On the Money with Secure Money: Episode 127

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Video Transcript

Rebecca Powers 00:24

Welcome, everyone to this week’s edition of on the money with secure money with Brian Quaranta. I’m Rebecca Powers. So happy to have you with us. A lot of people have cold and gotten your book. Yes. And you even pay for the shipping and handling, which no one does. I know.


Brian Quaranta 00:42

I know. There’s a lot of people that tell me I’m crazy for paying for the shipping and handling, but yeah.


Rebecca Powers 00:45

But you’ve done a lot of things.


Brian Quaranta 00:47

I’ve done it for a while.


Rebecca Powers 00:48

I love how it has paid off. Yep. So many clients. Most of your business is families referring other family members and friends. So, you are a success. Yeah. Absolutely. So, we’re going to talk about we’ve gone over, we’ve done shows before talking about each chapter of the book. But I want to talk let’s start today’s show with a lot of the questions we get are. I don’t understand the basics of retirement planning. Yeah. So, let’s just start there. What are the very, very basics, and the word planning is very important, because everyone needs a written plan. Yeah.


Brian Quaranta 01:24

And we I think we need to talk about what a written plan actually means. So, but basic fundamentals are accumulation and distribution. So, let’s talk about accumulation first. So, there’s long term retirement goals, their short-term retirement goals. So, let’s talk about long term retirement goals. Long term retirement goals are really, when you’re a lot younger thinking about the long term, what is it going to look like when I’m 65 When I ever want to retire, okay. And usually, those goals are going to be around accumulation, meaning you need to grow your money so that you have a big pile of money when you go to retire. And the reason for that is we’re just we don’t have pensions today. So, it’s your responsibility to fund your retirement. The one thing you have to remember is this, the one job that that money is going to need to do for you, the day you stop working, is going to need to provide income, the earlier you start, the better compounding interest will work for you. When you’re younger, you can take a lot more risk also. Then we go into distribution. Distribution is okay, I’m retired, I’ve got this pile of money. Now what? Okay, well, now, there’s five key areas that start you have to start to think about income taxes, because when you when you withdraw money, it’s taxable, right? Your investment strategy, because the things you were doing during your accumulation years, when you were younger, getting, growing that pile of money, you can no longer do a lot of those things because you don’t have the time to recover if you lose a lot of money. Right? It’s not that the market wouldn’t recover. It does. But when you’re retired, and you take a loss, the question is, the question is, will it recover in a time period you needed to recover it? Right? So, you know, you’re 65 you gotta retire in the first three years of retirement, you know, markets down? What are you going to do, you know, not take money out of your accounts. So, and if you do take money out of your accounts, and you have lost a lot, you compound, the loss, you lock in to the loss. So, we have an investment strategy. Fourth, is your healthcare strategy, right? Because you are older, there’s a possibility of a health event. If a health event were to take place, how are you going to pay for that? I mean, hopefully you’re on Medicare, and, you know, Medicare, will pay for some but not all. And the last part is your estate planning documents. Most people don’t have these done, right, I would say eight out of 10 people that we talked to don’t have them done. It’s just one of those things that people kick the can down the road on. And it’s a terrible idea to kick the can down the road because he can at least go out and get a basic will. Right.


Rebecca Powers 04:10

Right. I could do that. Yeah, we talked like last week about annuities. We got a ton of calls and emails about that. Because I said, Oh, and it keeps you out of probate. But we didn’t really explain what that means. So, I want to answer Jerry in Cranberry actually asked, What did you mean by and it keeps you out of probate and that is tremendous. Yeah.


Brian Quaranta 04:28

Probate. Yeah. So, the way you keep out of probate is you have a beneficiary document. So, a beneficiary document is going to come with any type of retirement account, you have Ira Roth, Ira 401k, everybody knows that. When you are filling out the paperwork for those types of accounts, it’s going to ask you Who do you want as your primary beneficiary contingent beneficiaries? Okay. Well, what if you have nonretirement dollars that you want to invest? Okay, well, you If you put that money into an annuity, an annuity has two advantages. One, it would grow tax deferred just like an IRA or 401k. And number two, it has a beneficiary document that you have to fill out saying who you want as your primary beneficiary contingent. So, if you die, the money has a direct path to who it needs to go to. And because it has a direct path, it avoids probate. So that’s how we get to that.


Rebecca Powers 05:25

And probate can take up to 18 months, it can be very expensive, right? Yes, yeah, seven to $10,000.


Brian Quaranta 05:31

It could be, you know, the more important thing is that when someone’s mourning your death, yeah, the last thing you want to be doing is, is unraveling this mess. And a lot of you folks probably leave your most responsible child as the, as the trustee, the one that’s going to take care of everything. And I promise you, you are not doing them a favor. And I can promise you they will, they will have some choice words of knowing that you’ve left this to them, the responsible and always gets punished. And it is a punishment, quite frankly, ask anybody that’s had to settle an estate, especially in a estate that hasn’t had any organization to it, or a written plan. And, you know, that’s why we believe in having a written plan, because that organization not only helps you in retirement, it helps you at death also,


Rebecca Powers 06:30

Well, we’ve said it many times, if you’re going to open a business, you do an in-depth business plan, if you’re gonna go on a trip to Europe, you have a in depth I mean, I write down what colors and clothes and jewelry I’m gonna wear each week with you. Yes, right. But it’s such human nature that we know we’ve never been taught to write down a retirement plan. Where’s the Safe Money? Where’s the risk money? Where’s the guaranteed income coming from? It’s so Elementary, but we were never taught that. So, I guess my point is, don’t feel bad if you’re one of those people have a friend who’s a surgeon, and he was asking me about this show. Yep. What did you mean by body? Oh, I didn’t do that. What do you mean a written plan? Yes. So, I guess my point is to our friends at home, don’t feel bad. We’re all in the same boat. Yeah.


Brian Quaranta 07:10

And I, here’s the thing, too. You know, there’s been a big movement in the financial industry, meaning a lot of financial advisors got started with the big box firms, right? These big powerhouse firms. And there was a certain way that financial planning was being taught. And a lot of us said, this isn’t good enough. And so now there’s a huge movement by financial advisors to get away from the big box firms and go to their own fiduciary firm that they create themselves, we still have access to all the big, strong, safe companies. But we have nobody’s saying, you need to do this, you need to do that. We can sit with the client at the table and be a partner with the client. And not this, you know, I’m trying to sell you something. Right. And so, the big box firms never taught written plans.


Rebecca Powers 08:01

Know that you just taught me something. You told me everything, you know?


Brian Quaranta 08:04

No, they taught they never taught written plans, they,


Rebecca Powers 08:08

Why not?


Brian Quaranta 08:09

It because they were teaching you how to sell. They were teaching you how to recommend.


Rebecca Powers 08:13

Right. And only the products that your company that you were working for sells, you can’t look at all the products. Yeah, like he was an independent fiduciary now can.


Brian Quaranta 08:20

You know the biggest training you’d have in the early days? How to overcome objections. Right? Now think about that!


Rebecca Powers 08:27

How to overcome objection. Yes. I’m gonna write that down.


Brian Quaranta 08:31

Yeah, now, I don’t know about you, Rebecca. But overcoming objections is not financial planning, or


Rebecca Powers 08:37

Or really helping your client, you just want to tell them what they’re objecting to, does it not have any…?


Brian Quaranta 08:42

Validity? Right? Yes. So, we don’t, we don’t have objections at our office. And the reason we don’t is because all we’re doing is presenting the information. Here’s where you are, here’s what your risk are, here’s the challenges you’re going to have. Would you like to know some ways that you could fix some of this? Right? Yes. Okay. You could do this, this and this. Wow, I didn’t know I could do that. Okay, it Do you want to continue with your current plan? Or do you want to implement some of these changes? I want to implement some of the changes, okay. I don’t want to implement some of the changes. Okay. Right. It’s on you. Right?


Rebecca Powers 09:16

And again, your fee base like if you go to get your teeth cleaned or charge you 100 bucks, you’re fee based not commission based, right. So, if you do Sherry’s, you’re sitting on the same side of the table as them you’re just on the same team. There’s no conflict.


Brian Quaranta 09:28

Yeah, and my hopes is that most people understand what it means to work with a fiduciary today, and I hope most people are and I would tell you, whether you decide to come to secure money advisors, and have a review of your current portfolio, or you’re just working with somebody else, just make sure your Google with a good fiduciary firm that’s going to offer you a written plan. Make sure they’re focusing on the five key areas of your income, your taxes, your investments, your healthcare and your estate planning. And if you’re getting all five Out of those areas, and you can walk out of there with a tangible written plan, I would tell you to keep doing what you’re doing, right, especially if you like the person. But if you don’t have a written plan, if you haven’t looked at those five areas of retirement that I just named, that I would tell you to go to onthemoneyoffer.com, get a copy of my book, right track your retirement, I send this book to you absolutely free, I pay for the shipping and handling, we literally send us priority mail to you, I pay for it. And all you have to do is read it. And you’ll start to understand what a real written plan looks like. So, onthemoneyoffer.com, you go there. And you can also schedule a time to come in for a complimentary comprehensive right track review, or our team is standing by, you can call 1888-382-1298. And schedule with us today.


Rebecca Powers 10:45

And we’ll be right back on how to secure your money stay with us.


Brian Quaranta 10:49

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 11:03

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 11:10

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 11:26

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


Brian Quaranta 11:30

9 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 11:41

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


Brian Quaranta 11:46

This is about you if you’re not getting what you need. And you feel that when you walk out of the advisor’s 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 you dream of.


Rebecca Powers 12:16

Welcome back to On the money with secure money. I’m Rebecca powers here with Brian Quaranta, we’re talking about taking risk completely out of your retirement. And it is possible here’s the book we always talk about right track your retirement. And he touches on so many of the things that we speak about in the show. Let’s talk about understanding social security. Because as a holistic, fiduciary firm, you’re looking at the whole body, the whole financial picture. So, security is a big part of it. Most of us know we can’t live on that. Right? So, what do you need us to understand about Social Security?


Brian Quaranta 12:49

When to actually take Social Security. So, what’s going to be the best time for you to collect? Okay, understanding your spousal benefits? So, if you’re married, what happens to your benefit? If you die? What amount would you receive? So? But yeah, so security is one of those things that you know, if you are, if you’re at a place where you’re getting ready to retire, the question is, do you collect now? Or do you collect later? Okay, if you want to retire right now. And let’s say you’re 62? Well, you could turn your Social Security on, but you’re going to get the minimum amount. So the question would be if you want to retire, and if you turn Social Security on, you’re only gonna get the minimum amount right now, could you use what we call a bridging strategy to where we would create income from the retirement accounts for a period of time to maximize the amount of Social Security you get, so maybe we get three more years of delaying social security so that the amount that you receive goes up? Now, this has to be customized to your situation. Not everybody’s going to benefit from that. Because the real question that you have to ask yourself, when you’re collecting your Social Security is, How’s your health?


Rebecca Powers 14:10

Oh. I thought you were going to say tax bracket.


Brian Quaranta 14:11

Nope, it’s How’s your health? Because that’s gonna be a big determining factor of whether you turn it on now or later. I mean, if you don’t have a long-life expectancy, you know, you have a family that’s died very young. You know, I had a client that came in and he’s made it longer than his grandfather, his dad and his brothers. Wow. So, he feels like he’s on borrowed time. Yeah, he’s 63 When I met him, and when he told me that story, it was only logical to turn the Social Security on now and not wait because Social Security is one of those benefits you only get when you’re alive when you’re alive. Right. Yeah. And then and then understanding your spousal benefit to Yeah, is important because when you die, you know if your sole security is $30,000, and you’re or spouses is $40,000. When you die, the lowest check drops off, you pick up the highest check, but you still have a loss of income, right? And you got to prepare for that. And that’s part of the written plan is, you know, we want to make bad things happen on paper. That’s right, make bad things happen on paper so we can plan, you know, and then you try to expect the best as you’re going through retirement, right?


Rebecca Powers 15:20

So, let’s talk about pensions and defined benefit plans. So, pensions for that little quick history lesson in 1978, the Carter administration decided, let’s get rid of get rid of pensions, some economist, from one of the Ivy League colleges came up with a thing called a 401k. Everyone will just do it themselves. It’s fabulous. You can invest your independence. So, America bought into that idea. But we were never really taught how to do it. We just kind of put it in our jobs, set it and forget it. And that’s been detrimental. So, let’s talk about pensions. And what is a defined benefit plan?


Brian Quaranta 15:56

Yeah, so a defined benefit plan is when you’re going to get a defined amount of money for the rest of your life. So, when you put money into a defined benefit plan, you were putting money your employer’s probably putting money in also, and then they’ll let you know, if you retire at 55. Here’s how much we’ll give you for the rest of your life. If you retire at 60. Here’s how much we’ll give you retire at 60 to 65. So on and so forth. Right?


Rebecca Powers 16:20

And I’m sorry, the defined benefit plan is that like the TSP, and the different pensions that are already there?


Brian Quaranta 16:24

The defined benefit plan is a pension plan, a defined benefit plan, because you’re getting a specific defined benefit.


Rebecca Powers 16:33

Gotcha, like teachers still have and firefighters. Okay.


Brian Quaranta 16:36

Yeah, so there’s defined contribution plan, which is going to be your 403 B or 401. K, your 457. Because, again, you’re making a defined contribution. Okay, you’re not getting a defined benefit. So. But the question that you have to explore and the math that you have to calculate, if you are entitled to a pension these days, is a lot of pensions will offer you the ability to take a lump sum. So rather than taking your defined benefit, are your defined a monthly amount that they’re going to give you for the rest of your life. They’ll say, Well, if you’d like we can give you this lump sum of money. So now the question becomes, well, do I take the monthly income that they’re gonna give me Yeah, and lose control of all of the money. But understand, the minute we say, we’re going to take that defined monthly income amount, we have no access to that money. So, if you’re in a period where you need a little extra money that month, you can’t go to the pension company and say, Excuse me, can I get an extra 10,000 hours this month? They’re gonna say, No, you gotta wait till we give you a check next month. So, the lump sum option is, you get to now take your money from them, and you get to control it yourself. So, the calculation you should be running is, if you take the lump sum, could you create the equal or greater amount of monthly income, but now you control 100% of the money, meaning that money is in your pocket. versus the other option is it stays with the company, and you have no control over it. And by the way, when you choose that option, and you die, that pension dies with you. So, if you just collected on that pension for a year, that’s all you’re ever going to get from that pension. Whereas if you had a lump sum option, let’s say the lump sum was going to offer you $500,000. If you then created your own private pension, by utilizing an income annuity, you could create your own monthly income that could be equal or more to the amount that you would get from your pension. And if you only lived one year, when you died, that remaining balance in the account would pay to your beneficiaries. And most people don’t realize that they can create their own private pension through the use of income annuities. So, I had a client that came in, they had they had an option to take their monthly benefit amount or take the lump sum. So, we calculated the monthly benefit amount with 100%. Survivorship, okay? They were going to get $49,000 a year, okay. $49,000 a year they were going to get for guaranteed for her life if she died guaranteed for his life. Okay. So, I said well, before we submit this pension paperwork, let’s just look at taking a lump sum. Let’s shop it with a couple of annuity companies and see what income we could get. So, we did they come back, and they say for a joint lifetime income for you and your spouse. We had run three different quotes for them with three different things. We will give you $51,000 Yeah, for your life if you die $51,000 for your husband’s life. Oh, and by the way, when both you and your husband die, any balance in the account will Pay your kids. That’s amazing versus the other Oh, yes, it was the other option of, yeah, they were-


Rebecca Powers 20:05

49,000 and zero, you made such a good- ell we need to take a quick break the producer saying, Here’s the number 888-382-1298. That’s 888-382-1298 you can always go to onthemoneyoffer.com, Brian really will mail you this book, even pay for the shipping and handling. You can also just walk into the office and get an appointment and get a book. Alright, stay with us. We’ll be right back; we’re talking about securing your retirement money.


Announcer 20:37

The work never seems to end until the day it finally does. After nearly a lifetime on the job, you should be rewarded for all the time you spent working, whether that’s crossing off items on your bucket list, learning a new passion, or rekindling the love of an old one. After all, life isn’t over when you stop working. It’s the start of an all-new chapter, the one where you’re the writer and you get to choose how your story will go. A way to achieve that is by having a clear financial plan to sustain your golden years, the biggest fear most retirees have is if they’ll have enough money to maintain the lifestyle they’ve always enjoyed. Having a plan to help protect you against the curveballs life often throws will help to maintain your lifestyle. Call today to get your free written financial plan. See me live every day to the fullest and enjoy the retirement of your dreams.


Rebecca Powers 21:28

Welcome back to on the money with secure money. I’m Rebecca Powers here with Brian Quaranta. And Brian and his amazing firm secure money advisors have changed- can I say 1000s of lives?


Brian Quaranta 21:39

Yeah, we manage we manage about 1200 households. Yeah, yeah,


Rebecca Powers 21:43

Yep. It’s amazing. Yeah. And everyone gets to meet you. Yep.


Brian Quaranta 21:47

I mean, it’s sometimes I’m not there. Well, yeah.


Rebecca Powers 21:50

You know what I mean?


Brian Quaranta 21:52

Well, we have client events here. Yeah, yeah, we’ve client events that people come to I get to meet them, you know, if they’ve worked with one of my other advisors, you know, that they really do become part of the family. I take it very, I take it very personally, when someone decides to, you know, use us for their financial planner. Absolutely.


Rebecca Powers 22:07

Let’s talk about annuities. Because you kind of say you feel like screaming it from the mountaintops. And I feel the same way personally, because we made the decision to take all of my 401k from the television station that I left after 26 years with that TV station. I put it all into a fixed indexed annuity. It is so powerful it is how you become stress free. We lose nothing. When it goes down. I get some of the gains, not all of the gains. But husband still a producer. He’s from swiftly he works for ESPN, we are keeping his money because you said that you’re like, you still want to accumulate You’re right. You’re 50 is Rebecca, let it ride. So, I love this kind of it can be a tool, right is the right bucket? Yes. So, let’s talk just about annuities, if you don’t mind, because they’ve gotten a bad rap in the past.


Brian Quaranta 22:55

Yeah. Well, first off, let’s talk about the tool that it is. Yeah. And the tool that it’s not yes. So, the tool that it is, is principal protection and income. Okay. So, if you’re not looking for principal protection and income, then you’re better off using the stock market. Right. All right. Now, depending on how old you are, you may not need an annuity. Now. 46 I have quite a bit of money in annuities. Now, why would I do that at 46 years old? Well, insurance companies reward me for having my money there for a longer period of time. So just like if I have if I delay taking my Social Security, I get an increase the amount of income I get. It’s the same thing with insurance companies. The sooner you buy it, the more benefit you get later on. See a lot of people think well, I’m too young to buy an annuity. Well, at 46, I own three of them. And the reason is-


Rebecca Powers 23:53

Do you have any on your children? I’m sorry to interrupt. You have two small boys. Yes. Can you buy annuities?


Brian Quaranta 23:58

No, you cannot. Yeah, you cannot. But the boys are the beneficiaries. Right? The boys are the beneficiaries. Okay, well, Kate’s first.


Rebecca Powers 24:05

Sorry Kate.


Brian Quaranta 24:06

You don’t want to leave Kate out.


Rebecca Powers 24:07

And his beautiful wife works in his office. So, you’ll get to meet her? Yeah.


Brian Quaranta 24:10

So, but, what the heck was I saying, Rebecca?


Rebecca Powers 24:13

About… That time is on your side & insurance companies reward you.


Brian Quaranta 24:18

That’s right. So, the insurance companies reward you. So, the longer you have the money and the more income that you’re gonna get. So, take two people, for example. One says I’m gonna put $500,000 in today. And I’m going to wait five years to take the money. Okay, the other person says, I’m going to put $500,000 in and I’m going to take the money one year from now, okay, the person that put in $500,000 and waits five years is going to get a higher income than the person that put $500,000 in and took it near one. Now, here’s even the bigger benefit. If you’re going to wait five years, you don’t have to put in 500,000 you could put in 400,000 and get more income than the guy that put in 500,000, because you waited? Well, so you can put less money in and get the impact of what a higher contribution amount would give you just by delaying right. So, but the tool is principal protection and income. All right, that’s the main reason why you want to use the annuity. Now. You’ll see some people buying annuities for investment purposes. Okay, they’re trying to grow their money. Well, that may work out, but the annuity is really designed for income, we just have to be honest about that. I think we’re annuities get a bad rap is people advisors will say, Well, why don’t we rather than investing in the stock market? Why don’t we try to get the growth that we need in the annuity without risking your principal? Well, that may work. But usually, the annuity is not going to produce as much interest is what the market would over the long term, right. This is why I believe that the only reason the annuity should be used is for the income feature alone. And then on top of that, you’ve got, you know, with yields going up, you have fixed rate annuities now that are paying over 5% in interest, and you can get as long as five years, seven years, 10 years people go, Well, I can get 5% at the bank, and I don’t have to keep it in there for five years, I think you’re making a terrible mistake, because interest rates are probably going to come back down. So, if you’re in a bank account, that’s paying you four or 5% interest, when rates start to come down, you’re subjected to interest rate risk now, right. Whereas if you would have had it in an account that was given you a five and a half percent interest rate for seven years, or a 6% interest rate for 10 years, interest rates come back down, you’re still earning that 6%, or five and a half percent. And so, people think that having money at the bank and a liquid account at four or 5% is a good thing. And it may be for money that you need to be short term. But if that’s longer-term money, you’d be foolish not to get an account that allows you to have that guaranteed rate guaranteed to you and locked in for a longer period of time. Because when rates come back down, you’ve just protected yourself from interest rate risk. And these are the simple things that people are not thinking about. Right. So, folks, I want you to get a copy of this book. I really want to get this in your hands, go to onthemoneyoffer.com Get a copy of the book. While you’re there, you can schedule a comprehensive, complimentary right track review where we’ll help you literally untangle and create a comprehensive plan that’s clear and easy to understand and make your life a lot simpler in retirement, or just call 1-888-382-1298 My team standing by to get you scheduled to come in.


Rebecca Powers 27:41

And like you said many times before are promises you will never be pressured. You will never be sold anything. There is no cost. There is no obligation, and we want to get this book in your hands. Thanks for joining us again. Thank you, Brian, and we love you. We’ll see you next week.