Retirement You TV: Episode 38

To see a full schedule of our TV airtimes, please click here.

Video Transcript

Cynthia De Fazio – 00:20

Welcome to retirement You TV My name is Cynthia de Fazio. I’m joined today by Brian Quaranta. He is president and founder of secure money advisors, as well as Neil Major, Senior Investment Advisor. Brian, how are you today?

Brian Quaranta – 00:33

Great. Good to see you again.

Cynthia De Fazio – 00:34

Good to see you again as well. And Neil, how are you?

Neil Mager – 00:37

I’m doing well. Thanks, Cynthia.

Cynthia De Fazio – 00:40

Good, I know that you’ve both been so incredibly busy. We were talking about that this morning, before the show began. You’ve received so much positive feedback from the viewing audience. They’re calling in, they’re scheduling appointments with you, Brian, what is it been like for people coming into the office recently busy?

Brian Quaranta – 00:57

Yeah, busy. I mean, I think there’s people are, I think, really confused of what to do with retirement planning. And information is so easily accessible today. I mean, you can google just about anything you want. And there’s a paralysis by analysis. And so, people are coming in unsure of what to do. And unfortunately, I think all this information is done people a disservice. Because a confused mind does nothing exact right. And that’s not what we want to have happen. Because people that are coming in close to retirement five years, 10 years within retirement, they don’t have time to mess around anymore, they’ve got to get this stuff taken care of. Now, it’s they don’t have time to be paralyzed. So, we’re very, very busy. We’re very busy educating people on what the basic fundamentals of retirement planning are, so they can make good sound decisions. And that’s what we’ve learned over the years of working with people is that if we provide really good information, and what we’re really good at is taking very complicated subjects, and breaking them down into very easy to understand bites, so that people can make good informed decisions and feel good about it.

Cynthia De Fazio – 02:01

Sure. Sure. That makes sense. Thank you, Brian. Neil, I have a question for you. How much money does someone need to retire?

Neil Mager – 02:08

I think it’s 3.87 million.

Cynthia De Fazio – 02:13

I have a ways to go.

Commercial Break – 02:16

Obviously, you know, it’s a question that we typically hear, because people are really confused. They really have no idea exactly how that money is going to work for them in retirement. And typically what you’ll hear is they’ll get their brother’s opinion, their sister’s opinion, their co workers opinion. And they’ll each have different numbers, right? They’ll one will say 300,00 will say 500,000 loan will say one and a half million. And so they’re all over the map, right? But really, what we want to do is sit down and understand their personal situation, and how do we go about helping them to achieve their retirement? And what’s interesting about that, Cynthia is, all different numbers come into play. It’s really based on your spending habits, right? I mean, how much money do you need each and every month, in order to pay the bills, but only pay the bills to do the fun things that you want to do? because keep in mind, you know, we always say every, every day in retirement Saturday and Sunday? Sure. So typically, you know, personally, I spend a lot more money on Saturday and Sunday. And I do all week, but because I’m at the office all week, but yeah, you know, so what you have to understand is, how much do you need every month? And then we have to reverse engineer and figure out? How do we make that money that that pile of money that you save into an income stream for you. And we successfully retired people with? You know, all kinds of different amounts?

Brian Quaranta 03:30

Yeah, 300,000, 500,000. I mean, a lot of people come in and say, I don’t think I have enough. And what we show them is that you do have enough. And it’s because most firms, most financial firms don’t focus on the distribution planning. So they don’t know how to properly articulate what truly needs to be done in retirement, to generate the cash flow they need. Because the strategies and techniques you use during your accumulation years, and we’ve talked about this, right, there’s two different phases of cumulation. And distribution, the accumulation years, as the strategies and techniques you use are so different than the strategies and techniques you use during those distribution years. Sure. And most people just don’t understand that part of the planning process. And when I say most people, I’m actually talking about most advisory firms, because they focus on that accumulation. Most people come in and we’ll say, tell me a little bit about your income strategy. My advisors just said we need to start taking money out. Okay, well, just taking money out is not a plan, we have a withdrawal rate, is there a certain rate of return we’re trying to achieve? How much income are we going to need? What are we going to pay in taxes? Do you have Roth IRA money, traditional IRA money, there’s a lot that goes into figuring out proper distribution, and to properly do it in a way that you mitigate risk so that you don’t run out of money while you’re still alive.

Cynthia De Fazio – 04:43

Sure, sure. That makes sense. Neil, is that still everyone’s number one fear is to run out of money during retirement.

Neil Mager – 04:51

Oh, gosh, I mean, of course it is. Yeah. You know, a lot of studies have been done that they tell you that people fear running out of money, more than they fear death. That’s why it’s so important to have that sound plan in place to make sure that you’re able to accomplish all that you want to accomplish in your retirement years. I mean, it really should be the best years of your life, I mean, you no longer have to trade your time for money. Hopefully, most likely, the kids are out of the house doing well on their own, you don’t have to financially support them anymore. And he should be really knocking off that bucket list, one by one and doing all the things that you promised you would do, because you sacrificed all those years by, you know, not taking the vacation, not buying the new car, to help the kids or to help pay the family bills. So you know, we want to make sure that we’re very sound in our planning techniques, so that we can achieve those goals. But also not only the worst sound to achieve the goals, but so we never have to go to a client say, hey, the plan that work, you need to go find some work. I know you’ve been retired for 10 or 15 years.

Brian Quaranta 05:54

So here, I want to just dive a little bit deeper on what the sound plan looks like. Because there’s five key areas that we have to focus on. And we talked about this on our radio show on the TV show, we talked about it the educational events, the five key areas are income, investments, taxes, health care, and legacy planning. And I want to share with the viewing audience that a sound plan starts with an income plan, because we can’t retire without income. That’s the one fundamental that we have to understand, you know, myself included. I mean, if you look at the way that I’m building my own portfolio, it’s moving towards generating income at a later point in life, because remember, 85 to 90% of the people out there, Cynthia, are not getting pensions anymore. So, you know, you go back 30, 40 years ago, retirement planning was pretty simple, right? But people retired, they got a pension, they got Social Security, that usually was enough money for them to maintain their lifestyle. If they were looking for supplemental income, on top of what they were getting with pension, Social Security, they went to the bank, and they bought a CD. Yeah, because at the time bank CDs, were paying 14, 15%, we’ve heard as high as 18, 18%. I think they even gave you a toaster when you when you’ve got an account, you know, but think about that, let’s say you had $200,000 saved and you go down to the bank, they give you a 15% return on $200,000. That’s $30,000 a year in additional income without ever touching your principal, FDIC insured. So, we’re just we’re in a completely different environment where the banks don’t want our money anymore. They’re giving us virtually 0%. Yeah, there’s getting harder and harder to find safe places to put money that have low risk and reasonable rates of returns. I mean, if you look at the bond market, right now, Bond rates are very, very low. And a lot of people what happens is advisory firms that focus on accumulation, and they don’t truly understand distribution will typically lead people down the wrong path by moving more of their money to bonds, as they get older to try to make the portfolio more conservative. And what they don’t realize is that there’s subjecting those individuals to what we call interest rate risk. So, if bond price or bond rates are very low, and then they go up, well, they have an inverse effect on your portfolio balance. So, if interest rates go up, your bond portfolio will go down. Well, historically low interest rates, where do you think interest rates are gonna go? Exactly. So, it’s just so important that we really take the time to do a proper analysis of where people are at so they can determine whether or not they’re on the right track?

Cynthia De Fazio – 08:27

Well, Brian, I know that you and Neil have a special offer to the viewers at home today. Let’s talk a little bit about that. And then open the phone lines.

Brian Quaranta – 08:35

Yeah, well, I would say the number one question we get all the time is, are we on the right track? And you know, I was talking to Neil, one day and I said, Neil, we need to call our process something he says why don’t we just call it the right track retirement system? And I said, You know what, that’s great, Neil, because that’s what most people want to know. So, what we do during our right track meeting is we do a portfolio analysis for you. And what we’re going to look at is the five key areas that we talked about. First, and most importantly, is we’re going to figure out what the income strategy needs to look like. Now that’s more in detail than you really think. Because when you’re building an income strategy, you got to look at what income sources you have, while both you’re living assuming that you’re married. But what happens if one of you die, and we call this making bad things happen on paper, because if we make bad things happen on paper, that’s a good thing. So we can address it. So, for the next 10 callers who call in right now, we are going to give you a complimentary portfolio analysis to help you determine whether or not you’re on the right track, but you’ve got to do your part. You’ve got to pick up the phone, get up off the couch, put the cup of coffee down and dial 1-888-382-1298 we will take you through a process that’s very easy to understand. It’ll give you a lot of clarity of what your retirement planning should look like. But again, you’ve got to do your part call 1-888-382-1298 and schedule your complimentary portfolio analysis.

Cynthia De Fazio – 09:54

Brian, thank you so much, Neil. Thank you so much to the viewers at home. The phone lines are now open that number to call Is 888-382-1298 we know you have a lot of questions about how to plan your perfect retirement, how to plan a stress-free retirement. Brian and Neil have the answers for you. All you have to do is be one of the first 10 callers today. 888-382-1298. We’ll be right back after this very short commercial break.

Commercial Break – 10:21

How confident are you in 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 hope 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 – 11:54

And welcome back to retirement You TV. My name is Cynthia de Fazio. I’m joined today by Brian Quaranta. He is president and founder of secure money advisors, as well as Neil, major Senior Investment Advisor, a wonderful show that we’re having today again, talking about the importance of proper planning when it comes to retirement. Brian, I have to ask you, what is your investment philosophy, if you will

Brian Quaranta – 12:17

plan, protect and preserve? Okay, yeah, really. I mean, because at the end of the day, you know, we’re focused on that distribution phase of retirement when we’re getting ready to distribute money. Remember, just like we talked about on the last episode, and what we talked about a lot, is the fact that most people are not retirement pensions. So number one, most importantly, you’ve got to generate income. So how do you do that? How do you properly allocate the investments to be able to do that, one of the greatest commodities that we don’t get more of his time. And if you talk to any investment professional, they’ll tell you that in order to be successful in the market, you have to have time, so as long as you just put the money in there and don’t touch it, you’re gonna be fine. We’ll tell me how that’s gonna work in the distribution phase, when you have to touch it. So here you have people retiring. And the advice that they’re getting is contradictory to what they’re actually about to do, right? So don’t worry about it, hang in there, you’ll be fine. Well, you can’t not worry about it and hang in there. And you’ll just be fine. Because you’re going to be in a distribution phase. So how do you build this distribution phase to mitigate the risk? Well, we’ve got to buy time back on the portfolio. How do we do that? Well, we have to have a buffer account, right? I mean, think of a buffer account as garden rolls down the road, right? We just don’t want to hit those guardrails. But if we do, they’re there to protect us from going off the cliff. And that’s what we call a buffer account. So we have a two bucket approach, okay, where we set enough money aside to generate at least 10 to 15 years worth of income. Now if my investment bucket is doing well, okay, so the second bucket is your, what we call your growth bucket. If that’s doing well, we’ll take the income from there, that’s fine. But if it’s not doing well, we certainly don’t want to remember they say, buy low, sell high. So if you’re going to try to generate income from a stock portfolio that’s down, what are you doing, you’re selling low, which is opposite of what you’re supposed to do. So what do you do when the markets down because if you’re in a portfolio, that’s all at risk, and you’re in your distribution years, and you’re taking income, just because the markets down doesn’t mean you’re going to stop taking your income, you’re going to need it, you’re going to need it to live off of. So what’s going to happen is if you do that, you’re going to compound the loss and you’re going to lock into the loss, right? Because the portfolio is down 15%, and you take 5% out in income, you’ve just compounded that loss down to 20%. Now, and you’ve also locked into that loss, and now the portfolio has to do even a greater rate of return to get back. So the two bucket approach that we utilize is our investment philosophy for making sure that we mitigate enough risk to generate cash flow. So think about it like this. Our job is to help you create a pension that you don’t have.

Cynthia De Fazio – 14:56

Okay, excellent. Brian, thank you so much, Neil. This is a great Question two, what is your process for servicing your clients?

Neil Mager – 15:03

Yeah, that’s a great question. Because, you know, a lot of times people come in and, you know, they like what we’ve shown them, and they want to move forward with secure money advisors. And, you know, they don’t really know what the future holds. So we’re very specific about how we go about servicing those clients throughout the years, because this is not a set it and forget it. I mean, this is a retirement plan. And we’re focused in those five key areas that we have to continue implementation on throughout the years to make sure that we’re achieving the goals. Now, we also want to be very fluid in the plan, because we know, for been doing this, as long as we’ve been that things are gonna change, right, they’re gonna have unexpected expenses, bad things are gonna happen, you know, maybe your spouse passes away or, you know, something significant like that. So we have something called a 411 servicing model. And basically what that looks like is we do for clients specific events per year. Now typically, what we’d like to do is just engage with our clients, let them know that we’re available in there. And, you know, they can come and ask us questions and talk and things like that they’re typically fun in nature, and people love them. I mean, during COVID, we were a little disappointed because with cancel a lot of the events and our clients were really at this point, our phone lines have been ringing off the hook asking, Where do you go to things like that, that they just really love. And then we do one annual review, sit down, and just make sure that we’re continuing to work on the plan. Yeah, it’s really, really important that we have that annual Sit down. Now a lot of the investments that we’re utilizing, really all we need, because of how technology is playing a part, we really only need one review. And then we do one typical State of the Union address where we’re talking about, you know, tax law changes or estate planning changes. And sometimes we bring in speakers that are more educated on the subject, whether it be an estate planning attorney, or something like that. And then folks are able, with unlimited planning meetings throughout the year. So if they’re getting close to retirement, and want to set up a few meetings throughout the year, they’re certainly eligible able. So we have a really good process. And we think it really, really works well, because of the feedback that we get from our clients.

Cynthia De Fazio – 17:14

Most definitely, I know everyone really enjoys working with both of you. Because obviously we’ve heard so many positive comments and feedback through the times that we’ve been doing the show together. When people call in they say that you’re exactly the same in the office as you are on the show. That’s a huge testimonial to both of you.

Brian Quaranta – 17:30

Yeah, you know what? He’ll be sitting in the meeting, sometimes I’ll walk in, and they’ll say, oh, wow, you’re the guy on the show. You sound exactly like I thought Why? What should we did we really we have, we have a very, you know, kind of a really just welcoming office.

Cynthia De Fazio – 17:49

Yeah. about that. What does it feel like when someone’s got a great culture,

Brian Quaranta – 17:53

we’ve got it, we’ve got a really great culture, we’ve got a culture of education and listening. And because, look, it’s an intimidating process for somebody to come in and expose their financial situation to a financial advisor. And so we don’t want that process to be intimidating. We’re not there to judge you on what you’ve done. We’re there to help you. Because I give people a lot of credit for picking up the phone and calling and saying, Look, I’m humble enough to say I need help. Right? I do need help. It’s not my area of expertise. I mean, we’ve got doctors, attorneys, accountants, steel workers, union workers do naval we’ve seen it across the board, we work with so many of the companies in Pittsburgh, we know all of what a lot of the plans look like for those companies. And we just know how to structure things for people. So our culture at the office is something that you can’t duplicate anyplace else, you know, and as a business owner, right, not only a financial adviser, but also the owner of the practice. I see it in the in the emails that I get about our team, your team, so wonderful. It was such a wonderful experience and onboarding with you guys, because we have a team based approach. And the reason is, is because people work with me just as much as they work with Neil. But the nice thing is if somebody calls in, and they need me, and I’m not there, they’ve gotten you to lean on. They’ve got another advisor of ours Maggie to lean on. They’ve got our new business team, you know, Cindy, and Danielle and Trudy, all these people to lean on to help them through what is kind of, you know, a very stressful course process that you have to go through. And we’ve done a really good job in making it a very easy, simple and stress free process as much as we can.

Cynthia De Fazio – 19:29

Yeah, absolutely. Well, Brian, I know that you and Neil have a special offer you would like to present to the viewers at home today. Let’s talk about what that is and reopen the phone lines.

Brian Quaranta – 19:38

Yeah, well, you know, Neil will tell you, everybody will come in and say, you know, we just want to know if we’re on the right track. And that’s ultimately what we’re going to do here, folks, for the next 10 callers who call in right now. We’re going to help you determine whether or not you’re on the right track. Now if you’re not on the right track, when would be a good time to know that probably now versus later. So We’ve seen other people charge up to $1,000 or more for what we’re going to do complimentary. So you’re going to get a complimentary portfolio analysis. When you come in, we’re going to go through the five key areas with you starting with income, looking at investments, taxes, health care and legacy planning. With me for about 45 minutes or so in during that meeting, you’re going to get a lot out of it. And we’re going to keep the process very simple and easy for you to understand. And you don’t have to worry about not knowing what questions to ask because we’re going to ask you a lot of questions, because we want to know about you so that we can help you customize a plan that truly fits what you’re trying to accomplish. But you’ve got to do your part, you’ve got to call 1-888-382-1298. Schedule your complimentary portfolio analysis today.

Cynthia De Fazio – 20:45

Brian, thank you so much, Neil, thank you so much to the viewers at home, the phone lines are now open. That number to call is 888-382-1298. We have to take a very short commercial break when we come back. I’m going to have viewer questions for Brian and Neil, so please stay tuned.

Commercial Break – 21:02

As a good saver, you’ve been putting away money during your working years. studies find that the biggest fear of retirees is running out of money. market volatility isn’t just the downward movement of stock prices. It’s the size and frequency of change. The more dramatic the ups and downs, the higher the volatility. This can put savers who are newly retired or a few years away from being retired at greater risk. today’s generation of retirees is not receiving traditional pensions as our parents or grandparents did. Instead, we have retirement accounts such as 401, K’s or 403 B’s. These accounts typically expose your money to market risk. The last thing you want right before retirement is to lose a portion of the money you need for income. But how do you turn these accounts into a retirement income? Is it safe to keep all your retirement money sitting in the stock market. The last thing you want is to lose a portion of the money you need for income due to market loss. By working with a financial professional, you can learn how to turn a portion of your savings into an income stream for life and income for the life of your spouse if you’re married. We all have moments in our lives when we wish we had taken action sooner. Don’t let procrastination rain on your retirement parade. Act now before it’s too late. Please call our office to set up your no cost no obligation retirement income review today.

Cynthia De Fazio – 22:27

And welcome back to retirement You TV. My name is Cynthia de Fazio and I’m joined today by Brian Quaranta. He is president and founder of secure money advisors, as well as Neil Mager Senior Investment Advisor, gentlemen, a great show that we’re having today. And I love the viewer questions because we never know what’s coming. And they’re always interesting, and they’re coming from all different directions. So Neil, I’m going to guide the first question to you if that’s okay. This is a great question says Neil, what taxes would I have to pay? If I worked with you?

Neil Mager – 22:57

Wow, that’s a great question. So it really depends on what type of an account it is, if it’s any sort of retirement account, 401, k 403, b 457. Plan, Ira of any kind, you’re not gonna pay any taxes, no taxes, no penalties in moving your money. Okay. Now, if it was an after tax account, potentially you have some capital gains in that account. And what we’d want to do before we even considered moving any money is make sure that we understood exactly what those capital gains look like, and what we would be subject to taxation, before we made any changes. So potentially, hopefully not if you decide to work with secure money advisors.

Cynthia De Fazio – 23:36

And Brian, does that tie into income planning, if you will?

Brian Quaranta – 23:40

Oh, absolutely. I mean, you know, because taxation is a big issue when it comes to income planning. So, you know, you think about generating income and retirement for most people, their largest account might be some type of tax deferred retirement accounts. So when the money comes out of those accounts, there’s going to be taxes owed on those. So what we like to do for people is show them how if they roll that money over to secure money advisors, right, and we use big financial institutions, we, we use TD Ameritrade. So, you know, we use big, strong, safe companies, we roll that money over, and we start to do the planning there. And a lot of times what we’re looking to do is kind of get the IRS out of the picture. So that when we do get into that distribution phase, the income that we’re taking is mostly tax free.

Cynthia De Fazio – 24:21

Okay, excellent. Great. Well, Brian, I have another question for you. This is a wonderful question. says I am exactly five years away from retirement, Brian, I do not yet have a plan in place. Is it too late for me,

Brian Quaranta – 24:33

never too late. Never too late to get a plan in place. The most important thing is that you get a second opinion or you just get an opinion period to determine if you’re on the right track, but it’s never too late to start the planning process. Don’t ever feel that you’re behind. Because there’s a lot of things that you can do and we see that you know, there’s people that you know, have been taken care of kids and grandkids and have had more money out got more money going out than they would have liked to and they might feel a little bit behind We help them get on that right track. And we set a goal in mind of where we need to go. And we know what rate of return we’re going to need to achieve. We know what contributions we’re going to need to make, so that they can get into retirement and act successfully through retirement without any worry or concern.

Cynthia De Fazio – 25:14

Thank you, Brian. Neil, a great question. I want to ask you this one quickly. We have about two and a half minutes left. It says, Neil, I have a question. My friends and family are advising me to pay down all debt before I hit retirement. What is your philosophy on that?

Neil Mager – 25:28

Yeah, that’s a great question. I mean, it’s certainly appropriate for some people. I mean, certainly you want to clean up any sort of high interest rate debt, right? credit cards, things like that. Now, a lot of people questions we pay off the mortgage. And you know, it’s certainly appropriate for some, the goal in creating a retirement plan is really creating cash flow. So how do we create cash flow, if we’re able to pay off some debt, you know, that enables us to create cash flow. So you know, if the mortgage is 15 $100 a month, and we pay that mortgage off, all of a sudden, we have 15 $100, a month of cash flow. So that’s very, very important. So it’s certainly appropriate for a lot of people I know, Brian’s philosophy is always to, you know, quit contributing to your 401k, maybe just get your match and no longer contribute in pay off debt. So it’s certainly different for everybody. But yeah, it can be a great philosophy to get rid of as much debt as possible. before retirement.

Brian Quaranta – 26:25

Yeah. And if you think about it like this, I mean, if you’re contributing, let’s say your mortgage is 15 $100 a month and you’re contributing money to a 401k. I would say reduce those contributions down to at least the company match and get the get the, the mortgage paid off. And the reason for that is because I know that when your mortgage is paid off, you’re going to have 15 $100 of additional income. Because you have no, that’s no longer going out. I can’t guarantee you that if you’re if you’re putting that money into your 401k plan, because I have no idea how that’s going to perform. That thing could go down. 20%. So now you just put all this money into it over the five year period prior to retirement, and the market goes down and poof, it’s gone.

Cynthia De Fazio – 27:02

Yeah, absolutely. Absolutely. Well, Brian, we only have about 45 seconds left of this show this week. Any final words of advice you want to give before we say goodbye?

Brian Quaranta – 27:10

Yeah, folks, make sure you’re on the right track. Call us today. 1-888-382-1298. For the next 10 callers who call in right now, we are going to give you a complimentary portfolio analysis to help you determine whether or not you’re on the right track. I always say if you’re not on the right track, when would be a good time to know that probably now but you’ve got to do your part. You’ve got to pick up the phone and call us. It’s 1-888-382-1298. We’ve seen people charge up to $1,000 or more for similar features. We’re going to do a complimentary for you.

Cynthia De Fazio 27:40

Brian, thank you so much, Neil, thank you so much. To the viewers at home, thank you for spending time with us. number to call is 888-382-1298 be safe. Be happy, be blessed. We’ll see you next week.