On the Money with Secure Money: Episode 44

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Video Transcript

Cynthia de Fazio 00:22

Welcome to On the Money with Secure Money. My name is Cynthia De Fazio. I’m joined today by Brian Quaranta. He is president and founder of Secure Money Advisors. Brian, how are you?


Brian Quaranta 00:32

I’m great. How are you doing?


Cynthia de Fazio 00:34

Fantastic. It’s always good to see you. I always look forward to our shows together, because I know that you have been so extremely busy. Obviously, we were talking about this when we were entering the studio today. Your phone has been ringing off the hook. Let’s talk a little bit about that.


Brian Quaranta 00:49

Very, very busy office. Yeah. You know, I think what it shows is that people are hungry for good advice. You know, and we’ve really tried to educate as much as we can to share with people, you know, ways to avoid the pitfalls when it comes to retirement planning. Sure. So, we feel very blessed, you know, people are driving a long way to come to our office and see us. But I think there’s a lot of value and what we’re providing, because most people today retiring, do not have a real retirement plan. They typically have what I call their POS, which stands for pile of stuff, right? And usually it’s a, you know, a bunch of maybe mutual funds, life insurance policies, maybe some old 401 K’s. Well, what do you do with all this? How do you actually build a strategy? Right, that actually helps you get to retirement and through retirement without the risk of running out of money, or not having enough money. So, we feel very blessed with how busy we are?


Cynthia de Fazio 01:45

Sure. Well, I know people are so hungry for that information. Brian, we were also talking about that this morning that people just don’t know where to go to get that value information. One of the reasons being, obviously, retirement in the past, a lot of people had pensions that came in. And so, it made it a little bit easier, if you will, to plan if you know what’s coming. Right, yeah. But Brian, what happens when there’s not a pension in place,


Brian Quaranta 02:09

which is most of the people retiring today. That’s the scary part, about 85 to 90% of people retiring today do not have a pension. Wow. So it didn’t take employers a long time to figure out that it was a lot cheaper to provide a 401K plan, or some type of 403 B or 457 plan, right, where they’re going to make a contribution on your behalf, it was a lot cheaper for them to provide that than have to worry about paying the employee an income for the rest of their life. So, they said, well, let’s we’ll start to make contributions to these accounts, the poll you can save, but it’s gonna be the employees responsibility when they retire, to generate that income. You know, you talk to most married couples today, and even single people, they’ll tell you, Social Security is not enough money for them to live off of shore. So, they are going to need additional income. Now, here’s where it gets really scary. When you start to withdraw money from your retirement accounts, how do you know you’re not going to run out of money?


Cynthia de Fazio 03:09

That’s a great question, Brian. How do you know?


Brian Quaranta 03:12

You don’t, unless you have a plan. Yeah, right. You’ve got to be able to pressure test your plans to figure that out. Most people when they come in, Cynthia will the number one thing they will ask is, are we on the right track? Are we doing the right things? Folks? I would tell you, if you’re if you feel that you’re not on the right track, When would you want to know that? If you are on the right track? Wouldn’t it be good to know that, and for most people, they’ve never sat down with somebody that focuses on the distribution phase of retirement, most people always are talking about the accumulation phase, how to actually grow and accumulate your money. That’s actually the easy part. But specializing in the distribution phase, the same strategies and techniques that you use during your accumulation phase, are not the same strategies and techniques you’re going to use during your distribution phase. It’s a completely different process. Sure. And that’s the thing we do really, really well at secure money advisors, is we’ve got a really great process to bring people through and showing them how when the paycheck stops, right, bills, taxes, all those things that you want to do, that’s not going to stop exactly. So, you’re going to have to replace that paycheck. And we teach people how to take 35-40 years’ worth of work, and actually create an income from it. And an income that they can rely on that they’re not at the risk of running out of money.


Cynthia de Fazio 04:33

And Brian, what about when life happens? Because obviously, we know we have a plan in place, but sometimes things happen to change that plan. Is the plan adjustable to any life situation?


Brian Quaranta 04:44

Well, that’s exactly the point of having a plan, right? Because when life does show up, and it will, you know, I’ve been doing this for over 21 years, and life does show up. But because we have a real mathematical model that we use it Secure Money Advisors. If somebody were to call me and say, Hey, we’re in a situation, and we need to take $50,000 out of our accounts, what’s that going to do? We can actually plug that into the model, based on what’s going on right now with the model returns, right? Maybe past performance and look at what the impact of that withdrawal would do to the portfolio. Now, what kind of peace of mind would you have? If you knew you could make a phone call? And you could say, I need this money? And you’re not getting an answer where you say, you know, most people tell me why advisor says, I’m just going to be okay.


Cynthia de Fazio 05:35

Oh, no, we don’t want we don’t want to,


Brian Quaranta 05:37

we need to actually mathematically look at what that impact is going to do. And this is the importance of building a mathematical model so that you can plug these things in. It’s no different than managing your own money. If you only have so much in your checking account, and it’s only earning so much interest, you’ve got to be able to determine if I take this much money, how much longer is this going to last? Or am I going to run out of money before the end of the month? Retirement is a little bit the same. But it’s a little bit more difficult than that? Right? And there’s a lot of moving parts on top of it.


Cynthia de Fazio 06:05

Sure. Brian, the benefits of working with a fiduciary: Why is that important to the viewing audience today?


Brian Quaranta 06:10

Well, you’d hope that no matter who somebody is working with, they’re going to get advice that’s in their best interest. But the fiduciary standard is the highest standard in the industry, meaning we have to do what’s in our client’s best interest. So maybe the client comes in and says that they’re risk adverse, right? Well, I just can’t go out and just do whatever I want. I’ve got to do what’s right for them based around what they need. And so, the fiduciary standard just holds us to a higher accountability than what we would call the suitability standard. Most people today, understand that a fiduciary works in the client’s best interest. Most people today understand what a fiduciary is, and they want to work with a fiduciary. And I think it’s very important that as you go through the decision process of choosing who you’re going to work with, make sure that you do work with a fiduciary.


Cynthia de Fazio 07:06

So that’s an okay question to ask if someone in the viewing audience is wondering, and if they currently are working with someone, they can just call them up and say, can you tell me are you a fiduciary?


Brian Quaranta 07:14

That’s right, yeah. Well, people have done that before. So, you know, people come into my office and say, you know, we did go back to those other advisors. We were interviewing and asked if they were a fiduciary, and, and the one guy said that, well, not yet, but we’re working on it. Right. So, people do go out and ask that question. And they should be I think that’s one of the number one questions they should be asking, as they’re looking to choose who they’re going to trust with their retirement savings.


Cynthia de Fazio 07:39

Well, it makes perfect sense, Brian, because obviously, you would want to work with someone who had their best interests at heart, not what you would gain personally, but what they would need actually to survive and thrive, especially in the retirement years when money can be very tricky and hard to navigate. Without a plan.


Brian Quaranta 07:54

I always say the fiduciary responsibility is very simple. What would I do for my mom and dad? Yeah, if that’s what I’m gonna do for mom and dad, then that’s what I’m at. Right? That’s our litmus test when we’re doing that, and that’s the fiduciary responsibility.


Cynthia de Fazio 08:07

Absolutely. Well, Brian, I know that you have a special offer to the viewers at home today. Let’s talk a little bit about what that is, and then open up the phone lines.


Brian Quaranta 08:14

You have, folks. If you want to know if you’re on the right track, you know, it’s the most important part of the planning process to determine are you pointing in the right direction, if you weren’t pointing the right direction? When would you want to know that now would be a good time for the next 10 callers who call in we’re going to give you a complimentary retirement analysis. We’re going to go through five key areas when you come in, we’re going to talk about how to build income and retirement, we’re going to talk about how to save on taxes, how to properly position your investments, how to protect yourself from a healthcare event. And most importantly, when the good Lord takes your home, we want to make sure that the money goes to your family, to your loved ones to your charities, and not to Uncle Sam, but you’ve got to do your part. You’ve got to pick up the phone and call 1-888-382-1298. Again, that’s 1-888-382-1298


Cynthia de Fazio 09:07

Brian, 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 plan for your perfect stress-free retirement. Brian is offering you the consultation; all you have to do is pick up the phone and call be one of the first time callers only that number is 888-382-1298. We have to take a very short commercial break, but don’t go anywhere. I’m gonna have so much more with Brian when we return.


Break 09:35

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 11:09

And welcome back to on the money with secure money. My name is Cynthia De Fazio. I’m joined today by Brian Quaranta. He is president and founder of secure money advisors. Brian, a great show that we’re having today. And I love talking about the importance of planning for retirement because so many of the viewing audience at home, if you will, they might have a lot of questions about how to do that. And some of the things that perhaps they should be thinking about. So, I wanted to talk to you a little bit if we could about taxes. For people that are in the viewing audience today approaching their retirement years, perhaps in the retirement years, how important is it to focus on tax planning.


Brian Quaranta 11:42

is very important. And it’s one of our five key areas. So, when you come into secure money advisors, and we start to look at where you’re currently at, we’re going to look at the five key areas, income taxes, investments, health care and legacy planning. Okay, so income, why is income so important? Because we can’t retire without income. We need income on a monthly basis to live. But we have to remember that when you’re generating income, you’re probably also going to have to pay taxes. Sure. Now, I don’t know about the viewing audience. But do you think taxes are going to be going up or down in the future, most people believe that they’re going to be going up. And if that’s the case, then we want to make sure that the retirement income that we’re generating is tax efficient. Here’s why. Let’s say an individual needs $1,000 a month in income. And let’s suppose that they’re in a 20% tax bracket. So, we know after they pay the 20%, in taxes, they’re only netting $800. But what happens when the taxes go to 30%. Now that same withdrawal of $1,000 is only going to be netting them $700. So, what we have here is we are actually seeing our wealth deplete through taxation. Now you add inflation on top of that, and you can see how people’s over time can be very, very compressed. Now, if we’re doing proper planning, right, is we’re going to actually focus on how do we create some or all of the money that we generate on a monthly basis to be tax free. So, most people probably know of a Roth conversion, a Roth conversion is we’re taking taxable money, and we’re turning it into tax free money. Okay, so let’s just suppose that with good planning, which you would get it secure money advisors, were doing tax planning to get you to the point to where your money is now tax free when we go to withdraw it, or at least a good portion of it. So, let’s use the example of the $1,000 again, so we got $1,000. But now we’re pulling it from a Roth IRA. We’ve got, let’s say, that person’s in a 20% tax bracket doesn’t matter anymore, because the withdrawal from the Roth IRA is tax free. So, the $1,000 you take, you’re gonna get $1,000, let’s say tax rates go to 30% Doesn’t matter, you’re still gonna get $1,000 because the tax planning based around IRS guidelines allows us to go from taxable money to tax free money so that when we pull it out down the road, it’s all tax free. And that’s the proper way to do it. Now, there’s lots of other advanced tax strategies that we can use, like charitable partnerships and things along those lines for high-net-worth individuals that want to maybe get tax deductions. And those are things that we do really, really well also, but for most people, they’re looking to make their income as tax efficient as possible.


Cynthia de Fazio 14:36

Okay. Brian, I want to ask you, what’s the difference between a Roth conversion and a Roth contribution?


Brian Quaranta 14:43

Yeah, well, the conversion does not have a limit to where our contribution and I’d have to check but I believe that Max contribution is $7,000 this year or 7500, somewhere around there, depending on your age, but that doesn’t really matter. There’s a limit where are a ceiling of how much you can contribute to a Roth IRA. So, you know, $7,000, you know, you’re not going to be able to accumulate a whole lot of money year after year and a Roth IRA only contributing $7,000. The cons are the conversion has no limit, though. So, if I have $100,000, sitting in a traditional IRA, or 401 K, and I want to go from a taxable right taxable account, to a tax free account, I can convert all $100,000, the IRS has no problem with this. And this is what we can also call a back door conversion where we’re actually, maybe you don’t actually qualify because your income might be too high, you can contribute to a traditional and then immediately convert it. But again, those are a little bit more complicated strategies. But that’s what we do at secure money advisors. And that’s why I would recommend that you come in because making sure you’re on the right track is not about how much you have saved, it’s all about how are we going to take that pile of money that you’ve earned over your lifetime, and actually build a strategy around it. That works for you. Not only from an income perspective, but a tax perspective, making sure that your investments are positioned the best they can be in retirement, see most people that retirement tell me that they can’t afford at this point in their life to lose a lot of money. And when we do a risk analysis on their portfolio, we see that they’re actually at a lot of risk. Meaning if the markets were to go down, they could lose a lot of money. And they’re not aware of that they had no idea or they’re paying unnecessary fees that they don’t need to be paying. So, there’s more to retirement planning than just the interest rate that you’re growing your money at. Right? Because when you get into even when you turn 65, you got to think about Medicare, Medicare supplements, and you want to work with a firm, that’s all encompassing, so that no matter what the need is, it can be solved with your financial planners at that specific firm, and you don’t have to go to multiple places to get it done. And that’s the way we designed secure money advisors. It’s kind of a one stop shop, if you will, right, where you can get all of your retirement planning needs met, whether it be income taxes, Legacy planning, with estates, wills, you name it, secure money advisors, has the partnerships to be able to do that,


Cynthia de Fazio 17:17

Brian, how detrimental is it to someone going into retirement without a plan, in your opinion,


Brian Quaranta 17:23

I would say it would be the worst thing you could do. Okay. And most people when they come in are not on the right track. You know, they’ve done a good job saving, but they are just not on the right track for retirement. And it’s scary because my industry has done a really poor job in teaching people what a real retirement plan should look like. And once people understand the areas that they need to focus on, and they understand the best practices that they need to make sure that their portfolio is having, they get a sense of peace, right? There’s a peace of mind that comes with having a thorough plan. And that’s the whole goal. You know, I jokingly say to, you know, my team at secure money advisors, I said we provide sleep insurance. Yes. Somebody asked. Yeah, when somebody has a plan, you know, they Sleep well. Sleep well


Cynthia de Fazio 18:14

at night. Absolutely. Well, Brian, now you have a special offer to the viewers at home today. Let’s talk a little bit about what that is, once again, before we reopen the phone lines. Folks, we’re


Brian Quaranta 18:24

going to be given away for the next 10 callers a complimentary portfolio analysis. Have you ever wondered whether or not you’re on the right track? It is the number one question we get all the time at secure money advisors. If you weren’t on the right track, when would you want to know now would be a good time to know. So for the next 10 callers, again, that’s a complimentary retirement analysis that we’re going to give away at no cost no obligation when you come in, but you’ve got to do your part. You’ve got to pick up the phone and call 1883821298 Again, that’s 1-888-382-1298


Cynthia de Fazio 19:02

Brian, 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 comfortably how to retire with confidence. Brian is offering you a complimentary consultation. All you have to do today is be one of the first 10 callers that number once again is 888-382-1298 Don’t go anywhere. When we come back. We’re going to have so much more with Brian about how to plan your perfect retirement. Please stay tuned.


Break 19:32

As a good saver you’ve been putting away money during your working years. Studies find that the biggest fear of retirees is running out of money. Market volatility isn’t just the downward movement of stock prices. It’s the size and frequency of change. The more dramatic the ups and downs, the higher the volatility. This can put savers who are newly retired or a few years away from being retired at greater risk. Today’s generation of return Tyrese is not receiving traditional pensions as our parents or grandparents did. Instead, we have retirement accounts such as 401, K’s or 403 B’s. These accounts typically expose your money to market risk. The last thing you want right before retirement is to lose a portion of the money you need for income. But how do you turn these accounts into a retirement income? Is it safe to keep all your retirement money sitting in the stock market? The last thing you want is to lose a portion of the money you need for income due to market loss. By working with a financial professional, you can learn how to turn a portion of your savings into an income stream for life and income for the life of your spouse if you’re married. We all have moments in our lives when we wish we had taken action sooner. Don’t let procrastination rain on your retirement parade. Act now before it’s too late. Please call our office to set up your no cost no obligation retirement income review today.


Cynthia de Fazio 20:56

And welcome back to on the money with secure money. My name is Cynthia De Fazio. I’m joined today by Brian Quaranta. He is president and founder of secure money advisors. Brian, I love this part of our show because we get viewer questions and then we can take some time today. Would it be okay if we kind of do it?


Brian Quaranta 21:13

Yeah, I’m always I’m always shocked with how many questions come in. I wish we could get to them all. I wish we could get to them all but


Cynthia de Fazio 21:20

love the shows that we’ve devoted in the past to just do a quick because there’s so many I agree. So, we have time for a couple. So, are you ready? Let’s do it. Alright, this is a great question. Brian. I am curious, can IRAs be held jointly by spouses?


Brian Quaranta 21:33

They cannot? Okay. Cannot. So, a lot of people will ask me. Could we? What if we were to put all this money into one account? Would we get a better rate of return? Well, what you have to understand is that the IRS doesn’t want you commingle in dollars. So, if your husband and wife they have to stay in two separate accounts, and the IRS just doesn’t want them to come together. And that’s just the rules. Yeah. So no, no joint held accounts when it comes to retirement accounts.


Cynthia de Fazio 21:57

Alright, so IRA means independent retirement account?


Brian Quaranta 21:59

Or individual retirement account or independent? Yeah. I will just, I just I.


Cynthia de Fazio 22:06

Okay. This is another great question says, Brian, I’m retiring from my job in June of this year, I have money in a 401K and an IRA totaling approximately $200,000. I also have a pension and I will receive Social Security benefits; I still have a house payment and some other debts. My income and my debt are approximately the same. I am not looking to invest any of my retirement money. What type of advisor should I see to help me budget my retirement savings and pay off some debt? That’s a long one. Should I read it again?


Brian Quaranta 22:42

Did they say that they weren’t looking to invest their retirement savings? They are not I am not looking to invest. So, they just want to protect it. They want to protect is basically what they’re saying. Yeah. I mean, you know, we want to work with somebody that believes in protection. You know, I mean, that’s Secure Money Advisors was designed around that, because I’m not a gambler. I don’t believe you need to be gambling. When you get into retirement, I always say, when you’ve won the game, there’s no reason to keep playing anymore. And what people have to understand is your pile does eventually get big enough, that all you have to do is not lose and you’ll be fine. Because people don’t realize that in retirement, the losses will hurt you more than the gains will help you. And so not being invested. In this case, somebody might be able to let me think about 35-40 years ago, when people retired. It was really simple because when they retired, they did get a pension. In this case, this person is getting a pension. But they got a pension, Social Security. So that was typically enough from those two income sources that was typically enough for them to live off of. Now, if they did need additional income, okay, or they did have money that they needed to invest. 35-40 years ago, people didn’t have to put that in the market to earn a return. They could buy a bank CD. At like 10 or 15%! And I think even get a toaster or pots and pans that the bank used to offer.


Cynthia de Fazio 24:02

Oh, yeah. Right. Yes. Lots of toasters. Yeah.


Brian Quaranta 24:05

But you know, nowadays that the banks don’t want our money. Yeah. You know, they’re paying virtually zero for our money on checking, savings, money market, CDs. And so today, we’re really looking at we’re going okay, well, where do I get a rate of return? Most people don’t realize that if you’re looking to protect money, when the best places that you can utilize for some of that money is a fixed annuity, I mean, get fixed annuity rates between three and 4%. You can also get fixed indexed annuities that when the market goes up, you actually make money. But when the market goes down, you don’t lose any money. And you know, people go wow, well, how does that happen? That seems like there’s a catch there. There is no catch. It’s really simple. If the market goes up 10%, They don’t let you earn all the 10% because they’re gonna protect you on the downside when it goes down. So, if the market goes up, 10% they might only let you earn half. So maybe it goes up 10 And you earn 5, and let’s say you had $100,000 in that account. Well now your $100,000 goes to 105,000. And that becomes your new guaranteed balance and it’s locked in. So that means that the market goes down. The worst thing that can happen when you get your statement next year is just still have 105,000. So, if you’re looking to earn interest on your money, but also protect the principal, utilizing those types of accounts for some of the money could potentially be the right thing to do, depending on the individual situation.


Cynthia de Fazio 25:24

Interesting. Yeah, Brian, thank you for that. This is another great question. I think we have time to tackle this one as well. Brian, I do not yet have a plan in place for retirement, I am approximately five years away from my last day of work. Is it too late for me to start?


Brian Quaranta 25:40

This is all about the right track right here. This is- Well, it’s never too late to start, let me just say that. But in order to start, you got to figure out where you are on this track, right? Because what do we need to do? There’s cases where we’ve had at secure money advisors before where I’ve met people that have been divorced later on in life, and because of the divorce lost a lot of money. And now they don’t have a whole lot. And they’re 65 years old, they’re going I don’t know if I’m gonna be able retire. But we there is a lot of progress you can make in a very short period of time, if you have a well mapped out plan. And this is why the sooner you plan for retirement, so this individuals five years from retirement, yeah, this is great. Because if you put yourself on the right track right now, not only will you retire on time, right, but you might even actually be able to retire earlier than what you thought. And notice many times we bring people in, and we might have a five- or 10-year plan from them to retire. This happened a lot during COVID. Right, especially for our older clients, they got to a point to where, you know, they were working from home, they were spending more time with their loved ones. And all of a sudden, you know, we start to come out of COVID a little bit and the companies are starting to call him back and they’re going I don’t I don’t want to drive back to the city or I don’t want to drive the office anymore. And we got multiple calls saying Brian, can we retire earlier? And I love taking those phone calls. Because when we build the models, right, were able to look and say okay, well what happens if we move this up about two years earlier than what we anticipated? And the model is able to recalculate itself? And we look at the math and we go absolutely, let’s do it. And they feel great about it, because it’s not just a guess. It’s a mathematical calculation that determines that answer. And that’s really where you get to put yourself in the driver’s seat. And this is why we designed the Right Track Retirement system, because it will help you get on the right track right now. But it could also help you retire earlier than you ever thought was possible. But you’ve got to do your part for the next 10 callers who call in. We’re going to give you a complimentary Right Track Analysis. Call 1-888-382-1298 We will do a portfolio analysis of your plan.


Cynthia de Fazio 27:53

Brian, thank you so much for the viewers at home. Thank you for watching. Be safe, be happy, be blessed. We’ll see you back one week from today.