On this week’s episode of On the Money with Secure Money, Brian Quaranta shares strategies on how to safeguard your retirement from inflation and market volatility.

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Radio Show Transcript

Announcer 00:00

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

Pre retirees and retirees are saying they’re worried about a future market crash. Is that possible? I don’t think so. But on today’s show some ideas to help safeguard your retirement when we come back right here with on the money with secure money.

Announcer 00:55

And now On the Money.

Brian Quaranta 00:57

Any good retirement plans starts with the foundation,

Announcer 01:02

asset protection, tax reduction, holistic planning.

Brian Quaranta 01:05

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

Announcer 01:09

Retirement doesn’t have to be complicated.

Brian Quaranta 01:13

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

Announcer 01:16

And now On the Money with Secure Money.

Steve 01:23

Hey, welcome, everybody. This is On the Money with Secure Money. Brian Quaranta is here. Brian, of course President CEO of secure money advisors. He is a fiduciary and independent and all-around good guy. Hi, Brian. How are you?

Brian Quaranta 01:34

Hi, Steve, how you doing today?

Steve 01:36

Very, very well. Thank you. And, you know, there are I think there’s a lot of uneasiness out there, don’t you?

Brian Quaranta 01:42

Yeah, look, I mean, I mean, people that are worried, I mean, people that are not worried. You know, I think, you know, we’re in this COVID haze, still, you know, I think we got a taste of what return to your normal life felt like, over the summers. You know, COVID-19 cases were weighing the stock market was nearing record highs and worries over Retirement Risk, like volatility inflation, weren’t necessarily top of mind for investors shouldn’t and that’s really the way it was. But things are changing quickly. I mean, I think the biggest concern we see right now, and rightfully so, is the inflation number. Inflation is on the rise. And there have been some major swings in the market and the markets. The market has been good for us for a long time. And I think, you know, this is, the scary part about the stock market is that when we’re all used to opening up our statements, and seeing our account balances go up, we continue to believe that that’s what we’re going to see. But as we know, the markets do correct. When they do correct, we know that time is our friend. And as long as we have the time to recover, we should be okay. The challenge though, especially for the people that we deal with, is that most of the people that come to our office for advice are five years from retirement or are already retired. And you know, the industry, when I say the industry, I’m talking about the financial industry, the financial industry has done a really good job in managing people’s emotions over the years when the markets go down. And you know, they like to say things like this, you know, their cookie cutter phrases. When the markets go down, they’ll say, Well, don’t worry about it. It’s just a paperwork loss, or don’t worry about it hang in there, you’re in it for the long haul, which are all true to a certain degree. Sure. But not if you’re one of these people retiring today that don’t have a pension. I mean, think about the guy retiring today, that doesn’t have a pension, the only guaranteed source of income they may have is Social Security, if you even want to call that guaranteed. So, there’s no pension, which means that the individual is going to need to rely on generating monthly income from their retirement savings. So, what I mean by that is they’re going to have to start taking money out of a 401 K, an IRA, a 403, B, whatever you’re, you know, whatever your retirement account has been. And if the markets go down, while you’re taking that money out, that’s going to compound your losses, it’s going to lock into your losses, and then you’re subjected to something that experts called sequencing risk, which is why people run out of money before they die. And it’s a big problem right now. You know, what the Wall Street Journal did a study on a rule that we use in financial planning called the 4% withdrawal rule. And what they looked at was the rate of return an individual would receive at the beginning of retirement and they would change up these rates of returns based on market volatility. And they said you know, if you if you retire in an up market, right when the markets at an all-time high, you have a higher probability of running out of money, because it may mean that when you start to take money out of your retirement accounts, when you retire, there’s a higher probability that the markets go down. So, I think for most people, the worry that not only will the markets go down when they retire, right? Because again, who wants to run out of money before they die? According to AARP? Nobody? Nobody does. ARP interviewed 1000 people, they said, Hey, what do you fear most running out of money or death? You know, 95% of those people said, they fear running out of money more than they fear death alone. And I think we all have to remember this, the best advice that I can give to anybody that’s listening to this right now is that as you get close to retirement, or when you retired, the losses will hurt you more than the gains will help you. So, at let me say that, again, the losses will hurt you more than the gains will help you. Once we’ve, once we’ve won the game, once we’ve gotten to retirement, the same investment strategies that we’ve used to get to retirement are not the same investment strategies we want to use to get through retirement. Because the name of the game changes for a lot of you, you’re going to switch from what we call an accumulation phase to a distribution phase, we’re going to start to take money out of your accounts, while the strategies that were you’re using during your accumulation phase are not the same strategies you’re going to use during your distribution phase. So mitigating risks becomes your number one priority, making sure that you’re protected from a major market downturn. I mean, you know, I always hate to use 2007 2008. But it’s the greatest example that we’ve ever went on example, I mean, it happened, right? It’s not even an example. It’s, it shows you what can happen. Not being prepared. So many people were so used to the markets just being okay, and nothing bad happening. We got off easy this time, Steve, when the markets went down with COVID, they came right back. You know, they continue to come back very, very quickly. A lot of people made a lot of money over the last, you know, 12-month period. But when we get to retirement, we don’t want to do anything stupid, it really becomes about protecting-

Steve 07:08

Heh, yeah, ideally, no, we don’t.

Brian Quaranta 07:13

It really does become about protecting your risk. And one of the things we’ve done really well at secure money advisors is we show people how to mitigate the downside risk. And it’s what we call the drawdown risk. So, what people don’t realize is in you inside of each of your portfolios, there’s a max drawdown number or max drawdown number is calculated by what the potential drawdown of that portfolio could be in a down market. Some people are sitting out there with max drawdown of 40%, which means that the market goes down. That’s two potentials for loss. At secure money advisors, we focus on that as somebody comes in and we see it they’ve got a max drawdown of 40%. Maybe we could change that drawdown to 10%. So, when the market goes down, they’re not affected as badly. But this is why every week on the show, Steve, for the next 10 callers who call in right now, we give you the opportunity to come in and sit down with us and get a right track retirement review. The number one reason why people come to our offices, they want to know if they’re on the right track. Let me ask you, folks, if you weren’t on the right track, when would you want to know that? Hopefully now, because now would be a good time to know. We focus on five key areas. When you come in, we focus on your income, your taxes, your investments, your health strategy, and your estate planning strategy. We literally are going to take the mystery out of financial planning. We’re going to help you put together an organized plan, turn by turn directions that are simple and easy to understand. But you got to do your part. You got to pick up the phone you got to call us today. This is not the time to kick the can down the road and procrastinate schedule a call it’s complimentary. It’s not very often you get to sit down with a fiduciary at no cost

Steve 08:45

800-656-8616 You’ll get a true practical financial review. And you’ll get that you’ll get that review with no cost no obligation to get all the extras that Brian just talked about. But more importantly you’ll walk out the door with a roadmap a guide if you will, that will help get you to where you need to be when it comes to retirement 800-656-8616 again 800-656-8616

Brian Quaranta 09:11

When we come back, we’ll outline some strategies that can help you have a secure mostly tax for retirement when we come back right here with on the money with secure money

Announcer 09:26

Do you ever feel like you’re fighting for financial knowledge? Don’t let bad advice be a punch in the gut your retirement to 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. Of course, Brian’s president, CEO of Secure Money Advisors. He is a fiduciary independent and you know yet it doesn’t take much to get my attention when you start talking tax free prior. That’s what we’re going to talk about in this segment. I mean, we all know the 401k, a lot of us have 401 k’s and what 60 million of us I have a 401k. But what if you don’t have one, or maybe you want to put that 401k to work a little harder? Or maybe there are some other things that you can do that can help you grow your retirement nest egg.

Brian Quaranta 10:36

You know, we were just talking on the last segment, that a lot of the worry right now, especially for retirees is coming from inflation. Yes, we got an inflation number almost at 6%. I’ve read some studies that have shown that we may see that again next year. It’s not hard for me to believe that the cost could go up that much. The other amazing statistic that I just read the other day was that 40% Of all the dollars in our country’s history have been created over the last 12 months. God, let me say that again. Yes, say that 40% Of all the downwards in existence in our country’s history have been created in the last 12 months, 40% of the wealth that’s out there right now has been created out of thin air over the last 12 months. That’s amazing. So, is inflation real? It absolutely is why because there’s just a lot more dollars out there, which means things are going to cost a lot more. So, let’s talk about taxes. Because the two things that are going to erode your wealth faster than anything that could possibly erode your wealth is going to be taxes and inflation. So, let’s look at what’s happening right now. Let’s just suppose that you need an extra $1,000 A month when you retire. And you’re going to need to take that from your retirement savings. Well, if that’s coming from a 401k, right, Steve, you just said what 60 million, I believe? Yeah, 60 million workers? Yep. 60 million workers are contributing to a 401 K plan. So, what’s the advantage of a 401 K plan? Well, the IRS allows me to make a contribution to this 401 K plan and get a tax deduction in the year that I make the contribution. So, what does that mean? Well, let’s say I put $10,000 into the 401k plan. And I make $100,000 of income. Well, if I make $100,000 a year in income, but I make a $10,000 contribution to a 401k, I only have to pay taxes on $90,000. But the $10,000, that went into the 401 K, I eventually am going to have to pay tax as a matter of fact, as it grows, what they call tax deferred, so that $10,000 becomes $20,000, that $20,000 becomes 50, that 50 becomes 100,000. It’s going to grow tax deferred, which means as it’s growing, you’re not going to owe any taxes on it, but you will eventually owe taxes on it. And when you’re going to start paying taxes on that money is when you start to withdrawal it now if you need $1,000 extra a month in retirement and you plan on taking that from some type of retirement account like a 401 K or an IRA, let’s say that $1,000 That you take out, you’re in a 20% tax bracket. After you pay taxes, you’re only going to net $100. Add an inflation rate to that, and your purchasing power is less than $100. Let’s say tax rates go to 30%. So now that same $1,000 withdrawal is not going to net you $1,000 is not going to knit $100. It’s going to net just $700 Because I’m paying more in taxes. Let’s say I have an inflation rate of 6%. I have my purchasing power is less than $700. Now, does everybody see the compounding effect here? So, we opened up the segment talking about mostly tax free? Why is tax free important? Because as the account balance in your accounts get larger? Would you rather have to pay taxes on that larger balance? Or would you rather it be tax free? Let me ask you that question, Steve, how would you feel about it? If you put $10,000 into account and it grew to $100,000, and you had to pay tax on it? Or you put $10,000 in an account that grew to $100,000 and you didn’t have to pay taxes on it? Which one would you take? Well, I’ll

Steve 14:20

take the non-tax, the no tax every time

Brian Quaranta 14:23

Every time. But people continue to put money away into tax deferred accounts because they want a tax deduction right now, what they don’t realize is they’re kicking the can down the road. And they’re compounding the tax problem making it bigger and bigger and bigger. Think about it. If you invested $10,000 And it grew to $100,000. And you now owe taxes on all $100,000. That problem compounded itself over time. But if I just say you know what, I’m going to deal with the problem right now on the 10,000. And I pay taxes on the 10,000 and I put it in an account that grows to 100 1000 I owe no taxes on that 100,000 I solve the problem right now it’s no different than do I want to pay taxes on the seed, or the harvest, folks are five key areas when it comes to retirement planning. And this goes for everybody forget retirement planning, even though secure money advisors is focused on those that are five to 10 years out from retirement and are already retired. The biggest advice I could give to each and every one of you out there trying to accumulate your wealth and make a pot of money that can someday work for you, is to get rid of the tax man right now, you can do that through the utilization of Roth IRAs. If you haven’t used Roth IRAs, you can do Roth conversions. If you haven’t done Roth conversions, and you haven’t started investing yet. And you don’t qualify for Roth IRAs. Look at backdoor Roth IRAs, look at things like tax free life insurance and things along those lines that you can use to get rid of the taxman and solve that tax problem right now. Because you’ll be much happier later on in life when you don’t owe taxes on any of the income you’re taking. Because not only was it going to cause an income tax problem later on down the road if you don’t get rid of the tax man right now. But it’s going to cause a problem on your Medicare premium, it’s going to cause a problem on your Social Security tax is going to cause your income taxes to go up. And it just becomes a compounding effect. Our right track Retirement System is all designed around five key areas, income, taxes, investments, health care, and your estate planning. Those are the most important five keys if you have all those five key areas taken care of and you got every i dotted and every T crossed you are possibly on the right track. But if you’re not on the right track, let me encourage you to come in, take advantage of a complimentary right track retirement review, to see if you’re doing the right things. If you’re not, this would be a great time for you to find out if you weren’t doing, we can actually help give you turn by turn directions give you a roadmap of how to get to the right track so that you’re doing all the right things come retirement or getting going into retirement, we literally will take the mystery out of financial planning. It’s all complemented you need to do your part though. Call us today. 1-800-656-8616.

Steve 17:10

That’s right, folks. Take advantage of the offer. Brian put them out there today. It’s a chance to get that financial roadmap put together taking a lot of complex financial rule. Let me just double even talking about the how to create a tax free or mostly tax-free retirement. Yes, Brian and his team at secure money advisors can help you achieve that. It’s an excellent chance for you to get a true practical financial review. And it is that phone call away 800-656-8616. Get a comprehensive financial review, see where you are today. But most importantly, walk out the door with a roadmap that can help get you to where you need to be 800-656-8616 again, 800-656-8616.

Brian Quaranta 17:49

When we come back, we’ll answer a frequently asked questions that I get all the time. And we’ll follow that with a segment on some questions, you should be asking your financial advisor when we come right back with on the money with secure money.

Announcer 18:09

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 two 800-656-8616.

Steve 18:45

We’re back on the money with secure money and Brian Quaranta and consumer advocate Steve’s at all 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 19:04

Is there a lot to it? Isn’t there? I know. Well. I know. We’ve got quite a few questions.

Steve 19:11

Well, yeah, we were talking about stress test. And we talked about stress and 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 19:29

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

Steve 19:34

Exactly. I could 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 19:59

Very common. These days, where we’ll see people that had been working for employers, 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 401k plan, but who also had 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 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 gonna be fine. If I retire at 60, I’ll be fine. And that’s part of our job here at secure money, viruses 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 21:42

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 22:01

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 going to 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 that could have gone over and down over time. So, you’re going to 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 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 23:49

All right. Well, let’s see. We have time for one more. I’m gonna 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 24:01

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

Steve 24:03

It’s right below there. Ah.

Brian Quaranta 24:08

All right. Let’s ask the question again.

Steve 24:10

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 earnings are returned to you in monthly installments when you reach full retirement age?

Brian Quaranta 24:25

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 24:50

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

Brian Quaranta 24:52

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 they’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 that’s going to help get you to where you need to be when it comes to retirement 800-656-8616 Again 800-656-8616 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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