Retirement You TV: Episode 12

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Video Transcript

Cynthia De Fazio – 00:22

Good morning and welcome to retirement You TV. My name is Cynthia de Fazio, I am joined today by Brian Quaranta. He is president and founder of secure money advisors, also known as Brian Q and Brian I have.

Brian Quaranta – 00:37

So I can say phonetically wrote it out for you. So we always start with humor, which is great. I love that. So have you been? I’ve been great. Yeah. Thank you for asking.

Cynthia De Fazio – 00:52

Yeah. So things have been really busy for you. I know. Because we keep up in between the shows and you have just been? Well, you have the radio show? Of course, yes. But now the TV has taken your career to a totally different level, if you will.

Brian Quaranta – 01:04

Yeah, yeah. Well, you know, it’s important for me, because, you know, my mission has always been to get people good information, accurate information. Yeah, there’s so much noise in the marketplace today. And people are confused of what to do. And unfortunately, a confused mind does nothing, which is the worst thing you could be doing, going into retirement. And so for us, the radio show has has been great. It’s been a great platform for us to really educate on. But the TV show has been even even a great addition to continue our mission of educating people on how to properly build out a plan in retirement and really just, you know, silence the noise and show them the basic fundamentals of how to do it. So we’re very, very happy and grateful to be able to have this platform.

Cynthia De Fazio – 01:50

And I love how you just mentioned having being the basic information, having it easy to understand, yes, we’ve talked about that. And I love this in the past, we’ve talked about how you call your mom. And you’ll say, Mom, is this something that you understand? If she says, Yeah, that sounds great.

Brian Quaranta – 02:06

Well, anytime I’m coming up with a new concept of how to explain something, and I want to address it in a way whether it be you know, some of the stuff that we show in our conference room can be very, very complicated strategies. And so what I do is, I will call my mom once I have those strategies in place. And I’ll figure out the best ways to be able to communicate that and so I’ll call her and I’ll say, Mom, I said, you have a minute, I’m going to share an idea with you. And I understand and I want you to if you don’t understand it be truthful with me. And she’ll go Honey, I completely understand that. She says, why doesn’t everybody do that?

Cynthia De Fazio – 02:42

I know, that’s what I say. I love that. Yeah. And because that is the one thing that’s so overwhelming, when you’re entering into those retirement years, and let’s just say for argument’s sake, Brian, that you don’t have a plan and you don’t know where to start. If someone does give you something that’s so complicated, all you’re going to do is put it aside and not look at it.

Brian Quaranta – 03:02

That’s right here, correct? Absolutely, uh, you know, a lot of times people will go out, and they’ll get these big thick reports from from firms. And, you know, and a lot of times I’ll hear is, you know, they sat down with a few advisors, or even their current advisors will, will speak over their heads, you know, they’ll use terminology industry lingo, which is very intimidating, it’s not something that the average person, you know, understands well, and so they feel, you know, let’s, let’s face it, there’s oxygen, and then there’s money, you can’t live with either one of them, right, without either one of them. So, and, and money is just, you know, it’s just as important because it makes our life go around. And yet people are having to take 4050 years worth of work, and trust somebody with that money. That’s a very difficult thing to do. And so what happens a lot of times is, you know, they’ll go out and they might, you know, meet somebody and an advisor, and they’ll say, Well, you know, that they’re, they’re very nice, they’re kind, I really don’t understand what they’re saying, but you know, I trust them, and they’ll, they’ll make a decision, they’ll come to find out later that they didn’t make the best decision. So, you know, it’s just, we’ve designed things a little bit differently at secure money advisors to really make the process easy and simple to understand.

Cynthia De Fazio – 04:16

Yeah, absolutely. And I believe that that is one of the most important things that we keep hearing from your client base as well. They’re saying that you really take the time with them, Brian, and when someone says that that just is like music to my ears, because nobody wants to feel rushed, especially when you’re talking about something that’s so very important about planning out the remainder of your years, because as we’ve spoken up before, retirement used to be that you had a few years left, that’s not the case anymore. Now people are living longer, so that money has to stretch even longer. And I love how you’ve mentioned that it’s important for them to be able to pay themselves, they’re not going to have a regular paycheck coming in.

Brian Quaranta – 04:52

That’s right. And we’ve got when we retire, we have to be able to replace that paycheck. And you know, the strategies that go People to where they are right now, let’s say you’re getting ready to retire in the next five years, or you’re all retired, the strategies that got you there the investment strategies that you were accumulating dollars with, those are not the same strategies that are going to get you through the next 25 years. Sure. And if you’re still utilizing those strategies, just put your retirement at way too much risk. Yeah. And we’re going to show you the proper strategies to use because in, in retirement plan, it’s all about mitigating risk, it’s so important to mitigate that risk. And you’re right, people are living longer. And so we have to have a plan that’s designed to be able to provide income, additional income for those individuals for that extra time that we’re living here on this earth. And that’s what’s made retirement planning so much more difficult today than what it was 30, 40 years ago. But what else has made it very difficult is that safe yields have gone down so much. I mean, if you go back 10, you know, 30, 40 years ago, I mean, we could go to the local bank and get a CD paying 10 15% in interest. Now, today, I mean, the banks really don’t want to pay us any interest at all, because quite frankly, they just don’t need our money. Right? You know, they’re getting so much money from the federal government that they don’t have to pay us for our money. So why were they given us big yields, you know, 30, 40 years ago, is because they needed to pay us a good enough yield for us to be able to say you can borrow my money? Yeah. And then what are the banks do they turn around, they lend that money back out in the form of home loans, car loans and things along those lines. But you know, the average bond yield right now is even hovering below 3% right now, and bonds have always been a place for people to put money in a place where they felt was safe or secure, right? Because bonds were your less riskier of your options when it came to the stock market. But in fact, bonds can lose just as much money as stocks. So you think about it, people are getting less than a 3% yield on on a bond portfolio, but yet they’re potentially taking the same amount of risk is that they were in an equity portfolio. Wow. So you know, we heard a lot from folks that, you know, were coming into our offices in March. And, you know, they had what they thought were relatively conservative portfolios that their advisors had put together for them. And the message that they were sharing with us were common amongst multiple people that were coming in, they said, Look, I had asked to be in a very conservative portfolio. But yes, I lost over 20% of my portfolio in March, and I was supposed to be in a conservative portfolio. And the other thing that frustrates them is that even when the markets were doing well, they really weren’t earning that much interest. And so we’ve got a very, very powerful software that we, that determines the level of risk and the efficiency of somebody’s portfolio. So we’re able to look at each individual position that they own and determine the probability of success. And the software is a third party software, any firm can purchase it, but it’s very expensive. So a lot of firms don’t, okay, but we do because we want to provide true value, and we want to get we want to be able to have good information to help people make good decisions. Sure. And so by running this analysis, we’re able to really figure out how to maximize an individual’s portfolio not only maximize the returns, but reduce the risk, which is very, very important to retirement

Cynthia De Fazio – 08:08

very shortly, because as you approach the retirement years, you obviously want to be more conservative. That’s right. You have money to last longer, if you will,

Brian Quaranta – 08:15

yes. Yeah, absolutely. Right. You just can’t afford to take big losses. Exactly. Because you don’t have the time to make the money back. And here’s what my industry has done. to, to handle losses. What they do is they manage emotions. And and and I just think it’s so terribly wrong. But if, if you’re working with a brokerage firm, and they lose your money, here’s what they’re going to tell you. Don’t worry about it. It’s just a paper loss. or hang in there. Yeah, you know, you’re in it for the long haul. Well, do you ever wonder when the long haul ever ends? Yeah, because there is a point that comes when you’ve won the game. And if you’ve won the game, you don’t need to continue to play it. You see, the key to retirement plan is really figuring out what rate of return Do you really need, in order to make your portfolio work? If you only need a 345 percent rate of return, and you’re trying to get 10 or 15%? And you’re taking that level of risk to try to get it? The answer is why if you if you only need this much, then let’s shoot for that. Because if your portfolio is going to work on that, then that means we have to take a lot less risk or what rate of return Do you really need in order for your portfolio to work? You know, the other thing that cracks me up is, you know, they’ll say, don’t worry about it, hang in there. You’re in it for the long haul. And I always say, you know, what, Do you ever wonder when the long haul ever ends and according to Wall Street, it should never end because if they’re if they’re doing what we do, we’re we’re helping people build private pensions, we’re putting that into accounts or providing guaranteed income to them. You know, that takes money away from Wall Street. So their whole mission is to help you is for you to keep that money there. So managing your emotions when you lose money, like don’t worry about it, hang in there. It’s just a paper loss. What I’ve learned in my 20 plus years of working in this business is that you It’s really easy for somebody else to tell you to take risk with your money, especially if they get paid a commission to

Cynthia De Fazio – 10:07

do it. Absolutely. Brian, hold that thought because you know what, it’s time for us to open up the phone lines for the very first time this week, can you tell the viewing audience what they can expect to receive by being one of the first

Brian Quaranta – 10:16

folks Absolutely. So we want to make the experience of you coming into a secure money advisors and enjoyable experience, we want to make it easy and simple for you. And my team has put together a very in depth intake process that will help guide you to help you understand what a real retirement plan should look like, so that you’re following the basic fundamentals when it comes to building out a good plan. So what we’re going to do for the next 10 callers who call in right now, we are going to offer a complimentary Financial Review. Now, we usually charge 1000 to $1500. For the review, we are going to give it away complimentary, and what we’re going to do is we’re going to build out a secure income report for you, we’re gonna look at all of your guaranteed sources of income, do you need more guaranteed sources of income? If you do, we’ll show you the proper ways to build those. We’ll also do a risk analysis for you. We’ll show you what risk you’re taking in your portfolio if you’re actually maximizing returns. But most importantly, we want to show you how to reduce your risk. So if we can show you how to maximize your returns and reduce your risk and get your portfolio working more efficiently, you’re just going to have a better retirement because you’ll have more peace of mind. So again for the next 10 callers who call in right now. That’s 18883821298, 18883821298 for the next 10 callers who call in right now that’s a complimentary Financial Review.

Cynthia De Fazio – 11:31

Brian, thank you so much to the viewing audience at home. That number to call once again is 888-382-1298. When we come back from this very short commercial break, we’re going to have more questions and answers for Brian about planning your perfect retirement. Please stay tuned.

Commercial Break – 11:47

How confident are you and your current financial plan? Do you know with certainty how the recent market volatility will affect your future hopes and dreams? How much are you paying in taxes? And how much are you losing to unnecessary high fees? You didn’t work to save this money so that you could spend your time worried in retirement. Now is the time to take charge of your finances so you can feel confident about your future call in during the next 30 minutes of today’s show only to set up an absolutely complimentary no obligation full blown Financial Review that will result in your own customized written plan. This is a $999 value that we’re giving away complimentary to the first 10 people who respond. We’ll start with a full blown analysis of what you already have, by running a report to untangle how much you are currently paying in fees, how you’re allocated for risk, and what it’s costing to work with your current advisor. Next, we’ll identify your goals. Where do you see yourself in the next five years? Where do you want to go? And who do you help to go there with is your current financial plan set up to get you there without mishap? Let’s design a roadmap to create a financial plan you can follow with confidence. Get the piece that so many people are missing from their retirement. Find out how having a written plan can make a difference to your retirement dreams. Call now to schedule your complimentary no obligation full blown Financial Review today.

Cynthia De Fazio – 13:21

And welcome back to retirement You TV My name is Cynthia de Fazio. I’m joined today by Brian Quaranta a president and founder of secure money advisors. I was so close. Right? Well, Brian, this is the best part of the show. Because when the phones were lighting up, we know that viewers are calling in and they sometimes leave questions for great questions. So we do have some viewer questions. So if you don’t mind, I’m just gonna jump right in. Let’s do Okay, sounds good. So, Brian, I have not yet retired. I am considering purchasing an immediate annuity using all the funds in my 403 b plan upon retirement, would the annuity distribution satisfy required minimum distributions? And how will placing the entire amount in an annuity be taxed? How will the monthly payments be taxed? Brian, I am very confused about this and any light you can shed would be fantastic.

Brian Quaranta – 14:13

Okay, that’s a big long question. Yes. Should we start with parts? Yeah, well, let’s start with parts first. Okay. What we’re talking about here is the question was about an immediate annuity. And there’s lots of different types of annuities out there. So an immediate annuity acts a lot like a pension where you give your money to an insurance company in return, they’re going to give you monthly payments, but you lose control of the lump sum value. So that’s kind of the old way of doing it. Because if you’re going to buy an annuity, you want to maintain control your money, meaning you don’t want any restrictions, if you need to take all the money out with an immediate annuity that that happens. So there’s a little bit better way to do it than the immediate annuity. Not a lot of people use immediate annuities much anymore because of the restrictions of not being able to pull your money out but if you Putting IRA money into the annuity. If you’re moving money from let’s say, a 401k, a 403, B, an IRA or anything along those lines, you can set the annuities up as an IRA account. So you can move the money from any qualified retirement account into the annuity and pay no taxes doing that. Now, if you start taking withdrawals from the portfolio, depending on what your age is, in this case, she’s asking about required minimum distributions. Yes. So if we’re asking about required minimum distributions, then if she’s of age, in this case, right now, keep in mind, we don’t have to take required minimum distributions till the age of 72. Now, that was the big change with the secure act last year. But if you’re of that age, where you should start taking required minimum distributions, then withdrawals from the annuity will count towards the required minimum distribution. Okay. Now, the downside behind the way that she wants to build this strategy is solely the fact that if she dies, this annuity dies with her meaning it’s not the money that’s not going to pay out to her family members. Okay. So if you can still build a plan, utilize an annuity by utilizing a fixed annuity or indexed annuity, where you’re still going to get a protection of principle, you’re going to have no risk to the principal, and you can generate income off of those, but you still have access to your money. If you need to take all your money out your you’ll be able to do that with those types of annuities. But more importantly, if you die, all that money can be left to your family members, you know, rather than going to a company.

Cynthia De Fazio – 16:30

Sure, absolutely. Brian, excellent answer. Thank you so much, because that was a many part question. marks. Yeah, absolutely. So the next question is my current advisor group only invest in stocks and ETFs, my new advisor group only invest in their own products. If I sell off my current advisor holdings, will I incur extra income and pay more income tax on this sell off? I have six account types Brian, two Roth IRAs, one traditional IRA, one SEP IRA and two regular investment accounts.

Brian Quaranta – 17:00

Okay, so this is a really good question. So you’ll see this a lot. Now, a lot of the firms are starting to work with a lot of their own proprietary products, and they like to give the money to their own money managers. And I’m sure that’s by design, there’s probably a lot more meat on the bone for them to to make money from those proprietary products is the only reason why they really do it. And I’m not saying they’re good or bad, right, I’m just saying that this is the way most of the firms have gone. I think working with independent third party wealth managers is a little bit better than working with the proprietary products. But if you want it to get out of those accounts, any retirement account that you would have a Roth IRA, an IRA, a SEP IRA things along those lines, you could sell off those investments within those accounts. And you could move those, okay, and buy other investments that are not proprietary, and you’ll pay no taxes, no penalties, no nothing if they’re in retirement accounts. Now, for your two other regular accounts, what we call individual brokerage accounts or individual accounts, those could potentially create a taxable event. Now in this case, there’d be something called a cost basis in there and anything that you add earned over the cost basis would be taxable. It could be taxable at short term, capital gains rates or long term capital gains rates, anything held for more than one year would be long term capital gains rates. And that would be about 20%. So there could be a taxable event there. But again, paying taxes is not always a bad thing. If you’re improving the the investment situation and maximizing returns reducing risk is that it’s always worth paying taxes to make adjustments. Hmm.

Cynthia De Fazio – 18:42

Thank you so much, Brian, we have time for one more question, I believe. And IRA is being Well, to me, if I inherit it before the age of 59 and a half, can I have it sent directly to my own IRA? What are the tax implications? Brian, I need to know the answer. Please.

Brian Quaranta – 18:58

Folks, this is a big one. And and if there’s anything that you get out of listening to my radio shows, or retirement, UTV or anything, understand that your IRAs are the biggest tax bomb that you own in your portfolio, and the reason is, is these accounts have never been taxed, they’re going to start to be taxed when you withdraw income from them. But most importantly is if you die, in this case with this individual talking about is inheriting an IRA account, when you inherit an IRA account, it cannot go into your own IRA. If it does, it will be 100% taxable at whatever your income tax rate is. So that could be a very large tax that you pay. Now, the way that it’s properly done is setting up what we call a beneficiary IRA or an inherited IRA or a stretch IRA. They’re all three the same thing you they’re just different terminology that people use in the industry. Now, if you roll that money into those accounts, there are no taxes when you roll that money into a beneficiary IRA but you will be required to start taking distributions out of that account. Immediate Now, we used to be able to take those distributions over our lifetime. But now they only allow us to take those distributions for 10 years. And then we got to cash in the remaining balance, again, creating a huge taxable event. And that’s why when it comes to legacy planning, it’s so important that you have a good legacy plan in place, because for most people, you are going to leave the IRS, your biggest beneficiary, and without a plan, the money’s not going to get to where you want it to go, the IRS is gonna have a plan for you.

Cynthia De Fazio – 20:28

We don’t want that to happen. You do not know. Yeah, we do not? Well, Brian, it’s time for us to take another commercial break, can you tell the viewing audience what they can expect to receive by being one of your first 10 callers today,

Brian Quaranta – 20:39

you have folks for the next 10 callers who call in right now we are going to be offering a complimentary Financial Review. Now during this review, we’re going to build a couple things for you. Number one, we’re going to build a secure income report, which is going to look at all your guaranteed sources of income, we’re going to look at ways to maximize those sources of income. And if you need additional sources, we’ll show you the best ways to be able to do that. We’re also going to run your risk analysis on your current portfolio. How nice would it be to determine how much risk you’re currently taking, right what the probability of success of your portfolio is. And if you could actually get a better rate of return, maximize your returns, but most importantly, reducing your risk we got a very, very powerful software that will help us determine that so for the next 10 callers. That’s a complimentary Financial Review. When you come in, if you call 18883821298. Again, that’s 1883821298.

Cynthia De Fazio – 21:32

Brian, thank you so much to the viewing audience at home that number to call once again as 888-382-1298 we know the phone lines were busy, we added an additional phone line for you this week. Again, the number to call is 888-382-1298. When we come back, we’re going to have more questions than answers about planning your perfect retirement, so please stay tuned.

Commercial Break – 21:53

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Cynthia De Fazio – 23:22

And welcome back to retirement UTV. My name is Cynthia de Fazio. I’m joined today by Brian Q. He is president and founder of secure money advisors. Brian, what a great show we’re having I love the viewer questions because you never know what’s coming. And you answered all of them. So flawlessly because you have such a passion for what you do. Yeah, spent a lot of time in this business. Yes, over 20 years. So that definitely shows as well. So I wanted to ask you maybe for perhaps the younger viewers that are out there right now that are still kind of in the face of okay. retirements a little ways off? How important is it to carefully select your investments, if you will, as you’re approaching retirement through the years?

Brian Quaranta – 24:01

Yeah, I mean, as you’re getting closer and closer to retirement, again, we talked about this on the on the last segment, the biggest danger to anybody that’s going to be retiring in the next, let’s say, three to five years, is is taking a big market loss, you know, you think about 2007 2008 when the markets went down, that caused some people to have to delay their retirement, and some people that actually have to come out of retirement. So it’s so important to make sure that you’re minimizing risk. Now we can’t sacrifice yield when we minimize risk, and there’s ways to do that. And we’ll show you the technology that’s available today to be able to do that. Okay. But it’s it’s very important that you get the dynamics right within the portfolio because again, the biggest key to retirement, if you know if there’s any advice that I could give to anybody, it would be you’ve got to be able to minimize losses. Now what a lot of folks don’t understand is that through technology We can build portfolios that actually have a stoploss built in. So what that means is that if a client doesn’t want to lose, let’s say, beyond 5%, or beyond 7%, or beyond 10%, we have the ability to be able to do that today. And we do that through technology, also known as algorithms, algorithms are a very powerful way. And in today’s marketplace, if you’re not using algorithms, it can be very difficult in the dynamic marketplace to really keep ahead in the marketplace that we’re in. And it really is because the markets just move so fast. You have to have a fast system working for you. Sure. And we’ll be able to show you how to do that.

Cynthia De Fazio – 25:37

Wow, amazing answer. Brian, I just have to ask you again, though, is it? Is it ever too late for someone to start a retirement plan? What if someone at home is like on the other end of the spectrum? And let’s say they’re 63 years old? And they’re just right there, and they’re at the cusp of retiring? Is it too late?

Brian Quaranta – 25:51

No. And I get asked this question all the time. And when they’re successful strategies that you can use to do it. I mean, you know, most people don’t realize that, you know, at your full retirement age, you can start collecting your social security and still work. And so you can actually leverage your social security as a way to maximize your savings. And in a very short period of time, you can have three, four or $500,000, saved right over a period of time by taking some money that from work, taking some money from Social Security and putting that away into a good portfolio and growing it over a 10 year period, you can make it happen very fast. So if you’re over the age of 60, and you’re thinking to yourself, I have no way of retiring, just know that there’s hope out there, right, and there’s ways to do it. The thing is this, you have to work with someone that’s going to give you a plan. Once you have a plan laid out in front of you, you can make a lot of things happen.

Cynthia De Fazio – 26:39

And I love how you’ve compared the plan to the pieces in the puzzle. And then the plan is the box on the top. So actually, everything fits together. And it’s this beautiful picture when you’re done.

Brian Quaranta – 26:49

That’s right. And there’s multiple pieces to a financial puzzle. And what we do is everybody at our office gets a personal financial inventory binder. And that’s important because we want to make sure that we cover everything when it comes to financial planning. See, most people are leaving things undone because they don’t have a comprehensive financial planning checklist and a system to follow. And we make sure that all five areas are handled, we make sure income, investments, taxes, health care, and legacy planning is all handled. So folks, again, we want to make the experience of you coming into the office a good experience. So for the next 10 callers who call in right now we are going to give you a complimentary Financial Review at no cost. We’re going to have multiple reports for you. We’re going to have a secure income report, we’ll show you how to maximize your secure income. We’ll show you how to develop more income if you need it. We’ll also do a risk analysis for you again, that’s a complimentary Financial Review if you call 18883821298.

Cynthia De Fazio – 27:48

Brian, thank you so much to our viewers at home. Thank you so much for spending time with us again this week. We look forward to seeing you next week. Have a safe, healthy and happy week ahead. See you soon.