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Video Transcript
Rebecca Powers 00:25
Welcome, everyone to this week’s edition of On the Money with Secure Money with Brian Quaranta. Of course, Brian created Secure Money Advisors because that is what it’s all about, not only making money, but protecting that hard earned money. AND I’m Rebecca Powers, great to be with you, and as always, great to be with you.
Brian Quaranta 00:44
Great to be with you. Yes, protecting is what it’s all about. You know, I think people tend to miss that part when it comes to transitioning from their working years and going into retirement, you don’t do the same things that you were doing during your working years. The game changes, and we have to shift into principal protection mode. We got to shift into income generating mode. And of course, you know when the good Lord takes you home, the estate planning mode. So, the whole different ball game.
Rebecca Powers 01:18
Since you said ball game, I’ll use the analogy you played football. And as we all know, there’s an offense and there’s a defense, there’s even a coach for the two different sides. It’s very analogous, isn’t it? It is, yeah, for sure, is getting that money working hard defense is protecting and defending.
Brian Quaranta 01:35
That’s right, that’s right. And a lot of people purely are positioned for offense during their working years, their accumulation years, and that’s fine because you have time on your side. And any investment guru will tell you, well, as long as you got time on your side, you’ll be fine. But as we approach retirement and start and go through retirement now, that time window starts to shrink. So, if markets drop, we know they will come back. The question is, will it come back in the time period you need it to come back in? So, think about somebody that might have been three, four years into retirement, and now 2007, 2008 happens. They lose, you know, 40% of their money. How long did those people have to wait for that money just to get back to where it was? A long time? And not only that, but some of those people never recovered, because a lot of people, once they retire, start withdrawing money from their retirement accounts, which is ultimately just compounding those losses.
Rebecca Powers 02:54
And you talk about that in the book, and I want to put this up on the screen for all of you. It is free. It’s very short. Brian has a really good way of telling stories to get points across and also keeping it simple. It’s very important for us to see a clear vision to our retirement. You can go to OnTheMoneyOffer.com Again, it’s free. It’s a great short read. He’ll even pay for the postage to send it to you, because it is so very important to understand about protecting our money, and we’re going to do today’s show with questions from you, very popular. So here we go. We’re going to start in Cranberry Township. Thank you so much to Bob and Karen for sending this question in their ages, 62 and 60 Brian, they make a combined 165,000 a year. Bob plans to retire in two years. Karen might work part time for a little while. They’re not sure. They’ve saved almost a million between the two of them, so that’s really good, but it’s still in 401(k)s and IRAs. So of course, they’re smart to worry about losing money this close to retirement, and they’re also unsure about Social Security. So, they say, with bouncing around so much, how do we protect what we have saved so close to retirement? We don’t want to lose 20 or 30% like we did in 2008 what should we be doing differently?
Brian Quaranta 04:11
Well, there you go. Look at how many variables are involved here, right? This is why, not only do you need to work with a fiduciary, but you need to work with someone that specializes in just this part of planning, Secure Money Advisors, we only do retirement planning. A lot of the big box firms, they will work with folks in their 20s, 30s, 40s. We don’t. The only reason we would work with a younger couple is because it’s a client of ours, grandchild or child, right? Because you have to be so hyper focused on retirement planning itself, because there’s so many variables. What we’re talking about here and their question we’re talking about. Having to create an income strategy, having to create an investment strategy, having to create a tax strategy, having to create a healthcare strategy, and then on top of it, creating an estate planning strategy. Those are all the five key areas that need to be addressed here and with their question here. The first thing that this comes down to is, okay, fine, you’ve got all this money saved. I understand that you’re worried about risk, but let’s focus on the most important thing, and that is, how much money are you going to need on an annual basis? That’s where we need to start. The income is going to drive everything. So, when people come into our office, we just don’t disappear behind a curtain and come back out and magically, your plan is built. We roll up our sleeves. We sit down at the table with the client, because we’re partners, right? It’s not us against them. We’re partners. We’re doing this together, and we’re guiding them together, because I want them to see exactly how we arrive to the solution. Because once you bring somebody through that process, now they understand it. Okay, so in this case, the first thing I’m going to want to know is, what do we want, as far as annual income goes right, that’s also going to determine when we turn Social Security on. It’s also going to determine what we do with the million dollars that they have saved, what portion of it we keep invested, what portion of it we need to protect. And you know, for these folks, most likely, because about 90% of people I meet Social Security is not enough money, right, for them to be able to live off of so there’s going to be a portion of their money where we’re going to have to look at building them their own private pension utilizing an income annuity, which I am a big fan of. I write about it in the book, right? If you want to learn how to give yourself your own private pension. This is the book you want to get, and I would tell you to go to OnTheMoneyOffer.com, OnTheMoneyOffer.com, and get a copy of the book. While you’re there, you can also schedule a time complimentary to come in and sit down with the team, folks. It is not a sales pitch at our office. We are there to help you solve problems. If there are no problems to solve, we will shake your hand and we will tell you to keep doing what you’re doing, because you’re on the right track. But if you weren’t on the right track, when would you want to know OnTheMoneyOffer.com, That’s right where you can go get the book,
Rebecca Powers 07:50
and that’s why it’s called a Right Track Your Retirement. Because so many people would come in and say, Am I on the right track? We don’t know. And we’re all, a lot of us, in that very same boat. All right, as Brian said, you can go to OnTheMoneyOffer.com during this quick break, more questions from you right after this.
Brian Quaranta 08:07
One of the biggest challenges people face when planning for retirement is simply knowing where to start. Over the years, I’ve sat with countless families who felt overwhelmed by all the information out there, and that’s why I wrote my book to cut through the noise and give you straightforward strategies to protect your money, avoid unnecessary risk and build real financial confidence inside you’ll find step by step guidance on how to structure your retirement income, how to prepare for rising healthcare costs and how To reduce the impact of taxes. It’s not about complicated theories, it’s about clear, actionable steps that anyone can follow. And here’s the best part, I’d like to send you a complimentary copy of my book, no cost, no obligation, just real information that could make a difference in your retirement. This book has helped 1000s of people better understand how to secure their financial future. If you’re in that five-to-10-year window of retirement, or you’re already retired and you want to make sure you’re not missing something, this book is for you. Call Secure Money Advisors today, or visit us online SecureMoneyAdvisors.com to claim your complimentary copy today.
Rebecca Powers 09:26
Welcome back. This is the book Brian was talking about just now. Obviously, he’s here live on the set with us. We’re going to continue to take your questions, and we really, really love this, because it’s kind of case studies, and so many of us can relate to things that that you hear. All right, Jeff and Melissa from Bethel Park. Thank you so much for writing in they are ages 58 and 56 Brian, their combined income is $210,000 so they’re high earners, but no pension, like most of us, their advisor only talks about investments, never income. Planning so typical. So, the question is, Brian, we’ve been great savers, but we honestly don’t understand how to turn our savings into a paycheck. When should we start building an income plan? And what does it actually look like? Well, there’s the binder right there. Show them what that looks like.
Brian Quaranta 10:18
Well, first off, when would now be a good time yesterday. Look, folks, I know we live in a world of paperless everything, but I would highly recommend that you do not keep your financial plan on a computer drive or on a thumb drive you need it in a place that, God forbid anything ever happened to you. Your family will know exactly where this is at, but this is a written plan in here would be your income plan, your investment strategy, your tax strategy, your health care strategy and your estate planning strategy, those five key areas go right here in your financial planning binder, and this becomes your plan. This will be monitored year after year, updated if there’s life changes. But more importantly, for those of you that travel, the greatest peace of mind that you’ll get is when you go on your next trip. If you’re anything like my clients, they’ll tell their kids this is in your father’s office. It is on the top shelf. If anything were to happen to us, grab that binder. Everything is in there. Make sure you call Secure Money Advisors. They will take care of everything. So, let’s get back to their question here. Okay? Because they say that their advisor only talks to them about investments. That’s typical, isn’t it? Yeah, I hear this often. They’ll say, people will come in. They’ll go, Well, my advisor just doesn’t do what you do. That’s interesting. That’s like me going and saying, Well, my accountant doesn’t do what you do, right? I mean, if you’re putting yourself out there as a retirement planner, then where’s the retirement planning strategy, right? But you see the big box firms, it’s a bunch of smoke and mirrors. Yeah, we can take care of your retirement planning. Here’s your investment portfolio, here’s your rate of return. Just let me know when you want to start taking money, right? There’s no details around what you know. What does the income look like while you’re both alive? This is a big one. Rebecca, yeah, because when you are solving for income for a married couple, you have to have bad things happen on paper, right? Meaning you’ve got to be able to kill off the husband, which a lot of women love, to see what the impact of that would be. The scenarios that y’all do, yeah, the scenarios, I mean, you’ve got, you’ve got to be able to look at and go, Okay, here’s how much income we have while you’re both living, but if one of you die, here’s what the income drops to, right? But not only does the income drop, the tax rates go up, because now the widow goes into a single file or tax bracket. Do you understand the challenges here, folks? My greatest fear for all of you that are watching right now is that you do not understand the magnitude of this problem. If you think you are just going to solve it through a diversified portfolio investments, I hate to tell you, but you are setting yourself up for a major problem, a major problem. So, when we build an income plan, we’ve got to run all those different scenarios. We have to see, okay, here’s all your income sources. Do we have a shortfall? So, if they’re only getting Social Security, and that generates $50,000 a year, and they need $100,000 a year, where are we going to get the 50,000 from? Rebecca? Yeah, right. And where are we going to withdraw it from? Because the order in which you withdraw your money and from what account you withdraw your money matters from a tax perspective. So, I can go on and on this case, right? Because at the end of the day, what I see is a couple that has high income. They’ve saved a lot of money, great, but it’s not about how much you have in savings. It’s about how much money is going to show up in your mailbox every month and how long is it going to be able to show up?
Rebecca Powers 15:02
Exactly.
Brian Quaranta 15:05
Right, so, but in this case, we really have to understand that. Again, there’s five areas that always need to be solved, income, investments, taxes, health care and estate planning. Again, folks, all in my book, Right Track Your Retirement. If you weren’t on the right track, when would you want to know it? How about now? So go to OnTheMoneyOffer.com you can get a copy of my book right there. It’s a quick read, but it’s going to give you all the information you need to start making very informed decisions.
Rebecca Powers 15:42
And like I always say, it is free and no obligation. We mean that it’s a great start to read the book, and then if you want to come in for a complimentary consultation, again, you don’t have to become clients, but you can do that as well at OnTheMoneyOffer.com. All right, another question, this one’s from Ron and Denise in Butler. Thank you all so much for watching their ages are 63 and 61 Brian, 135,000 is their combined income. Ron was just offered an early retirement package from his employer. They’re unsure if that makes sense. Maybe they should hold off. They’re also confused about health insurance and Medicare. Their question is, Brian, if Ron takes his early retirement package. How do we know if we can afford health care until Medicare kicks in? They’re smart to know that they’re going to have that gap. Yeah.
Brian Quaranta 16:30
Well, you know, this is, this is what? Again, another big piece of the puzzle is health care. The great thing about Secure Money Advisors is we do health care, right? Why do we do health care? Because it’s part of the puzzle, because it’s part of the puzzle. Yeah. Now, yes, most people, you go, Okay, you’re working with an advisor. They don’t give you advice on when or how to collect your Social Security. They don’t give you advice on taxes, because they’re not allowed to give you advice on taxes, right? And they don’t do anything-
Rebecca Powers 17:03
With Medicare.
Brian Quaranta 17:07
With Medicare. How do you call yourself a retirement planner? What’s the plan? What’s the plan? I’ll tell you what the plan is. Good luck. Good luck. Just diversify it. You’ll be fine. That’s what we hear all the time, really? Oh, my advisor said, I’ll be fine. I’m diversified, whatever that means. My advisor said, I’ll be fine. That would be like my doctor listening to my heart and going, it’s making some weird noises, but you’ll be fine. Sounds okay to me. But again, this is an interesting case, because he’s being offered an early retirement package.
Rebecca Powers 17:43
Right, did you lump sum? Or how do you decide that?
Brian Quaranta 17:46
It all depends. It all depends. The question is, where are you going to get the highest income? So most likely, this retirement package is going to offer him the ability to either take a lump sum and invest it how he would like to invest it, or he can keep it there and it’s going to pay him a certain amount of monthly income.
Rebecca Powers 18:08
Even when he leaves the company.
Brian Quaranta 18:09
Even when he leaves the company.
Rebecca Powers 18:09
He can stay in that 401(k) if it’s advantageous.
Brian Quaranta 18:11
Yes, now, well, in this case, an early retirement package probably is being he’s probably being given Some type of pension is what I’m assuming. Okay, okay. So now the question is, if we take the lump sum, can we recreate the income that he would be getting if he stayed there, and could we get it higher? But let’s just say we could do apples to apples, right? If you leave it there, you get $5,000 a month. If you move the money out and you invest it in an income annuity, and get $5,000 there, what do you do? You move the money. Why? Yeah. Why? Because, if it stays with them, it stays with them. If you put it in the income annuity, you have access to your lump sum too.
Rebecca Powers 19:06
And you have control.
Brian Quaranta 19:07
You have control
Rebecca Powers 19:07
And a contract. You know what it’s going to do.
Brian Quaranta 19:09
Well, not only do you get the monthly income, but you also have access to your lump sum of money. Whereas over here, the minute you say we’re going to leave it there, we’re going to take the $5,000 a month. You can’t ever go in and take any of that money out. Gotcha. It’s not liquid. It’s not liquid over here, it can be liquid for you. So, it’s the best of both worlds. Gotcha, right now, in a lot of cases, Rebecca, we’re able to take a lump sum and move it into a private pension, right? And actually get the income higher, because the product designs in the open marketplace are much better than a lot of what the pension companies can do.
Rebecca Powers 19:54
That’s a good point, you can shop around. There you go, cherry pick for your client what they really need.
Brian Quaranta 19:58
And I think that, you know, that’s great point, because, you know, as an independent fiduciary, you can shop around. Yeah, we’re not beholden into any company, you know. I mean, we’ve got access to hundreds and hundreds of insurance companies, thousands of investment companies. That gives me peace of mind, yeah, because, look, my career started off in the big box firm.
Rebecca Powers 20:21
I love that story that’s in the book as well.
Brian Quaranta 20:26
Yeah. That’s another- But the dirty little secret that nobody wants to talk about is that at the big box firms, you have what they call the grid.
Rebecca Powers 20:34
Ooh, ominous.
Brian Quaranta 20:38
Right? The grid. Welcome to the grid. Would you like to know what the grid is? I do, here’s the grid.
Brian Quaranta 20:44
We have decided, as an organization, that you can only recommend these 15 products. Yeah, wow. So, I’m supposed to sit down with Mr. And Mrs. Smith and do what’s in their best interest. But yet, I’m handcuffed by this grid, limited supply, limited to supply. Now, nobody from the big box firm is going to tell you that, but I am, because I was an insider. You got off the grid. I want it off the grid. You want to know why? Because, gosh darn it, my mom and dad did me a disservice. They gave me morals and values, right? And because of that, I wanted to be able to sit down and say, Okay, I understand your situation. Let me now go shop the marketplace and let me find you the best of the best, right? That gives me peace of mind, knowing that I get to do that for them, and honestly, get to do it for them the big box firms, people are going to say, we work with anybody. We work with all kinds of companies, really. How about you show them your grid sheet? Exactly? Okay?
Rebecca Powers 22:02
And an analogy for that is, there are a million cars out there, and if you go to Ford, they’re going to give you an offer, 50 cars, right? But they’re not going to say, go check out Toyota, Chevrolet, Mercedes, right? It’s the same thing, because they’re they just can’t, that’s right, proprietary, yeah, yeah. All right; we have time for another question. This one’s from Beaver County. Let’s see Steve and Angela, ages 59 and 57, their combined income is $150,000 they have $730,000 saved, no debt. Good for you. And they have already raised their three children. They want to retire at 62 but are very smart to worry about inflation. Their question is, Brian, how do we build inflation protection into our retirement income? Everything costs more and more. How do we keep up? I love that. Thank you so much for that question.
Brian Quaranta 22:50
All right. Rebecca, you ready? This is how we’re- Give me your cup.
Rebecca Powers 22:54
Okay?
Brian Quaranta 22:55
All right, because this is how we are going to give them their income and keep pace with inflation. All right. What do most people do? Most people will put all of their money in this one cup. They’ll have mutual funds, stocks, bonds, right? Yeah. And then they’ll try to do everything they need to do for retirement out of here. Bad idea. Why? Because if all of your money is in this cup, you have to blend it out to a moderately conservative portfolio, because you’re trying to build in some protection, which then causes you to not get the best rate of return when the market goes up, because you’ve got bonds in here, you know, all kinds of stuff. Garbage way of doing it better, way I want to give my stock market money time to grow. Time is our friend, right? We know that the market over any 10-year period is always up. So, if we took a portion of their money and put it in this cup, and we’re going to call this the private pension, and we generated the income they needed from this cup, and this purely was just cash flow, just designed for cash flow. The remaining money goes into that bucket. But now that bucket can be invested aggressively, because we’ve got a 10, 15, year time horizon before we even need to touch that.
Rebecca Powers 24:38
And you know, your income is covered.
Brian Quaranta 24:39
Yes, now
Rebecca Powers 24:40
So, you can do a little more with this-
Brian Quaranta 24:41
What happens if, in five years, that that cup right there starts to overflow? Yay, right? Yay. What do we do?
Rebecca Powers 24:51
Take it and-
Brian Quaranta 24:52
We grab, scoop some off the top, like when we put it in here and we increase your income. Nice. Now. Well, we’re keeping pace with inflation. Folks. Simple here. Simple. That’s the way you want to build a plan. Keep it simple. The more complicated things get, the harder it is to manage, and there’s a higher probability of it going wrong. Trust me, I’ve seen it all in 25 years. After 25 years of doing this, helping probably 1400 families. Oh, wow, I’ve never had to apologize for a plan not working ever. We’ve got a 98% client retention rate, which is unheard of, which I always say, if people didn’t die, I think it would be higher. How dare they. How dare they. But again, in my book, I talk about that very simple strategy here. I call it the two bucket strategy, because, again, I’m keeping it simple for you, right? And in the book, I write about it in detail so you can start to understand it. The reason why we don’t want all of our money in one cup in the market trying to withdraw money for income is because of something else I write about in this book called sequencing risk. Sequencing risk simply is an unfavorable order of returns very early on in your retirement. So, you can take two couples with the same amount of money, needing the same amount of income. And one couple in their first year of retirement gets a positive rate of return. The second couple gets a negative rate of return. Just by them getting that negative rate of return in that first year, it causes them to run out of money. I write about it in the book. It’s called bill and Joe. You have to understand this. This is a risk nobody’s telling you about, and this isn’t a this is not an opinion. This is a mathematical risk that you cannot avoid. The only way you can avoid sequence risk is to not withdraw money from a stock market account, go to OnTheMoneyOffer.com, get a copy of my book. I promise you; you won’t be disappointed. You will learn a lot. Also, while you’re there, you can schedule a time with the team that come in as complimentary.
Rebecca Powers 27:37
That’s right, complimentary means absolutely free, and their promise is always the most beautiful statement that they will never pressure you to do anything. This is about empowering you, enlightening you get the book. We love you Pittsburgh, and we’ll see you next week.
