WEBVTT - When Should You Take Social Security? 0:00:08.160 --> 0:00:10.680 Whether to buy a house or go to college are 0:00:10.680 --> 0:00:14.440 major financial decisions, but so is deciding when to take 0:00:14.440 --> 0:00:18.440 Social Security. I am Rob West, it's true. Tens of 0:00:18.440 --> 0:00:21.680 thousands of dollars, if not more, are on the line 0:00:21.680 --> 0:00:26.040 when deciding when to start taking Social Security benefits. Eddie 0:00:26.079 --> 0:00:29.440 Holland joins us today to help you make that decision. 0:00:29.480 --> 0:00:33.639 And then it's on to your calls at 800, 525 7000. 0:00:33.680 --> 0:00:38.279 That's 805, two five 7000. This is faith in finance. 0:00:38.320 --> 0:00:44.640 Live biblical wisdom for your financial journey. Well, we're excited 0:00:44.640 --> 0:00:47.520 to have Eddie Holland with us today. Eddie's a senior 0:00:47.560 --> 0:00:51.280 private wealth advisor and partner of Blue Trust in Greenville, 0:00:51.280 --> 0:00:55.280 South Carolina. He's also a CPA, a certified financial planner, 0:00:55.280 --> 0:00:59.160 and a certified Kingdom advisor. So a triple threat, so 0:00:59.280 --> 0:01:01.840 to speak. Eddie, great to have you on the program. 0:01:01.880 --> 0:01:04.200 Rob, thank you so much. I'm honored to be your guest. 0:01:04.240 --> 0:01:07.440 Eddie, this is a topic we get so often related 0:01:07.440 --> 0:01:11.160 to when to take Social Security benefits. Now, we usually 0:01:11.160 --> 0:01:14.680 advise folks to put off taking Social Security benefits at 0:01:14.720 --> 0:01:19.760 least until full retirement age, which is now 66 or 67. 0:01:19.760 --> 0:01:23.280 But we realize that isn't always the best for everyone. 0:01:23.280 --> 0:01:25.320 So I'd love for you to weigh in on what 0:01:25.360 --> 0:01:28.040 folks should consider when making this decision. 0:01:28.080 --> 0:01:30.560 Sure, and I'll start out by prefacing that this is 0:01:30.560 --> 0:01:33.880 not an exhaustive list, just some things to consider. I 0:01:33.880 --> 0:01:36.240 think the first thing people need to consider, Rob, is 0:01:36.680 --> 0:01:40.679 understanding that if they take Social Security before full retirement age, 0:01:40.680 --> 0:01:44.520 they will be subject to a reduction. However, delaying past 0:01:44.560 --> 0:01:48.120 their full retirement age, they will receive an annual increase 0:01:48.120 --> 0:01:51.960 that equals 8%. That's what Social Security calls a delayed 0:01:51.960 --> 0:01:55.800 retirement credit. So those are very important things to consider. 0:01:55.840 --> 0:01:59.350 Another consideration is cash flow needs. If someone retires, then 0:01:59.350 --> 0:02:02.430 there's obviously going to be potentially cash needs that arise. 0:02:02.430 --> 0:02:05.230 So they may start taking Social Security earlier than full 0:02:05.230 --> 0:02:08.270 retirement age because there's cash needs, income needs that they 0:02:08.270 --> 0:02:11.070 need to replace. We have some clients that we've advised 0:02:11.070 --> 0:02:12.910 that needed to pay down debt. And so if you 0:02:12.910 --> 0:02:16.350 have debt payment that you need to consider, that's another factor. 0:02:16.669 --> 0:02:18.710 We've had clients that have said, I just want to 0:02:18.710 --> 0:02:21.070 increase my charitable giving. And so I want to draw 0:02:21.070 --> 0:02:26.429 Social Security, start giving more even in retirement or potentially 0:02:26.830 --> 0:02:30.830 as a legacy gift. So that's another consideration. Um, one 0:02:30.830 --> 0:02:33.710 other factor to consider, and I don't mean to be morbid, 0:02:33.710 --> 0:02:37.510 but health is is obviously a consideration. People that, um, 0:02:37.550 --> 0:02:40.830 don't have longevity in their family line. They may start 0:02:40.830 --> 0:02:44.870 taking Social Security benefits a little earlier. Others that plan 0:02:44.870 --> 0:02:47.510 to live a long time or feel like they're very healthy. 0:02:47.550 --> 0:02:51.070 Generally speaking, the longer you live, the more you benefit 0:02:51.070 --> 0:02:54.790 by delaying Social Security, at least until full retirement age 0:02:54.910 --> 0:02:59.430 and possibly even later until age 70. Another factor, Rob, 0:02:59.430 --> 0:03:01.350 that I'll mention. I'll mention a couple more and then 0:03:01.350 --> 0:03:04.790 one that maybe is a little more nuanced. Legacy goals 0:03:04.790 --> 0:03:07.750 and inheritance. Most of the time, you can't pass Social 0:03:07.750 --> 0:03:11.150 Security benefits on to kids or charity, but you can 0:03:11.190 --> 0:03:13.790 your portfolio. So some clients have said, I want to 0:03:13.830 --> 0:03:17.950 earmark my portfolio for giving or for inheritance reasons, and 0:03:17.950 --> 0:03:21.350 I want to start drawing Social Security. Now, everybody loves 0:03:21.350 --> 0:03:25.630 to talk about taxes, but income taxes a component to consider. 0:03:25.910 --> 0:03:29.389 Federal income tax guidelines state that Social Security could be 0:03:29.389 --> 0:03:32.590 subject to tax. So we've had some clients delay Social 0:03:32.590 --> 0:03:35.190 Security until a year where they're going to be in 0:03:35.190 --> 0:03:37.470 a lower tax bracket. And then one of the more 0:03:37.470 --> 0:03:40.990 nuanced strategies that really came up a couple of years ago, Rob, 0:03:41.230 --> 0:03:43.990 was when the market was down significantly. We had had 0:03:43.990 --> 0:03:47.790 clients that had retired prior to full retirement age. They 0:03:47.790 --> 0:03:50.670 were starting to draw from their portfolio. They wanted to 0:03:50.670 --> 0:03:54.380 delay Social Security. Well, the market did not cooperate, had 0:03:54.380 --> 0:03:57.980 significant market drop. What the client then at that point 0:03:57.980 --> 0:04:02.060 decided was can I stop or pause my Social Security benefit? 0:04:02.380 --> 0:04:05.300 If you are younger than full retirement age and you 0:04:05.300 --> 0:04:09.380 have started drawing Social Security within the first 12 months, 0:04:09.540 --> 0:04:12.980 you can do what Social Security calls a withdrawal so 0:04:12.980 --> 0:04:17.220 you can withdraw your application. But a withdrawal application simply 0:04:17.220 --> 0:04:20.380 means I had a 12 month free look. Period. I 0:04:20.420 --> 0:04:23.580 don't want to draw it. I want to have what 0:04:23.620 --> 0:04:26.099 in golfing terms is a mulligan? Yeah, I don't want 0:04:26.100 --> 0:04:29.140 to start drawing it back. And it's as if you 0:04:29.140 --> 0:04:32.299 never drew it. The benefit of that is that you 0:04:32.300 --> 0:04:34.620 can turn it back on at a later point, and 0:04:34.620 --> 0:04:37.820 you're able to potentially act as if you never drew it. Now, 0:04:37.820 --> 0:04:42.580 that's a very nuanced strategy, something to consider before actually 0:04:42.620 --> 0:04:43.820 making that decision. 0:04:43.820 --> 0:04:46.180 That was so helpful. We're obviously going to have to 0:04:46.180 --> 0:04:48.500 have you back, but you gave us some really important 0:04:48.500 --> 0:04:51.860 things to think about as you consider the right age 0:04:51.860 --> 0:04:55.500 to start taking Social Security benefits. Eddie, we appreciate you 0:04:55.500 --> 0:04:56.859 stopping by today, my friend. 0:04:56.900 --> 0:04:57.940 Rob, thanks for having me. 0:04:57.940 --> 0:05:01.380 That was Eddie Holland of Blue Trust in Greenville, South Carolina. 0:05:01.420 --> 0:05:03.580 Back with your calls and questions on the other side 0:05:03.580 --> 0:05:08.659 of this break. The number to call is 800 525 7000. 0:05:08.700 --> 0:05:13.620 Call right now 800 525 7000. By the way, you 0:05:13.620 --> 0:05:17.460 don't have to call. Just send an email. Ask Rob 0:05:17.500 --> 0:05:22.500 at the letters phi.com. We'll be back after this. 0:05:32.300 --> 0:05:35.220 The opinions offered during this program represent the personal or 0:05:35.220 --> 0:05:39.299 professional opinions of the participants, given for informational purposes only. 0:05:39.420 --> 0:05:42.740 Any information provided is not intended to replace advice from 0:05:42.740 --> 0:05:46.539 a financial, medical, legal or other professional who understands your 0:05:46.540 --> 0:05:47.979 specific situation. 0:05:56.010 --> 0:05:57.850 Great to have you with us today on Faith and 0:05:57.850 --> 0:06:00.650 Finance live. I'm Rob West, looking forward to taking your 0:06:00.650 --> 0:06:03.170 calls and questions today. How do you get in on 0:06:03.170 --> 0:06:08.529 the conversation? Well it's easy, you just call 800 525 7000. 0:06:08.570 --> 0:06:10.370 Our team is ready for you. We'd love to have 0:06:10.370 --> 0:06:14.290 you on today to answer whatever is on your mind today. 0:06:14.290 --> 0:06:17.210 That pressing question in your financial life. Again, the number 0:06:17.210 --> 0:06:22.850 with lines open, although that won't last long. 800 525 7000. 0:06:22.890 --> 0:06:24.610 What do we do on this program each day? Well, 0:06:24.610 --> 0:06:27.770 we set aside an hour to encourage you in your 0:06:27.770 --> 0:06:31.810 role as a steward of God's resources, recognizing God owns 0:06:31.810 --> 0:06:34.890 it all. Money is a good gift from God to give, 0:06:34.930 --> 0:06:36.810 to meet the needs of others, and to love our 0:06:36.810 --> 0:06:41.330 neighbors and to solve problems. To expand and spread the gospel. 0:06:41.330 --> 0:06:47.169 To invest in companies supplying business with capital for human flourishing. 0:06:47.210 --> 0:06:49.970 To create goods and services that should be good and 0:06:49.970 --> 0:06:53.170 that love our neighbors. Also to enjoy. You know, I 0:06:53.170 --> 0:06:58.529 think God smiles when we use money to enrich relationships. 0:06:58.529 --> 0:07:02.290 Maybe for a joyful celebration that's a good use of 0:07:02.290 --> 0:07:05.130 God's money. But we also have to recognize that this 0:07:05.130 --> 0:07:09.970 good gift can actually rival our hearts with devotion to God. Remember, 0:07:09.970 --> 0:07:12.370 he said, you have to choose. Is it going to 0:07:12.370 --> 0:07:14.890 be mammon or is it going to be God? So 0:07:14.930 --> 0:07:18.690 money can be dangerous, just like anything where we worship 0:07:18.690 --> 0:07:21.450 the creation over the creator. But I think we see 0:07:21.490 --> 0:07:23.730 clearly in Scripture that we need to be on our 0:07:23.730 --> 0:07:27.970 guard with regard to money, not serving its proper place 0:07:27.970 --> 0:07:31.610 as a tool, but instead becoming an end rather than 0:07:31.610 --> 0:07:33.450 a means to an end. And so we want to 0:07:33.450 --> 0:07:36.530 encourage you in that each day and help you to 0:07:36.970 --> 0:07:39.570 put money in that role that it was intended to 0:07:39.570 --> 0:07:42.930 occupy you accept your role as steward and encourage you 0:07:42.930 --> 0:07:46.250 with very practical answers to the questions you're facing in 0:07:46.250 --> 0:07:49.920 your financial life, because we understand you're trying to manage 0:07:49.920 --> 0:07:54.720 it appropriately and save it regularly and give it away generously. 0:07:54.720 --> 0:07:56.920 And all of that comes with questions. What does that 0:07:56.920 --> 0:07:59.840 look like in my life? And I made some mistakes 0:07:59.840 --> 0:08:02.360 along the way. And how do I deal with those? Well, 0:08:02.360 --> 0:08:04.400 that's why we're here to be an encouragement to you. 0:08:04.400 --> 0:08:07.040 So call right now with whatever you're thinking about in 0:08:07.040 --> 0:08:12.560 your financial life today. That number again is 800 525 7000. Again, 0:08:12.560 --> 0:08:17.640 it's 800 525 7000. Let's begin with what's in the 0:08:17.640 --> 0:08:22.480 news today. The markets are moving up positively. The Dow 0:08:22.480 --> 0:08:28.440 Jones closed up 740 points. The S&P up 118 points 0:08:28.480 --> 0:08:33.480 a little more than 2%. The Nasdaq up 2.5% on 0:08:33.480 --> 0:08:37.400 the news that, uh, well, perhaps the Trump administration was 0:08:37.520 --> 0:08:39.679 wanting to make sure that they knew that or that 0:08:39.679 --> 0:08:41.800 you knew that they were not trying to harm Apple 0:08:41.800 --> 0:08:45.280 with the iPhone tariffs. They've also put a pause on 0:08:45.480 --> 0:08:49.199 the tariffs related to Europe. The European Union, that was 0:08:49.200 --> 0:08:51.920 a big deal. The market responding positively to that on 0:08:51.920 --> 0:08:57.040 top of consumer sentiment, how consumers are feeling about the economy. 0:08:57.080 --> 0:08:59.840 It was up higher than expected. All of that together 0:09:00.000 --> 0:09:03.320 snapped last week's losing streak, and we saw some pretty 0:09:03.320 --> 0:09:06.480 good strength in the market today. Again, most of the 0:09:06.480 --> 0:09:10.560 major indexes up close to or more than 2% today. 0:09:10.559 --> 0:09:14.120 That's a good sign. We'll get Bob's take on that 0:09:14.120 --> 0:09:16.760 Bob Dole. That is a little later in the broadcast 0:09:16.760 --> 0:09:19.640 when he stops by to weigh in on the markets, 0:09:19.640 --> 0:09:23.040 what's moving them and just the overall health of the 0:09:23.080 --> 0:09:25.240 US economy. But one of the things we want to 0:09:25.240 --> 0:09:28.640 do today is, though get into your specific questions. Also, 0:09:28.640 --> 0:09:30.760 if you have a testimony, I'd love to hear it. 0:09:30.760 --> 0:09:33.280 You know, we're always encouraged when you share what God 0:09:33.280 --> 0:09:35.560 is up to in your financial life. The way to 0:09:35.559 --> 0:09:37.760 do either of those, again, is to call right now 0:09:37.800 --> 0:09:44.510 800 525 7000. Again, that's 800 525 Five. 7000. You know, 0:09:44.550 --> 0:09:48.270 when we think about managing money practically often, we get asked, 0:09:48.270 --> 0:09:51.110 what are those basic principles that we need to know 0:09:51.309 --> 0:09:54.750 coming from Scripture? You know, if I just do these things, 0:09:54.750 --> 0:09:57.070 I at least know I'm headed in the right direction. Well, 0:09:57.070 --> 0:09:59.510 I would give you five. I would say spend less 0:09:59.510 --> 0:10:02.230 than you earn. Sound simple? It's not. I get it, 0:10:02.230 --> 0:10:06.229 especially now with everything more expensive than it has been. 0:10:06.230 --> 0:10:09.190 But it's the key to every financial success that leads 0:10:09.190 --> 0:10:11.709 to having margin. Because if you live within your means, 0:10:11.710 --> 0:10:13.270 you're going to have something left over at the end 0:10:13.270 --> 0:10:15.150 of the month. That's the only way to fund your 0:10:15.150 --> 0:10:18.710 longer term goals. Then set long term goals. That's key 0:10:18.710 --> 0:10:22.710 because the longer term your perspective, the better your decision today. 0:10:22.990 --> 0:10:26.270 Avoid the use of debt because debt mortgage is the future. 0:10:26.270 --> 0:10:29.550 And give generously because giving breaks the grip of money. 0:10:29.590 --> 0:10:31.910 If you understand, God owns it all except your role 0:10:31.910 --> 0:10:35.069 as steward and apply those five principles, it doesn't mean 0:10:35.070 --> 0:10:37.990 you'll be free from worry or difficulty. We live in 0:10:37.990 --> 0:10:41.230 a fallen world, but you will put yourselves, I believe, 0:10:41.230 --> 0:10:43.470 in a in a position to experience God's best, and 0:10:43.470 --> 0:10:45.870 that's what we want to encourage you in each day. 0:10:45.910 --> 0:10:48.390 All right. Let's dive into those phone calls again. Calls 0:10:48.390 --> 0:10:50.590 are coming in now, but we've still got some lines open. 0:10:50.630 --> 0:10:55.230 800 525 7000 is the number to call. We are 0:10:55.230 --> 0:10:58.030 going to begin today in Tulsa, Oklahoma. Hi, Christy. Go 0:10:58.030 --> 0:10:58.630 right ahead. 0:10:59.590 --> 0:11:02.710 Hi, Rob. Thanks so much for taking my call. Um, 0:11:02.790 --> 0:11:07.550 my concern is with, um, the investment of my employer 0:11:07.590 --> 0:11:10.350 adding into my 401 K. I've not yet been with 0:11:10.350 --> 0:11:12.750 my employer for a year. And in order to be 0:11:12.750 --> 0:11:16.030 fully vested, um, them adding to my 401 K, I 0:11:16.030 --> 0:11:18.630 have to be there for five years. Of course, you know, 0:11:18.670 --> 0:11:24.829 things are not always, um. Yeah. It's. Sorry. Anyways, my 0:11:24.830 --> 0:11:28.550 question is, um, due to the possibility that maybe I 0:11:28.550 --> 0:11:31.309 won't be there for, you know, at the five year mark, 0:11:31.870 --> 0:11:33.829 would it be wise for me to get a 401 0:11:33.830 --> 0:11:35.110 K outside of my employer? 0:11:35.710 --> 0:11:37.870 Yeah. Uh, you would not be able to get a 0:11:37.870 --> 0:11:42.510 401 K outside of your employer because for one have 0:11:42.510 --> 0:11:46.070 to be offered by a plan administrator and you have 0:11:46.070 --> 0:11:49.470 to contribute to them through salary deferral. The only option 0:11:49.470 --> 0:11:51.750 you would have for a 401 K is what's called 0:11:51.750 --> 0:11:54.830 a solo K or an individual 401 K, but that 0:11:54.830 --> 0:11:58.510 requires you to be self-employed and it sounds like your W-2. 0:11:58.550 --> 0:12:01.150 You just haven't met that vesting requirement. Is that right? 0:12:02.030 --> 0:12:02.829 That's correct. 0:12:03.070 --> 0:12:07.189 Okay. Yeah. So your option would be a Roth or 0:12:07.230 --> 0:12:11.510 a traditional IRA. Um, are you familiar with those terms? 0:12:12.350 --> 0:12:14.590 I am, yes. And it's something actually, I've been trying 0:12:14.590 --> 0:12:16.950 to get my husband to do. Where? His 401 K. 0:12:17.950 --> 0:12:21.390 Okay. Yeah. So the the Roth and the 401 K 0:12:21.429 --> 0:12:25.670 are the account type. And then inside the account type 0:12:25.670 --> 0:12:30.470 is the you make contributions and then you have your investments. 0:12:30.630 --> 0:12:33.750 So a 401 K has to be apart from somebody 0:12:33.750 --> 0:12:38.260 who's completely self-employed. Uh has to be created by and 0:12:38.260 --> 0:12:41.699 administered by your employer. So that would not be an option. 0:12:41.860 --> 0:12:46.620 The IRA individual retirement account. That first letter I is 0:12:46.620 --> 0:12:48.900 the key. It's not set up by your employer. It's 0:12:48.900 --> 0:12:51.220 set up by you. So anyone can open an IRA 0:12:51.660 --> 0:12:54.460 and you can have one. Even if you have a 0:12:54.460 --> 0:12:57.340 401 K, you're able to have both and you're able 0:12:57.340 --> 0:13:01.180 to contribute up to the maximum of both. Now, between 0:13:01.179 --> 0:13:05.540 the Roth and the traditional, you still cannot exceed the 0:13:05.580 --> 0:13:10.140 annual IRA contribution limit, regardless of how many different IRAs 0:13:10.140 --> 0:13:12.780 you put it in. And so you have to decide, 0:13:12.780 --> 0:13:15.580 do I want a Roth or do I want a traditional. 0:13:15.780 --> 0:13:19.260 Now the Roth IRA is simply money that you put 0:13:19.260 --> 0:13:22.260 in after tax. So you get paid, you pay the 0:13:22.260 --> 0:13:24.940 tax on it, and then you put the after tax 0:13:24.940 --> 0:13:27.860 contributions into the Roth. You don't get a deduction. You 0:13:27.860 --> 0:13:30.420 don't get it to to write it off against your 0:13:30.500 --> 0:13:32.620 taxes for that year. So why would you do that. 0:13:32.660 --> 0:13:36.459 Well the benefit of the Roth is it grows tax free. 0:13:36.980 --> 0:13:40.219 So all the growth between the time you contribute and 0:13:40.220 --> 0:13:42.780 when you pull it out, let's say in retirement you're 0:13:42.780 --> 0:13:44.860 not going to be taxed on any of that growth, 0:13:44.860 --> 0:13:48.020 which is a nice benefit. With the traditional IRA. It's 0:13:48.020 --> 0:13:51.700 just the opposite. The traditional you put the money in, 0:13:51.740 --> 0:13:54.500 you get the current year tax deduction. So you get 0:13:54.500 --> 0:13:59.219 a tax benefit now and then it grows tax deferred. 0:13:59.380 --> 0:14:02.020 And then when you take it out you pay tax 0:14:02.020 --> 0:14:05.220 on it as income. The contribution that you got a 0:14:05.220 --> 0:14:08.380 deduction on. Plus all the growth gets added to your 0:14:08.380 --> 0:14:10.460 taxable income in the year that you pull it out. 0:14:10.460 --> 0:14:13.900 So when you're younger typically better to use a Roth IRA. 0:14:14.260 --> 0:14:15.940 Now let's do this. I've got to take a break. 0:14:15.940 --> 0:14:18.500 When we come back I'll answer any questions you have. 0:14:18.500 --> 0:14:20.180 And then we'll talk about where you might want to 0:14:20.220 --> 0:14:23.220 open that. This is faith and finance live. We'll be 0:14:23.220 --> 0:14:32.460 right back. Great to have you with us today on 0:14:32.460 --> 0:14:35.290 Faith and finance live. I'm Rob West. We're taking your 0:14:35.290 --> 0:14:42.890 calls and questions today. 800 525 7000. That's 800 525 7000. 0:14:42.930 --> 0:14:46.130 We'd love to hear from you today. Christie was not 0:14:46.130 --> 0:14:48.490 able to hold. Let me just mention something to make, uh, 0:14:48.490 --> 0:14:52.010 make clear. So when Christie was referring to that vesting 0:14:52.210 --> 0:14:55.930 of five years for that 401 K, uh, that does 0:14:55.930 --> 0:15:00.130 not apply to her contributions. So when you make contributions 0:15:00.130 --> 0:15:05.210 to your 401 K, you're 100% vested. You own them 0:15:05.210 --> 0:15:08.450 right away. Which means if you leave the company, you 0:15:08.450 --> 0:15:13.170 take your contributions, uh, the employer contributions, the part that 0:15:13.170 --> 0:15:18.570 they add that would often follow a vesting schedule. And 0:15:18.570 --> 0:15:20.730 so it may be for, you know, it could be 0:15:20.730 --> 0:15:25.210 what's called cliff vesting where you get 0% for a 0:15:25.210 --> 0:15:27.290 set number of years, like in her case, five. And 0:15:27.290 --> 0:15:29.890 then you get all of it, or a graded vesting 0:15:29.890 --> 0:15:33.490 where you get a certain percentage each year building up 0:15:33.490 --> 0:15:35.770 to the fifth year in her case. But if you 0:15:35.770 --> 0:15:40.450 leave the company before you're fully vested, you would forfeit 0:15:40.450 --> 0:15:44.050 some or all of that employer match, but you would 0:15:44.090 --> 0:15:47.370 absolutely be able to take your contributions with you, which 0:15:47.370 --> 0:15:50.090 is just like the IRA. You're not going to get 0:15:50.090 --> 0:15:53.210 any matching in the IRA, but it's yours immediately. The 0:15:53.210 --> 0:15:55.610 same would be true with the 401 K. Now, if 0:15:55.610 --> 0:15:59.410 you don't have a Roth 401 K, though, Christie I 0:15:59.450 --> 0:16:02.050 if you're young, I would say go ahead and start 0:16:02.050 --> 0:16:05.330 with that Roth IRA and get that money going in 0:16:05.370 --> 0:16:09.050 after tax but growing tax free. Now if you bump 0:16:09.050 --> 0:16:15.810 into the IRA contribution limit for 2025, which is $7,000, 0:16:16.170 --> 0:16:19.770 then that's where I would go ahead and start contributing 0:16:19.810 --> 0:16:24.570 to that 401 K even prior to you reaching the vesting, 0:16:24.570 --> 0:16:27.530 because to my point, you don't have to worry about 0:16:27.530 --> 0:16:30.930 your portion. It's only the employer match. So hopefully that 0:16:31.080 --> 0:16:33.720 helps you just clear up. I know that can get confusing, 0:16:33.720 --> 0:16:36.440 but we appreciate your call today. Let's, uh, go right 0:16:36.440 --> 0:16:37.800 back to the phones. By the way, if you have 0:16:37.800 --> 0:16:42.240 a question, call right now 800 525 7000. We're going 0:16:42.280 --> 0:16:44.800 to go out to Coral Springs, Florida. I know it well. Hi, Jessica. 0:16:44.800 --> 0:16:45.400 Go ahead. 0:16:46.320 --> 0:16:50.400 Hi, Bob. And thank you for your service. Yeah, um, 0:16:50.680 --> 0:16:54.240 I'm considering going back to school for my doctorate, and 0:16:54.240 --> 0:16:56.880 I wanted to know, would it be wise if I 0:16:56.880 --> 0:17:00.760 take an equity credit, um, to actually to pay for 0:17:00.760 --> 0:17:04.600 my tuitions or just go ahead with the student loan 0:17:04.600 --> 0:17:05.680 that they offer me? 0:17:06.200 --> 0:17:09.160 Yeah. You know, I don't like that option, Jessica. And 0:17:09.160 --> 0:17:12.880 here's why. Um, you know, you're collateralizing that debt to 0:17:12.920 --> 0:17:16.280 your home. And so if something happened and you lost 0:17:16.280 --> 0:17:19.719 your job, or you had a disruption in income and 0:17:19.720 --> 0:17:22.280 you're not able to make that payment for a period, 0:17:22.320 --> 0:17:25.919 you've just put your home at risk, um, with the 0:17:25.920 --> 0:17:29.080 student loan, especially if it's a federal student loan in 0:17:29.080 --> 0:17:33.000 the same scenario where something unexpected comes a financial hardship 0:17:33.000 --> 0:17:37.120 of some kind. The student loan program, the federal one 0:17:37.400 --> 0:17:41.960 offers income based repayment options. So they're going to let 0:17:41.960 --> 0:17:45.840 you reduce your monthly payment equal to the reduction in 0:17:45.840 --> 0:17:48.480 income that you've had for a period of time until 0:17:48.480 --> 0:17:51.560 you can get back up to the normally scheduled payment. 0:17:51.560 --> 0:17:54.800 So there's a lot more flexibility there, as opposed to 0:17:54.840 --> 0:17:56.560 the line of credit, where there's not going to be 0:17:56.560 --> 0:18:00.399 that option and you've collateralized your home to the loan, 0:18:00.400 --> 0:18:03.800 which again, you know, carries additional burden or risk. So 0:18:04.119 --> 0:18:06.959 I wouldn't go there. I would stay away from that 0:18:06.960 --> 0:18:11.280 and exhaust the federal loan options. First. They're going to 0:18:11.320 --> 0:18:15.240 offer fixed rate. And those borrower protections are pretty nice. 0:18:16.480 --> 0:18:17.480 Okay. Thank you. 0:18:17.960 --> 0:18:22.800 Okay. We appreciate your call today. 800 525 7000 Sioux City, 0:18:22.800 --> 0:18:24.280 Iowa Marc. Go ahead sir. 0:18:25.400 --> 0:18:30.310 Hi. I have a question about mutual funds versus exchange 0:18:30.310 --> 0:18:34.990 traded funds. I don't really understand the basic difference. Um, 0:18:35.030 --> 0:18:40.750 I have $10,000 to invest. Everything else. My retirement, everything 0:18:40.790 --> 0:18:46.350 is fully funded. Um, we do have, uh, 2% mortgage, 0:18:46.470 --> 0:18:51.149 about 80,000 left on that. Uh, other than that, uh, 0:18:51.150 --> 0:18:54.310 I'm wondering, you know, what's the best thing to do 0:18:54.310 --> 0:18:58.750 with this money that I have to invest? I'm looking at, uh, 0:18:58.869 --> 0:19:04.270 robotics and AI, possibly as far as exchange traded funds. 0:19:04.950 --> 0:19:09.149 Okay. Yeah. So the key difference is, uh, Mark, and 0:19:09.150 --> 0:19:12.390 it's a great question. Um, you know, the the trading 0:19:12.390 --> 0:19:15.510 would be the first one. So ETFs trade like stocks. 0:19:15.630 --> 0:19:17.990 So you buy them and sell them just like a stock, 0:19:18.030 --> 0:19:20.870 you know, shares of Coca-Cola or whatever company you want 0:19:20.910 --> 0:19:24.310 to use. As an example ETFs trade just like stocks. 0:19:24.430 --> 0:19:27.709 As long as the exchange is open, you place a trade. 0:19:27.710 --> 0:19:29.629 If you do a market order, you're going to get 0:19:29.630 --> 0:19:32.910 the next trade comes to you and you know you 0:19:32.910 --> 0:19:34.909 buy it and sell it at any time. With a 0:19:34.910 --> 0:19:38.270 mutual fund, they trade once per day, and you get 0:19:38.270 --> 0:19:41.950 based on the net asset value of the fund, all 0:19:41.950 --> 0:19:47.190 the outstanding shares and all the the investments held divided equally. 0:19:47.430 --> 0:19:50.629 After the market closes. You get that trade once per 0:19:50.630 --> 0:19:55.230 day on the fees. ETFs are generally lower fees, mutual 0:19:55.230 --> 0:19:58.270 funds usually have higher fees, and they can have what 0:19:58.270 --> 0:20:02.429 are called sales loads commissions. Although there are no, you know, 0:20:02.470 --> 0:20:06.670 no fee or no commission, uh, mutual funds. But generally 0:20:06.670 --> 0:20:10.350 the fees are higher. Uh, tax efficiency ETFs are usually 0:20:10.350 --> 0:20:14.070 more tax efficient. Uh, mutual funds can trigger what are 0:20:14.070 --> 0:20:18.830 called capital gain distributions when there's a capital gain that incurs, uh, 0:20:19.109 --> 0:20:22.550 inside the fund and it's passed along to the shareholders 0:20:22.750 --> 0:20:26.060 and then the minimum investment. Um, the ETFs can be 0:20:26.060 --> 0:20:28.859 bought with as little as one share. Mutual funds might 0:20:28.859 --> 0:20:32.139 have a minimum investment. So you can understand quickly why 0:20:32.180 --> 0:20:36.660 ETFs are gaining and growing in popularity. Because they're less expensive, 0:20:36.660 --> 0:20:39.500 more liquid. So you can trade them more frequently. They're 0:20:39.500 --> 0:20:42.980 tax efficient and they usually have lower minimums. So if 0:20:42.980 --> 0:20:46.740 you want lower costs and flexibility I'd say go with ETFs. 0:20:47.100 --> 0:20:50.540 If you want more hands off investing or you want 0:20:50.580 --> 0:20:55.300 to buy into a particular mutual fund's actively traded manager 0:20:55.460 --> 0:20:58.620 where you're buying his or her expertise, you know that's 0:20:58.619 --> 0:21:01.139 where you may want to buy a mutual fund, although 0:21:01.300 --> 0:21:04.820 more and more mutual funds, you know, are spinning off 0:21:04.859 --> 0:21:09.179 ETFs that basically mirror the same investment strategy. So I 0:21:09.180 --> 0:21:11.180 would say, given what you're looking for, where you want 0:21:11.220 --> 0:21:14.940 to buy into a particular sector like AI or robotics, 0:21:14.940 --> 0:21:18.379 I think you're most flexible and cost efficient approach is 0:21:18.380 --> 0:21:21.900 going to be an exchange traded fund focused specifically on 0:21:21.940 --> 0:21:24.140 that sector of the market. The only thing I might 0:21:24.180 --> 0:21:26.580 warn you on, just as I wrap up here, would 0:21:26.580 --> 0:21:29.540 be just make sure you're not too highly concentrated. You 0:21:29.540 --> 0:21:32.660 want to be properly diversified, even though I think robo 0:21:32.700 --> 0:21:35.740 robotics and I have a great future. You just want 0:21:35.780 --> 0:21:38.139 to make sure that, you know, as you look over 0:21:38.140 --> 0:21:41.979 all of your investable assets, that that doesn't comprise too 0:21:41.980 --> 0:21:45.820 high a percentage, which makes you too highly concentrated. Hope 0:21:45.820 --> 0:21:48.420 that helps. Thanks for your call. We'll be right back. 0:21:56.500 --> 0:21:58.139 Great to have you with us today on Faith in 0:21:58.140 --> 0:21:59.140 Finance live. 0:21:59.140 --> 0:22:02.060 I'm Rob West. We're taking your calls and questions 800 0:22:02.060 --> 0:22:06.419 525 7000 is the number to call again. That's 800 0:22:06.460 --> 0:22:12.700 525 7000. Right back to the phones. Elk Grove Village, Illinois. Hi, Brian. 0:22:12.700 --> 0:22:13.419 Go ahead. Sir. 0:22:13.980 --> 0:22:16.260 Hi. First of all, I love your show. I listen 0:22:16.260 --> 0:22:18.180 to it all the time. Thanks for what you do. 0:22:19.180 --> 0:22:23.739 So The, uh. So I'm 57, and so the, uh, 0:22:23.940 --> 0:22:28.700 for the, uh, are right with the required minimum deductions, 0:22:28.700 --> 0:22:33.179 I guess. Um, so I'm thinking once I get to retirement, 0:22:33.180 --> 0:22:36.460 I want to live off, like, 4%, which is what 0:22:36.460 --> 0:22:41.220 you always say of your, you know, IRA 401, your savings, 0:22:41.220 --> 0:22:45.780 whatever your. And then, uh, when, when does, when does the, uh, 0:22:45.820 --> 0:22:50.820 required minimum deductions kick in? Um, because I just I 0:22:50.859 --> 0:22:53.340 didn't want to I mean, like, is it going to 0:22:53.340 --> 0:22:55.340 be more than 4% or. I just don't know how 0:22:55.340 --> 0:22:56.179 to plan for that? 0:22:56.740 --> 0:22:59.980 Yeah. Yeah, it's a good question. Um, so there's a 0:22:59.980 --> 0:23:04.820 table that the IRS publishes and it's based on your 0:23:04.859 --> 0:23:09.700 life expectancy. So, uh, the RMD percentage at age 73, 0:23:09.700 --> 0:23:12.900 I'm looking at it. So the life expectancy factors here, 0:23:13.220 --> 0:23:17.939 you would take, um, your account balance, uh, times the 0:23:17.940 --> 0:23:23.010 life expectancy factor. So at 73 that's 26.5. And so 0:23:23.010 --> 0:23:28.610 the equivalent percentage would be about 3.75% of your balance. 0:23:28.970 --> 0:23:31.609 Um and so when you get to that point because 0:23:32.090 --> 0:23:34.409 based on the current law and it could change between 0:23:34.410 --> 0:23:37.290 now and then, but the required minimum doesn't kick in 0:23:37.290 --> 0:23:41.689 until age 73. Uh, if you turn 73 and in 0:23:41.730 --> 0:23:45.370 2025 or later. Um, so it sounds like, you know, 0:23:45.410 --> 0:23:47.690 you would be pulling out just based on at least 0:23:47.690 --> 0:23:51.690 the way the tables are today. With the life expectancy factors, 0:23:51.690 --> 0:23:54.409 you'd be pulling out a little bit more than you 0:23:54.410 --> 0:23:57.690 would be required to anyway with a 4% withdrawal rate. 0:23:57.890 --> 0:24:00.530 If for some reason you wanted to take less and 0:24:00.530 --> 0:24:03.010 you weren't getting above it, then you know you could 0:24:03.010 --> 0:24:05.250 do some of your giving out of it, uh, through 0:24:05.250 --> 0:24:10.530 what's called a qualified charitable distribution and perhaps replace additional 0:24:10.530 --> 0:24:13.210 give or the same giving you were doing with after 0:24:13.250 --> 0:24:16.490 tax dollars from checking or savings. You could instead take 0:24:16.490 --> 0:24:19.410 it from your IRA. Um, you know, to get up 0:24:19.410 --> 0:24:22.010 to the minimum. But just based on your current plans 0:24:22.210 --> 0:24:24.850 and the way the the tables are structured, you're going 0:24:24.890 --> 0:24:26.050 to get above it anyway. 0:24:27.369 --> 0:24:31.889 Sounds great. Okay. Uh, that gives me some relief factor. Okay. 0:24:31.890 --> 0:24:32.490 Thank you. 0:24:32.850 --> 0:24:35.810 Awesome. Yeah. You're welcome. Call anytime. Hey, Brian. Uh, appreciate 0:24:35.810 --> 0:24:37.890 you being such a regular listener. Stay on the line. 0:24:37.890 --> 0:24:39.850 We'll send you a gift. I'd love to give you 0:24:39.850 --> 0:24:42.050 a copy of our magazine. Faithful steward. I think you'll 0:24:42.090 --> 0:24:44.330 enjoy it. We appreciate your call today. Uh, let's go 0:24:44.330 --> 0:24:46.930 to Bradenton, Florida. Hi, Margie. How can I help? 0:24:47.690 --> 0:24:51.889 Hi. Hi, Rob. Um, yeah. Um, I'm currently giving to 0:24:51.930 --> 0:24:55.850 charities every month, uh, on a monthly basis, and I'm 0:24:55.890 --> 0:25:01.370 cashing out mutual funds to do that. Um, but I'm wondering, uh, 0:25:01.369 --> 0:25:03.090 if there's a better way to do it that I 0:25:03.090 --> 0:25:07.929 can give the mutual funds directly to the a variety 0:25:07.930 --> 0:25:11.530 of different charities without cashing it out first. And I 0:25:11.530 --> 0:25:13.850 know a lot of churches and different charities can't take 0:25:13.850 --> 0:25:16.840 stocks and mutual funds. And I didn't know if you 0:25:16.840 --> 0:25:20.800 could direct me of a way to how to do that, 0:25:20.840 --> 0:25:22.960 to give them, you know, so I don't have to 0:25:22.960 --> 0:25:24.919 take that tax burden. 0:25:25.960 --> 0:25:28.720 Yes, ma'am. No, I totally get it. And this is, um, 0:25:28.960 --> 0:25:32.400 in a taxable account, not a retirement account. Is that right? 0:25:33.359 --> 0:25:36.560 Uh, one is an individual, and it's mutual funds. And 0:25:36.560 --> 0:25:42.840 the other one is Roth mutual funds. So it's a 0:25:42.880 --> 0:25:46.560 non one nine and one's a Roth. 0:25:47.520 --> 0:25:51.200 Okay. Uh yeah. So one is just a straight taxable account. 0:25:51.240 --> 0:25:53.720 And you didn't get a tax deduction or anything when 0:25:53.720 --> 0:25:54.880 you put it in. Right. 0:25:55.359 --> 0:25:55.959 Right. 0:25:56.320 --> 0:26:00.800 Okay. Yeah. So you're right is you do need to contact, uh, 0:26:00.800 --> 0:26:06.159 the charity first. Not all mutual funds, uh, are accepted 0:26:06.160 --> 0:26:09.879 directly by the charity. If they do, you would ask 0:26:09.880 --> 0:26:13.640 for their mutual fund information. Sometimes it's different than their 0:26:13.640 --> 0:26:16.680 brokerage for stock gifts, and then you just initiate the 0:26:16.680 --> 0:26:20.320 transfer with the mutual fund company, and that may take 0:26:20.320 --> 0:26:23.159 longer than donating stock. So you've got to just be 0:26:23.160 --> 0:26:25.840 aware of that. And then you would receive the charitable 0:26:25.840 --> 0:26:30.040 deduction for the the fund's fair market value, which avoids 0:26:30.160 --> 0:26:34.080 that capital gain. Now, if the charity cannot take the 0:26:34.080 --> 0:26:38.040 mutual fund, then you'd probably want to consider donating it 0:26:38.200 --> 0:26:42.680 to a what's called a donor advised fund and then 0:26:42.680 --> 0:26:46.240 grant the money out in the form of cash after 0:26:46.240 --> 0:26:48.480 it hits the donor advised fund. Are you familiar with 0:26:48.480 --> 0:26:49.120 that term? 0:26:50.119 --> 0:26:55.600 Um, yeah, I'm seeing online a Da giving 360. Is that. 0:26:56.280 --> 0:26:57.360 Yeah. So that that would. 0:26:57.359 --> 0:26:59.879 Be a donor advised fund sponsor. I would use a 0:26:59.920 --> 0:27:01.760 donor advised fund. I mean, if it's going to just 0:27:01.760 --> 0:27:04.080 go in and go right back out, then you could 0:27:04.080 --> 0:27:08.080 look for a low cost provider like Fidelity or Schwab. Um, 0:27:08.200 --> 0:27:09.600 you know, if the, if any part of the money 0:27:09.600 --> 0:27:11.750 is going to stay there, I would rather you be 0:27:11.750 --> 0:27:15.950 with the National Christian Foundation NCF giving com. They call 0:27:15.950 --> 0:27:19.310 it a giving fund. It's just because ultimately the donor 0:27:19.310 --> 0:27:22.950 advised fund sponsor has control over whether or not they're 0:27:22.950 --> 0:27:26.430 going to honor your grant request. Now, the way they're 0:27:26.430 --> 0:27:29.030 supposed to work is you make the grant request and 0:27:29.030 --> 0:27:31.750 they grant it out to the 500 1C3 charity or 0:27:31.750 --> 0:27:36.430 your church upon your wishes. But they can establish protocols 0:27:36.430 --> 0:27:41.510 around certain organizations that they won't give to. But so 0:27:41.510 --> 0:27:44.590 that's why I like being with a faith aligned organization 0:27:44.590 --> 0:27:47.310 to ensure they're never going to close you off from 0:27:47.310 --> 0:27:50.869 giving to the the ministries or charities that you want 0:27:50.869 --> 0:27:54.070 to that might have a religious intent. I'm not saying 0:27:54.109 --> 0:27:56.510 Fidelity or Schwab do that, but they have the ability 0:27:56.510 --> 0:27:58.990 to do that if they wanted to in the future. 0:27:58.990 --> 0:28:01.710 But yeah, you would create a donor advised fund with 0:28:01.750 --> 0:28:04.350 Fidelity or Schwab or the one you talked about or 0:28:04.390 --> 0:28:08.550 NCF giving com that I mentioned, National Christian Foundation, and 0:28:08.550 --> 0:28:12.710 then you would make the mutual fund gift. Um, typically, 0:28:12.710 --> 0:28:16.190 donor advised funds can accept mutual funds as soon as 0:28:16.190 --> 0:28:19.429 it hits the account. Then that would be gift. So 0:28:19.430 --> 0:28:23.030 you'd get the the charitable contribution for the full amount, 0:28:23.150 --> 0:28:25.750 and then you would be able to grant the money out, 0:28:25.950 --> 0:28:29.350 usually through an online portal, kind of like online banking 0:28:29.470 --> 0:28:31.830 at whatever point you want in the future. But at 0:28:31.869 --> 0:28:34.590 that point you're no longer getting a contribution receipt from 0:28:34.590 --> 0:28:37.070 the ministry. You're getting it when you make it to 0:28:37.109 --> 0:28:39.990 the donor advised fund, and then the donor advised fund. 0:28:40.030 --> 0:28:43.030 Sponsor will just send cash to the ministry whenever you 0:28:43.030 --> 0:28:44.630 tell them to. Does that make sense? 0:28:45.430 --> 0:28:49.110 Yeah, that sounds great. Now is there um, how does 0:28:49.110 --> 0:28:53.430 that NCAA that ncc's keeping any of my funds as 0:28:53.430 --> 0:28:55.710 a processing fee or anything like that? 0:28:56.070 --> 0:28:57.630 Yes, they do. And so you're going to want they 0:28:57.630 --> 0:29:00.870 all have a fee that they would charge, probably a, 0:29:00.910 --> 0:29:03.430 you know, an ongoing fee that would be pretty modest. 0:29:03.430 --> 0:29:05.190 And so you're going to want to understand what that is. 0:29:05.190 --> 0:29:08.340 I don't remember what NFS is right offhand, but if 0:29:08.340 --> 0:29:10.180 the money's going in and right back out, it's going 0:29:10.220 --> 0:29:13.460 to be very modest. Um, but if you were really, 0:29:13.540 --> 0:29:16.060 you know, curious about the fees, then you could compare 0:29:16.300 --> 0:29:19.420 NCF against, you know, Fidelity or Schwab or the one 0:29:19.420 --> 0:29:21.980 that you're looking at. But as long as you verify 0:29:21.980 --> 0:29:24.620 in advance that they will allow you to grant out 0:29:24.620 --> 0:29:27.460 to whatever ministry or your church you want to and 0:29:27.460 --> 0:29:30.300 they will. And cost is a factor. Then you could 0:29:30.300 --> 0:29:31.580 make it on that basis. 0:29:32.660 --> 0:29:36.980 Okay. And and you're saying like Nancy cat. Sam. 0:29:37.660 --> 0:29:44.100 Uh, no f as in Frank. So National Christian Foundation. Um, yeah. They've, uh, 0:29:44.220 --> 0:29:47.060 you know, give out, uh, they grant out billions of 0:29:47.060 --> 0:29:50.620 dollars every year, but it's not their giving. It's just 0:29:50.620 --> 0:29:54.340 they're the vehicle for the giving among tens of thousands 0:29:54.340 --> 0:29:57.860 of Christians that use NCF as their giving platform. It 0:29:57.860 --> 0:30:01.820 was founded by Ron Blue and Larry Burkett. Wonderful organization. 0:30:01.820 --> 0:30:04.740 They're great partners of ours. You'll find them at, uh, 0:30:04.740 --> 0:30:11.140 in CCF, National Christian Foundation, NCF. Com. It's called a 0:30:11.180 --> 0:30:14.140 giving fund, but that's the same as a donor advised fund. 0:30:14.180 --> 0:30:14.700 All right. 0:30:15.340 --> 0:30:17.660 Oh, wonderful. Thank you so much. I'll give them a 0:30:17.660 --> 0:30:19.900 call and get this all worked out. I really appreciate 0:30:19.900 --> 0:30:21.220 your guidance. Thank you. 0:30:21.260 --> 0:30:24.860 Absolutely, Margie. You're welcome. Thanks for calling today and for 0:30:24.860 --> 0:30:27.460 being a part of the program. We appreciate it. All right, folks, 0:30:27.460 --> 0:30:29.100 we're going to head to a break. Bob Dole is 0:30:29.100 --> 0:30:30.980 going to stop by right after the break and catch 0:30:31.020 --> 0:30:33.020 us up on the markets. By the way, if you 0:30:33.020 --> 0:30:36.100 love the program, want to support our work and receive 0:30:36.140 --> 0:30:39.980 quarterly issues of Faithful Steward, our magazine and pre-release copies 0:30:39.980 --> 0:30:43.459 of our studies and devotionals and get Faith five Pro, 0:30:43.500 --> 0:30:46.180 our app. Go to faithful.com and click give. We'll be 0:30:46.180 --> 0:30:46.820 right back. 0:30:53.340 --> 0:30:55.580 Great to have you with us today on Faith in finance. 0:30:55.580 --> 0:30:59.020 Live here in this final segment today Bob Dole is here. 0:30:59.020 --> 0:31:02.180 Bob stops by each Monday in this segment to give 0:31:02.180 --> 0:31:05.650 us his take on the markets and the economy. And Bob, 0:31:05.650 --> 0:31:08.730 a welcome reprieve from the sell off last week, huh? 0:31:09.410 --> 0:31:11.370 A lot of green on the screen. And of course, 0:31:11.410 --> 0:31:15.450 the reason, as you know, is, uh, primarily, um, President 0:31:15.490 --> 0:31:19.930 Trump's walk back of his, uh, punishing words of a 0:31:19.930 --> 0:31:23.330 little more than a week ago related to tariffs, uh, 0:31:23.330 --> 0:31:26.930 discussions not going well with the EU. Uh, add to 0:31:26.970 --> 0:31:30.970 that a good consumer confidence number today and stocks took 0:31:30.970 --> 0:31:31.890 to the upside. 0:31:32.370 --> 0:31:35.530 Yeah, they sure did. Uh, Bob, you know, where do 0:31:35.530 --> 0:31:38.570 we find ourselves just in terms of the likelihood of 0:31:38.570 --> 0:31:41.050 a recession over the balance of the year? I know 0:31:41.050 --> 0:31:43.850 there's a lot of uncertainty, but, uh, you know, you 0:31:43.850 --> 0:31:46.730 market guys like to, uh, look at the hard numbers 0:31:46.730 --> 0:31:48.850 and make guesses. So we'll let you guess. What do 0:31:48.850 --> 0:31:49.370 you think? 0:31:49.610 --> 0:31:52.610 Yeah. I'm glad you suggest we do that all day long. Uh, 0:31:52.610 --> 0:31:54.770 my guess, having come into the year with a guess 0:31:54.770 --> 0:31:58.850 of 25% chance, got as high as 50 when the 0:31:58.850 --> 0:32:01.370 worst of the tariff news was there. Now we're kind 0:32:01.370 --> 0:32:04.330 of one out of three. Call it 30% chance. So 0:32:04.450 --> 0:32:08.810 higher than normal, but still comfortably under 50%. What I 0:32:08.810 --> 0:32:12.570 would clarify, uh, with that, Rob is a slow down. 0:32:12.610 --> 0:32:15.650 I'm convinced we're going to have a slow down, although 0:32:15.650 --> 0:32:18.930 with consumer confidence numbers like today. Maybe that's wrong too. 0:32:19.330 --> 0:32:22.010 But I think we'll get some slowdown as we'll see 0:32:22.010 --> 0:32:27.770 some unemployment pick up some jobs lost, but not a disaster. 0:32:28.690 --> 0:32:31.370 Yeah. Bob, what would be some of those leading indicators 0:32:31.370 --> 0:32:33.730 that you would be looking at that really give us 0:32:33.730 --> 0:32:36.490 the full story on the slowdown if it's happening. 0:32:37.050 --> 0:32:41.770 Yeah. The best that's reasonably frequent meaning every week is 0:32:41.770 --> 0:32:47.570 initial unemployment claims. Uh, and they have held pretty steady. And, uh, 0:32:47.570 --> 0:32:50.490 that tells us that all the soft data about the. 0:32:52.690 --> 0:32:56.610 Surveys that have fallen off a cliff, that has not 0:32:56.650 --> 0:33:00.850 yet bled into the hard data, the actual news of 0:33:01.010 --> 0:33:04.170 our economy, so we're still in that limbo land. Will 0:33:04.210 --> 0:33:06.330 the soft data move into the hard data? 0:33:06.850 --> 0:33:10.810 Yeah. No question about it. Bob, what about inflation? What 0:33:10.810 --> 0:33:12.729 what are the latest readings showing? And do you feel 0:33:12.730 --> 0:33:14.450 like that's continuing to come down? 0:33:15.130 --> 0:33:20.210 Well inflation numbers are going to say sticky at high 0:33:20.250 --> 0:33:25.730 two 3%. Nowhere close to the 2% target the fed had. 0:33:26.050 --> 0:33:30.930 Having said that, the University of Michigan Consumer Inflation Survey 0:33:31.170 --> 0:33:36.650 has individuals guessing the inflation rate is going to be 7.3% 0:33:36.650 --> 0:33:39.650 in the next 12 months. They must be doing something 0:33:39.650 --> 0:33:44.530 special in Michigan, I don't know. Even long term expectations 0:33:44.530 --> 0:33:49.010 are part of those. Consumer respondents was 4.6%. I don't 0:33:49.010 --> 0:33:51.410 think inflation is going to be that high. But as 0:33:51.410 --> 0:33:53.210 you know, we've been saying for quite some time, we're 0:33:53.210 --> 0:33:55.770 not going to get to two absent a recession. 0:33:56.330 --> 0:33:58.410 Yeah. And I guess that's why the fed has really 0:33:58.410 --> 0:34:01.160 taken their foot off the gas with any prospect of 0:34:01.160 --> 0:34:04.360 additional rate decreases anytime soon. 0:34:05.040 --> 0:34:07.320 Yeah, I think the fed will just kind of go 0:34:07.320 --> 0:34:10.399 down the middle saying things aren't weak enough for us 0:34:10.400 --> 0:34:13.239 to cut, but inflation is not high enough for us 0:34:13.280 --> 0:34:16.240 to increase. So we're going to watch the data and 0:34:16.239 --> 0:34:17.560 sit on our hands for a while. 0:34:18.200 --> 0:34:22.160 Bob, you had some comments in this week's deliberations just 0:34:22.160 --> 0:34:24.560 about the debt. And I know this is something that 0:34:24.600 --> 0:34:27.560 is looming. It has a lot of people concerned. You know, 0:34:27.600 --> 0:34:30.240 we went into the year excited about perhaps what Doge 0:34:30.239 --> 0:34:32.359 was going to do. And I mean, they've made some 0:34:32.360 --> 0:34:36.279 great progress, but where do we find ourselves today? And 0:34:36.320 --> 0:34:38.200 how do you think about that just in terms of 0:34:38.200 --> 0:34:39.080 where we're headed? 0:34:39.680 --> 0:34:41.920 You know, this is a great subject for a long 0:34:41.960 --> 0:34:45.359 term conversation, because I think it is one of our 0:34:45.360 --> 0:34:49.440 biggest long term problems. But as we observe history, federal 0:34:49.440 --> 0:34:54.120 debt service interest expense is now a bigger burden on 0:34:54.120 --> 0:34:59.239 our federal income statement than defense We spend more servicing 0:34:59.239 --> 0:35:03.000 our debt than on defense. Historically, that's marked a tipping 0:35:03.000 --> 0:35:06.960 point for great global powers, and they begin to deteriorate. 0:35:07.280 --> 0:35:11.000 Either we got to fix our debt problem, or we 0:35:11.000 --> 0:35:14.000 might go the way of these other major powers that 0:35:14.000 --> 0:35:18.440 have begun to lose importance in the world. Slowly but surely, 0:35:18.440 --> 0:35:22.600 we've got to tackle it. But the political system whereby 0:35:22.640 --> 0:35:25.680 folks do all they can to get elected, and immediately 0:35:25.680 --> 0:35:29.319 they start thinking about reelected, that's not an environment where 0:35:29.320 --> 0:35:31.680 you're likely to take the goodies away from people to 0:35:31.719 --> 0:35:32.560 fix the debt. 0:35:33.000 --> 0:35:35.200 Yeah, I guess the good news is, at least it 0:35:35.200 --> 0:35:38.520 is front and center on most Americans minds. And that 0:35:38.520 --> 0:35:41.480 wasn't always the case. So hopefully we're going to see 0:35:41.520 --> 0:35:44.160 people that are voting in favor of those that are 0:35:44.160 --> 0:35:45.439 going to take it seriously. 0:35:46.160 --> 0:35:48.440 Let's hope that's right. It's going to take a lot 0:35:48.440 --> 0:35:52.239 for Americans as a majority, to say, I'm going to 0:35:52.239 --> 0:35:54.640 vote for this guy or gal, even though they're going 0:35:54.680 --> 0:35:57.589 to take benefits away from me because they need to 0:35:57.630 --> 0:35:59.630 to cut the spending. That's what it's going to have 0:35:59.630 --> 0:36:02.150 to get to. Otherwise the debt will just continue to 0:36:02.190 --> 0:36:02.750 burn us. 0:36:03.469 --> 0:36:05.950 Bob, we're so thankful for your time. Thanks for being here. 0:36:06.310 --> 0:36:07.270 God bless. Bye bye. 0:36:07.510 --> 0:36:10.270 All right. That's Bob Dole. He's CEO and chief investment 0:36:10.270 --> 0:36:14.950 officer at Crossmark Global Investments. Learn more at Crossmark global. Com. Uh, 0:36:14.950 --> 0:36:16.870 let's finish out the broadcast today. We'll try to get 0:36:16.870 --> 0:36:19.790 to two more calls. Chicago is where Vanessa is located. 0:36:19.790 --> 0:36:20.590 Go right ahead. 0:36:21.710 --> 0:36:23.430 Hello. Um, hi. Can you hear me? 0:36:23.630 --> 0:36:24.310 Yes, ma'am. 0:36:25.190 --> 0:36:27.430 Um, yes. I'm calling because I'm trying to get an 0:36:27.430 --> 0:36:31.150 understanding of how my Social Security benefits will be taxed. 0:36:31.190 --> 0:36:34.509 I'm still working. I'm making about $30,000 a year, and 0:36:34.510 --> 0:36:38.590 I'm thinking about applying for my benefits, um, later this year. 0:36:38.710 --> 0:36:40.630 And I'm 68.5 years old. 0:36:41.430 --> 0:36:44.029 Okay. Got it. Yeah. So a couple of things there. 0:36:44.070 --> 0:36:46.189 I mean, number one, you can earn as much as 0:36:46.190 --> 0:36:49.629 you want, uh, being that you're over full retirement age. 0:36:49.630 --> 0:36:52.029 So that's a good thing in terms of how the 0:36:52.030 --> 0:36:57.270 taxes work. The basics are this. Your benefits may be taxable, 0:36:57.510 --> 0:37:00.670 and it's going to be dependent upon what the IRS 0:37:00.710 --> 0:37:05.350 calls combined income. So what is combined income? Well it's 0:37:05.350 --> 0:37:10.549 your adjusted gross income plus the non-taxable interest. So that 0:37:10.550 --> 0:37:13.310 would only apply if you have municipal bonds let's say 0:37:13.670 --> 0:37:16.830 plus half of your Social Security benefit for the year. 0:37:17.270 --> 0:37:21.910 So AGI plus half of your Social Security benefit, if 0:37:21.910 --> 0:37:26.430 that equals an amount more than the limit, then that's 0:37:26.430 --> 0:37:29.150 when you start to be taxed. Now do you file 0:37:29.190 --> 0:37:31.549 file single or married. Filing jointly. 0:37:32.510 --> 0:37:33.110 Single. 0:37:33.469 --> 0:37:37.469 Okay. So your limit where your your combined or your 0:37:37.469 --> 0:37:43.190 Social Security benefits begin to be taxed is $25,000. If 0:37:43.190 --> 0:37:47.110 your combined income, half your Social Security plus your AGI 0:37:47.430 --> 0:37:50.670 is over 25,000, you're going to start to pay tax 0:37:50.670 --> 0:37:54.899 on your Social Security up to 34,000, and you would 0:37:54.900 --> 0:37:58.460 pay taxes on 50% of your benefits if you go 0:37:58.500 --> 0:38:03.620 above 34,000 with your combined income. Now your Social Security 0:38:03.820 --> 0:38:08.420 is 85% taxable. Now what is AGI? Well, that's just 0:38:08.420 --> 0:38:11.420 all of your wages, your salaries, your tips, your dividends, 0:38:11.420 --> 0:38:18.180 your interest, your capital gains minus, you know, any deductions. So, uh, 0:38:18.340 --> 0:38:22.020 you know, traditional IRA contributions, things like that. When you 0:38:22.020 --> 0:38:25.300 add that AGI to half of your Social Security, that's 0:38:25.300 --> 0:38:28.180 the number you're looking for. And if it's above 25, 0:38:28.500 --> 0:38:30.819 up to 34, you're going to have up to 50% 0:38:30.820 --> 0:38:35.020 of your Social Security taxed over 34, up to 85%. 0:38:35.540 --> 0:38:38.779 And with that AGI include the standard deduction that you 0:38:38.780 --> 0:38:39.779 get for taxes. 0:38:40.580 --> 0:38:41.980 Yes. Mhm. 0:38:42.700 --> 0:38:44.220 So it's after that. 0:38:45.460 --> 0:38:48.939 Uh no I'm sorry. AGI is before the standard or 0:38:48.940 --> 0:38:53.859 itemized deductions. So the only deduction only adjustments that come 0:38:53.860 --> 0:38:59.780 out of AGI are. IRA contributions. HSA contributions. Student loan interest. 0:38:59.780 --> 0:39:04.620 Self-Employment taxes. Uh, alimony, things like that. Not the standard 0:39:04.620 --> 0:39:06.020 or itemized deductions. 0:39:07.580 --> 0:39:10.100 Okay. Thank you very much. 0:39:10.300 --> 0:39:12.819 Okay. You're welcome. Thanks for your call today. We're going 0:39:12.860 --> 0:39:15.580 to finish in Deerfield Beach. Mackenzie, how can I serve you? 0:39:16.460 --> 0:39:18.980 Hey, um, I was this is a follow up question 0:39:18.980 --> 0:39:21.060 from a previous caller. I was going to ask, what 0:39:21.060 --> 0:39:24.140 are some good ETFs I should invest into, and what 0:39:24.140 --> 0:39:26.859 are some resources you recommend that helps me narrow down 0:39:26.860 --> 0:39:28.020 my decision making? 0:39:28.820 --> 0:39:30.060 Yeah, it's a good question. 0:39:30.100 --> 0:39:30.380 You know. 0:39:30.420 --> 0:39:31.020 If you're just. 0:39:31.020 --> 0:39:35.260 Starting out. That's why they created what are called indexes. Uh, 0:39:35.260 --> 0:39:38.580 so an index is how you can buy a broad 0:39:38.580 --> 0:39:42.020 swath of, of the market. And you can do that 0:39:42.020 --> 0:39:45.500 based on different market indexes. So if you buy an 0:39:45.500 --> 0:39:49.850 S&P 500 index then you'd own the 500 largest growth 0:39:49.850 --> 0:39:54.010 companies in the United States. You could buy the total market, 0:39:54.010 --> 0:39:57.890 which is a much bigger exposure to US stocks. You 0:39:57.890 --> 0:40:01.530 could buy an international ETF or a bond ETF. So 0:40:01.730 --> 0:40:03.969 you've got to decide what do I want to own? 0:40:03.969 --> 0:40:06.450 And then do I want to just own the broad 0:40:06.450 --> 0:40:10.170 market or do I want to pick individual sectors. So 0:40:10.170 --> 0:40:13.290 you can make those decisions yourself. And there are faith 0:40:13.330 --> 0:40:17.090 based investing ETFs where you can ensure that the companies 0:40:17.090 --> 0:40:20.489 are being screened for Christian values to make sure you're 0:40:20.489 --> 0:40:24.810 not supporting something that's, you know, antithetical to your values 0:40:24.810 --> 0:40:27.410 and that companies that are being bought are being bought 0:40:27.450 --> 0:40:31.210 not only because they provide compelling value, but also because 0:40:31.210 --> 0:40:34.689 they are promoting the common good flourishing. So, uh, you know, 0:40:34.730 --> 0:40:37.370 it really just comes down to how much due diligence 0:40:37.370 --> 0:40:40.210 and research you want to do. The other approach is 0:40:40.210 --> 0:40:44.569 to connect with our friends at Sound Mind Investing. They 0:40:44.570 --> 0:40:47.129 could probably help you out with that. Um, and I 0:40:47.130 --> 0:40:49.530 can send you a book that would help you as well. But, 0:40:49.570 --> 0:40:52.290 you know, I think it really starts with education, where 0:40:52.290 --> 0:40:54.529 you need to become familiar and then you need to 0:40:54.570 --> 0:40:58.290 make sure you're properly diversified. Another approach that takes some 0:40:58.290 --> 0:41:01.330 of the guesswork out, Mackenzie, is you could use what's 0:41:01.330 --> 0:41:05.290 called a robo advisor, which is basically an automated approach 0:41:05.290 --> 0:41:09.730 that uses ETFs, but it will build the portfolio for you, 0:41:09.850 --> 0:41:14.649 ensuring that you're properly diversified and ensuring that your risk, 0:41:15.450 --> 0:41:18.610 the amount of risk you're taking, is appropriate for your age. 0:41:19.090 --> 0:41:21.810 And if you wanted to use robo instead of picking 0:41:21.930 --> 0:41:26.130 ETFs directly, I would look at betterment or the Schwab 0:41:26.130 --> 0:41:27.690 Intelligent Portfolios. 0:41:30.130 --> 0:41:33.690 Got it. Okay, perfect. Thank you. I really appreciate you 0:41:33.690 --> 0:41:36.050 answering that because I have me I would like to 0:41:36.090 --> 0:41:39.330 invest wisely. And I just want to know most of 0:41:39.330 --> 0:41:41.650 the companies that they're doing something righteous with the money. 0:41:41.650 --> 0:41:42.649 So thank you. 0:41:42.690 --> 0:41:46.720 Yeah. Well let me tell you if you want an ETF? Um, 0:41:46.719 --> 0:41:49.200 you know, all the sponsors of this program, if you 0:41:49.200 --> 0:41:53.640 go to.com and click on the show and scroll down, 0:41:53.640 --> 0:41:59.040 you'll see Eventide, you'll see Praxis. You'll see, um, you know, 0:41:59.080 --> 0:42:02.960 one ascent. You'll see cross Mark. All of them have ETFs. 0:42:03.280 --> 0:42:06.280 And you'll know that any one of those fund families 0:42:06.440 --> 0:42:10.200 that also have ETFs is faith screened. So it's going 0:42:10.239 --> 0:42:12.760 to ensure that companies that are misaligned with your values 0:42:12.760 --> 0:42:16.239 are eliminated. So just go to faith. Com click on 0:42:16.239 --> 0:42:18.600 the show. And that would be a great starting point 0:42:18.600 --> 0:42:20.960 for you to check out companies that you should be 0:42:20.960 --> 0:42:23.200 looking at. McKenzie thanks for your call today. God bless 0:42:23.200 --> 0:42:25.120 you my friend. Well that's going to do it for 0:42:25.120 --> 0:42:27.600 us today, folks. Faith in Finance Live is a partnership 0:42:27.600 --> 0:42:31.000 between Moody Radio and Faith. I want to thank say 0:42:31.200 --> 0:42:34.640 thanks to my team today, Amy, Taylor. Dan and Anthony 0:42:34.640 --> 0:42:37.000 couldn't do it without them. Plus everybody here at Faith by. 0:42:37.040 --> 0:42:39.040 Enjoy the rest of your day. We'll see you next time. 0:42:39.040 --> 0:42:40.160 God bless you. Bye bye.