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Video Transcript
Rebecca Powers 00:21
Welcome, and thanks so much for joining us for this week’s edition of On the Money with Secure Money brought to you by Brian Quaranta and his team at Secure Money Advisors. I’m Rebecca Powers now a consumer advocate, but I retired from news in 2015, but I’ve been a reporter, a producer, an investigative reporter, and, of course, a news anchor, and it is always a thrill. I’ve learned so much from you doing these shows. Thank you for having me, Brian.
Brian Quaranta 00:49
Yeah, thank you. I gotta ask, when you investigated me, what did you find?
Rebecca Powers 00:52
You’re an okay guy. Your wife said, ehhh, not so sure… No, I’m kidding. You are an awesome guy. I love your whole family. Your sister Michelle is now part of our team, and we’ve had a great time with her, too.
Brian Quaranta 01:04
We’ve got a really good team. We got a really good team. I feel very blessed.
Rebecca Powers 01:07
Your book is so great because you keep it very, very simple, right? You’ve heard of the KISS theory. Keep It Simple, Stupid. Well, he says Keep It Super Simple. That’s right. Started in a big box, you know the double talk, the confusion we all had no financial education. So, today’s show, we’re going to call it the five pillars of a plan, a rock-solid plan in your hand.
Brian Quaranta 01:31
That’s right. And those five pillars we talk about all the time, it’s income, it’s taxes, investments, health care and estate planning; and Rebecca, the thing that I try to stress the most is that, if you have investments, and you get those investment statements, that’s not a retirement plan.
Rebecca Powers 01:55
It’s a piece
Brian Quaranta 01:55
It’s part of one,
Rebecca Powers 01:57
Right. It’s a good piece. That’s your asset.
Brian Quaranta 01:58
Yes, but you know, where’s your legal documents, where’s your power of attorney, where’s your financial power of attorney, where’s your health care directive, where’s your long-term care plan, right? Where’s your where’s your health care, your Medicare strategy. What’s your investment mix look like? What’s your tax strategy to optimize? And how in the world are you going to replace your paycheck when you retire?
Rebecca Powers 02:21
Income, you’ve always said it’s the foundation of your home. If you’re building your dream house, you start with a good foundation. First you start with an architect and blueprint. So, there’s a plan right there. The foundation is income. How do you help us figure out what income we need and what that gap is, and then how do you help us fill it?
Brian Quaranta 02:39
Well, think about how an architect works, right? Okay, you’re gonna sit down with an architect to build out a studio or a house. The architect starts by asking a lot of questions, yeah, and getting a feel for who you are as a person, what you want to do. You know, everybody’s different, because some people want to travel. Some people just want to stay home. Some people want to be charitable. Some people have no, you know, desire to be charitable. You know people, some people going into retirement are single, some are married.
Rebecca Powers 03:14
Some people want to leave a lot to their children. Some people say, I want to spend every last darn penny.
Brian Quaranta 03:19
I want to spend every last penny. By the way, there’s a great book out there called Die With Zero.
Rebecca Powers 03:24
Oh, really?
Brian Quaranta 03:25
Yes, and it’s all about it’s all about not leaving your children money. It’s about
Rebecca Powers 03:29
Truly enjoying your retirement.
Brian Quaranta 03:25
Truly enjoying, yeah, truly enjoying. One of my favorite strategies, though, that we talk about our clients with, and it can’t be done with everybody, because not everybody qualifies. But it’s what we call spend it twice, and it’s a signature strategy that basically involves the use of you being able to spend down 100% of your money and still leave your kids all the money that you spent down. So basically, this simplistic explanation of this is that we would take the money that you’ve accumulated, we’d build a strategy for cash flow with it. Okay. Now keep in mind, the majority of money people have saved is going to be a mix of money that they might have saved at the bank, you know, money that might be in brokerage accounts or non-retirement accounts, and then, of course, retirement accounts themselves, okay? All taxed differently, right? All inherited differently by your kids, and it can be quite messy. If you want to make it really simple, you use all that money. So we build a distribution plan that creates enough cash flow to actually buy a $1 million so I was saying, let’s say you have $1 million okay, you want to spend all 1 million down over your lifetime, enjoy the heck out of retirement, but you are it’s really important for you to leave a lot of money to your kids. Well, the best money to leave to your kids is tax free money. Course, right? Because if a child gets a million dollars and they wind up owing 40% in taxes on it, it’s only a $600,000 inheritance. So what we do is we build enough of a distribution plan and enough cash flow that we can actually go out and buy life insurance that pays a million dollar death benefit at death now here’s the beauty in that life insurance is the only tool that is tax free, federal and state tax free, and it can be a state tax free, also if it goes into what we call an eyelet, which is an irrevocable life insurance trust. But again, think about the strategies that Rebecca and I talk about. Think about the uniqueness of these and think about having access to these strategies and being able to see if some of these things work for you. How much of a difference could that make in your life? How much more simple could that make your plan and all you’ve got to do is call 888-382-1298 and schedule a time with the team to come in and sit down and have a 45-minute conversation. Nobody’s going to judge you, nobody’s going to press you to do anything. Nobody’s going to try to sell you anything. You’re going to share with us what you’re trying to accomplish. We look at what you’re doing, and then we share with you whether or not there’s areas to improve, and even when we share that with you, it doesn’t mean you need to move forward with it. You know, there’s many times folks come in, we share ideas with them, and I’ve talked about this before, but Relationships are hard to break off, right? So, if you’ve been working with somebody for a long time, a lot of people don’t like breaking out with people. I was terrible breaking up with my girlfriends. I never wanted to hurt anybody’s feelings. And that’s how people get about professionals they work with. But we got to remember, folks, this is your money. This is your retirement, and if you’re not optimizing it, or you’re in a position where you could run out of money. I could promise you; I don’t care how friendly you are with your advisor, they’re not paying your electric bill and they’re not going to pay your mortgage. So, we you it’s always good, even if you have a great relationship, to get a second opinion.
Rebecca Powers 07:17
Absolutely, and I love that. And if you’re on the right track, they’re happy to tell you that as well. And not everyone is the right fit, but you’ll definitely learn something. All right, stay with us. We’re talking about how you can be on the right track for retirement. Make sure you go to OnTheMoneyOffer.com ask for one of these free books from Brian, and we’ll be right back.
Brian Quaranta 07:35
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 08:24
All right, talking about ways to build a rock-solid retirement plan. Of course, things might change. Maybe you want to move, maybe you have a grandchild. So, a lot of things, but it all starts with a relationship. So, let’s continue. Brian, what does it take to build a rock-solid retirement plan?
Brian Quaranta 08:39
Yeah, well, first off, it’s not about picking the best stocks or chasing rates of returns. It really starts with replacing your paycheck first. But you also need to know what rate of return you need for your plan to be successful. So, in my book, I write about the three most important interest rates that you need to know about, okay, and those three most important interest rates that you need to know about is your spend down rate, your preservation rate and your legacy rate. And when you start to understand what those interest rates are, you are now going to understand what you’re shooting for, as far as returns. How many people out there just buy investments with- hoping to achieve some type of rate of return but not knowing what determines whether you had a good year or bad year? So, if your advisor got you an 8% rate of return, is that good or is it bad? If your advisor got you a 3% rate of return, is that good or bad? Now some of you might be thinking, Well, both of those are bad. Some of you might be thinking, Well, that seems to be a reasonable return for me, but it’s not. Yes, because your returns are different than the next person’s. Let me explain. So, we have to first figure out what is the minimum rate of return that you need to replace your paycheck, to protect yourself from a health event, to take care of your estate, to take care of the cost of living potentially going up, and all the other life events that can happen. And the way we look at that is we build in scenarios, and we look at, what if all of these things happened and we only got a 3% rate of return? How long would that money last? Let’s say it lasted till age 100. Well, if we built in all of those life events, and we withdrew large sums of money when those life events happened, and we had a rate of return of 3% in there, and that money still lasted.
Rebecca Powers 10:54
So, you’re 100.
Brian Quaranta 10:55
So, you’re 100.
Rebecca Powers 10:55
That feels good.
Brian Quaranta 10:56
That Feels good, right? Now, let me just say this. Let’s- that- Let’s just say that money’s spent down all the way to zero by 100 Okay. The next one would be, what happens if all those life events happened and you were able to take out all those withdrawals and still preserve the principle, okay? And then the other one would be, what if all those life events happened and you were able to withdraw all the money, but your money still grew. So again, you got the spend down rate, the preservation rate and the legacy rate. Why is that important? Because let’s say your legacy rate. Let’s say we build in all of these scenarios that could happen. We have to increase your income. You all of a sudden have a health event. You got to spend a couple hundred thousand on a health event. You got to take care of a parent. Cost of living goes up. You got to buy more insurance, whatever it may be, right you want to move and buy a new home. And let’s just say that that all with all of that baked in, let’s say that you were getting a rate of return of four or 5% and with all of that baked in, you still grew your money at four to 5% that’s a win. That’s a good plan. And that means that in order for you to know if you’re winning each year, that means all you have to do is get four to 5% every single year, right? If it all it took was a 3% rate of return to preserve your principle with all those withdrawals, then we know that at 3% all this can happen, and you’re still at least going to preserve 100% your principal. Now you have a range of where your rate of returns need to come in. So, when you meet your advisor and they share with you performance of your accounts, now you know, wow, I’m winning at the legacy level, or I’m winning at the preservation level. And that gives you peace of mind, because people come in to their advisors every year, and the advisors will report their rates of returns, but they’re still walking out with fears and anxiety.
Rebecca Powers 12:53
And the portfolio could have told you that, and it says “your average rate of return is” but the law doesn’t make it say what is your yield.
Brian Quaranta 13:00
Yes.
Rebecca Powers 13:00
So, that is skewed too. It makes people have the sense of, Wow, well, I’m supposed to be ma- if I made 8% why is my money- the number not increasing? Because it’s the yield that matters.
Brian Quaranta 13:12
That is a great point, right? Because if you get a, let’s say, a -50% rate of return, and then you get a plus 50% rate of return, right? Your average rate is zero. Your average rate is zero. And so averages kind of lie, and you got to be very careful in you talking about, what’s the yield is very important, because if you actually look at where your principal started versus where the money is today, and then did that calculation, it would be very different than the average that they’re showing on the statement.
Rebecca Powers 13:54
Yeah, you know, we always say the problem with the stock market is no one has a crystal ball. Is it, we have a little-
Brian Quaranta 14:00
Nobody has a crystal ball.
Rebecca Powers 14:03
Nobody
Brian Quaranta 14:03
I don’t believe that.
Rebecca Powers 14:04
So, stockbrokers will say, Well, you should have enough money. You should, but here’s the crystal ball.
Brian Quaranta 14:09
Listen-
Rebecca Powers 14:09
We love to surprise Brian on the show.
Brian Quaranta 14:13
We are the only one out there that can prove that we actually have a crystal ball.
Rebecca Powers 14:20
Can we get a tight shot of that? It’s kind of blending into the background, yeah, it’s the three rivers.
Brian Quaranta 14:25
So, this is the stockbrokers favorite thing to say, right?
Rebecca Powers 14:29
It should last. You should last. Withdraw 4% of your money for the rest of your life, and it should last you. That’s not good enough.
Brian Quaranta 14:36
It should last you. That’s right, that’s right.
Rebecca Powers 14:38
That’s not a plan.
Brian Quaranta 14:39
It’s not a plan. That’s not a plan. And you know these crystal balls, let’s go. Let’s go with another mathematical scenario here. Okay, so remember I said if you got a -50% rate of return and a +50% rate of return, we all know basic math says that’s an average return of zero. But. But what we’re talking about is the money. The money responds differently than the actual average of just the math. Watch this. So, let’s say that we get so if I got -50 +50, it’s a zero, right? -50 +zero is a 0% rate. But if I have $100,000 and I lose 50%, I go to $50,000. I gain 50% I go to 75, which means it’s a -25% loss. Everybody share yields, and that’s your yield so but by law, listen to this, folks, by I still can’t get over the fact that they’re allowed to do this by law, the mutual fund companies are allowed to print on their prospectus the mathematical average, not the actual yield, because if I had a minus 50 and a plus 50 and a mathematical return is zero, but the return on my Money is minus 50, my 100,000 goes to 50,000 I get plus 50. I go to 75 it really should say you got a minus 25% rate of return, right? But mutual fund companies can report that they got a zero return in that year. And quite frankly, that’s misleading to me.
Rebecca Powers 16:16
It absolutely is. And again, that’s the way the law is. So, when we come back, we’re going to talk about taxes. How does that affect you? A penny saved is a penny earned. Instead of risking and jumping over sure money, we’re risking for possible maybe money. Let’s invite our friends in, though. I want them to know what that first appointment feels like. It is absolutely free, and we really want you to get one of these books.
Brian Quaranta 16:38
Yeah. So first off, when you come to Secure Money Advisors, understand you are coming to have a conversation. That’s it. You are not coming to do business with us. That’s my promise to you, because we don’t know if we can help you. And quite frankly, you might be on the right track. You might be already doing the right things now, even if we do expose some areas that can be improved. That doesn’t mean you’re ready to move forward on improving it. You may be one of those people like I was, where you can’t break up with your girlfriend, your current advisor. It’s hard for some people to fire their advisor. Matter of fact, you know, when we do have to do it. We do it quite a bit. Every month, people always say, Well, what should I do if she calls me or he calls me? And I always tell folks, look, it’s as easy as saying thank you so much for everything you’ve done. We appreciate where you’ve gotten us, but we have done some more planning, and we need to go in a different direction at this point. And I just want to thank you again so much for everything that you’ve done, and it always- and if that person on the other end of the phone says to you, well, what are you doing? Where are you going? And they start to combat with you. Well, I could do that for you. I could do your taxes for you. I could do your estate planning. I could help you with your Medicare. My question back would be, I’ve been with you for 10 years. Why are you only telling me that now? So again, OnTheMoneyOffer.com, go there right now. Get a copy of the book. Please do not procrastinate. Do not kick the can down the road. Too many people do that. If you’re uncomfortable, that’s the sign you need to do it. Or call 1-888-382-1298, my team is standing by to take your call and get you scheduled to come in.
Rebecca Powers 18:28
We even have the bar code right there for you on the screen. If that is easier for you to give us a call that way, we’ll be right back. Stay with us.
Speaker 1 18:41
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 so you may live every day to the fullest and enjoy the retirement of your dreams.
Rebecca Powers 19:32
Welcome back. So, you’ve always heard about risks in retirement. What is your risk tolerance? How much risk do you want to take? Have you ever thought of things like your lifetime tax bill as being your biggest risk, and, Brian, you always say that is the biggest liability in someone’s retirement plan, but the big box doesn’t ever, in my experience, ever bring that up.
Brian Quaranta 19:55
Right, well, first off, they’re not allowed to talk about it.
Rebecca Powers 19:57
Oh, that’s right by law, because they’re just brokers.
Brian Quaranta 19:59
Yeah, I mean, and I’ve got plenty of friends that have worked at the big box firms, including myself, yeah, and we were always told if somebody has a tax question, you need to tell them they need to go consult with their tax accountant. So, they don’t even engage around the conversation of taxes. They don’t engage around the conversations of Medicare or healthcare planning or estate planning, so and what people need today more than ever, is a comprehensive planning firm. And think about medicine. Medicine’s changed a lot. You know today if, if you’re going into a doctor’s office, you know, it’s like watching a herd of cattle come through, you know, and the doctor doesn’t even really even know your name anymore, but now what you’re seeing is these concierge services popping up. Where, yeah, where?
Rebecca Powers 20:59
It’s like cash, $50 for your appointment. You don’t have to use insurance.
Brian Quaranta 21:05
That’s right, personal, it’s personal, and, you know, look at 48 I’ve got two very young kids, got a three-year-old, got a five-year-old. Yeah, I want to have the energy, and I want to be around for them. And so, we made a decision a couple years ago that we needed better health care, because none of the doctors knew me. I mean, I’d go in and see a different doctor every time. If I asked for a physical, they would still put me on this on the bed and hit my knee with the little thing like I was a little kid.
Rebecca Powers 21:41
Did you get a lollipop?
Brian Quaranta 21:43
Got a lollipop at the end, you know, little tongue depressors. They are feel my glands, you know, does your belly hurt? Okay, you’re good. We go to the concierge service. My physical is two hours long. That’s awesome. Sitting across my doctor, talking about everything, my history, everything, what my goals are, what I want to accomplish. You know, what areas do I feel that I’m lacking in right now? And I felt, for the first time, that I was in good hands. And that’s what it’s like coming to Secure Money Advisors. That’s what it’s like the doctor that I explained prior, yeah, you know, meeting all these different doctors,
Rebecca Powers 22:27
Like cattle.
Brian Quaranta 22:27
Like cattle. That’s the brokerage firms. It’s the brokerage firms. And I’m telling you, the advisors that work at the big box firms. They’re all great people, and I truly believe in my heart that every single one of them want to do what’s in the best interest of the client, but their hands are tied. Their hands are tied. And if you don’t believe me, folks, just look at the law. Look at the law of somebody that is a licensed fiduciary compared to somebody that just carries a brokerage license. You’ll very clearly see that the law treats us differently as a fiduciary planner, we can handle all areas of planning. That’s why I have the five key areas, your income, your taxes, your investments, your health care and your estate planning, because we can tie all of that together for you. Plus, at the big box firms, they work off of a grid. What does that mean? It means that there’s a select few investments that they can choose from, you know, some are proprietary, and some are from, you know, other companies that they’ve brought in. But if you’re a broker at that firm, you can only sell from that grid.
Rebecca Powers 23:37
It’s a small menu.
Brian Quaranta 23:40
It’s a small menu, yeah. As a fiduciary independent, you truly do become a problem solver for your client, because you sit on the same side of the table. And we just want to find the best product with the strongest companies that have great track records that we can move to. And we don’t believe in the check the box annual review either, what we believe is in planning reviews, because in retirement, your plan should be built so that you can go out and enjoy retirement, not go in and have to see your advisor every quarter. I mean, if you’re going in and seeing your advisor every quarter, there’s something wrong with that. Okay, you shouldn’t have to be making that many decisions in retirement, all right? I mean, are you paying them to manage the money, or are you managing the money? Because as a fiduciary, by law, we are going to make the changes for you. Okay, we’re going to move the money around for you. Why? Because we don’t get paid a commission to manage your risk money, we get paid a fee. So, we have a vested interest in that account balance going up because it benefits us, that’s the truth. So, the broker gets paid a commission on the stocks for the trading and things along those lines. And some of them have figured out a way to do some fee-based stuff. But working with an independent is so critical because, you know, there’s no bias towards any company they’re using, they will literally sit down, at least at our firm, we sit down, we say, look, here’s every single company we can choose from. Here’s every annuity, here’s every life insurance policy. Here’s every Medicare plan. I mean, what more do you want than that to know that they are there to do what’s in your best interest, and especially with me being on TV, let me tell you something last time, the last thing I want to do is see you at the grocery store, you know. And you go, you know, that company, right? I want to know when I put my head on the pillow at night, we did the absolutely best thing for our clients.
Rebecca Powers 25:48
And we’re almost out of time. But going back to the analogy of the physician and the concierge service, you have to know your baseline to know if you have good health, right? Yeah, they do blood work. They probably do analysis, and all these things touch on the third-party reports that you have in the office, and he pays for this service that shows us the client coming in, what is my true risk? What are my true fees? Brings up all those hidden and buried fees too that we don’t even know about.
Brian Quaranta 26:15
Yeah, well, there, there’s many reports that we run to give us that data. There’s the Morning Star reports, there’s the quantity reports, there’s the Riskalyze reports, and that aggregates data from three different reporting systems, so we get a really crystal-clear picture, and then what we’re able to do is just do a side by side comparison, right? Here’s the track record of this portfolio. Here is the track record of the fees, here’s the ratings, you know, and then you compare it over here, here’s the ratings, here’s the track record. What’s the drawdown if the market goes down? That’s a big one. A lot of people don’t realize is that we try these reporting systems, track draw down, meaning, if the market were to drop 50%, what’s the maximum drawdown that that portfolio could go down? These are very eye-opening reports. And then on top of it, we do an income gap analysis to determine what gap you have between what income you have coming in compared to what you need, right? And then I like to build two things. I want to replace your paycheck, but I also want to give you a play check.
Rebecca Powers 27:25
Oh, I love that paycheck and a play check.
Brian Quaranta 27:27
Because every day in retirement, folks, is Saturday and Sunday. 1-888-382-1298, get a copy of the book, schedule the appointment. Go to OnTheMoneyOffer.com. Do it right now. Put your coffee down. Go there right now, and we’ll see you at the office.
Rebecca Powers 27:42
If anything we talked about resonated with you, any red flags or anything you wonder, do I have that in my plan? That’s a reason to give us a Call. We’ll see you next week.
