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Video Transcript
Cynthia de Fazio 00:20
And welcome to Retirement You TV. My name is Cynthia De Fazio. I’m joined today by Brian Quaranta. He is president and founder of Secure Money Advisors, as well as Neil Mager, senior investment advisor. Brian, how are you today?
Brian Quaranta 00:34
I’m great. Good to see you again.
Cynthia de Fazio 00:36
It’s good to see you as well. Neil, how are you?
Neil Mager 00:38
I’m great. Cindy, how are you?
Cynthia de Fazio 00:39
I am doing fantastic. Thank you so much. And I know that both of you are so incredibly busy. Obviously, we’ve been doing the shows together now for quite a while and viewers are enjoying the shows. They’re calling in. They’re booking consultations. They’re leaving viewer questions behind. So, Brian, what has life been like in the office for you?
Brian Quaranta 00:57
Busy? Yeah, always very busy. You know, I’m always surprised of how hungry people are for good advice. Yeah. Because I just, I just don’t think they’re getting it. Or I should say they’re getting it; I just don’t think they’re getting it articulated in a way that is clear. And they understand it to where they can make good, informed decisions.
Cynthia de Fazio 01:16
Okay, Neil, any common questions that you’re hearing from people across the board right now?
Neil Mager 01:23
Well, that’s an interesting one. Because, you know, people are watching and tuning into the show, we get into a lot of different topics on the show. So, you know, they’re coming in and touching on a lot of the things that we spoke about, they’re also, you know, listening to the radio show grabbing information from there. So, they’re coming in, they want to know about taxes, they didn’t want to know, you know, am I positioned the right way? Am I on the right track? Am I going to be able to retire? You know, inflation is causing them some concern. So, you know, they’re bringing in a lot of good topics that they want to talk about. And we’re really trying to maximize the time that we spend with them, when they do come in for that complimentary consultation.
Brian Quaranta 02:00
And I think the, the other big thing that a lot of people are asking this is probably the number one thing is that we’re seeing that about 85% of the people retiring, if not higher, are not retiring with pensions. So, a lot of people are coming in, they’re saying, look, I’ve got this 401k At work, and I want to retire soon. And the only guaranteed source of income that I’m going to have is going to be social security. And they want to know how they take that 401k that they’ve been accumulating for the last 30 years, and how to create a pension with it. And that’s really the key to retirement planning. Because, you know, someday, the paychecks gonna stop. But bills, taxes, and all the things you want to do, including that bucket list is not going to stop. So how do we create a paycheck from the money that you’ve spent the last 3040 years accumulating? And that’s one of the things we do really well at secure money advisors. She’s showing people how to build a proper cash flow plan and do it the right way without worrying about running out of money.
Cynthia de Fazio 02:56
All right, Brian, thank you so much, Neil, thank you so much. We do have fewer questions today. So, if you don’t mind, I’m gonna jump right in because people have been so very patient, they would love to have their questions addressed. And so, I think we have an ample amount of time to do so Brian, can I start with you, Stuart? All right. This is a great question says Brian, can you help me understand what kind of preventative steps can people take to reduce healthcare costs? I’m concerned about rising health care in the future.
Brian Quaranta 03:22
Oh, my gosh, how about we just stay in shape? Eat good, right? Drink lots of water. I mean, I think what was the last statistic, I think, if you’re the average health care costs right now for a couple of moving into retirement, over the course of their retirement is going to be somewhere around $300,000. That’s amazing, $300,000. I mean, if you’ve ever had, you know, known anybody that had a family member, that might have had to go to a nursing home, I mean, nursing home expenses are up around $10,000 a month. I mean, can you imagine if all of a sudden you have a health event, and you’ve got to go into a nursing home facility, or even if you just need care at home, how expensive that could be to take care of Sure. And the insurance industry has done a terrible job creating a solution for that. Because if you look at the ways that we’re trying to solve that problem, it’s through long term care insurance, and most people can’t qualify for it. And if they do, it’s extremely expensive for them to receive. So one of the areas investments, health care, and legacy planning, part of a good retirement plan is all about mitigating the risk with your health care plan, we have to know that if you can’t go the traditional route of solving the problem by purchasing some type of insurance policy to protect from that would pay for care, then we’ve got to make sure if something happens that you can actually self-insure yourself through the portfolio that you’ve accumulated over the course of your working years. And so, we’ve got to have a plan either way, right? Because it’s most the last thing we want to have happen is not have a plan and then something happened. We always want to make bad things happen on paper so we know what the solution looks like.
Cynthia de Fazio 05:04
Okay. All right. Thank you so much, Brian. Neil, this is a great question as well. I am about 10 years away from retirement, what types of things should I be doing today, someone advised me that I should be paying off all debt, including my mortgage, 10 years away from retirement paying off mortgage? That’s
Neil Mager 05:22
Yeah, great question. And I think, you know, something that we offer is the right track financial review, right? So am I on the right track, you’re 10 years away, it’s really crunch time. You know, what’s interesting to me, is a lot of people come into the office, and they’ve accumulated a lot of wealth over a very, very short period of time. And, you know, what they typically will tell me is that, you know, they were paying for a lot of expenses with the children and helping the kids get to college go through college, those expenses, while the kids are finally out of out of college, those expenses have fallen off. So, they really were able to turbo drive their savings. So one is, are you on the right track? As far as what do you have to do from here on out to make sure that you have enough money saved, that you’re in the right position. So, if you saw 2008 scenario, play out that you’re not, you know, regressing. 10-20 years, right on your portfolio. And you know, paying down debt is an important piece of that, right, we want to go in with needing as little cash flow as possible when we go to retirement. So, paying off that paying off the mortgage, eliminating the credit cards, things like that are going to be really, really important. Now, you don’t always want to pay down debt by having to remove a significant chunk from your retirement accounts. Because obviously, that’s going to be a taxable event. So, you want to make sure that yes, paying down debt can be appropriate, but it’s got to be the right plan for you.
Cynthia de Fazio 06:45
Okay, Neil, thank you so much, Brian, this is a great question as well. Brian, why do some annuities seem to have negative stereotypes? I would like to have annuities in my retirement plan. But I’m a little nervous.
Brian Quaranta 06:57
Yeah, well, a lot of annuities are horrible. Let’s just face it. They’re terrible. I mean, they’re high in fees. They, they’re misleading in their sales brochures. I mean, people think they’re going to do things that they absolutely don’t do. I can’t tell you how many times we’ve had people come into the office that have annuities, and 21 years of practicing now going on 22 years of practicing, I’ve created what we call the variable annuity escape. And the reason I did was I was tired of seeing people stuck in these annuities that were really high and fees that were a word that had benefits that they didn’t understand. And a lot of times what will happen is when we call the insurance companies, with people that own these annuities, we’ve got about a 15-point checklist that we go through with the insurance company. And usually, the time I get off the phone, I’ll ask whoever we’re doing that call with, I’ll say, had you known all of this prior to signing the paperwork and putting your money into this annuity? Would you have done it? And they said, Absolutely not. And I think a lot of people are just misled on how these annuities work. I’ll hear it all the time. We’ll hear it at the educational events, people will say, Well, my annuity guarantees man 8% Every single year, let me tell you something, folks, if your annuity was guaranteeing you 8% a year please call 1-888-382-1298. Because I want to know, because I want to put my money in that product. Okay? I promise you, that does not exist. And if someone’s telling you it does, you need to run. So, if you have one, don’t panic, sometimes you can escape them. Sometimes you can’t, because there can be some big charges getting out. But there is just like with any investment product, you have the cream of the crop, right. So, in the annuity marketplace, there is a small grouping of annuities that are worth looking at in retirement. But the majority of them out there, you gotta be very careful with there’s a lot of strings attached to I always say, there’s more strings attached to these things than a puppet. Okay, we
Neil Mager 08:50
hear it all the time. You know, you ask folks, what was the main purpose in purchasing the annuity? And, and they have no idea. So often, you know, it was sold to them, they didn’t buy it, right. And that’s becomes the biggest challenge. And when you go through that checklist, we go through the checklist, you know, they had no idea how significant the fees were, they had no idea that it wasn’t truly a safe investment option. Now, keep in mind, we actually like annuities. But there’s a lot of bad ones out there. And you got to be very, very careful.
Brian Quaranta 09:18
We had a guy we had a guy come in the other day over a million dollars in an annuity. We call the insurance company; he tells us I’m not paying any fees in this thing. He says, you know, and I said would you be upset if he found out you were paying fees? He said “I would” we call the insurance company. We asked for the fees. Now there’s a number of different fees you got to ask for number one is the sub-management fees, the m&a charges, which is the mortality expense charges, there’s rider fees, when we asked about all of those different fees, it added up to three and a half percent so in a million dollars. He’s paying $35,000 a year in fees and did not know it, Now, there is there are laws in Congress right now that they’re trying to pass to make these annuities more transparent, because could you imagine getting a statement that showed a deduction of $35,000? You would call the company right away and question it. But they don’t, they hide it. They hide it. And that’s why it’s called hidden fees.
Cynthia de Fazio 10:14
Oh, my gosh. Well, Brian, I know you have a special offer that you and Neil would like to be presenting to the viewers at home today, let’s talk about what that is, and open up the phones.
Brian Quaranta 10:22
You have folks, we want to make sure you’re on the right track. And that’s exactly what we do at secure money advisors, we’ve created the right track retirement system to help you out with that we have a very specific process that we go through with you. You don’t have to worry about what questions to ask, we know how to do this. We’ve been doing it for a very, very long time. So, for the next 10 callers, we’re gonna give you a complimentary portfolio analysis at no cost. You got to do your part though. Call 1-888-382-1298. And schedule with us today.
Cynthia de Fazio 10:53
Brian, thank you so much, Neil, thank you so much to the viewers at home, the phone lines are now open that number to call is 888-382-1298. We know you have a lot of questions about how to retire with confidence how to retire comfortably, and to make sure that you’re on the right path. And if you’re not when you want to know today, and again, that number to call is 888-382-1298. We have to take a very short commercial break, but don’t go anywhere. The minute we return, I have more viewer questions and yours could be next. Stay tuned.
Break 11:23
How confident are you in your current financial plan? Do you know with certainty how the recent market volatility will affect your future hopes and dreams? How much are you paying in taxes? And how much are you losing to unnecessary high fees? You didn’t work to save this money so that you could spend your time worried in retirement. Now is the time to take charge of your finances so you can feel confident about your future calling during the next 30 minutes of today’s show only to set up an absolutely complimentary no obligation, full blown financial review that will result in your own customized written plan. This is a $999 value that we’re giving away complimentary to the first 10 people who respond. We’ll start with a full-blown analysis of what you already have, by running a report to untangle how much you are currently paying in fees, how you’re allocated for risk, and what it’s costing to work with your current advisor. Next, we’ll identify your goals. Where do you see yourself in the next five years? Where do you want to go? And who do you hope to go there with is your current financial plan set up to get you there without mishap? Let’s design a roadmap to create a financial plan you can follow with confidence. Get the piece that so many people are missing from their retirement. Find out how having a written plan can make a difference to your retirement dreams. Call now to schedule your complimentary no obligation full blown financial review today.
Cynthia de Fazio 13:02
And welcome back to Retirement You TV. My name is Cynthia De Fazio. I’m joined today by Brian Quaranta. And actually Neil Mager,- the President and Founder of Secure Money,- I’m sorry Brian.
Brian Quaranta 13:09
I know, it’s been a long morning. It’s been a long morning. I know. I know. I know. It’s okay, yeah. You’re doing –
Cynthia de Fazio 13:18
Brian, founder and president of Secure Money Advisors and Neil Mager. I’m so excited because we have so many viewer questions to get through. So, I was trying to rush the intro just so we could get back to this. So, Brian, let me go ahead and put this next question towards you. It says I was advised to roll my 401 K plan from a previous employer into a traditional IRA, which I did. I haven’t made any contributions to it since rolling it over and it’s grown very little. I have a 401 K with my new employer, should I roll my traditional IRA into my new 401k account?
Brian Quaranta 13:51
Well, you know, the answer is I don’t know, because you don’t know how the investments within the 401k portfolio are going to look. And you don’t know how the investments within the traditional IRA look. So, the first thing you’d want to do is get a portfolio analysis to determine which one would be better to put money into now rolling your traditional IRA into your 401k. That would be up to your plan administrator at your 401 K company of whether or not you’re going to be able to do that. But typically, why you want to have a self-directed traditional IRA, is because you’re going to have so many better options to choose from, than you would from the limited options that you have within the 401k. Now, again, this is not advice towards this specific situation. I am saying in general, in general, you’re going to be better off with the options that are available to you in the open marketplace in that traditional IRA versus rolling money into a 401k. That’s going to be very limited, but without doing a proper portfolio analysis, you would not be able to confidently answer that question. So, I would just tell you keep doing what you’re doing. I would have both I think it’s beneficial for somebody to have both Okay,
Neil Mager 14:59
okay. It makes sense. So, I think the true answer would be well, what specifically was your goals in moving that to that traditional IRA, where you’re trying to decrease your risk or something like that, and maybe you made your 401k the risk portion of your portfolio? And I think oftentimes people forget how quickly those 401 K’s can grow. When you’re an active contributor. Yeah, well, I’ve
Brian Quaranta 15:21
had I had people that have rolled their 401 K’s over because they left the previous employer, right, they roll it over, because they don’t have a new job yet, right? So, they roll it over to a traditional IRA, and then all of a sudden, they get a new job, and now they’re being offered a 401k. And maybe they’re going, Hey, that 401k That I rolled over months ago, should I now put it into my 401k? So, a lot of times, you see, that’s how people wind up getting a lot of multiple accounts to they change jobs, they wind up having multiple accounts. But you know, as far as what Neil’s referring to, I mean, the strategy as far as how that money should be allocated, you know, risk versus safety. You know, there could have been a reason for that purpose, but we don’t know. Right? I mean, it’s a very kind of general question that was asked there. Sure.
Cynthia de Fazio 16:04
Sure. That makes sense. Thank you, Brian. Neil, this is a great question for you. It says, Neil, can I buy ETFs? For my Roth IRA?
Neil Mager 16:13
Great question. Yeah. So that’s certainly one of the options available to somebody within a Roth IRA. I mean, you know, something that I typically see is people are a little bit confused of exactly what a Roth IRA is, right? They think it’s an investment choice. It’s just an investment designation. So you know, you’re utilizing after-tax money that’s growing entirely tax free. A lot of people don’t understand, well, well, what investment Am I utilizing, so you still have to pick an investment within the Roth IRA. So, in ETFs, they can be an appropriate choice, if that’s what you want to utilize. And that would all be according to, you know, what plan you’re setting up and establishing for yourself. I know there’s a lot of I feel like rhythm with ETFs in the marketplace today, because they’re typically a lower expense ratio than a mutual fund. So yeah, could certainly be appropriate.
Cynthia de Fazio 17:04
Okay. Okay. Excellent. Thank you, Neil. This is a great question as well, Brian, it says, My wife has been retired from the workforce for eight years, and the two of us have approximately 750,000, and assets and no debt, our combined Social Security benefits today would be more than adequate to sustain our current lifestyle. Is there any point in waiting an additional three years to retire at full retirement age, if I can comfortably live off of Social Security benefits now? Yeah.
Brian Quaranta 17:31
I mean, look, I am a believer in collecting Social Security sooner than later. Right? I mean, there are strategies that are out there that are really great for delaying it. But you know, my question first would be, How’s your health? Do you have longevity in your family? Are you going to potentially live a long time? Could it benefit you to get a little extra money? And what would be the difference of the Social Security now versus collecting it at 70? Where it would max out, but the majority of people that we deal with, collect their suit their Social Security sooner than later? Because they need the income? And if they don’t collect their Social Security, they’re not getting a pension? Where are they going to get their income from? They’re going to have to withdrawal it from somewhere. So, what we find is that for every dollar you get in Social Security, it’s $1 Less they actually have to withdraw from your retirement account. And we’d rather see a keep the majority of your money in your retirement account, because we have unexpected things that show up in life. Right. So, a health event you might need money for. So let Social Security do the heavy lifting. Heck, it’s only guaranteed while you’re alive. Yeah, right. Yeah,
Cynthia de Fazio 18:29
there you go. That’s true. Because we’re hearing that question a lot is so security gonna go away? That’s the other question that we get asked quite a
Brian Quaranta 18:35
bit. Yeah, let’s hope not, I think we’d have tanks in the street.
Cynthia de Fazio 18:40
On Friday, know that you and Neil have a special offer that you would like to present to the viewers at home. Let’s talk a little bit about what that is, and then reopen the phone lines.
Brian Quaranta 18:48
You have folks, we’re always looking to get you on the right track. And that’s why we’ve developed our right track retirement system and it’s really designed to help you take the uncertainty out of retirement planning. We always focus on five key areas during this complimentary portfolio analysis. We focus on income, investments, taxes, health care and legacy planning. If you call and you’re one of the next 10 callers, we’re going to do this complimentary it’s not very often you get to sit down with a fiduciary at no additional cost and go through your portfolio the risk is truly on us. So, you got to do your part call 1-888-382-1298 Again, that’s 1-888-382-1298
Cynthia de Fazio 19:27
Brian, thank you so much, Neil, thank you so much to the viewers at home. The phone lines are once again now open that number to call is 888-382-1298. We know you have a lot of questions about how to retire with confidence how to retire comfortably. Brian and Neil are offering you the opportunity to come in today for a complimentary portfolio review. We have to take a very short commercial break but when we come back again, we have more viewer questions and could be yours. Stay tuned.
Break 19:54
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Cynthia de Fazio 21:19
And welcome back to retirement you TV. My name is Cynthia De Fazio. I’m joined today by Brian Quaranta he is president and founder of secure money advisors as well as Neil Mager senior investment advisor. And another great show we’re having today, obviously talking about so many different topics that the viewers are asking questions about. I love that. So, Neil, you’re up next. Are you ready? I’m ready. All right. This is a great question says Neil, can you help me understand what exactly is rebalancing a portfolio? And is it necessary?
Neil Mager 21:48
Yeah, it’s certainly necessary. I mean, you know, typically the people that are coming into our office are wanting to make sure, you know, as they get closer and closer to that retirement date, that they’re invested properly, right. So, they want to continue to make adjustments to make sure if we saw that 2008 scenario, they don’t significantly take three steps back. So, we want to make sure that the portfolio is balanced properly, right. And so, what we want to take a look at is how much risk are they actually taking. Now, there’s a Certified Financial Planning Board rule of 100. And basically, what that says, you take your age, take 100 minus your age. So, if you’re 60 years old, you come up with the answer of 40. So, 60% of your portfolio should be safer, more conservative, avoiding market risk, just getting reasonable rates of return. And 40% should be more aggressive for long term growth, really, with that portion of the money. You want to want to buy time, right? So, 15 plus years, you’re gonna use that money. So yeah, rebalancing is important, making sure that you’re structured properly, is very, very important, more important than ever, as you get closer and closer to retirement.
Brian Quaranta 22:55
Yeah, and I, you know, I just want to add to rebalance it because, you know, it’s a very loosely thrown around term in the industry, because there’s a couple of ways to consider rebalancing, what Neil’s talking about, is peeling money off that’s at risk and protecting it. And we typically do that to generate maybe 10 to 15 years’ worth of cash flow, while you’re taking risk with this pot of money over here, which gives you time for it to grow. But the rebalancing aspect of it, I’m not a big fan of if we’re talking about the investment strategy itself. So, let’s say I own five stocks. Okay. Well, the idea of rebalancing is if I own five stocks, and one of them goes up quite a bit. All right, they would say take the money that you’ve earned here, okay, in this stock, and equally distributed amongst the rest of the stocks. That’s rebalancing. Okay. But that’s a terrible idea. Because if this stock is going through the roof, why would I want to take this money from this really great stock and rebalance it amongst these other ones that might not be doing that? Well. So, you know, sometimes you’ll see that, you know, a lot of advisors like to talk about rebalancing, like it’s some gospel thing that’s been done and some mutual funds and investment, portfolio managers will rebalance automatically on a quarterly basis. And I’m just I just don’t see it as being a huge benefit. So again, rebalancing, there’s a couple of ways to look at rebalancing, again, the way Neil was referring to risk money versus safe money, and then the actual rebalancing of this stock investments themselves.
Cynthia de Fazio 24:26
Okay. All right. Brian, thank you so much. This is a great question is Well, Brian, can you help me understand the difference between being secure in retirement and a retirement income gap? What is the difference between the two?
Brian Quaranta 24:39
Yeah, well, the retirement income gap is a big deal. I mean, if when we’re building income plans at the office, and this is one of the things we do really well at secure money advisors has actually given people a real written plan, and I think that’s what a lot of people are, are missing. I mean, how many times do we have people that come in say, Listen, the reason we chose you is because you guys are the only one who truly given us a real Well, yeah,
Neil Mager 25:00
they typically say I’ve never seen anything like this ever seen anything like this.
Brian Quaranta 25:03
That’s amazing to us, because we’re all Wow, we’re just doing some really basic fundamental stuff here. But typically, when you’re looking at an income gap, what they’re referring to is we’re going to add up, we look at our cash flow model, the office, we add up each source of income that you have coming in. So, let’s just say it’s social security. So, I got husband and wife, their social security is, you know, $40,000 a year between both of them, and they need $60,000 A year. Well, that means we need $20,000, right? From start from somewhere, typically, that’s going to be a withdrawal from probably their 401 K plan, when they retire, but that’s the income gap. And that’s the problem. And that’s the problem that 90% of the people need to solve out there. But it’s more than just $20,000. Because it’s $20,000, potentially over a 25-year retirement. So, you could be looking at a 1.7 to $1.8 million income gap shortfall that’s in a monster amount of money. And it’s a monumental task that’s put in front of us to try to solve. And this is why you have to work with people that focus on the distribution phase, like we do at secure money advisors.
Cynthia de Fazio 26:14
That makes perfect sense. Well, Brian, we have about a minute and 40 seconds left in the show this week. I know that you and Neil have a lot of information that you want to give the viewers, but any final tidbits of advice you’d like to leave them with this week.
Brian Quaranta 26:26
Yeah, I would say get a plan. Right? It’s very important. It’s the planning portion of it is very important. And I would say you have to go beyond just the investment performance itself. The accumulation phase is just that, that that you’re really just talking about investments. But if you really want a retirement plan, it’s five key areas, its income, its taxes, its investments, its healthcare and its legacy planning. So, folks for the next 10 callers who call in right now, we’re actually going to do this for your complimentary no cost if you come into the office. So, we’re going to bring you through our right track Retirement System, which is designed to go through these five key areas income taxes, investments, health care and legacy planning, but you’ve got to do your part. You’ve got to call us and schedule that time to come in call 1-888-382-1298 and you can get your complimentary portfolio analysis today.
Cynthia de Fazio 27:21
Gentlemen, thank you so much for another amazing show this week. I can’t believe how fast the time girl was together and I love the viewer questions have been amazing. To the viewers at home. Thank you so much for spending time with us again this week. That number to call is 888-382-1298 the viewer questions please keep those coming. We love hearing from you, and we enjoy giving the answers. Again, the number 888-382-1298 Be safe. Be happy be blessed. We’ll see you next week.