On the Money with Secure Money: Episode 72

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Video Transcript

Rebecca Powers – 00:20

Hi, thanks so much for joining us. Welcome to on the money with secure money. I’m Rebecca powers, your host. So happy to be here again this week with Brian Quaranta and Neil Major. Let’s talk about Social Security. We’ve had a lot of viewer questions, and you’ll become very popular. And a lot of people are saying, can you earn more money in Social Security? Does that make sense?

Brian Quaranta – 00:41

Yeah, here’s the big secret. Most people watching the show probably have been receives a beggar postcard in the mail, convincing them to come out to a Social Security workshop, where they’re going to tell you how to increase your Social Security. Let me save you some time. Don’t go, okay. Because what most people don’t understand is that in 2015, the Bipartisan Budget Act, I believe was October 28, to be exact, at midnight, when nobody was watching, they pass it back to took away most of the Social Security filing strategies, right. So, they exist anymore, all this file and suspend and all these different things you can do collecting on half your spouse’s and then turn yours on, they’re all gone. So, security is very straightforward now. So do yourself a favor, don’t go to one of those events, because you’re just going to waste your time doing it. Because the reality is, you should really be learning about how to generate cash flow from the other money you’ve accumulated, because Social Security is only going to give you what it’s worth today, there’s no special strategy, there’s no checkbox, there is no nothing on a document that you can fill out. That’s going to increase the amount of Social Security that you get. And I think people still believe today that there’s these mystical, magical ways to increase social security. It just doesn’t exist.

Rebecca Powers – 01:51

Have you had people ask you about that? Now?

Brian Quaranta – 01:54

Of course, yeah. Now, I will say this, there are some for if you’re single, widowed, or divorced, or some strategies still, but for husband and wife, most have gone away? Right?

Neil Major – 02:04

Yeah, I mean, the first thing that we always want to do when you come in, when we onboard clients, we need to map out income. I mean, that’s the most important thing to our clients, because we deal with predominantly 55 and older. And these folks have a bucket list of things that they want to do when they retire, they want to buy a fishing boat, they want to visit the family in different states. They want to take an RV to all the national parks. And so, they want to understand how am I going to generate? How am I going to get a paycheck because I don’t have a pension in our job and secure money advisors is to give you the income, to give you the peace of mind to be able to do that bucket list, and not wait until it’s too late to do everything that you wanted to do.

Rebecca Powers – 02:43

Is there ever a situation where social security is enough to live? Or is it just one part?

Brian Quaranta – 02:50

We’ve seen this? Yeah, I mean, sure, there’s people that have done such a good job having their expenses so low that they’re able to, to live a good life off of security. It’s very few though.

Neil Major – 02:59

I think, you know, to that point. I read a book recently and talked about how not working with a financial planner and retirement, people do one or two things. One, they use the money that they save, like a checking account, and they just blow through it very, very quickly, not really thinking about tomorrow, or they do the total opposite, where they don’t spend any money. And so, they’re not able to do the bucket list. And they just end up living off of Social Security.

Rebecca Powers – 03:29

And things aren’t you don’t have a quality life. And that’s not what you want. After 40 years of working and raising a family. Correct?

Brian Quaranta – 03:35

Yeah, we had a lady come in. She’s a school teacher for four years. And as a matter of fact, she’s going on her 35th year of retirement, right. 35th year retirement and that amazing. 35th year of retirement, fifth year of retirement. She’s in her mid-90s. Okay. She says she’s worked with the banks all of her life; she was referred by a client of mine. And she drove to my office from Ohio. Okay, which is about an hour trip to tack sharp attack. And she comes in and she said, Brian, I think I need to stop working with the banks. And I said either tell me why. And she said, well, because I have, I’m starting to spend down my money because I can’t get enough interest. She said I’ve always used the interest from my bank CD’s to pay my taxes at the end of the year to pay for my heating bill during the wintertime. And on I believe it was on about $400,000 She was earning like $36 a year in interest. $36 a year interest. Yeah. So, I showed her that, you know, again, we talked about better product designs right and better things to use other than bank CDs. The bank CD alternative today is what we call a fixed annuity. It’s so simple, and it’s so easy to use that it actually gives you a guaranteed rate of return just like a bank CD does matter. Fact, at the time that she came in and got it from me, it was paying 3% interest. Okay. So now we’re taking her from earning literally $36 a year to earning about 12 to $15,000 a year in interest every single year. And now she’s able to take money out on a monthly basis, she’s I have her taken out about $800 a month in additional income, and she’s not touching her principal at all. As a matter of fact, her account is still growing. Oh, and by the way, she never loses control of her money. If she wants her money back, she can take it at any point in time. Sure, there’ll be some penalties for early withdrawal if she were to break the contract, but that you get that with a bank CD anyway.

Neil Major – 05:39

Right. Brian? I heard those fixed annuities are really high and fees.

Brian Quaranta – 05:43

Yeah. How about there’s zero fees. You know, people don’t understand when you know, people, you know, the thing that confusing thing about annuities is the fact that there’s, there’s three different types. There’s variable, there’s index, and there’s fixed, fixed annuities work on the same concept is what the banks work off of banks make the money off of what we call a spread. So, if we give the bank $100,000, and they give me 1% interest, all right? How do they make their money with that? Well, they lend it back out, they lend it back out in the form of mortgage. And so, let’s say they’re making 4% on that money. Well, the difference between what they’re paying me and what they’re making is called the spread, right. And that’s how the banks make the money. Same thing with the fixed annuities, you don’t pay the advisor a fee, right? You don’t pay the insurance company a fee, because the insurance company is making it by giving you three and a half percent or 3%, whatever the rate is that you’re going to get. And they’re earning about four to four and a half percent. So, they’re earning money off with a spread.

Rebecca Powers – 06:40

You mentioned the word insurance. That was also on my list to ask you about Neil. There are so many different types of insurance products, there’s death insurance in a way, right, you’re paying we’ve been paying for 30 years, and we won’t get a penny unless we die. What is the best or the worst? Or is insurance even necessary?

Neil Major – 06:58

Yeah. I mean, we use insurance and secure money advisors in the form of life insurance. Absolutely. You know, when you really start to think about, if you look at the wealthy in our country, then you know, the wealthy can’t get enough life insurance, because it’s the best way to pass money to your beneficiaries, because it’s 100%.

Rebecca Powers – 07:19

Tax free, and it will definitely happen. What is going to die when?

Brian Quaranta – 07:25

That will?

Neil Major – 07:26

Yeah, but yeah, we’ve utilized different strategies in the past, maybe somebody doesn’t need to utilize their IRA money, because their pensions and Social Security are so strong, and they’re going to be forced into taking required minimum distributions. So maybe we fund a life insurance policy to get the money more efficiently to their family. Gotcha. So that could be another.

Brian Quaranta – 07:47

tool, you could literally double your estate, right? From a million dollars to $2 million, with a strategy like that, and leave the majority of a tax free to your family. Just by simply utilizing a strategy like that. Now, here’s the thing, everybody should try to get it because most of you won’t get it. And the reason you won’t get it is because they look at your health. And so most people just don’t qualify it. But I’ll tell you the most important insurance you need. And it’s called income insurance. Because the biggest risk that we all have is running out of income. That’s right. And that’s where the annuity comes into play. It is the best insurance to buy to protect your income. Now think about this. Yeah, you insure your car, you insure your house, you insure your life, why wouldn’t you insure the most important thing in your life, and that’s your monthly paycheck. Interesting, but what happened is Wall Street a long time ago, created this negative campaign around annuities. So, everybody thinks annuities is a bad dirty word. Now, I will say not all annuities are created equally, right. It would be like saying, you know, I have an SUV, well, what kind of SUV Do you have? Right? I mean, what make what manufacturer right? Same thing with annuities. Annuities come in all different shapes and sizes, the ones that are best, that have no fees, right, are your fixed indexed annuities. Now, you can purchase little bells and whistles where we’d add fees on to those, but you don’t have to. So, you can get a no fee annuity that ensures and guarantees a rate of return which can ensure your income for the rest of your life. And by the way, if you die, it can share the income for the rest of your spouse’s life. So, I always think of myself when I got in this business 23 years ago, I got right into the stock side of the business, right stocks, bonds, mutual funds, got in the business right at the end of 1999. My first my first three years in the business out of college, I saw people lose money every single day. And what I was being taught by, you know, advisors that had 2530 years in the business is they would say you need to make sure that you reassure the client that everything’s going to be okay. I said, well, what do you mean by that? They said, well just let them know when they when they lose money, it’s just paper loss and let them know that don’t worry about anything, just hang in there in the rain for the long haul. You know, I didn’t grow up with a silver spoon in my mouth. And that didn’t feel right to me. And the reason it didn’t feel right to me is because I thought to myself, wow, it’s really easy to tell some else not to worry about it, especially when it’s not your money, and especially if you get paid a fee or commission to do it. And this is why working with a fiduciary is so important because we don’t earn commissions, right, we actually work on the same side of the table as a client, meaning we have the client’s best interest at hire at heart, single time, and we have to operate that we’re held to the highest standard legally to do what’s in the client’s best interest. And so, if we’re calling a client to make a change, or move strategies around, it’s because it’s in the client’s best interest, we don’t get paid to do that you work with a broker and they make a change, you don’t know whether they’re making that change, because it’s in their best interest Exactly. in their best interest. But I will tell you, Rebecca, the best insurance you can buy, is the one that guarantees and protects your income and retire securing your money.

Rebecca Powers – 10:46

I love this book, I can’t wait to read it again, right track your retirement, it’s really very simple. You have five philosophies, and we’re going to talk about that. But I want you to call this phone number every 1-888-382-1298 you get to come into the office, meet Brian shake his hand, and he will hand you one of these books.

Brian Quaranta – 11:06

And I will say folks, if you have not scheduled to come in and take advantage of that right track retirement, you do it, get yourself a second opinion. Remember, you can’t get the second opinion from the first person that gave you the first opinion, right? So come in and see us and take advantage of it’s not very often you get the opportunity to sit down with a fiduciary advisor at no cost. And we’re really going to help you identify what’s working and what might not be working my hopes for you is that you are on the right track. And that Neil and I could shake your head and say keep doing what you’re doing. But if you weren’t on the right track, when would you want to know schedule your appointment today 1-888-382-1298,

Rebecca Powers – 11:44

we will be right back finding out more how to stay on the right track for your retirement.

Brian Quaranta – 11:49

So everybody can tell you how to invest your money. There’s not a lot of people out there and a lot of firms that can teach you how to use your money. Most people also tell you that they’re scared. And the reason they’re scared is because they’re afraid of running out of money.

Neil Major – 12:03

The last thing you want to do is have a really good job and you’re in your 60s retire, be looking for work again in the late 70s.

Brian Quaranta – 12:11

The average person might say, well, a good portfolio would be a good mix of stocks, bonds and mutual funds. A good portfolio is all designed around the five key areas income, taxes, investments, health care and legacy planning.

Neil Major – 12:25

Because we’re not just product pickers here, what we do best here as we build retirement plans,

Brian Quaranta – 12:30

nine out of 10 people, when they walk through the door would ask us, we just want to know if we’re on the right track. And I always say if you’re not on the right track, when would be a good time to know it. Probably now,

Neil Major – 12:41

people can actually see a vision once we start to really build out their plan.

Brian Quaranta – 12:47

This is about you, if you’re not getting what you need. And you feel that when you walk out of the advisors office, it’s time to get a second opinion. And you can’t get a second opinion from the person that gave you the first. The difference. It’s secure money advisors, as a fiduciary firm, we help you manage the risk, build the income, and give you the retirement to dream.

Rebecca Powers – 13:17

Welcome back to On the money with secure money learning so much every time I do a show with you guys, I learned something new. I mean, I sit here and take notes to go home and tell my husband, you said something about second opinion. And it’s so true. If you had a serious ailment or you had a bad mammogram, but you had something serious in your family with your health, you would always get a second opinion. So why not go get a second opinion about the thing that your livelihood?

Brian Quaranta – 13:41

I’ll tell you why people don’t because I’ll let Neil give his opinion too. But I’m going to tell you why people don’t why? Because when they do a review with their adviser, the adviser says don’t worry about everything’s going to be alright. Yeah. So, they don’t think anything’s wrong. Until the day that it shows up. And unfortunately, we meet those people. We meet the people that say, they’ve been telling me for the last five years, everything’s going to be wrong. But my simple math tells me that I’m going to be out of money in 10 years because it didn’t go the way that they said it was going to go right.

Neil Major – 14:07

I mean, I don’t know what doesn’t make. Tyson says everyone has a plan until they get punched.

Rebecca Powers – 14:15

Tell you what happened to poor Mike Tyson. Don key who was a guy that took up part of his money. Don’t worry, I’ll take care of your money. Unfortunately, didn’t have the best advisor, you know?

Neil Major – 14:26

Yeah. So, I think you know, people are unsure of things, because when they sit down for their reviews with their advisor, it’s simply you’re going to be alright. Yeah. What about what I need money, we’ll just let me know how much you need. And I’ll send it to you. And people are too analytical to say that that approach is okay with them. They want more than that. Yeah, they want some data behind that. They want some guarantees. And they want to focus on those five areas that we always talk about that they keep hearing about tax planning, yet their guys aren’t doing any tax plan, right. And they’re wondering Why, you know, they’re their friend or their neighbor or their or their brother or sisters doing Roth conversions, and they’re not. So, there’s a lot of different things in the reason why we’re so successful is because we focus on those five, five areas that I think really give people that peace of mind.

Brian Quaranta – 15:16

This, you know, Neil came into my office the other day, and he said, you know, I have a client that that wants to increase the amount of income that she’s taking. And he says, I have a little bit of concern with it, because it’s going to it’s going to go outside of the parameters to where her probability of success of that plan working now is going to come down a little bit because she really wanted to increase her income quite a little gamble. She right. And so, you know, and rather than Neil, just saying to her, sure, fine, we’ll, we’ll go ahead and dial it up for you. We sat down as a team, and we went through the spreadsheets, and we looked at it, okay. If she did this, what does the probability of success goes to? Does it go from 98% to 95%? Does it go to 90%? Or 85%? Right? Does she want to dial this up forever, or just over the next year or two. So, he actually called her back. And she says, I really was just thinking, I’d like to turn it up over the next year or two, because she had just retired. And she had a lot of things planned that she wanted to do. Yeah, now, this is what we call creating a bridge or front-loading retirement strategy. So as long as we can have a conversation with the client about the risk of dialing it up, now we’re giving the client clarity of what things are going to look like. Now, in her case, when we did dial it out, we’re only going to dial it up for the next 36 months, because she has some things planned over the next three years she wants to do. She’s got trips that she wants to take her kids on, she’s got some trips that she’s going to be doing with her friends. So, we turned it up. And then in 36 months, we’ll turn it back down and her probability of success still stayed at 98%. That’s an even though we want to increase it. But rather than just saying short, go ahead and increase it. We wanted to look at the black and white map to make sure that it absolutely was in her best interest.

Neil Major – 17:03

Yeah, and I think that’s really, really important. I mean, we want to make sure that, you know, we’re uncovering everything with the client, right? Yeah. And the focus really, at secure money advisors is how do we get your income as high as we possibly can, as quickly as we possibly can. Because like this woman, most of our clients have that bucket list, right? And we call those first years in retirement the go-go years. That’s when people want to do all that fun stuff. And then you kind of transition to the slow go, where maybe you’re not taking as many trips and traveling and going out to eat as often. Yeah, and then you go into the no go years, and even though the cost of living has continued to increase, your need for income has gone down. So our focus is getting you the income as high as we can now to enable you to do everything that you want to do. But everyone was different in the strategy. Exactly.

Rebecca Powers – 17:52

Everyone’s different. So you have to have a plan and a strategy for every single person,

Brian Quaranta – 17:57

everybody’s different, everybody’s different. And there’s a lot, there’s there. And then you have folks out there that are on the extreme. Right, and they want to take they think they can take way more than what’s possible.

Rebecca Powers – 18:08

You know, so you’re the mean, daddy that says,

Brian Quaranta – 18:12

you really with those folks who just you try to in the most kindest way, you cannot know that, hey, this, this is a

Rebecca Powers – 18:18

very dangerous, I don’t advise it, but it is your decision. Yeah,

Brian Quaranta – 18:21

I don’t I you know, and if that person is, is not a client, we usually will shake hands and part ways because we just know, we won’t be able to deliver. See one thing, our philosophy of secure my advisors is we know what we can deliver on what we can’t deliver. And if somebody’s asking for something that we know is going to have a high probability of failure, we’re going to let them know that. And we’re also going to kindly decline on onboarding them as a client, because we’re not going to take that risk as advisors, because they’re going to do it anyway. Right? Because of our advice or not, those people just kind of want to do it anyway. But it’s important that you run the math, it’s important that you’re not just getting like Neil says, It conversations where everything’s going to be fine, you got to run the math. And that’s what I think our clients love the most is that you get a customized plan with all of your numbers in it. So if you want to start taking more income, we can go in and we can make that adjustment. And we can see the long-term impact of that. Or if interest rates go up, and all of a sudden, we start earning more interest, what does that look like? Or if our risk bucket took a little bit of loss in the market? What does that mean? And we can model all of those things in so we’re staying on top of the planning. And we’re actually looking at the real math to make good decisions. So

Rebecca Powers – 19:32

when you say real math, talk about the program that you had, that I’d never even heard of until a few weeks ago. Sure.

Neil Major – 19:38

Utilize a software program called Riskalyze gives the probability of success. More importantly, it takes a look at, you know, your current investments, the risk score of your current investments, the max drawdown of your current investments, the return over a three and five and 10 year period. You know that stuff’s important and, you know, there wasn’t a lot of pain in the market. Over the past 12 years, because the market went straight up, right, right, so you didn’t really know how your advisor was doing. Except for every time you open up your statement, it looks like bigger,

Rebecca Powers – 20:09

look bigger, right? The computer won’t lie, math does not lie, and

Brian Quaranta – 20:14

therefore that’s right. That’s right. And that’s why the right track retirement system is so important, because it’s all built around math. And when you come in, and you schedule your right track retirement review, which is complimentary, no obligation, I am going to hand you a copy of this book, you can purchase it for $20. Or I can hand it to you for no cost when you come into the office for your meeting. But when you come in, we’ll spend about 45 minutes with you to an hour and we’ll talk about your concerns and the problems that you’re experiencing. And we’ll give you essentially a financial X ray or MRI, and we’ll be able to tell you what’s working, what’s not working. And some things you may be able to consider my hope is that you’re on the right track, and we can shake your hands and tell you to keep what you’re doing. But if you weren’t on the right track, when would you want to know, pick up the phone? Call us today and schedule that appointment? It’s 1-888-382-1298.

Rebecca Powers – 21:07

Fantastic. Stay with us, we will be right back.

Commercial Break – 21:11

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 call in 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 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.

Rebecca Powers – 22:46

Welcome back to On the money with secure money secure is the key word question. Can a retiree be out of the stock market completely? Or do you need to be diverse?

Neil Major – 22:58

I mean, I think you could look at the one of two ways I mean, secure money advisors approach has always been, we’re going to build your buckets of money that are designed to do different things for you in your retirement, right, we’re going to have bank money, you know, that’s liquid and available in a moment’s notice, then we’re going to have a principal protected bucket that we’re going to generate our cash flow from. And typically that buckets designed last 15 to 20 years, where we’re just looking to get three, four or 5% on and then we’re going to take some risk for long term purposes. But at the end of the day, you know what, what you have to look at, and I have a new client like this right now. They determined 3% was all that they needed. And because interest rates have gone up, we’re able to find really short term three year fixed rate annuities at that 3% range, three 3.5%. And what they’ve determined is if they’re able to get that rate of return, they don’t need to take any risks. They don’t need to have any sleepless nights right in the market. So, I don’t know if you’ve been experiencing that with some people coming in as well. But you know, from time to time, especially when you hit this volatility, yeah, people like get me out completely.

Brian Quaranta – 24:08

Yeah, I always say, Look, if you don’t need to take risks, don’t take risk. And then and again, the math shows that right? I’ve always said, if you’ve won the game, you don’t have to keep playing it and you do arrive at a point to where you’ve won the game. My people might say, well, if I’ve had all my money earning three and a half 4% How do I keep pace with inflation? Let me tell you the number one way to keep pace with inflation. Don’t lose money.

Rebecca Powers – 24:30

Don’t lose money.

Brian Quaranta – 24:34

Think about it. Most people are you know where they were three years ago with the losses that they’ve taken. So how’s that inflation plan? Because my client has been earning three and a half percent guaranteed is further ahead than you. Right, that just lost a bunch of money.

Rebecca Powers – 24:48

So hare and the tortoise.

Brian Quaranta – 24:50

That’s right, you got it. Exactly right. That’s right. And we know who won that race and that’s exactly at secure money visors. We want to make sure that you win the race and sometimes winning the race means putting together a plan that might be as exciting as watching paint dry or grass grow. But the important thing is, once you reach a certain point in your life, what’s more important is the return of your money versus the return on your money. And to make sure it’s going to be there when you need it. And you can build a design really good plans around that, and you should not be afraid of utilizing an annuity to do that, because fixed and indexed annuities are a great way to approach safety. As a matter of fact, some big companies out there BlackRock, for example, a Trillion Dollar Portfolio Manager just did a great report on how annuities really are new, the new bond alternative, and people don’t realize when you, when you buy an annuity, you’re going to get a bond like return, but you’re going to shift the interest rate risk to client. Right. And most people that might own bonds right now.

Rebecca Powers – 25:52

Yeah, it’s the insurance company. Yeah.

Brian Quaranta – 25:53

Most people on bonds right now might have experienced losses. But yes, shifting risk is part of the game and retirement.

Neil Major – 25:59

I think, you know, what, what we’ve experienced in our office in particular has over the past five, six years, I think I’d say, people have really educated themselves on the value of the annuity in the portfolio for the retirement plan, you know, used to be the annuity was like, a bad word. Right. And you couldn’t say it in the conference room. But I think that’s totally changed this in particular, over the past five or six years, you know, people have done a good job educating themselves, right, and they understand there’s a place.

Rebecca Powers – 26:25

But that’s why we only have 90 seconds left, believe it or not, but that’s what’s so good because you guys stay up to date on every single change. Well, we are all working in raising our kids. You’ve got it.

Brian Quaranta – 26:36

Let me tell you something in my book right track your retirement I write about Babe Ruth, Babe Ruth, as we all know, it swung for the fences every time he got off the bat, and he struck out most of the time. That’s right, Babe Ruth, when he retired, did not swing for the fences. He bought himself an annuity. When people lost money during the Depression, he did not really see the stories in the book, but you got to call it and you got to schedule an appointment. And when you come in, I will hand you a copy of this book. Now you can buy it for $20 or you can come in and I can give you a free copy. But we don’t send free copies out, but you got to do your part. You got to call us today and schedule a complimentary right track retirement review. Call 1-888-382-1298 You owe it to yourself to know whether or not you’re on the right track to give yourself the peace of mind and security that you deserve in retirement. Folks, we don’t get a second chance at this. It’s not a dress rehearsal. We’ve got to get it right from the start. So, call today. Get up off the couch but that cup of coffee down go over the phone dial 1-888-382-1298 and schedule your right track retirement review today.

Rebecca Powers – 27:42

And it is stress free and pressure free. Give them a call. Thanks so much for joining us. We hope to see you again next week. We want to secure your money.