Episode 149 – The Difference Between Investment Plans and Retirement Plans

On this week’s episode of On the Money with Secure Money, Brian Quaranta discusses the importance of financial education along with the differences between investment and retirement plans.

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Radio Show Transcript

Intro 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.

Announcer 00:39

It’s a big one today because we’re going to be talking about an investment plan versus retirement plan and what makes them so different. And on today’s show the importance of financial education when we come right back with on the money with secure money. And now on the money. Any good retirement plans starts with the foundation, asset protection, tax reduction, listing planning, these are the things that start to move you towards having a retirement plan. Retirement doesn’t have to be complicated. You think that’s the difficult part. That’s just getting started. And now On The Money With Secure Money:

Steve 01:23

Hey, welcome, everybody. Here we are on the money with secure money. Brian Quaranta. Here on consumer advocate, Steve said, Brian is the President CEO of secure money advisors. He’s a fiduciary, He is an author. He is a father times two and so much more. Hi, Brian, how are you?

Brian Quaranta 01:40

I’m great. Steve. Yeah, Father times two and with very little sleep.

Steve 01:44

Well, that’s what happens. Right? Yeah,

Brian Quaranta 01:48

I know. I know. So lots going on, man. Isn’t there just lots going on?

Steve 01:53

Oh, my gosh. I mean, you know, look at the market. And I mean, I, you know, once 9:30 rolls around, I sort of, you know, look at it, and you kind of go: huh. And that’s really whether it’s up: huh or down: huh. It’s still: huh.

Brian Quaranta 02:07

Yeah, worst, worse four month start to a year since 1934, I believe. So not a real good start for the S&P 500. And not a good start for any of the indexes. And it’s very interesting, because going into the year, all the data, all the literature was showing, you know, another good solid year in front of us, although many of us have thought the markets had been overinflated for quite some time. But there was still a lot of momentum in the marketplace. And it turned very quickly on everybody. And we’re in a really unique environment right now, because we kind of have 100 year storm. And what I mean by that is, when you look at the economic cycle of how the economy expands, it peaks out, it contracts, and then it troughs. There’s opportunity within the business cycle, to take advantage of different asset classes. Typically, when stocks aren’t doing well, bonds can be a little bit more of a safe haven. So a lot of times if you’re actively managing a portfolio, and you get indications that earnings reports don’t look good, or outlook for stocks don’t look good, you can start to remove risk, or what we call in the investment community remove beta from your portfolio and typically shift into some type of fixed income. The 20 year treasury bond, Steve, and any listeners can look this up if you type in T L T. That’s the 20 year Treasury ETF. If you were to look up the 20 year Treasury ETF right now, you would assume that you would probably find an interest rate of somewhere around one to 2%. Treasury bond has always been a place to where you could protect money during times of market volatility. Steve, you have any idea what the rate of return is right now on a 20 year treasury?

Steve 04:06

I have no idea. But I think you do.

Brian Quaranta 04:08

It’s about minus 20%

Steve 04:11

Minus 20%?

Brian Quaranta 04:12

Minus 20%. Long duration bonds are being absolutely destroyed right now in the marketplace because of the increase in interest rates. So for folks that don’t know this, when interest rates go up, bond prices go down, so your portfolio will take an impact. So what’s happening is you’ll see a lot of people that have relatively conservative portfolios, some with very conservative portfolios that are losing quite a bit of money right now. Total Return Bond Fund, whether you look at Vanguard or any Total Return Bond Fund, down about 10 to 11%. On the year right now for bonds. So you got stocks down. I mean, you look at companies like Amazon, Netflix, Facebook, I mean 25%, 30%, 40% declines in those stock prices.

Steve 04:59

Well, those tech companies have really been hit hard.

Brian Quaranta 05:01

Tech companies have been hit hard healthcare companies have been hit hard. So that’s another defensive sector. When you’re looking to be defensive during volatile times, you can typically run towards consumer staples, health care, things along those lines, you look at companies like CVS or Rite Aid, they’ve taken big hits. So across the board, there hasn’t been a whole lot of places to hide. Gold hasn’t even been performing that well, certainly not keeping pace with inflation. So you know, and it’s a troubling environment. Because, you know, if you keep your money under the mattress, which a lot of people when the markets are as volatile as they are right now, typically, you know, will feel better keeping their money tucked under their mattress.

Steve 05:43

That seems like a good idea. Right?

Brian Quaranta 05:45

Right, but with an eight and a half percent inflation rate, you know, you’re losing money, safely, losing money. So it’s an ugly environment right now. And this is why we preach so much at Secure Money Advisors about the importance of having what I call a bucketing system. So a bucket strategy, which I’ve written about in my new book, Right Track your Retirement. It’s a simple planning strategy to help you reduce risk, build income and provide peace of mind. I’ve been teaching this for probably the last 15 to 20 years of my career, where we literally set aside 10 to 20 years worth of guaranteed money to generate the cash flow that you’re going to need in retirement, so that we don’t have to worry about what’s going on in the stock market. So when we look at a Secure Money Advisors strategy, from the basic fundamentals, we’re looking at three buckets that we utilize. Folks, if you’re listening to this, write this down, because these fundamentals truly can change your life. Number one, most importantly, bucket number one needs to be a cash reserves bucket. Everybody’s cash reserves are going to be a little bit different based on specific needs. Typically, what’s recommended is 12 to 24 months worth of expenses within that bucket. Bucket number two needs to be a guaranteed account safe, it can be either some type of guaranteed annuity bank, CD cash account, something along those lines. I personally like fixed and indexed annuities because fixed annuities right now we’re going to pay anywhere from three and a half to 3.75%. Guaranteed, you’re not going to have any risk of interest rates, like you do in bonds, meaning, you know, in bonds, you think you’re being safe, but if interest rates go up, you lose money. And then your third bucket needs to be a risk bucket. Now, why is this important? It’s important for those going into retirement because the grand experiment in this country is the fact that nobody’s getting a pension anymore. And the biggest mistake people make going into retirement is they keep 100% of their money at risk in the stock market. Folks, this is why we keep a few openings on our calendar each week for our listeners. And we’d love to hear from those folks who are experienced in this volatility that I’m talking about right now and do have concerns you have an opportunity to come into our offices, sit down and have a conversation with a fiduciary financial advisor who can guide you and possibly help you improve your situation. So for the next 10 callers who call in, we’re going to perform a complimentary Right Track Retirement review, that’s going to indicate whether or not you’re in need of a comprehensive financial plan, we’ll run a fee report, we’ll run a risk assessment, we’ll recognize where you might have taken unnecessary losses in your portfolio, we can show you ways to help protect your retirement so that you can experience better peace of mind and better growth potential. Second, we’ll perform a tax analysis we’ll review how it’s possible that you can reduce taxes. But most importantly, we’ll show you how to generate cash flow in a volatile market so that you don’t put yourself at risk of running out of money. So again, folks for next 10 callers who call in right now that’s a complimentary Right Track Retirement review.

Steve 08:47

And that sounds fantastic, Brian, folks don’t miss the opportunity to come on in, sit down, get that financial roadmap put together. You heard Brian 10 callers right now will get that comprehensive financial review, you’ll see where you are today. But more importantly, you’ll walk out with a roadmap that’ll help get you on the right track to retirement. In short, you’ve got nothing to lose 800-656-8616, 800-656-8616.

Brian Quaranta 09:11

When we come back, folks, I’m going to continue to talk about the grand experiment that you don’t want to be part of when we come right back with On the Money with Secure Money.

Announcer 09:24

Do you ever feel like you’re fighting for financial knowledge? Don’t let bad advice be a punch in the gut to 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 You 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 10:01

We are back on the money with Secure Money and Brian Quaranta, I’m consumer advocate Steve, Brian is President and CEO of Secure Money Advisors, a fiduciary and independent, and again with 20 plus years experience. And you’ve got a great team of people behind you, Brian. And again, you’re on a roll man, this is this is difficult time for folks. And you’re sort of smoothing it out for us, or at least helping us understand what’s going on. And what we can do about it.

Brian Quaranta 10:28

What we can do about it is make sure that we follow the fundamentals, too many people get caught up in chasing performance and chasing performance is a loser’s game, when you get close to retirement, you’re retired, it’s not about chasing performance, it’s about chasing protection, it’s about chasing simplicity, it’s about creating a plan that can weather any market so that you can continue to enjoy your retirement. Unfortunately, if this market continues to decline, you know, you can see people have to come out of retirement because they’re not gonna be able to afford to stay retired. You know, and I want to get back to this grand experiment that I was talking about, you know, back when my grandfather retired, he got a pension after working a lifetime for one employer, and that pension replaced about half of his income. So you combine that with the Social Security benefits, you know, that that he was getting at the time, that that was enough money for him to be able to live off of, now, any additional income that they needed, they didn’t even have to take risk with the additional money that they saved, they would go down to the bank, and my grandfather was buying bank CDs between 10 and 15%. I mean, maybe we’ll see those rates again, here someday. You know, an I bond right now, one of the best places you can put your money right now is an I bond. I bond is paying over 10% interest. That’s amazing. Here’s the only problem though, you can only put $10,000 in these things. So even though it’s a guaranteed bond, you know, there’s a cap on how much you can put in. So that doesn’t help a lot of us who have to worry about funding a retirement for the next 25 or 30 years. But back then you could buy CDs in any denominations, and you would get a 10 to 15% guarantee FDIC insurance. So, if you had an extra $200,000, and the bank was giving you a 10% on it, that’s an extra $20,000 a year on $200,000, you know that you’re able to take out as income without even touching the principal. And that’s really all any of us want to do with our money, we just want to protect the principal and live off the interest. Unfortunately, with inflation, where it’s at right now, the interest rates that the banks want to pay us, it forces people into the markets. And, and you look at what’s happening right now, with the markets, it’s very scary for those that are very close to retirement. Now we do know this, we do know that the worst thing that you can do during a down market is sell. But that’s easier said than done. You know, everybody understands fundamentally that volatility is part of the process, it’s part of the answer. And what I mean by that is, when you got it eight and a half percent inflation rate, you have to understand that in order to beat that you’re gonna have to, you’re gonna have to accept a little bit of volatility in your portfolio. In order to keep pace with that. The problem is that people take too much risk, as a matter of fact, they take risk with 100% of their life savings. And so what we want to do when you come in to Secure Money Advisors are a few things I’m gonna show you: number one, I’m going to show you the bucketing technique that is very, very powerful, how to split your money up into three separate buckets that ultimately are going to provide you with available cash in case of an emergency, it’s also going to provide you with an income stream that you’re going to be able to take on a monthly basis, that’s not going to be impacted by the ups and downs of the stock market. And then it’s going to require that you put some money at risk, but the money that you’re putting at risk is truly long term money. What do I mean by long term money, it needs to be 10 years or longer. Typically, what we like to do is protect at least the first 10 to 20 years of retirement. So, if somebody became a client of ours last year, I was talking to them about getting chips off the table. If you became a client of Secure Money advisors last year, you pulled chips off the table, and we put some of that money into that safe, guaranteed bucket that we talked about. You know, at the time, when the market was up and people were making 25-30% Some people came to the office and thought I was crazy for telling them to do that. But a lot of people took my advice and they’re very happy. They took my advice right now because for those that did, we pulled money out, we protected it, we protected the first 10 to 20 years of retirement. So even though their risk money is down right now, because certainly, you know our portfolios have taken losses too we’ve got nothing to hide. The only difference is this. My clients don’t have 100% of their money in the stock market. So, when their risk money goes down, we have time to recover. For the most people out there when their risk money goes down. It’s 100% of what they have. So they don’t have that time to recover then you add to the fact that they want to take income on top of it, but this is why the work we do at secure money advisors is so important, you know I wrote the book Right Track Your Retirement, it truly is a simple planning strategy to help you reduce risk, build income and provide peace of mind. I talk about all of this stuff in my book, the difference between investment plans and retirement plans and why you don’t want to fall prey to the grand experiment of just using risk money, why you want to break your money up into buckets, I talk about the math and how it works, and the peace of mind and protection you get by doing things this way. And this is why we always will keep time open on our calendars for people to meet with us. And I will tell you come in and get a second opinion. Remember, you can’t get a second opinion from the guy that gave you the first opinion. And most answers that you’re gonna get right now in a declining market is people are going to tell you don’t worry about it, just hang in there, you’re in it for the long haul. Well, if you have 100% of your money in the market, I’d hate to tell you that that is not a solution. Okay? Especially if you’re going to need to generate income from that money anytime soon in the next year. Or maybe you’re even generating income right now, I just met with a guy at the end of last week that pulled 100% of his money out of the market. Because he’s in his 21st year of retirement, he cannot afford to continue to lose money. But every time he called his advisor, his advisor just kept to kept telling him not to worry about it, he came in, I figured it out. Look, if he just got a 6% to 7% rate of return every single year, he was gonna be out of money in nine years. So, in his case, I can understand why he pulled that money out of the market, don’t put yourself in a position to where you’re going to be worried about whether or not you’re going to make it all the way through retirement. That’s not a plan that you want to build. When you come in, I’ll show you how to build out the buckets. And I will show you the proper way to approach handling markets like we’re going through right now. So again, we keep these openings on our calendar each week for our listeners, folks take the time to come in and get a second opinion, you have an opportunity right now to sit down with us a fiduciary financial advisory firm to help you improve your situation. We’re going to do a complimentary no obligation, you’re going to come in and have a conversation with us. Take advantage of our Right Track Retirement Review, it truly is going to show you how to build wealth the right way and protect your money. So, for the next 10 callers that’s a complimentary easy to understand finance review, that’s really going to help you indicate whether or not you really need a full blown Financial Review. We’ll talk about the fees you’re paying and the risks you’re taking, we’ll show you better ways to handle taxes, how to create income. Most importantly, we’ll show you how to create peace of mind. So again, for the next 10 callers. It’s a right track, retirement review, no obligation, no cost to you.

Steve 17:26

Sounds great. It’s a phone call away to folks. That’s how you get started 800-656-8616. You heard Brian: 10 callers right now will get that comprehensive financial review. And you’ll see, well, here’s where I am today. But more importantly, it does become that roadmap that can help get you where you need to be. 800-656-8616. Again, 800-656-8616.

Announcer 17:49

Retirement accounts and dividend stocks are a great pairing. When we come back, we’ll highlight three reasons why holding dividend stocks in your 401 k or IRA could be a strategy built just for you. He’s letting the clock run out on his social security to age 70 For maximum benefits. And here comes the Roth conversion. He’s got some outstanding coaching with that lifetime income plan. He’s created his own pension as well. And it looks like he’s going to go all the way. Play your best retirement game call Brian Q 800-656-8616. Or text Brian Q to 800-656-8616. Call or text Brian Q to 800-656-8616.

Steve 18:40

And we are back one more segment on the money with secure money. And Brian Quaranta. I’m consumer advocate Steve’s at all I love our conversation today, Brian, we’ve covered so much ground and we’re talking I think we’re talking about things that are so current and so topical from inflation to, you know, the right plan. And right now with things feeling in a bit of flux. I think having that confidence that we talk about, you have to know that that plan is actually in place, and it’s up to date, and it’s going to help us get to where we need to be. That is the beauty of working with you guys.

Brian Quaranta 19:11

There’s only one thing that gives you confidence. And that’s clarity. And if there’s anything that we do really well, it’s giving our clients and even those of you that are coming in for a second opinion, the clarity that you need to make good financial decisions. It’s one of the things I’m most proud of here at secure money advisors is that we have found a way to make retirement strategies and planning simple and easy to understand.

Steve 19:35

Right? Well, I’m again, give us a call folks 800-656-8616. I know a lot of you already have but we’ve still got some availability for you. And in the meantime, let’s jump into some of these questions. Brian, what do you think? Yeah, let’s do it. I think we got a question coming in from Jerry here. Yep. Here is Jerry. Jerry says I was born in 1956 and worked enough years to draw some social security retirement benefits. My spouse was born in 1954 She’ll be waiting until 70, to start collecting her retirement benefits, now, if I start to draw my own benefit now, will it affect the amount of my spousal benefit when I switch, since that amount will be larger than my retirement benefit, a lot going on there.

Brian Quaranta 20:16

There’s a lot going on there. But I will tell you this, I mean, you’ll still get a little bit of a spousal bump, you know, Social Security has a way of calculating that Now, depending on what your wife’s primary insurance amount is going to be on, on her social security. But you know, 70 is a great time to collect, you know, especially if you feel you’re gonna live a long time. And I think that’s the big thing that a lot of people have to determine for themselves is, when is going to be the best time to collect here. And whether or not you’re going to qualify, like Jerry is talking about here for some type of spousal benefit. Keep in mind, you know, the easiest way to understand a spousal benefit is let’s suppose that you have a husband or wife, that was a homemaker, you know, and, you know, both genders play a role here. Now, I mean, I see, you know, I’ve got a good friend of mine, who’s a homemaker, matter of fact, he just entered back into the workforce after like 20 years, when he’s the one that raised the kids and his wife retired from the military. And now he’s back out and working. And the spousal benefits are great, because let’s suppose that your spouse was a homemaker and you collect social security, your spouse can get up to 50% of your Social Security, depending on when you collect and the ages of both of you at that time, but Social Security will give at least up to half of that amount. So if you’re going to be entitled to let’s say, $3,000 a month, your spousal benefit, if you were entitled to 50% would be up to $1,500 a month. So a spousal benefits are important to understand and look into. And that’s certainly something we can do when you come in is help you figure out what strategy to go with when it comes to taking that spousal benefit. And I think we’ve got another one coming in from Grace here, Steve.

Steve 21:52

Here it is. Yeah, Jerry, again, 800-656-8616 is the number grace is wondering. She says, I’m a divorced woman, aged 67, and lost my job due to the pandemic being eligible for retirement and having no family close by, I thought it was a good time to move from my little town to a sunny senior community. Unfortunately, I did not think about what retirement would actually look like, now I’m at a loss, the club’s pickleball other activities, just don’t do it for me after a 35-year management position, is retirement a process? And how do I get a more fulfilling life? Wow, why would she want to leave sunny Pittsburgh?

Brian Quaranta 22:34

Well, you know, this is this is a big issue, right? Now, a matter of fact, you’re seeing a lot more life coaches pop up that specialize in this area. So, what do I mean by a life coach? Well, there’s people that are helping those of you that are retiring, make a transition and find a new purpose. And what Grace is really talking about here is, you know, 35 years in a management position, you know, and now transitioning to where she’s got her time. You know, there’s all these activities that may not be for her. And there’s people that just don’t do well in retirement. After doing this for almost 24 years now, and helping over 1000 people retire, what I’ve come to understand is that if you retire with a purpose, you’re going to be a lot healthier and happier throughout your retirement, and you got to find out what that purpose is going to be. But it can’t just be that I’m going to play pickleball. And I’m going to do things around the house, because eventually, there’s going to be a day you wake up and you don’t feel like playing pickleball. Although that may not be the case, because I’ve got a lot of clients at play, and it seems to be quite the addiction. Yeah, but the reality of the situation is, you really got to find out who are you in retirement, you know, because for a lot of people, and this happens with a lot of executives that we retire, I have a CEO of a company that retired, you know, and he was responsible for 3000 people flew all over the country and a private jet. And now he’s retired. And so he went from one day, having access to the corporate jet and flying all over the place and staying, you know, all over the country and all over the world, and, you know, telling 3000 people, you know, what the next strategy moves gonna be for the company to the very next day being just an average person, you know, and, and that was not easy for him. And it’s still been a struggle. And so, finding that new purpose is very important. It’s important that you figure out what your purpose is, folks. And that’s what we can help you do here at secure money advisors. We have a few openings on our calendar each week for our listeners, and we’d love to hear from folks who want to really get a plan in place, want to have some clarity and confidence around what they’re doing. Those of you that have seen some recent market volatility affect your portfolios might be a good time for you to come in and get a second opinion, see if you’re doing things and get you on the right track, and that’s exactly what we’re going to do. Our right track retirement review will help you identify the five key areas that we believe are important to be Get on the right track number one and most importantly, is having a strategy for income. Number two is a strategy for taxes. Three is a proper investment strategy, a health strategy, and of course an estate planning strategy. You have an opportunity right now to sit down complimentary with a fiduciary advisor who can guide you and possibly help you improve your situation. So again, folks for next 10 callers that’s a complimentary right track retirement review that we’re going to perform complimentary it’s easy to understand review that’s going to help you indicate whether or not you’re in need of a comprehensive financial plan. So, pick up the phone call us today. This is something you don’t want to procrastinate on. Give us a call now and schedule.

Steve 25:37

Absolutely, it’s 800-656-8616 you heard Brian 10 callers right now. Get that comprehensive financial review. You’ll see where you are today. But more importantly, you’ll walk out the door with your own right track retirement review your right track retirement plan 800-656-8616, 800-656-8616. Brian, as always, a pleasure to be here. I love the conversations; the information is really important.

Brian Quaranta 26:03

Always a pleasure. And folks we’re so grateful for you keep the questions coming in and we look forward to seeing you next week with on the money with Secure Money.

Announcer 26:17

Investment Advisory services are offered through foundation investment advisors, LLC, an SEC registered investment advisor Brian Carranza 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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