Brian Quaranta discusses the strategies and techniques to leverage throughout the different phases of retirement.
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Radio Show Transcripts
Announcer 00:00
Information provided is for illustrative purposes only and does not constitute investment tax or legal advice information has been obtained from sources that are deemed to be reliable, but their accuracy and completeness cannot be guaranteed. Neither Brian Quaranta nor his guests are liable for the usage of information discussed. Always consult with a qualified investment legal or tax professional before taking any action.
And now Retirement You Radio
Asset protection, tax reduction, holistic planning;
featuring Pittsburgh’s wealth, financial, and income Coach Brian Quaranta
Brian Quaranta 00:38
On today’s show, we’re gonna highlight some things you should keep in mind as you head into retirement when we come right back right here on Retirement You Radio.
Steve 00:49
Hey, Welcome everybody this is Retirement You Radio increasing your financial IQ with BrianQ. I’m consumer advocate Steve, and Brian Quaranta is here. He’s president and CEO of Secure Money Advisors. He is a fiduciary. He’s got over 20 years in the business. And how’s it going? Brian? What’s going on?
Brian Quaranta 01:05
Good. Good. Steve. Yeah, busy, busy, busy. Busy. Right?
Steve 01:08
That’s what we are. That’s what you are.
Brian Quaranta 01:12
A lot of people retiring over the last 24 months, you know.
Steve 01:15
I think a lot of people, you know, thought maybe now is the right time to retire.
Brian Quaranta 01:21
Yeah, yeah. Well, I think people got used to kind of seeing what was like being home. And when they finally had to go back to work and really start, you know, they were just like, I don’t know, I don’t want to do this anymore. Can you get me retired earlier. So, we’ve been very, very busy between the radio show, the TV show that runs on the weekend on Katie Kay at 12 o’clock. And then our educational events, which by the way, for the listeners, you can go to WWE at secure money advisors.com. And you can go to our events tab, you can actually see where we’re going to be next, out there doing some educational events. So, hope to see you out there.
Steve 01:54
Fantastic, folks. 800-656-8616. That’s the number you can call to get yourself sitting down with Brian 800-656-8616 or text BrianQ to 21,000. All right, so let’s talk about these things, if you’re in your 50s, and that there’s a lot of folks out there that we’re talking to, that are in their 50s, maybe in the second half of their 50s, or maybe closer to 60. But these are all things that need to be considered, you know, to make sure that we are really ready for retirement.
Brian Quaranta 02:23
Yeah, and I mean, getting ready for retirement can feel a little bit like a full-time job for some people. Other people don’t put enough time into it, some people spend more time planning their summer vacations, right? And they actually do paying attention to their retirement. And you know, back in the day, it was very easy to not pay a whole lot of attention to retirement planning, because it was probably pretty simple. When you retired, you probably got a social security check, you got a pension check. And that was enough money for you to be able to live off of and you didn’t even have to think about how you were going to take your Social Security or when you were going to take your Social Security or if you have a 401k how you’re actually going to withdraw your money from that 401 K plan or that 403 B plan. And that’s the big problem today is that 85 to 95% of the people retiring today, Steve, don’t have pensions, it’s the number one problem going into retirement. And we go from this accumulation phase of retirement into this distribution phase. And everybody out there talks about accumulation. But there’s not a whole lot of people teaching and educating on distribution, because the strategies and the techniques that you use during your accumulation phase are not the same strategies and techniques that you’re going to use during your distribution phase. And, and so here are a few things that you probably should think of number one, you might want to think about creating a budget. I mean, you want to look at your spending to figure out where your money’s going, if you need to start budgeting so you’ll have enough money for retirement savings, you know, work with your spouse, obviously with this piece and kind of get on the same page. Because getting on the same page actually helps you retire a little bit faster.
Steve 03:59
So, you’re both saying the same things. You’re both you’re both
Brian Quaranta 04:03
Eddie’s you both have the same target in mind. Right, right. So definitely pay yourself first. That’s kind of the golden rule of personal finance, it’s pay yourself first. And it’s especially important. When it does come to saving for retirement, it’s the most effective way to build a large nest egg. So, before you pay the mortgage, or any other bill, put some money directly into your retirement fund. And while we’re on that, I mean, you should be thinking about getting debt paid down as quickly as you can. As a matter of fact, I sometimes recommend if you’re maybe three to five years out from retirement, sometimes looking at a strategy where you might actually redirect retirement dollars to actually pay off debt. Now some people might go What do you mean that’s crazy, but I’m getting matching on my 401k Well, you still would deposit up to the match you would just take any excess and redirect it towards maybe paying down debts because look at the debts cost me $1,000 A month like a Mortgage, and we can get that paid off by the time you retire. That’s $1,000 in additional monthly income that you pick up guaranteed, there’s no, you know if ands or buts I mean, you think about you go, Well, if I didn’t pay that debt off, and I just put that money into my stock account, could you generate $1,000 a month from that extra money you’re putting away? Who knows? You may be able to you may not be able to because the market, we don’t know if it’s gonna cooperate, what if it goes down? And you can’t get that $1,000 a month? But if you pay off the mortgage, you’re guaranteed to get right, because that’s always Yeah, right. Makes sense? Absolutely. Makes sense. A lot of people don’t think about that one. I would say definitely consult with a financial advisor, I would recommend that you consult with a financial planner, someone that’s a licensed fiduciary that is held to the highest standard to provide you with a plan that is fee-based, Secure Money Advisors would fit into that category. But retirement planning can be difficult, especially if you’re trying to do it on your own.
Steve 05:56
So important is it to have a goal age. In other words, I want to retire when I’m 62. I want to retire when I’m 65. How important is it to have that out there?
Brian Quaranta 06:05
It’s important, you know, I mean, we always are looking for retirement age, because now we can work backwards. What do we need that to look like? So just take my retirement, for example, I run all kinds of different numbers, retirement at 55, retirement 60, retirement 62. And I say if I’m going to need X amount of income, what exactly is it that I’m going to need to save today? What’s the rate of return that I’m going to need? And then most importantly, is if I want to retire at that age, let’s say it’s 60 or 62? What’s the distribution rate going to be? And there’s three rates, you have to be aware of the most people are not teaching this, you know, matter of fact, I don’t know anybody teaching this except secure money advisors. And that’s the three rates you have to look for in retirement is, number one is the spend down rate. So, if you need to take distributions or money out of your retirement accounts, which again, 85 to 90% of the people are going to have to do that? What rate of return do you need your portfolio to do in order to be able to spend that money down to zero by the age of 95? What rate of return are you going to need to preserve the principle so you can take the money out that you need to take out and just live off the interest, right? Never touch principle. And number three is what if you still want to leave money to the kids or you want to leave a legacy behind, okay, but you still need to take money out of the accounts. And this is why having a written plan is so important. And this is why The Right Track Retirement System, Steve, that we have built helps people understand. Number one, what is a good retirement date for you? What is your distribution rate going to need to be? How long will that money last? You know, if you ever thought to yourself, when would be the best time to take Social Security or, you know, maybe you’ve thought to yourself before I don’t you don’t have a pension, and you’re going to need one and you’re gonna need to provide yourself with monthly income and you’re not sure how to do that. Or maybe you think to yourself, you know, I have all my money in the market right now. And I can’t afford to take another big market loss right now because I’m going to be retiring the next year or maybe I’m already retired and you just don’t have the time to recover the Right Track Retirement System truly will help you get answers to these major concerns that most people have matter of fact, for the next 10 callers who call in right now, we’re going to give you that Right Track Retirement Financial Review, at no cost no obligation to really determine whether or not you’re in need of a full-blown financial plan. Now we’ve seen others charge up to $1,000. Probably more than that for the type of work that we’re going to do complimentary when you come into the office. Well literally take that mystery out of financial planning all that confusion, we’re going to make it simple and easy to understand. And we’re going to show you the best practices and the five key areas. We’re going to teach you about your income. We’re going to teach you about how to mitigate taxes, how to properly allocate your investments, how to have a health care plan, and most importantly, when the good Lord decides to take you home to make sure that your family your charities and the people you love become the largest beneficiary, not the IRS but you got to do your part. You got to call the number
Steve 08:50
800-656-8616, Again 800-656-8616.
Brian Quaranta 08:55
For most of us it’s been a long time since we’ve been a rookie at anything, retirement can change that. In this segment, some rookie retirement mistakes to avoid when we come right back right here on Retirement You Radio.
Announcer 09:09
When should I take my Social Security? How much risk can I tolerate? I’m afraid I’m overpaying my taxes. Did I save enough? I can’t keep up with all these rules. There are a lot of components to your retirement planning, and it can seem overwhelming. It’s time to establish a partnership with a professional who can provide you with a written plan, the proper strategies, and then be there with you along the way. Call BrianQ 800-656-8616 or text BrianQ to 800-656-8616. Call or text BrianQ to 800-656-8616
Steve 09:43
We are back on Retirement You Radio increasing your financial IQ with BrianQ. I’m consumer advocate Steve, Brian Quaranta is here, of course, having a great conversation. Yeah, it’s been a while since I’ve been a rookie. And you know, as it gets close to retirement. I mean, that can be a little scary because you’re not really sure what youre supposed to do, right?
Brian Quaranta 10:01
Well, how many people have a roadmap for retirement?
Steve 10:05
In your experience? That’s a good question for you. How many people do?
Brian Quaranta 10:08
Nobody does. Nobody, nobody does. I mean, you know, I would say if 10 People come to the office, I might see two of them that somewhat are prepared, that have a little bit of an idea. But most people just don’t understand the key fundamental areas that they’re going to be dealing with. And there’s five of them, and the right track retirement system that we’ve developed, that if you call in and schedule a meeting with us, we’re going to walk you through the best practices of building your retirement to make sure that is on the right track. And there’s five key areas you have to focus on number one is income. Number two is taxes. Number three is your investment strategy. Number four is your health care plan. And number five is your legacy strategy. So, but some big rookie mistakes that people make, especially in the beginning phase of retirement, Steve is not establishing a savings withdrawal strategy. That’s a big one.
Steve 10:59
That really is. And we’ve talked about that before, and how important that is, and how not, if not done correctly, can really, you know, derail your retirement?
Brian Quaranta 11:09
Well, this is why for a lot of people, according to AARP, AARP interviewed about 1000 people. And they said: What do you fear most running out of money or death? You know, over 80% of people said they fear running out of money more than they fear death alone. And the last thing you want to do in retirement is deplete your nest egg prematurely. You know, I mean, doing so could result in a world of financial pain during the later stages of your senior years when you’re less likely to be able to supplement your Social Security benefits with a job. You know, most people just aren’t going to have the physical ability to do that, right. So don’t just withdraw from your savings without putting any thought into it rather come up with a strategy. Now, we’ve talked about this many times on the show, Steve, it used to be that the 4% annual withdrawal rate was considered acceptable for retirement savings. But if you expect to live a fairly long life, a rate of two and a half or 3% may be more suitable guidelines to follow. Now, you could actually increase those withdrawals. And the reason why they’re bringing these withdrawal rates down is because people are living longer. And we have more volatility in the markets. But see one of the things the Right Track Retirement System teaches people, Steve, teaches a bucketing strategy. See, so many people try to create an income plan with an accumulation strategy. And what I mean by that is the accumulation strategy is as simple as this right? You’re going to pick a few different stocks, bonds, mutual funds, whatever most people today, if you look at a 401 K plan or an IRA, they probably have five to 10 different mutual funds, depending on how many investments they have. But people try to take money out of a risk portfolio. And here’s what happens. When you start taking money out of a risk portfolio on a monthly basis or an annual basis. You’d need the market to cooperate with you 100% of the time, Steve, does the market cooperate? 100% of the time?
Steve 13:06
No 100% of the time
Brian Quaranta 13:11
No 100% of the time. So how do you build a distribution plan where you still have time to grow your money? Because remember, one of the things that we were all taught when it came to investing in our money in the market is when the markets go down? What do all the brokers tell us? Right? Don’t worry about it hang in there. You’re in it for what the long haul? The long haul? They all say it. So how are you supposed to be in it for the long haul. If you start taking money out of that when you retire? That’s no longer the long haul. That’s called now. So, if the markets go down, the question you have to ask yourself is will they come back in the time period that you need to come back in? Probably not because you need that money right now. So, what happens now, when you’re withdrawing money, as the market is going down? Well, you’re not only compounding those losses, but you’re locking into those losses. And so now what happens is people wind up prematurely depleting their nest egg before they die. And this is something called sequencing risk. This is something called withdrawal rate risk, and this risk cannot be solved if you don’t use a bucketing strategy. By utilizing a bucketing strategy. We can have different phases of the withdrawal strategy. So, you can have a one-to-three-year bucket, a three-to-10-year bucket, and then a 10-year beyond bucket. Well, the three-to-10-year bucket needs to be a bucket of money that we don’t have volatility and it needs to be like a pension where we can distribute that money and give the risk bucket money to grow. So, understanding how withdrawal rates work and understanding that there’s a difference between an accumulation plan and a distribution plan. And that you have to be understanding the rules and the guidelines that govern the distribution plan. Most people out there probably whoever’s listening to this right now you probably have an accumulation plan, not a distribution plan, it’s just a different strategy. Once you get into retirement, that doesn’t mean that you still can’t have an accumulation strategy with some of the money. But we have to have a distribution plan so that we have the time to let the accumulation part of the plan work. Okay, so some other things. What else? Are we doing wrong with rookie mistakes? Well, choosing the wrong Medicare coverage.
Steve 15:23
We get inundated on TV with commercials endlessly about, well, you know what, you know, this Medicare plan, that Medicare plan; how do we know?
Brian Quaranta 15:30
Again, there’s five key areas to retirement there’s income taxes, investments, health care, Legacy planning, healthcare. Why is that important? Because choosing the right Medicare coverage is important. Once you retire, you may be eligible for Medicare. But if you’re not careful, you can end up overpaying for health care and you know, that could eat into your savings. So, you have options when it comes to Medicare, you can stick with the original Medicare and sign up for Part D drug plan. Or you can get an all-in-one plan, or you know, the state of Pennsylvania if you want to retire before your Medicare age now has our own marketplace called Penny which we can get very affordable insurance at but understanding the right Medicare coverage, understanding how to get health care coverage if you want to retire before the age of 65. These are all part of what we help you with what the Right Track Retirement System. The Right Track Retirement System really is designed to help you get on the right track. And for the next 10 callers who call in right now we’re going to help you create a Right Track One-Page Financial Review, that’s going to indicate whether or not you’re in need of a full-blown financial plan. Now, we’ve seen others charge up to $1,000 or more for the similar features and offers, we’re going to do it at no cost, no obligation, but you’ve got to do your part. All you got to do is pick up schedule a time to come into the office, you’re going to have an hour consultation with myself are one of our team members. And you’re going to sit down you’re going to go through the five key areas of what Right Track Retirement should look like. All complimentary, no obligation, it’s going to help you truly determine whether or not you’re doing the right things. So, we’ll take the mystery out of financial planning will help you map out where you are and where you need to go literally giving you a roadmap of how to get from point A to point B we’ll also look at some tax analysis ideas, we’ll look at how you can build a customized income plan, we’re really going to help you take the guesswork out of financial planning. So again, that’s for the next 10 callers as a comprehensive Right Track Financial Review that we’re going to give away complimentary with no obligation
Steve 17:24
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 walk out with a roadmap that can help get you to where you need to be 800-656-8616 again 800-656-8616 You can also text Brian directly That’s BrianQ all one word to 21000.
Brian Quaranta 17:46
When we come back, let’s talk about how to keep your taxes in check going into retirement we’ll break down some ways you can be taxed in retirement and offer some ways you can potentially minimize the impact when we come right back right here on Retirement You Radio
Speaker 1 18:01
How’s the market doing?
Speaker 2 18:02
It’s fine.
Speaker 1 18:04
How’s the market doing now?
Speaker 2 18:05
The same as it was five seconds ago.
Announcer 18:07
Stop worrying about market volatility. A good retirement plan will keep you from panicking when and if there’s ever a panic; even during a correction or a mild recession, get that solid retirement plan with lifetime income and protection from pitfalls. Get in touch with Retirement You Radios BrianQ, 800-656-8616, 800-656-8616
Steve 18:35
Welcome back, everybody. I’ve consumer advocate Steve, Brian Quaranta is here. And this is Retirement You Radio increasing your financial IQ with BrianQ. We’re gonna jump into some questions at this point. And so, you talked about early on, you talked about you still got some of the seminars going on what you do, and it’s like a wine tasting or something.
Brian Quaranta 18:56
Yeah. Well, we try to get out to the wineries as much as we can. Usually. Sorry, well, you know, hey, you know, it makes it makes, you know, talk and financial stuff a little bit nicer, right. Yeah, of course. Absolutely. Absolutely. But yeah, well, I mean, you know, at WD security advisors.com. On our events tab, we got a lot of educational events going on right now. You can go there and find out where we’re going to be next. And, you know, sign up, come join us, we go over a lot of topics. It’s really nice at the events because we do a real one on one type of event where people get to ask very specific questions, and we dive deep with them right then and there. And people get a lot out of it. You know, it’s not a canned it’s not a canned presentation. You know, when I started doing these 15 years ago, I was the only guy out there doing it. I think now, you know, most people could probably go to a seminar, you know, a financial advisor, you know, every night of the week if they wanted to, but what makes ours different is we’re actually getting real work done. We’re not just sitting up there and, you know, regurgitating a presentation that we do, you know, 10 times a month. I mean, we’re really engaging in finding out what people’s concerns are. Are and trying to help them make some sense of it prior to them leaving. So, it’s a real benefit. And you can go again to WW at secure money advisors.com and fill out one of our intake forms on the on the web and then scheduled to come in and meet with us directly or just sign up to come to one of the events.
Steve 20:17
I like the sound of that. And folks, so let’s jump into a couple of these questions here. I like it. Arthur has checked in, he wrote us and says, I’m 67 years old, I intend to take Social Security benefits at age 70, my wife turned 65, in June of this year, she doesn’t have the minimum 40 credits to have work to get her own Social Security retirement benefits. When she turned 65. Can she claim spousal benefits? How will they be calculated if she claimed spousal benefits? Will that have any effect on my benefits when I claim at 70,
Brian Quaranta 20:51
As long as Arthur turns his social security on, his wife can turn hers on and get half but, but you know, if she doesn’t have any credits, and she’s been a homemaker, then she’s got to wait for him to turn it on. So, he used to have these like file and suspend strategies where the spouse could turn it on, but the husband didn’t. And now, you know, if you’re if you don’t have enough work credits, and you’re gonna be relying on your spouse’s, you gotta wait till your spouse turns it on. But yes, you’d be entitled to half is, which is nice. And this all comes into, you know, the strategies of when to take sole security. Now, I’m not a big fan of waiting until 70. Because your breakeven isn’t until age, you know, 80 to 83, somewhere around there, you know, unless you know that you got some longevity on your side of the family or whatever. But, you know, what we found in retirement planning is that, you know, for every dollar we get in Social Security, it’s less money that we’ve got to take from the retirement accounts, it actually leverages your dollars, meaning your retirement savings dollars much better, and allows you to accumulate a larger pot where preserve that pot for later on in life, rather than spending it down by delaying Social Security. Remember, Social Security is only a benefit that’s guaranteed of your living, you know, and for most people that delay, you’re missing out on hundreds of 1000s of dollars that you could have got throughout your 60s when you’re actually healthy and actually want to be active and go and travel and do what the things you want to do. And instead, you’re using your own money to do that and depleting it at a much faster rate. So, I’m just not a big fan of the delay in strategy. Although some people like to talk about it mathematically, you know, it does provide the largest benefit. But I think in practice, for a lot of people, it just makes better sense earlier than later.
Steve 22:24
You know, there are a lot of different strategies for couples to claim Social Security. And it’s and the beauty of what you do is you give us some options and let us choose.
Brian Quaranta 22:34
Yeah, we want to maximize the accumulated dollars that the individuals have saved over their lifetime. We want to use any subsidies that we can get from the government sooner than later to help preserve the dollars you’ve worked your entire life for.
Steve 22:46
All right, absolutely. All right. Well, Arthur, if you want to have that conversation, give Brian a call at 800-656-8616. Let’s check in with Sheila, she says I have most of my money in a traditional IRA. I’m 66 years old and still working. Is it better to convert to a Roth IRA and invest? Am I able to transfer the stocks in the traditional IRA? Or do I have to sell them?
Brian Quaranta 23:09
It’s a great question. Sheila, I mean, you know, I’m a big fan of converting, as you guys know, going from taxable to tax-free, certainly a conversion strategy would be beneficial for her, but I don’t know her tax situation. So, we don’t know exactly how beneficial it would be. But in theory, her going from taxable money to tax free money can definitely benefit her in retirement and you want to work with a financial planner to figure out whether or not that would make sense to you. But certainly, converting some of that money right now and getting it into a tax-free account and letting it grow tax free so that your distributions are tax free in the future is much more advantageous for you in retirement.
Steve 23:45
Sounds good. And again, 800-656-8616. Let’s see, we got time for one more. And it’s another Roth related question. Joel says this year I plan to maximize my contribution to my 401K, including the catchup, can I still contribute to a Roth?
Brian Quaranta 24:01
Again, depending, you potentially good, you know, depending on what your income is. So, it’s a good possibility. If you go to, the- if you just type in IRS income thresholds for Roth IRAs, you’ll see if you qualify to be able to do that. So, it’s certainly something I would look into if you’re if you’re eligible to do it.
Steve 24:23
All right, fair enough. Well, and on that note, we need to wrap it up here, Brian, what a great show lots of great information. Let’s go ahead and invite folks to call one more time.
Brian Quaranta 24:31
Yeah, these are all great questions. And this is why people always want to know the number one thing they always want to know is: Am I on the right track? Am I doing the right things? Folks? If you weren’t on the right track? When would you want to know that? You know, if someone said to me, Brian, you’re not on the right track, and you’re not doing the right things I would want to know now not later, because I know the sooner I can start making changes and the sooner I can start planning, the better. My plan is going to be 5, 10, 15 years down the road and I encourage you to do the same. Take advantage of the Right Track Retirement meeting that we’ve put together for you. It really is going to help you determine whether or not you’re in need of a full-blown financial plan. It’s going to help you understand the five key areas of retirement planning, which is income, taxes, investments, health care, and legacy planning. Now I’ve seen people charge up to $1,000 or more for similar features or offers, we’re going to do this complimentary for the next 10 callers who call in right now, it truly is going to take the mystery out of financial planning, it’s going to help you map out where you are right now. And where you need to go giving you turn-by-turn directions of how to get there. We can look at the fees that you’re paying. We can look at tax strategies, we can show you how to develop an income plan so that you don’t run out of money. But again, you’ve got to do your part. We’re going to help you take all the guesswork out of it for the next 10 callers. Steve, that’s a comprehensive Right Track Financial Review that we’re going to give away complimentary with no obligation
Steve 25:49
800-656-8616 The next 10 callers are going to get that comprehensive financial review showing you where you are today, of course, but more importantly, like Brian just said, you are going to get a roadmap that shows you are on the right track to get to retirement 800-656-8616 Again, 800-656-8616 Brian, as always, a pleasure. Lots of great information. And it was fun just to hang out and talk and talk about retirement.
Brian Quaranta 26:15
Absolutely, Steve and thank you to the listeners and join us again at one of our educational events. Go to WW dot secure money advisors.com Go to the events tab. You can also listen to our radio shows there you can see our TV shows and you can sign up for one of our events and until next week. Have a great weekend. Enjoy the rest of your time. And we’ll see you again right here next week on Retirement You Radio
Announcer 26:39
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 discuss. Always consult with a qualified investment legal or tax professional before taking any action.
