On the Money with Secure Money: Episode 73

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Video Transcript

Rebecca Powers – 00:20

Welcome to on the money with secure money. I’m your host, Rebecca Powers always happy to be here. And I learned so much from Brian Quaranta and Neil Major, you have the hardest name to say I do. I do. Sorry. I feel like you’re doing pretty well. Right?

Brian Quaranta – 00:34

It’s been butchered. You do?

Rebecca Powers – 00:37

Well, you use the Italian accent, right? And then it sounds better. Okay, so we had a question from one of our viewers about sequence of returns risk. Wow, I’ve never even heard of it.

Neil Major – 00:46

That’s a good one. So, you know, when you think about the market, right? Technically, have you lost anything, if you haven’t pulled any money out? Technically, it’s just the paper loss. But here’s the challenge for folks. Most people that are in retirement, they need that money, the pensions are gone, right. So they have to pull the money out. So what sequence of returns risk is, is when you’re pulling money out in the portfolio is going down? Well, you’re locking in and compounding that loss. So the sequence matters, meaning when you retire, how the market does is going to influence the success of your retirement. And so if you see those negative years early on, that can be very, very damaging to your portfolio where you potentially run out of money much, much sooner than you anticipated. So it’s probably the number one risk that retirees are facing today. You know, if you think about the past 12 years, the market has gone straight up, we’re a well, we could say at the peak of the market. Now all of a sudden, we’re seeing volatility, right? So are those people that retired in 2021? Are they at risk of running out of money, because the sequence of returns was not favorable. I remember watching a 60 minutes episode with you a little clip that we used to have in our office. Remember that clip, it was about people that retired in 1999 2007, right. And they were back looking for jobs a couple of years later.

Rebecca Powers – 02:16

2008 was such a big hit, right, because they experienced 99.

Brian Quaranta – 02:18

And then they experienced Oh, seven and eight. And so, a lot of people couldn’t afford to stay in retirement. And really what we’re talking about here is probability of success, right. And when you look at building a plan around probability of success, you also look to try to remove as much risk as possible. And sequence risk is a mathematical risk that shows up when withdrawals are made from the portfolio, it doesn’t show up when you’re just growing the money because it really doesn’t matter. Because you’re not doing any further damage by pulling money out, right. It’s the pulling of the money out as income that causes the problem. But you know, in order to give yourself financial freedom, you really have to protect a portion of your money, you got to protect at least 10 to 20 years of your retirement lifestyle. We typically like to shoot for it secure money advisors, I like to be around that 15 to 20 year mark, meaning I’m going to carve off enough money from the plan to get enough cash flow, right? We want to create cash flow, it’s our cash flow creation strategy, where we’re going to create cash flow for 15 to 20 years, what does that mean to the client? That means that if we do have to keep money in the market, that means that that buckets a 15 to 20 year time horizon. Now, we all know, because we’ve been told for a very long time, that the number one thing that you need more than anything, when you’re investing money, you listen to any talking head on TV, they’ll tell you that time is your friend, right time is your friend. Well, that starts to become very contradicting when you retire, doesn’t it? So how are you telling people that don’t worry about it, just give it time when these people need their money right now to live off of. So investing and retirement planning are two different strategies. So these talking heads on TV saying, Don’t worry about it, just giving time. They’re talking about your investments, not your retirement strategy. That’s why we have three buckets at secure money advisors because we build a retirement strategy first. And then the investment strategy is long term which it needs to be.

Rebecca Powers – 04:22

So that 15 to 20 years you’re talking about is in that middle bucket, the one that we don’t risk, we know it’s there. And the third bucket is the little money that you can feel comfortable. Like I’ll take $100 and go to the casino if I lose it. Oh, well, if I make it okay, great. Well, you know, yes, we could pay the babysitter. We had some free drinks. It’s kind of you know, I mean, that’s kind of how it is. Yeah, it’s the same idea

Brian Quaranta – 04:43

correct, that you have you have time to recover, right risk anything.

Rebecca Powers – 04:47

You cannot lose.

Brian Quaranta – 04:49

You cannot afford to lose. If you cannot afford to lose, you shouldn’t be risking it. And you know, there’s a lot of times when we’re looking at building out strategies where I want to show someone that you don’t have to take this risk, okay? Some people like to have a little bit of money in the market, believe it or not. Our engineers are our systems analyst. Executives, it’s your toughest. They’re actually our easiest, easiest clients. Most people struggle with a very analytical client. But see, analytical people want things very simple. If I tell him that this desk here is 10 feet long, they’re going to come back and say, no, it’s 10 feet one inches, they want accuracy. So, when there’s too many unknown variables, any engineer knows if you’re building a bridge, and there’s too many unknown variables, that’s not a well-engineered plan. And so, when you look at how the financial planning world has engineered, most financial or retirement plans, there’s still too many variables that you don’t know how it’s going to work out. It’s not a perfect science, right? We’re not, we’re not talking about like the law of gravity here, what goes up must come down, you know, Newton’s law, all that kind of stuff. We’re talking about probability of success, we’re talking about statistics, the only way you can do that is to remove as much risk as we could possibly remove and get as many guarantees built into the plan as we can get.

Neil Major – 06:09

I mean, think about this, Rebecca, how satisfying would it be if you’re in retirement, and you have a bucket laid out, that’s going to provide your cash flow over the next 15 to 20 years, even though you you’re experiencing some volatility, that’s your long-term money? sooner? You’re not even really looking at that money? You’re amazing. Yeah. 40 years old, with that money that’s going up and down, that’s okay. Because I have my income stream built that built out, it’s safe, it’s protected. And my lifestyle doesn’t have to be changed or impacted, just because the market changes on me.

Rebecca Powers – 06:44

And you know, you’ve heard Wall Street and I’m sure we all been taught this ride the roller coaster, you said, wait it out? Give it time? Do you feel like it’s just what we’ve been told, because if everyone pulled their money out, the market really would crash? It’s a possibility. That’s what it feels like?

Brian Quaranta – 07:00

Yeah, I mean, it’s a possibility. We do know that if you are younger, and you pull your money out, you have a higher probability of hurting yourself, than helping yourself. Okay. But that’s because time is still on your side, because you’re 30 instead of 60. Right. But when you are 60. Okay. It is, in my opinion, unresponsible for you to keep 100% of your money at risk. Yeah, there are just too many things that can go wrong. And we’re seeing it right now. Right bonds are losing just as much money as stocks right now, who would have ever thought the 20-year United States Treasury bond would be down almost 20%. No one would have ever thought that. And this is why making sure that you have guarantees built into your portfolio is so important. See, the Number One Insurance people need in retirement is income insurance, right? We insure everything we insure our health, we insure our houses, we insure our cars. But the one thing we never ensures why in the world would you not insure your

Rebecca Powers – 07:57

income? No one’s ever said that, Brian, I mean, I’ve never even heard that. And it is an extremely valid point. And how do you ensure my income, sir?

Brian Quaranta – 08:06

Yeah, well, through the use of annuities, and the annuity market has changed quite a bit. There’s lots of different types of annuities out there that look as a fiduciary think about it, I have to do what’s in the client’s best interest. So am I there to just sell an annuity course? If I’m a fiduciary, and I have to look at everything and say, what is in the client’s best interest? Why am I as a fiduciary choosing that product, when I am held to the highest regulation standard that there is, it’s because that is the number one most important thing in retirement that somebody needs is to replace the paycheck, you’re not going to replace the paycheck pulling money out of the stock market, alright, because too many things need to go right in order for that happen. Even if you own dividend stocks, right? I mean, dividend stocks, you know, you’re going to always get the dividends, well, I shouldn’t say always, because dividends could be reduced, but they also could be increased. But you could own a dividend paying stock and your account balance could be going down, even though you’re still receiving the dividends. So you still have money at risk, even though you’re receiving a dividend. So I just believe in guarantees and I believe in protecting a portion of the money. And that’s why I wrote right track your retirement because most people when they come in, want to know whether or not they’re on the right track. Let me ask you this. If you weren’t on the right track, when would you want to know? Hopefully now, for the next 10 callers who call in right now we are going to give you a complimentary right track retirement review, where we’re going to go over with you the five key areas of income taxes, investments, health care and legacy planning, but you got to do your part. You got to pick up the phone and call us today at 1-888-382-1298.

Rebecca Powers – 09:47

Absolutely. Stay with us. We’ll be right back.

Brian Quaranta – 09:49

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 – 10:03

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

Brian Quaranta – 10:11

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

Neil Major – 10:26

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

Brian Quaranta – 10:31

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 – 10:42

People you know, can actually see a vision once we start to really build out their plan.

Brian Quaranta – 10:47

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 at secure money advisors, as a fiduciary firm, we help you manage the risk, build the income, and give you the retirement to grow.

Rebecca Powers – 11:17

Welcome back to On the money with secure money. And I love the word secure, because that is what everyone wants. You are going to help people retire right? You’re going to have them come in the office. You have a very tell us about your staff who answers the phone. Who will they meet when they come in?

Brian Quaranta – 11:31

Oh, well, we know the whole team participates in answering the phone. But Ashley who is at our front office, she’s absolutely outstanding. And you know, but we’ve got we’ve got Ashley, we got Cindy, we’ve got Danielle, we’ve got Trudy, we’ve got Maggie, we’ve got Michael, I mean, I can go on and on. You know, and we really were a really cohesive team. And we worked so well together. When people do become clients of our office, they do meet everybody, because you really get a team of people, right? You’re not just getting Neil, you’re not just getting me, you’re getting an entire team of people. Now, you may be just sitting with Neil, but behind the scenes, everybody is working together on that case, if you were to call into the office, and Neil wasn’t available, somebody’s going to be able to help you with your case. And that’s what people want today. You know, how many people have we’ve seen over the years where they say, you know, I was with a big box firm, and I was with this guy. And then I guess he left and they put me with a different guy. And they didn’t even have the same philosophies.

Rebecca Powers – 12:30

Never even met them that happened to us. You get a call me my daughter, Molly, I’m like her name is Mary. I don’t even know you want me to get an insurance policy on her? Right?

Neil Major – 12:38

Yeah, I think that’s I hear that a lot. You know, what happens if, if something happened to you, Neal, would I go like a truth? Truth be told, if something did happen to me, nothing would change. Because our philosophy and our approach is the same throughout the company. So because we’ve heard that so many times, well, I really liked so and so. But she left the company and I really liked this guy. But he started his own company. And when I got to a third person, I we weren’t on the same page at all. So with secure money advisors, our approach is the same with everybody. And I think people appreciate that. And know if something happened to one of us that they’d be in good hands.

Rebecca Powers – 13:17

And your company has grown I know substantially because there is great leadership. But not every client is right for you. I mean, you’ve said, Yeah, most people, of course, you want to get the second opinion, you’ll give the complimentary advice, but not everyone jives with you. And that’s okay.

Brian Quaranta – 13:32

Yeah, yeah, absolutely. And, you know, look, when people come in, they want to interview us, but we’re interviewing them just as much as they’re interviewing us. Because, you know, we’re very specific in what we do, we do want a certain clientele. And that has nothing to do with the size of their portfolio. It has to do with what their beliefs are around money and their goals and their goals. Right. I mean, I, you know, we’ve had people come in over the years that, you know, are doing their own investing, and they’re big risk takers. And I would never put a portfolio like that together and take responsibility for it, they can, they’re more than welcome to do it with their own money. But I’m not going to go to the roulette table and bet money just on black. Black 33, right. So it’s very important for us to really, really have a good synergy with the individual that we’re interviewing, to make sure that the things that they’re concerned about that we can truly deliver. Look, we’ve got a 98% client retention rate for a reason. And I’ve been doing this for, you know, going on almost 24 years. And so I’ve had clients with me for a very, very, very long time. They don’t go anywhere. One because of our Client Servicing that we do throughout the year. We send out weekly educational videos, we do quarterly market updates. We do multiple client events throughout the year. We’re very engaged with the client. Not only that what we’re doing as you occasional events six to eight times a month that our clients can attend at any point in time. The one thing that people really love about our practice, though, is they get access to unlimited financial planning appointments throughout the course of the year at no additional cost. So, you know, and it doesn’t matter what’s going on their life, they have somebody they can use as a financial sounding board.

Rebecca Powers – 15:19

Is there any question that’s too small?

Neil Major – 15:21

No, I mean, we get emails throughout the day, you know, different client questions where they want to know if they should pay off the house or yeah,

Rebecca Powers – 15:29

You don’t mind I should have I should have gave my daughter a car?

Neil Major – 15:32

Absolutely not. I mean, that’s what we’re here for. I mean, we’re our goal is to provide you with financial advice for any possible board, right. And so, we want those emails, we want those calls to take place. Because we’re a big part of your plan. And we want to make sure that we’re guiding in the right direction. So absolutely not.

Rebecca Powers – 15:52

Have you ever had one of those stories where someone was in such the wrong direction? And you were able to turn it around? Let’s talk about some of those happy stories.

Brian Quaranta – 16:02

Yeah, well, I’ll tell you that a good story that just took place. Last year was single woman came in, she’s actually divorced. And she was pretty much starting over at the age of 60. And, you know, didn’t have a whole lot saved and didn’t receive a whole lot of money from her divorce. And so she’s back in the workforce for the first time. And she’s thinking herself, I don’t, I’m never going to be able to retire. And so she came in, and we showed her a way to take the money that she was earning from work, and start putting that away, and keep it relatively safe without a lot of risk. But what we also showed her was at her full retirement age, which were for her case was 66, we were going to show her how to turn her Social Security on and start utilizing that to accelerate the amount of money that she had in her retirement accounts. Because at 66, or your full retirement age, Social Security allows you to turn your Social Security on, and they don’t penalize you for taking it. So now we’re actually using the social security to save for retirement, and then it compounds. And by the time that we reach 70, which was just 10 years, yeah, we had close to $800,000 accumulated, and we were able to get her the income that she needed from that plus her Social Security to retire. So, she loves you. We have boxes of tissues everywhere. Reason, because for the first time, people are really realizing that things are a possibility. And you know that they’re not on a dead-end road, and that we can get them on the right track very easily.

Rebecca Powers – 17:34

It is very mystical. I mean, honestly, there is, like I’ve said before, we’re not taught this in school, and you are experts on this. So, you understand that when people come in, it is intimidating, even though you’re very nice, guys. They don’t want to pull up that band aid and look, sure, but it can be painless.

Brian Quaranta – 17:51

Yeah, they’re afraid of being criticized. Yeah, afraid of being criticized. And I think that our industry has done a really good job in criticizing people are making you buy this for how long? Have you had that? Well, yeah, why are you still been working with him or her? You know, and that’s not how we operate. We’re there to say, okay, where are we at? And where do we need to go and what changes need to be made. And in our first process, we’ve got a roadmap that we follow with each individual, new potential client. And really, at first, we’re just listening and understanding and getting to understand what their goals and concerns are, then what we’re going to do is we’re going to do an we’re going to analyze everything, we’re going to analyze it, we’re going to bring them back. And after we analyze everything we are now going to educate, here’s where you are, this is why you’re where you’re at, right. And this is where you need to go in order to get to where you want to go, right. And that’s when we give them turn by turn directions. We give them a map of how to get from point A to point B, but you still do it. It’s not like they have to do we hold their hand on every single turn? And when they say yes, we’d like to hire you. My team implements everything for them, they actually move all the money from where it’s at over to where it needs to go. All the client has to do is say yes, we’d like to hire you and we take care of everything else.

Neil Major –19:09

I just experienced last week. Yeah, I mean, you know, a woman came in, came up from West Virginia to live in a small town with the local advisor. And, you know, she was very nervous coming in. Yeah, she didn’t want to divulge all that information. But by the end, she just couldn’t be more thankful for what we did for her in that meeting. And kind of the peace of mind. As he’s leaving said we’re gonna switch to you. Oh, anything right? Just made her more comfortable.

Brian Quaranta – 19:39

Yeah. And that’s all what being on the right track is folks. I mean, and I want to make sure that you’re on the right track. And if you’d like to know if you are, call us today at 1-888-382-1298 and schedule a complimentary no obligation, right track retirement review, where we can give you peace of mind and clarity help you understand where you are and where you need to go. The changes that you might need to be able to make and if you are on the right track, wouldn’t it be great to know that if you’re like to schedule that right track, retire review, call 1-888-382-1298.

Rebecca Powers – 20:11

Fantastic. Stay with us. We’ll be right back.

Commercial Break – 20:14

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 a 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 retirees 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 exposure 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.

Rebecca Powers – 21:42

Welcome back to On the money with secure money someone asked Is it important to always have your spouse present in meetings?

Neil Major – 21:51

Yes, absolutely.

Rebecca Powers – 22:03

But there’s a lot of information that because you also want to find out what their dreams are. And they may figure they may say wow, honey, we never talked. I didn’t even know you wanted to buy a boat. I didn’t even know you.

Brian Quaranta – 22:13

Rebecca, you are 100%. Right. We have marriage counseling, the conference room table, because for the first time they’re talking about things they haven’t talked about. I didn’t know you wanted retirement that way. I didn’t want to retire soon. Right. So they’re discussing these things, sometimes for the very first time.

Neil Major – 22:31

That’s what we’ll hear too is, you know, the husband will say we need $3,000 A month net income where his spouse is the bill payer. And she says we need six out. So we’re building a plan for $3,000 net income, because maybe she didn’t come to the first meeting. Yeah. And so we’re way off. Right. So we want both parties there to understand the entire situation, kind of hear both goals and dreams of the retirement to make sure that we’re building out the proper approach for sure.

Brian Quaranta – 23:00

So you know, it’s kind of a little, you know, we can do as many meetings as we do, because we do about, you know, 30 to 40 meetings a week at our office. Wow, we’re very, very busy office, you wouldn’t think when you walk through the door, because we’re very efficient, right? But if we do have somebody that comes by themselves, which we don’t like, we really don’t encourage that because it’s really not a good use of time. But we’ll take we’ll take Benson will say if he’s not the CFO with a family, right? If he’s not the CFO, we’ll do a little bit of conversation. And he’ll say, Well, yeah, we need $3,000 a month. And I’ll say, how much do you think he’s off? He’s off by at least 70. But I’m telling you, they’re always off. But they’re

Rebecca Powers – 23:41

So funny.

Brian Quaranta – 23:42

The person that pays the bills and the family is the one that has the most stress and anxiety about retirement. Yeah, the one that doesn’t have to worry about paying the bills and doesn’t see the money going out. They think retirement is the easiest darn thing in the world. Okay. And they have no worries in the world. One of the things that we’ve done really well, and for some reason, we see this quite a bit that the female is actually the bill payer, right?

Rebecca Powers – 24:06

Yes. That’s me. Say he wouldn’t know what to do. But we like it this way. Because your shop or it’s $100 to get your nails done. It’s worth it. We’ll do the job.

Brian Quaranta – 24:18

That’s right. You’re the one that’s going to feel the most pressure about return because you’re going to be the one that has to figure out how is all this going to be paid? Yeah. Because he might not see everything that actually goes out or he definitely doesn’t feel the pain of having to exactly payments.

Rebecca Powers – 24:32

Joke about the POS the pile of stuff. Yeah. So, you don’t have to dig through all of your cabinets and look for your financial plan, your last one and all of your stubs. You don’t need that for the first meeting, right?

Brian Quaranta – 24:43

Yeah, you bring as much as you can.

Neil Major – 24:45

Yeah, we’re just talking basic numbers. But more importantly, we’re talking about what’s concerning you. Why do you drive up to the office to sit down and meet with us? What is it about your plan that you feel is not going to work? That UD remedy on and so our job is Just understanding you in that first meeting, understand the situation, we’ll talk basic numbers. If we decide that we want to go to a subsequent appointment, that’s when we’ll start to want the statements and things like that. So yeah, it’s a pressure free first meeting for sure. That’s really important.

Brian Quaranta – 25:15

Yeah, yeah. And that’s what the right track retirement review is all about. I mean, it’s really about putting you back in a position of strength, giving you the clarity, and confidence and peace of mind that you deserve. And really, it’s all about providing you with financial freedom. When I wrote right track, your retirement was really created because 90% of the time that Neil on the team and I would sit down with people, when we’d ask them, what is it that you’d like to find out today, they’d say, we’d like to know if we’re on the right track. And so most people just don’t know whether or not they’re on the right track. And there are very specific things that we look for, to help you determine whether or not you’re doing the right things or not, well, you’re moving in the right direction. And really, number one, it all starts with getting that review. So, if you call 1-888-382-1298, you’re going to get a complimentary, no obligation, right track retirement review, there’s no pressure to do any business with us. We’re there to interview you, for you to interview us get an idea of what our philosophies are. But you’re also going to get a copy of my right track retirement book. In this book, I lay out all of what we do and how we approach it, and what our philosophy is. And you’ll find as most people do, that this is a very simple and easy to understand plan. And the simpler it is, the more powerful it is. We all know that if you keep it simple, things just go a heck of a lot smoother. I want to encourage each and every one of you that if you have won the game, you don’t have to keep playing it. You don’t have to continue to roll the dice. If you are on the right track. Take advantage of the right track retirement review. Because if you weren’t, when would you want to know, call 1-888-382-1298 and schedule your right track retirement meeting today.

Rebecca Powers – 27:02

Get a second opinion. And hopefully everyone watching right now is on the right track. But it would be nice to even have that confirmed.

Brian Quaranta – 27:08

Right. Yeah. So I think it’s always important to have it confirmed. I mean, it’s the most important thing that we all would want how many we have out but what if you could retire, you know, five years earlier than what you thought Right? Exactly. Because we’ve done that many times.

Rebecca Powers – 27:20

He told me that that happens. Yes.

Brian Quaranta – 27:21

Yeah. 1400 clients you learn a lot lately.

Rebecca Powers – 27:25

Well, we’re already out of time. Once again, be sure to go online, watch all of these shows. Get all the free educational advice that these guys were talking about. And we’ll see you next week for on the money with secure money just keeping that money in your pocketbook. Stay with us. See you next week.