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Video Transcript
Rebecca Powers 00:24
Welcome and thanks for joining us for this week’s edition of On the Money with Secure Money by Brian Quaranta and his awesome team at Secure Money Advisors and I’m Rebecca Powers, I was in news The old days from 1996 until 2015 raised my children, and now I get to be on the set each week with Brian. We’re talking about right tracking your retirement. Free book offer today and every week. And we’re especially excited, excited Brian, because congratulations. It’s our 150th show!
Brian Quaranta 00:57
Is it really? Wow? We’ve been really grinding these out.
Rebecca Powers 01:00
The crew just told me today. So, we have something very special-
Brian Quaranta 01:04
That’s outstanding.
Rebecca Powers 01:05
-at the end of the show, little surprise for Brian. So definitely stay tuned.
Brian Quaranta 01:09
The crystal ball.
Rebecca Powers 01:11
No, it’s even better, it’s even better. Again, Greg’s idea. All right, we’re going to start today with, you know, taxes. You think, oh, planning for retirement, I think I have enough money saved, but so often people don’t think about tax liability going forward like a little tiny pin leak in your tire that you’re just driving along. You don’t realize there’s a problem until a big flat on the side of the road.
Brian Quaranta 01:36
Yes, you better believe it. And a lot of people don’t realize when we talk about taxes, what we’re really talking about is the erosion of your purchasing power. Because if I have to take withdrawals, right? And that’s where the game starts, the minute you go into retirement, the tax game really starts, because the minute you start taking withdrawals from those retirement accounts, every withdrawal is taxable, and so if you’re expecting to, let’s say, take $1,000 a month out and you’re in a 20% tax bracket, you’re only netting $800 so just taxes alone is going to erode your purchasing power. Now add inflation into that equation, and you can see it getting even worse. And then what? Of course, what if tax rates go up? If you go to 30% your $1,000 withdrawal now is only what? $700 Right? Right? 800 so it’s a big problem. A lot of people focus on their rate of return, but they don’t focus on the fact that taxes are going to reduce that rate of return, and that’s why tax planning is so important. We talk about the five curious all the time on this show your income, your taxes, your investment strategy, your health care and your estate planning. So if you want to know what your tax lien looks like on your retirement accounts, and you want to see how much you really owe the IRS with all that money you’ve accumulated over the years, I want you go to RightTrackMyTaxBill.com and there you can put in your information, and it will calculate how much you could potentially owe to the IRS when it comes to your taxes. And I am telling you with these IRA accounts and these 401(k) accounts, Rebecca, it is a big deal. The IRS is a business partner with you in these accounts, and they are a pretty darn big, large shareholder of it, 30 to 40% of that account is going to go to taxes.
Rebecca Powers 03:46
And $37 trillion in national debt. We have historically the highest personal consumer debt, right with credit cards, etc. We’ve been in historically low tax rates, yes. So, when people say I’d go to my CPA, and I say, I want to pay the lease taxes each year. Isn’t it better to pay on the seed instead of the harvest when you’re 73?
Brian Quaranta 04:06
Absolutely, that’s right. So that’s a great way to look at it. So, every one of us has the option now, because most 401 k’s are typically going to offer you two options. Now, one is to do the traditional 401, K, which is when you put money in, you put $10,000 in. Let’s say you get a tax deduction, which means that $10,000 is going to come off your income. So, if you’re making, let’s say, $80,000 a year, and 10,000 goes into your 401, K, you’re only going to pay taxes on 70,000 however, if that $10,000 if we never put another dime in that account, that $10,000 grows to a million dollars. Okay, we’re using a very, I like that big. We’re exaggerating this example, every dollar of that million dollars becomes taxable. Now. Yeah, if you did it the other way, where you said, All right, I’m going to do the same thing, but I’m going to use the Roth 401(k), I’m going to put the $10,000 in, but I’m not going to get that tax deduction on the $10,000 but if that 10,000 grows to a million, all the growth and all the income is 100% tax free to you, and that’s what you’re talking about, the power of the plan forward. That’s right. Do you want to pay taxes on the seed or the harvest? And when it comes to tax planning, it’s not April 15, it’s all year. Every year has to be done over time. So, if you’re not having conversations with your advisor around taxes and how to get the IRS out of your life so that you maximize your future purchasing power and the amount of wealth that you will have in retirement, I want you to go to RightTrackMyTaxBill.com. Right now, scan the QR code on the screen. You can go there and you can find out exactly how much you are going to potentially owe the IRS. Also don’t forget, you can call 1-888-382-1298, and you can schedule a time to come into the office and sit down with the team. And as always, I promise that when you come into Secure Money Advisors, nobody from my team is going to sell you anything. They are not going to pressure to do anything. They’re there to help you solve these problems.
Rebecca Powers 06:39
And the name of the show is On the Money with Secure Money. And of course, that’s what it’s all about, specifically 55 and over, when you’re in that 10-year red zone before retirement, it is crucial to have a plan to protect what you have saved. All right, stay with us. More from Brian Quaranta about how the you can get on the right track to retirement. Stay with us.
Speaker 1 07:03
We know the market is going to get worse from here. This is the biggest monthly decline in 10 years. People’s 401(k)’s took a major hit.
Speaker 2 07:11
My investments are tanking. My retirement isn’t going as planned. Can’t believe I let my kid talk me into buying crypto. I mean, what is that anyway?
Speaker 1 07:20
This was the fourth worst contraction in history.
Speaker 3 07:25
So how are you two doing?
Brian Quaranta 07:27
Your financial future doesn’t have to be uncertain. I’m Brian Quaranta with Secure Money Advisors. If you have amassed a nest egg, it’s time for a financial advisor to help you reach your retirement goals. This is one of the greatest tax windows in history. Now is the time to take advantage of this tax discount while you can. We specialize in retirement planning, tax mitigation, estate planning and more. Plan your retirement right Call now for your complimentary portfolio review and tax analysis.
Rebecca Powers 07:57
And not only the complimentary portfolio review, also the book, and Brian will even mail that to you before you come into the office. That is how crucial and how much he wants you to have this vital information. Let’s continue our talk about taxes.
Brian Quaranta 08:11
And shows up in a golden envelope. I mean, my gosh.
Rebecca Powers 08:14
I love that. was that your idea or your wife?
Brian Quaranta 08:16
I can’t remember whose idea is, but you know what? I’ll take credit for it. It’s a darn good idea. It’s a darn good idea, so you won’t miss it when it shows up in your mailbox.
Rebecca Powers 08:25
The golden ticket to a happy retirement. That’s right. Okay, so we- in your book, you give a lot of great examples and personal stories, but you also talk about some myths and mistakes that people make sure one of the biggest myths I see in taxes among my friends, like, What do you mean tax planning forward? Never heard of this. They say, well, once I retire, I’ll surely be paying way less taxes, right?
Brian Quaranta 08:53
Yeah… of course, right… Hear me very clearly: no, No. There are not many people that we meet that are in a lower tax bracket. They’re either in the same tax bracket or they’re in a higher tax bracket. There’s a chain reaction that takes place when you hit retirement, because you got to think about this, you’ve got social security that’s taxable, okay, which is going to be a source of income for people, if they’re getting a pension, that’s going to be taxable. If they’re going to be taking withdrawals from their retirement accounts, that’s going to be taxable at your income tax level, okay? And Social Security is a very bizarre calculation, because depending on how much money you earn, whether you’re single or married, will depend on what percentage of your social security becomes taxable, and it can be up to 85% that becomes taxable! And that was something, by the way, that we were promised- Social Security is one of those things that we were promised that we would never be taxed on. Roosevelt was the president at the time, and he says, As long as I’m alive, you will never, ever pay taxes on your social security. And of course, the reason we do today is very simple. He died, and our debt soared, yeah, and our debt soared, you know. And then not only do you have these income sources that are all taxable, Social Security, pensions and retirement accounts, but then you’ve got those ugly RMDs to deal with, where you’ve got these forced distributions at 73 which become taxable, which creates another chain reaction, because now it spikes your income which means your income taxes go up, and then on top of it, your IRMA goes up, which is how much you pay for Medicare. So, this is why tax planning, folks, is so important. And again, if you’re not covering the five key areas of planning, your income, your taxes, your investments, your health care strategy and your estate planning strategy, folks, you do not have a retirement plan if you have a financial advisor, and every quarter or every month you get statements showing a diversified portfolio investments, that’s great, but you have an investment strategy, not a retirement. At Secure Money Advisors, we’re handling all of those five areas that I just shared with you, not only that, but you get a tangible, written plan that goes into a binder, which is your financial inventory binder, which every single one of us needs. And here’s why. You know, this is a true story. This is going back probably about seven or eight years ago. I come walking out of a meeting, and about five of my employees are gathered around the TV, and I can see that they’re very upset, they’re distraught; and the news, there’s breaking news, and there was a house explosion, and it was our client’s house, and the house explosion was so violent, it looked like a missile hit the house. It obliterated the house. And these were some of the most wonderful people ever. And we’ve all seen these explosions happen with these homes, whether it be a gas leak or whatever, but they had always told their kids, if anything ever happens to us, there is a binder, a black binder with Secure Money Advisors on it. You take that binder and you bring it to Brian and Secure Money Advisors, and they will handle everything for you. Well, that house was completely obliterated. I told my team, if the kids don’t call within the next couple of days, we will reach out to them. The next day, the daughter reached out, and she said, Brian, I was walking around the yard, and people were coming to the house because there was papers that were miles away from the house, and I’m walking through the front yard, and there is laying your binder, perfect condition.
Rebecca Powers 13:32
Are you gonna make me cry on the air?
Brian Quaranta 13:35
And in there was a letter from their mom that she wrote
Rebecca Powers 13:41
like a personal letter to your personal letter, not just about money, but about…
Brian Quaranta 13:45
It would be that, if you’re reading this, I’m not here. Oh, wow. And those kids came in and, you know, everything was taken care of for them, everything was there and organized. And that’s the peace of mind that you want, because we all will think about our death from time to time. But you know, the worst thing is having something happen and knowing that you don’t have everything organized. There’s so many people out there today that everything in filing cabinets, and they’ve got, you know, paperwork everywhere. You need a way to organize the plan. So again, folks come into the office and sit down with us. I truly believe what we’re doing at Secure Money Advisors is uniquely different. All you’ve got to do is call 888-382-1298, my team is standing by to take your call and schedule a time for you to come in.
Rebecca Powers 14:50
We will be right back.
Brian Quaranta 14:55
Most people worry they’ll run out of money in retirement. Are you one of them after decades of. Working, you deserve peace of mind knowing your money will last 2030, even 40 years, maybe you want to leave some for your family after you’re gone. I’m Brian Quaranta, president of Secure Money Advisors, after getting to know you and hearing your goals, we build you a customized principal protection plan based on your unique needs, focusing on five key areas of retirement. Secure Money Advisors helps you with things like income, investments, taxes, health care and legacy planning. We can right track your retirement. Let us show you how. Visit our website or call us to schedule a free meeting today.
Rebecca Powers 15:43
Welcome back today. We’re talking about taxes and tax planning. When you hear that, you think, Well, I have a CPA, you know, I did my taxes a few months ago, but tax preparing, preparations very important, but it’s a history lesson, right? It’s what did I do in the last 12 months? How can I pay the least taxes? Tell us what tax planning is. It’s quite the opposite.
Brian Quaranta 16:05
Yeah, it’s about- tax planning is looking ahead till the end of your life, yeah, and it’s something that takes place over time, right? In order to optimize your tax strategy, it can’t just be done like that. It has to be done little by little over time. Otherwise you really don’t get an optimized strategy, because if you try to do too much at once, you kick yourself into a higher tax bracket, and then the math just starts to not work out as good as if we do it a little bit over time, usually about a five year period is what we recommend that be done in, right? Yeah, but that planning window is closing, because if these tax cuts don’t stay right now, we’ve got Donald Trump in office right now, and it was a good chance that that may be there, but he’s not going to be in the office forever.
Rebecca Powers 16:59
Right. And you don’t know what that’s going to you don’t know 20 years.
Brian Quaranta 17:04
That’s right. So why wouldn’t you take the time to put together a tax strategy that optimizes the amount of money that you’ll have in the future, not only for yourself but for your children? I mean, let me just share with you what happens when you don’t do planning. There was an article in Money Magazine about a son that inherited his father’s 401 k plan. The article went on to talk about how his dad had left him a half a million 401(k). All right, the son got a phone call from the 401(k) company letting him know that he was the primary beneficiary of his dad’s account. He says, Well, what do I do? They said, Well, we’re going to send you out a packet. You need to fill it out and send it back to us. Well, he doesn’t know any better. He takes the advice of the company, fills everything out, sends it back in, and they send him a check for $500,000 so he goes to the bank, and he deposits it, yeah. Few weeks later, he gets a 1099 in the mail for $500,000. Well, a 1099 folks, that means that that’s countable income now, right? So, now what happens? The article goes on to say the son gets the 500,000, on top of it, he’s making $100,000 so now he’s got pay taxes on 600,000 in the top bracket, probably in the top bracket, and he owed over $250,000 in taxes. You’re talking about half of that retirement account wiped out in taxation alone. So, when I tell you that there is a tax lien on your retirement money. That is what I mean, and that you need to get rid of. And that’s why you should be going to RightTrackMyTaxBill.com. Right now. It’s right at the bottom of the screen there, and there’s a QR code. There is that story. There’s the one that’s what we want. We didn’t want the quiz. We have a quiz coming by that later, but RightTrackMyTaxBill.com and you can scan the QR code. It’ll take you right there. You can see how much you’re going to potentially owe to the IRS, and on top of that, it’ll give you an opportunity to schedule a time to come into the office, sit down with the team and see if we can optimize your tax situation. Now, some of you might not be able to do it, and if you’re not able to do it, we’ll be very upfront with you, and we’ll let you know that it’s just not possible to do it, because you might have missed that window. But if you haven’t had a conversation around taxes with your advisor, then you should be coming into our office to have that conversation, because an advisor should be talking to you about your income, your taxes, your investments, your health care and your estate planning. Again, 888-382-1298, the team standing by to take your call to get you scheduled to come in and go through a comprehensive planning strategy with us, you’ll get a lot out of it, folks.
Rebecca Powers 20:01
And you have a few minutes to go to RightTrackMyTaxBill. You put in all your numbers, the money you’re going to be making, you’ll see that ticking Tax Time Bomb number. It’ll be in red, and you’ll know exactly what your goal is to make sure you pay less taxes. All right, stay with us. We’re talking about how you can right track your retirement. Pay less taxes is a great start.
Speaker 4 20:23
You’ve got quite an extensive resume. Wow, so many years of management. Bet that was fun. So, this job requires basic knowledge of the social media and video platforms, content creation and SEO. How proficient are you in those areas?
Brian Quaranta 20:42
Going back to work after retiring is not ideal. I’m Brian Quaranta with Secure Money Advisors. If you have amassed a nest egg, it’s time for a financial advisor to help you reach your retirement goals. This is one of the greatest tax windows in history. Now is the time to take advantage of this tax discount while you can. We specialize in retirement planning, tax mitigation, estate planning and more. Plan your retirement right. Call now for your complimentary portfolio review and tax analysis.
Rebecca Powers 21:15
today, our 150th show, and we are focusing so hard on tax prep. That means tax planning forward, potentially saving for some people, hundreds of thousands of dollars the Trump tax bill. Sun setting at the end of this year, December 31. We are praying that it is extended, and we’re seeing a lot of good- feeling some good energy in that realm. Let’s hear a real-life example, because you’re such a great storyteller, when you’ve had someone come in didn’t have a tax plan, and then you showed them the strategy, and they saved potentially… How much have you seen people save?
Brian Quaranta 21:50
Well, like most people, you know, you’ll usually hear that, you know, when they come in, they’ll say, Well, I understand we’re going to be in a lower tax bracket. And, you know, I’m the type of person that says, Look, don’t take my word for it. Yeah, you know, let me show you the proof. So, we have a very powerful tax software that we use where we can put their information in, and it will show us exactly what they’re going to be paying. And then we can optimize it by moving a few levers, pressing a few buttons, saying, if we did this, this and this, this is what the savings could be. Now, these folks had about 1.1 million in their IRAs and no tax strategy whatsoever. And you know, if you take after Social Security, after RMDs, you know, they were jumping into a big tax bracket that they weren’t aware of, they weren’t aware of, higher than what they were even when they were working. Oh, gosh, um, so what we did was we layered in a number of Roth conversions with a sequencing of withdrawals that was able to save them over $200,000 in taxes that they normally would have paid without any tax planning. Now, wow, you tell me, which would you say to you? You can have this plan and you’re gonna owe $200,000+ or you could have this plan and you’re going to owe $200,000 less. Do you want Plan A or plan B? Which larger pick? Right? Yes, it really. For a lot of folks, when it comes to tax planning, it really becomes a no brainer. You know, other things that we’ll see is, in these folks’ cases, they also had non-retirement dollars. Okay? Well, non-retirement dollars are going to have those investments are going to pay interest, and they’re going to typically have some type of dividends, right? So, what a lot of people do is they’ll reinvest the dividends, they’ll reinvest the interest. And what they’re doing when they do that is they’re just compounding that tax bill on that money at a later date, because with non-retirement dollars, we have capital gains tax to deal. Gotcha. So, you can build a strategy where we flatten out the tax rate by redirecting the dividends and the interest into a tax free account under Section 709, and a lot of people have never even heard of that.
Rebecca Powers 24:30
The billionaires certainly know it.
Brian Quaranta 24:33
Of course they do.
Rebecca Powers 24:33
And look, they’re playing by the rules. They’re not going to be more taxes than the law requires, and we shouldn’t either.
Brian Quaranta 24:38
That’s right, that’s right. And, you know, look, you can either play the game legally by the rules, by the rules, or you can do what the IRS hopes you do and kick the can down there. Understand the rules. And people aren’t seeking out this advice. And, you know, again. There’s not a lot of financial advisors out there that are focused on the five key areas that we focus on your income strategy, because you’ve got to replace that paycheck when you stop working. And the question you have to ask yourself is, how are you going to do that? If you’re one of those folks that Social Security is going to be enough good for you. If you’re one of those folks that’s going to get a social security check and a pension check, and that’s going to be enough good for you, but you’re, you’re a very small group of people. For the rest, you’re going to have to take withdrawals from your retirement accounts, and that’s when the tax planning really starts right? And this is why, again, we have the investment strategy that needs to change. You’ve got to mix in the healthcare strategy, because what happens if one of you gets sick and you need care, whether it be at home or you’re going to be taken care of at home? Look, my mother-in-law is a registered nurse. When my father-in-law got diagnosed with brain cancer, she took care of him, but she had the skill set to do it, but we still had to pay for people to come to the home because she needed a break. Absolutely, it’s a lot on a caretaker, really is I watched this happen with my mom taking care of my yeah-
Rebecca Powers 26:24
-Dad same exact story. My dad died of cancer, and she even got hospitalized by the end because it was so much stress. And…
Brian Quaranta 26:30
Yes, yes, hard folks, look, go to RightTrackMyTaxBill.com. Right now, get a copy of the tax calculator. It’ll show you how much you potentially might owe the IRS. It’ll be so valuable for you to see that. And of course, call 888-382-1298, the team standing by to take your call and get you scheduled to come into the office. Right?
Rebecca Powers 26:56
That’s right you want to leave more money to your beneficiaries instead of Uncle Sam, that’s right. All right, congratulations again to Brian Quaranta. This is our 150th show! Haha! Money is raining down!
Brian Quaranta 27:11
There’s hundred dollar bills everywhere!
Rebecca Powers 27:12
I know! Isn’t it so (indistinct)
Brian Quaranta 27:15
Can we get a close up on that possible? I mean, you know, would talk about money raining down from the heavens, you know, look at this. I mean, it is absolutely a little Benjamin. That is great. Now I just need to collect all this so I can put it in my kid’s little piggy bank.
Rebecca Powers 27:35
Oh, they would love that. Speaking of piggy banks, we have so many (indistinct). Join us next week. In the meantime
Brian Quaranta 27:41
That’s right, and for the 150th show, that was easy!
Rebecca Powers 27:47
Thanks for being with us, we love you Pittsburgh. We’ll see you next week.
