On the Money with Secure Money: Episode 132

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Video Transcript

Rebecca Powers 00:24

Welcome, and thanks so much for joining us for this week’s edition of on the money with secure money. This is all about you and your retirement. Of course, I’m Rebecca Powers here with Brian Quaranta, the man who pays the bills, who really created this show, you spent a whole lot of time money and effort to do radio, television, and send this book that you wrote out absolutely free even paying the shipping and handling. Let’s just talk about your heart of a teacher and why you are so fired up about giving the truth to every one of how to retire right.


Brian Quaranta 00:56

Yeah. Well, first off, I think the great thing about the world we live in today is that we have access to information, right. I think the bad thing about the world we live in is we have access to information. Because not all information is created equal.


Rebecca Powers 01:11

You know, what are their ulterior motives? I mean, everyone has certain motives.


Brian Quaranta 01:14

Yeah, I think I think when you read about anything, whether you read about your health, maybe you’re trying to get healthier, maybe you’re trying to eat better, what direction do you go? Do you go a Mediterranean diet? Do you go to a keto diet? You know, do you know there’s all kinds of opinions on how to do weight loss, how to do exercise.


Rebecca Powers 01:35

But when you start Googling those things you get bombarded with advertisements. So, that’s kind of my point of how do you know what to trust?


Brian Quaranta 01:42

Yeah, well, everybody essentially has an agenda, because everybody has a philosophy that they want to share. And secure money advisors is no different. I mean, we have a philosophy. And that philosophy is not right for everybody. A lot of people, and we’ve helped a lot of people over the years, believe in the philosophy of protecting 30-40 years’ worth of work, rather than continuing to roll the dice with it. So, when we have access to information and people are going on and trying to research retirement planning, they’re actually just becoming more confused. And a confused mind does nothing if a confused mind procrastinates. And that may be why you’re procrastinating, maybe you’ve attended a lot of educational seminars, from financial advisors. I mean, we do many educational events every single year. You know, 15-20 years ago, when I started doing educational events at local restaurants and universities, I was probably the only person out there doing those events, there was nobody else out there. I bet you now you could go out to eat every night of the week on a financial advisor, you know, if you want to.


Rebecca Powers 02:50

The postcards are so annoying. I literally just throw them in the trash. It’s so many.


Brian Quaranta 02:55

You get so many. And so, you sit through this person’s presentation, and then you sit through the next person’s presentation. And this person is saying, to do it this way, this person is saying to do it that way. Well, who’s telling you the truth? they’re probably both telling you the truth. They’re just telling you a different way to do it. And this is why I always say, Rebecca, the best thing you can do as a consumer is get together with a fiduciary firm that shares in the same money beliefs that you have. There’s so many people that have come in and said, Brian, the reason why we’re coming in and talking to you is because we don’t want to risk 100% of our money anymore. We don’t want to continue to hear the cookie cutter phrases. Don’t worry about it hang in there, you’re in it for the long haul. It’s just a paper loss. We’re tired of that game. We want something more secure. And that’s what we’re helping people build it secure money advisors.


Rebecca Powers 03:47

So, we get so many emails and questions and I know you get stopped in the grocery store. Now you’re at Giant Eagle and you’re like standing there for an hour talking to people and his wife.


Brian Quaranta 03:55

It’s not that bad.


Rebecca Powers 03:58

But, we’re gonna talk about how things have changed. Just a show, right? You know, before 1978 We all knew we had a retirement, we had a pension, we gotta go watch, we got our cake. We said goodbye. That’s exactly what we’re gonna make. There’s also world events, we’ve got several wars going on inflation and things aren’t so great in Washington. Let’s talk about how they’ve changed. Is it even more important to secure the money that you can afford to secure?


Brian Quaranta 04:25

Well, first off, we’re always going to have major world events going on, major economic events going on, that’s never gonna go away. So, if you’re getting ready to retire, and you plan on living, you know, a great retirement for the next 30 years, you’re gonna see a lot over the next 30 years. But what’s changed is if you look at retirement 40 years ago, 50 years ago, it was really simple. He retired. You got a Social Security check. You got a pension, that those two sources of income, Social Security and pension that was enough money for people to live off of and maintain their lifestyle in retirement. If you Save some additional money 40 years ago, you didn’t even have to take risk with that money. Because you could go down to the bank, and you could get a CD paying 10% 15%. And on your way out, the bank probably even gave you a toaster or Tupperware on the way out. But it was that easy. So, imagine having your Social Security, your pension, and then you have maybe $100,000 sitting in a CD, that’s paying 10% a year, and you’re getting $10,000, a year of $100,000, without ever touching the principal, very simple. Look, my grandparents did this, my grandfather, you know, paid for their lifestyle in retirement with bank CD’s. Never did he have to roll the dice and gamble with all of his hard years of work. Never did he have to. But today, it’s different. Because people are still getting Social Security. Most people are no longer entitled to a pension. Matter of fact, we’ve got about 85 to 90% of the American public today, not retirement a pension. It’s a big problem. And the grand experiment, and nobody knows how this is going to work out is we’ve replaced something that used to be guaranteed the pension with something that’s not guaranteed, it’s uncertain. It’s called the 401k. And it really is any retirement plan, right? 401 K’s four, three B’s 457 plan, whatever type of work, you do TSP, if you’re a federal worker, these are all forms of retirement accounts. But every dollar you put into those, usually you only have risk options available. So that means that those accounts are going to fluctuate, so you have no idea the amount of money you’re putting in every single year, you have no idea with absolute certainty what that amount of money is going to be, you know?


Rebecca Powers 06:39

And back by popular demand. We always say nobody has a crystal ball. Nobody has a crystal ball better. How do you know what stocks to buy? How do you know Brian? You’re like, I don’t know. But guess what? Wall Street doesn’t know either? No, hang in there. Nobody has a crystal ball. But hang in there? Well,


Brian Quaranta 06:58

this is the thing that frustrates me the most right. And this is because I always talk about the crystal ball. And I always say the thing that frustrates me the most about Wall Street advisors and most advisors, right? Is when the client says what do you think I’ll earn? They’ll say, Oh, well, we don’t know, we don’t have a crystal ball. But when you lose money, Rebecca, you know what they tell you? Don’t worry about it hang in there, you’re in it for the long haul. Everything is going to be okay, that sounds like they have a crystal ball to me. Right? I mean, they’re telling you the future there. But yet at the same time, there’s also fine print on everything that they give you that says past performance doesn’t guarantee future performance. But they’re telling you everything’s gonna be okay. They’re not talking to you about facts. They’re talking to about managing your emotions. They’re trying to control your emotions during downtimes, which is fine if you have the time to wait for your accounts to recover. But most people are retiring and losing money at the wrong time. And it’s not whether or not the market will recover. We know it will. The crystal ball says it will. Over the long term. It says it will. But the real question is if you lose a lot of money, is it going to recover in the time period you needed to recover. And, you know, I’ve met many, many people over the years that are going in their 20th year of retirement 25th year retirement, and they’re coming in because they see what’s coming. They see that in the next five years, they’re going to be running out of money. And let me tell you, folks, the worst day of retirement is not the day you run out of money. It’s the day you figure out it’s going to happen. And there’s nothing you can do to stop it. Imagine figuring out at 75 that you’re going to be running out of money in the next five years. So now you’re going to be at what are you going to do? You’re gonna go back to work, it’s tragic, it really is. And this comes from the fact that we’re relying on plans that are uncertain, we are-


Rebecca Powers 09:01

Or no plans that’s for no plans at all. 10 people we’ve met that come into your office do not have a written plan. And they’ve been in the big box for 30 years, sometimes.


Brian Quaranta 09:08

The thing that drives me crazy, and I know we gotta go to break here in a little bit. But you know, the thing that will drive me crazy more than anything is people will come in with, with what looks like a written plan from a firm, right? And they’ll show me they’ll say, well, the person said I could take this much out every year. And this is how much I’ll have in the next 30 years. And it’s like they’re taken, let’s say they start with a million dollars, and they have them taken out $50,000-60,000 a year. And they’re showing them having $5 million by the by 30 years. And what we don’t understand is that they’re giving you an average rate of return over that period of time. Well, that’s not how the stock market works, right? It goes up and it goes down. You don’t you don’t get this perfect 7% Every single year, but those calculators, those software’s are projecting your future balance that way, and it’s not a realistic way to predict it. Right. So, what happens is people are relying on this plan to work. And I will tell you that most people will tell me that they’ve never achieved the number that the advisor showed them that they were going to achieve. So, folks, look, the most important thing that you can have is a written plan, it is absolutely critical. And that written plan needs to cover five key areas of your retirement, it needs to cover your income, your taxes, your investment strategy, your healthcare strategy, and your estate planning strategy. That is what makes a great retirement plan. A 401k, an IRA, an investment statement. That is not a plan. That’s an investment statement. I want you to get all the facts. And I want you to understand what having a retirement plan really looks like I want you to onthemoneyoffer.com Get a copy of the book there. While you’re there, you can schedule your comprehensive, complimentary right track review, where we’ll bring you through a very simple process to help give you the clarity and peace of mind. You need going into retirement, don’t procrastinate on this Don’t kick the can down the road time goes quick, we know that right handle this stuff right now while it’s on your mind. It’s simple to do onthemoneyoffer.com, you can schedule right there, you can scan the QR code, or just call 1-888-382-1298 The team is standing by to take your call and get you scheduled.


Rebecca Powers 11:15

And as soon as you call, we’ll put this in the mail even pay for the shipping and handling. And that comprehensive review to see if you’re on the right track is also absolutely complimentary could be the most important eye-opening meeting of your life. It certainly was for my husband and me. All right, we’ll be right back more with Brian Quaranta, and how we can secure your money for retirement.


Brian Quaranta 11:34

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 11:49

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 your late 70s.


Brian Quaranta 11:57

The average person might say, well, a good portfolio would be a good mix of stocks, bonds, 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 12:11

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


Brian Quaranta 12:16

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 12:27

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


Brian Quaranta 12:32

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 13:03

Welcome back. Alright, we spoke about how things have dramatically changed. And so we know we need our own private pension or personal pension. Let’s talk now I love this in chapter two. And he’ll send you this book for free really, He’ll pay for the shipping and everything. Think like a pensioner. Not a gambler. Will you have enough to stay retired?


Brian Quaranta 13:24

Yeah, yeah, that’s a big question, right?


Rebecca Powers 13:27

Unbundle that chapter.


Brian Quaranta 13:29

Yeah. So, well, first off, I write about Babe Ruth in this chapter. Right? So those of you that are baseball fans, you probably know this story. But for those of you that don’t, in 1929, Major League Baseball saw a drop in attendance by 40%. player salaries dropped by 25%. And so Major League Baseball was not producing much. And in 1935, Babe Ruth retired, and when he retired, he retired with money. And at the time that he retired with that money, his agent at the time, had convinced him to go out and buy an annuity. Matter of fact, he bought multiple annuities. And that annuity paid him income for the rest of his life. And if you were to, to convert what he was getting paid, compared to today’s dollars, babe, Ruth had an income of over $200,000 A year from his annuities that allowed him to, to enjoy the rest of his retirement. Now, obviously, he wasn’t getting 200,000. But if I convert it to today’s dollars, right, that’s what that’s what he wouldn’t be equivalent to getting. And it was like a manager or someone who was his agent. Yeah, his agent, given the advice gave him the vise to go do that. And he went and did that. And a lot of baseball players ran out of money. A lot of them couldn’t maintain their lifestyle. And he did not because I mean, he was able to maintain his lifestyle because of that annuity. And I do I believe in the income annuity I have for the last 25 years, you know, 25 years certainly have them I personally only have one you personally have one. Yeah, you know, once people truly understand the pros and cons of these annuities. There is no perfect investment out there. Let’s just get that out of the way right now. But when you look at the pros and cons, and you see what the investment actually does for you, and the problem that it solves, it’s very hard to argue against doing it any other way. Let me give you an example. So, I had some folks that came in. And they told me that they needed roughly about $50,000 a year in income, okay. So, if they need $50,000 A year in income, what you have to do is you got to figure out okay, well, how much money do they need to have saved in order for them to be able to potentially withdraw this. So, one of the ways that you can calculate this, folks, is by using the 4% withdrawal rule. So, if you would take the amount of income, you’re going to need to calculate it, whether it’s 20,000 a year, 40,000 a year, 50,000 a year, 70,000 a year, here’s how you calculate how much money you need to have saved in order for you to be able to withdraw that money. So, in their case, they needed 50,000. So, we take 50,000, we divide it by 4%, that comes out to about 1.2 5 million, okay, that’s how much money they need. Now, if they follow this thing called the 4% rule, essentially, what they’re gonna do is they’re gonna start pulling money out of their stock market accounts. Alright. And when they do that, that account balance may be going up, it may be going down, we don’t know, because we don’t know the rate of return that that account is going to get. But we can certainly follow this 4% rule because they have enough money to be able to do it. In this case, these clients that I was working with had about 1.3 million. So, if they wanted to follow the 4% rule, they could. The problem is I couldn’t tell them with confidence, whether they were going to have money, where they were going to run out of money. Okay, so I said, look, the other way we can do it is rather than using all of your money to try to create 100% of your income, why don’t we just take 500,000 of the 1.3, we put that into an income annuity. When we turn that income annuity on when you need income, it’s going to generate over $51,000 a year. That’s it about 11% yield on that money that’s guaranteed for his life, if he dies, guaranteed for his wife’s life. If she dies, any balance is paid out to the beneficiaries.


Rebecca Powers 17:07

And avoids probate. And a big thing you’ve pointed out in the past, Brian, is that it is a contract with a major insurance company. There’s nothing stronger than an insurance company. And there’s nothing stronger than a contract.


Brian Quaranta 17:19

As long as you’re working with a big strong insurance company,


Rebecca Powers 17:24

Well, you only use the A+ rated-


Brian Quaranta 17:26

Well, and we so I’m glad you brought that up, because there’s crediting agencies out there to tell us the strength of these companies. Yeah. And we want to use big strong companies in order to do that. So, we want to look for A-rated carriers. And that matters, right? We’re gonna, you’re no different than choosing a bank. If I’m going to choose a bank, I want to choose a good solid, strong bank. So, what we did was we put $500,000 into the income annuity, they’re getting over $51,000 a year. Again, that’s an 11% yield. here’s the here’s the key to this though. If that balance goes to zero, they’re still going to get their income. This is ensuring your retirement income. You’ll hear me say it all the time. We insure everything in our lives, folks, we insure our cars, we insure our homes, we insure our health, why would you not insure the most important thing you’re going to need and that is your retirement income. I can’t say it enough. I can’t say it loud enough. It’s very hard to argue with when you were young, and you had a family. What did you buy to protect your family? If you bought life insurance? When you retire, and you’re going to need monthly income. You buy income insurance,


Rebecca Powers 18:34

No one’s ever taught us that. Like, no one has ever said it. Why doesn’t Wall Street want us to know that?


Brian Quaranta 18:38

The big box firms don’t like annuities because annuities, you can’t charge an annual fee on. Okay, insurance company pays the person they pay rent agent one time the agent never gets paid again, for that. It’s the worst thing you can do as a financial firm owner, because you basically stop getting the fees that you could have normally gotten on that money. But that’s why you’re a fiduciary because it’s better for the client. Well, let’s take that one step further. So, I am a fiduciary. So, think about it like this. If I’m a fiduciary, why in the world would I be using an annuity? If I by law have to do what’s in your best interest? Yeah, and I’m held to this high standard. Why would I choose to use an annuity and you’ve done it for yourself? Like you said, yes, so I use it because for most people, it can be the right thing. Okay, for most people can be the right thing. Not everybody should run out and do this, right. But you should figure out whether or not it makes sense for you to do, and this is why I want you to go to onthemoneyoffer.com Get a copy of my book where I write about all of this stuff in here to give you the facts, straightforward information. It’s a short read. I make it simple because I want you to have the information to understand how to build the framework for your retirement onthemoneyoffer.com Get a copy of the book schedule they comprehensive complete right track review there, come in see the team where we can bring you through the process to help give you some clarity and certainty around what You’re doing or just scan the QR code or call 1-888-382-1298. The team standing by to take your call right now.


Rebecca Powers 20:06

And we’re going to take a one-minute break, please call during the break. So, when we come back, you can pay attention, we’re going to talk about sequence risk. Another very powerful thing that we’re not taught in school stay with us.


Announcer 20:24

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 21:15

Welcome back, we’re talking about your retirement. Do you have an in-writing plan? Do you make all the mistakes on paper to kind of see what the next 2030 years of your retirement would look like? We were talking about how things have changed dramatically. So, we all need to understand how the world works. We’ve also talked about your book, Think like a pension or not a gambler? That’s chapter two. What’s the importance of sequence risk? And what does it even mean?


Brian Quaranta 21:39

Yeah, so sequence risk is the so if you’re if you’re investing in the stock market, and you’re trying to generate income from your stock market accounts, okay? You are relying on the return to help you maintain principal, okay, the problem is, you don’t know what the return is going to be. You don’t know if it’s gonna be positive, you don’t know if it’s going to be negative.


Rebecca Powers 22:00

Because no one has a crystal ball.


Brian Quaranta 22:03

Which is sitting low now, where the crystal ball is, we will get the crystal ball to come up again here. But yes, we don’t have a crystal ball. And so, we don’t know. And the problem is, is that people get themselves into a situation to where they don’t understand any other way, because they’ve been told one way to generate the income. And now we really don’t know what that portfolio is going to look like in the future, you can only make hypothetical projections of what it might potentially look like.


Rebecca Powers 22:34

And so that’s pretty much what we’ve always been given.


Brian Quaranta 22:39

Yeah, it’s the same old same old, yes, yeah. It’s like, you know, yeah, what Einstein said, you know, doing the same thing over and over again, expecting a different result is the definition of insanity. Yeah. So, like, what are you going to start to change? I mean, you know, and look, the problem is this, because sequence risk affects everybody differently. Yeah. Okay. I mean, you can have so in my book, I write about, Bill and I write about Joe. Okay, Bill retires in 1997. Joe retires in 1999. And just because of those two different time periods, Bill did okay, does fine. And matter of fact, he has a 25-year retirement takes out a bunch of money, and still has well over $2 million in his portfolio, where

Joe runs out of money in 20 years, they were invested identically the same. The only difference is the three-year time period. So, sequence risk does not impact everybody the same. Sequence risk is going to be your own situation based on the timeframe in which you retire. So, your success of your retirement is going to determine on what the stock market is doing when you retire. I’m sorry, Rebecca, I do not want to build a plan where I don’t know what the future holds.


Rebecca Powers 23:56

It gives you a mental health issues, honestly, because you will, right. Sure, you feel helpless. Like literally that’s why I switch the annuity and you know about that story, all of my 401k but my husband still working and accumulating, but that is literally why I did it because I would get so anxious and angry. Yeah. Watching national news. Yes. Because you feel helpless.


Brian Quaranta 24:14

You feel helpless. Yeah. And a lot of people say I don’t even look at my statements, right. Folks, Listen, the only time I’m gonna allow you not to look at your statements is if you’re in your 20s 30s or even early 40s. But, you know, if you’re in your 50s, your late 50s 60s 70s You need to look at your statements. Okay. So however, if you want to have money in the stock market, I don’t have a problem with it, I believe in the stock market, I want to make that very clear. But most people are risking money they cannot afford to lose in the stock market. So, if you want to risk money, there should only be a certain portion you can risk, and it should only be set aside for long term money. Long term means 10 years or longer. Okay? Because if you look at any time period in history, usually over a 10-year period, the market is going to potentially be up over that 10-year period normal cycle that should be the normal cycle, not saying that there might be cycles that are out of line with that. But on average, on average, but at the end of the day, what we have to understand is that anything that is in the market needs to be long term money, and you cannot be taking that money out. That’s what I want you to understand. The worst place to take money from on a monthly basis if you’re going to need monthly income is a stock market account. Because every month you take that money out, you have no idea the day that that money, that account gets sold, what the markets going to be doing. If it’s down, then you just compounded the losses. Yeah. Okay.


Rebecca Powers 25:39

So important to understand. It’s critical. All right. Well, we have two minutes to go. I’m gonna give you the final say today. What do you think is the biggest misnomer things that people come into you? Well, I know. I want to say this. The reason he named the book right track retirement is because most people who came in said, Am I on the right track?


Brian Quaranta 25:57

Yeah, yeah. I it was it was the number one question we get all the time. Do you think we’re doing the right thing? So, we own the right investments? Are we making sure? Is there anything that we’re missing in retirement? And the answer that I had to give people a lot of times is yes, you’re missing a lot, because the biggest area that people would focus on is their investments. Well, that’s only one part of a five-step plan in retirement. And it includes your income, your tax strategy, your investment strategy, your healthcare strategy, and your estate planning strategy, you have to have all five of those areas connected. Because the one thing that is most important for all of us to understand is that if you have a plan that’s invested directly in the stock market, you have to understand myself or any other advisor does not have a crystal ball. Okay, no one has a crystal ball, we don’t have crystal balls. So, the only way that you can beat the game is to have a long-term strategy. But if you’re like most of our clients, you need money right now, you need to start taking money now. So, if you can’t invest that money for the long term, you need a different strategy. And the different strategy is what I talk about in this book, its income allocation, not asset allocation, it’s allocating your income properly, so that you can have different phases of your retirement. So that money you do have in the market does have a long-term time horizon, it will make a difference onthemoneyoffer.com Go there and get a copy of the book or call the 800 number 888-382-1298. The team is standing by to get you scheduled for your complimentary right track review. We’ll see you at the office.


Rebecca Powers 27:35

And we want to say thank you to our amazing crew here in the studio. Our production crew are the best want to say thanks to Greg because we said crystal ball so much. He went out and bought this crystal ball and surprises within a few weeks ago. We know you loved it because we got a lot of comments. Keep those calls coming in. Keep those emails we love you so much. And thank you for joining us. We’ll see you next time.