey, what’s the best time to collect social security, you’re probably going to get about 10 different opinions. And the problem with that is that I’m sure there’s a reason why those 10 different opinions are being given. But the variable that’s missing when you read these articles, or you hear certain things is your situation, that’s the biggest part of the equation. So, you know, they their talents, you know, given an example or an opinion on something, might deal with that person’s situation, but it certainly is not going to apply it to yours. So, taking the noise out of all of this and simplifying it and making it easy for people to understand, you know, is my biggest passion. And we hear it all the time. And people say, you know, I wish we would have bet you 10 years ago, 15 years ago, because things would have been a lot simpler. And that’s my promise to you folks, when you come in is that number one, meeting with myself and my team is not an intimidating process. We make it very simple and easy to understand. And we’re using real tools here that really are going to give you real visuals, real math, black and white information for you to make a very, very informed decision of how to best get what you need, from the dollars that you’ve accumulated over Your hard work in yours
800-656-8616. That’s how you can get the ball rolling. And as far as questions goes, let’s get the ball rolling with Michelle. She writes in, says, “My husband and I are raising our grandchildren, their parents passed away years ago, we were both retired back then, although I have since gone back to work part time, we’re now in our mid-70s, with two teenagers who will want to go to college in the next few years. Our retirement plan obviously never considered this as a possibility. Is it too late to turn it around?” Wow, what a situation?
Brian Quaranta 30:34
Yeah, you know, this is where we really where I lean on, you know, other experts, you know, we’ve we have an individual that solely focuses on college planning, and he’s outstanding with it. And, and he knows, he knows that the process in a way that, you know, most people don’t, and that makes it simple, you know, turning it around, I’m not really sure what she means by turn it around. But I can say this, you know, what I’ve learned in 21 years of practicing and building financial plans, is that there’s always a way, it’s just a matter of having access to the right information to the right contacts to the right resources. And once you get that figured out, everything else becomes pretty simple.
800-656-8616. If you’d like to get a head start, let’s go to Barbara. Barbara says My mother wants to give me her IRA. She’s in an assisted living community. She asked me to watch it for her. I’ve been keeping up on her RMDs. She told me last week; she just wants me to have it. I’m not sure how that works. Does that work?
Brian Quaranta 31:38
Yeah. Well, I mean, she could have it. I mean, but where are we talking? You know, while mom’s still living? Are we talking when mom dies? Because, you know, there’s two problems that we have here. Number one, she can certainly take the IRA while she’s living, but she would have to her mom would have to cash in the IRA, which would create a taxable event for her mom. And then Mom would have to pay all the taxes on the IRA, and then Mom would have to somehow gift it to her daughter. That’s probably the least efficient way to do it. Because the better way to do it is obviously at death. If Barbara is left as the primary beneficiary, under current rules for IRAs, Barbara could actually inherit mom’s IRA and not pay any taxes on it. Now, the new rules, according to the secure Act is that Barbara does have to take a little bit of money out of that account each year. And she has to take it out over a 10-year period, which is a really nice strategy. Because number one, Barbara receives all of the money in mom’s IRA, she doesn’t owe a dime in taxes, and she could wait 10 years till she takes any withdrawals, or she could start taking little withdrawals over time. And most people don’t really understand the benefit of utilizing the inherited IRA, it’s a great way to stretch out the tax liability. And it’s a great way to receive money from, you know, anybody. I mean, if you can fog a mirror, you can inherit an IRA. And there’s some great tax advantages with the inherited IRA. I think where people get confused is that they think that this inherited IRA is something that they go out and set up right now. And it’s not number one, the beneficiary form needs to be set up properly in order to take advantage of the inherited IRA, because the proper people need to be listed. And number two, the inherited IRA is a specific type of account structure. But that’s why we do the complimentary views, right? And for the next 10 callers who call in right now, we’re going to create the one-page financial review, folks take advantage of it, don’t kick the can down the road, this isn’t a time to procrastinate, come into the office, meet with myself and my team, it’s very simple, very easy to understand, we’re going to take the mystery of the complications out of financial planning, it’s not very often that you get the opportunity to sit down with a group that’s a fiduciary at no cost. So please take advantage of it. We’re going to run a fee report for you. We’ll show you what it’s costing to work with your current advisors. I’ll show you how much you’re paying in taxes, how much you could actually save, how about a customized income plan, show you how to maximize the amount of money that you can actually get in retirement without running out of money. And I’m going to teach you about three interest rates that you need to know number one is your spend down rate, your preservation rate, your legacy rate, these are the most important rates that will give you the direction that you need to go with your portfolio. Gonna take all the guesswork out of it for you. Most importantly, so for the next 10 callers, that’s a comprehensive financial review that we’re going to give away, complimentary with no obligation
800-656-8616 you heard Brian the next 10 callers are going to get a comprehensive financial review. You’ll see where you are today. But more importantly, you’ll end up with that roadmap that we talked about that can help get you to where you need to be when it comes to retirement 800-656-8616 Again, 800-656-8616 or simply text BrianQ all one word, BrianQ to 21000. Brian as always, a pleasure. And again, such great information that an education that you put out.
Brian Quaranta 34:57
Yes, Steve, always a great time and folks, thanks How much for listen we appreciate you. We’ll see you again next weekend right here on Retirement You Radio.
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