1 00:00:08,800 --> 00:00:11,879 S1: Money touches every part of our lives, and for many 2 00:00:11,880 --> 00:00:15,080 S1: of us, it also touches our deepest fears. Hi, I'm 3 00:00:15,080 --> 00:00:19,080 S1: Rob West. When bills rise, when income feels uncertain, and 4 00:00:19,079 --> 00:00:22,000 S1: when the future feels cloudy, it's easy to slip into 5 00:00:22,040 --> 00:00:25,760 S1: worry and believe everything rests on our shoulders. But Scripture 6 00:00:25,760 --> 00:00:29,240 S1: invites us into a better story. One where God sees, 7 00:00:29,280 --> 00:00:32,920 S1: God knows, and God provides. Today we'll explore the peace 8 00:00:32,920 --> 00:00:36,479 S1: that comes from trusting him as our provider. And then 9 00:00:36,479 --> 00:00:40,920 S1: we'll take your phone calls at 800 525 7000. This 10 00:00:40,920 --> 00:00:45,720 S1: is faith and finance. Live biblical wisdom for your financial decisions. 11 00:00:49,640 --> 00:00:52,400 S1: Few things test our faith quite like money. But when 12 00:00:52,400 --> 00:00:55,920 S1: bills stack up, when emergencies hit, when the market dips 13 00:00:55,920 --> 00:00:58,959 S1: at the wrong moment, the question comes quickly will I 14 00:00:58,960 --> 00:01:03,090 S1: have enough? Most of us respond by trying harder, saving more, 15 00:01:03,130 --> 00:01:06,929 S1: hustling more, planning more. And there's wisdom in working diligently 16 00:01:06,930 --> 00:01:09,970 S1: and stewarding well. But beneath all that effort, many of 17 00:01:09,970 --> 00:01:13,690 S1: us carry a deeper fear the belief that everything ultimately 18 00:01:13,690 --> 00:01:17,850 S1: rests on our shoulders. Jesus invites us into something better, 19 00:01:17,850 --> 00:01:21,450 S1: something rooted in the character of God, not the instability 20 00:01:21,450 --> 00:01:25,610 S1: of our circumstances. In Matthew 626, he says, look at 21 00:01:25,610 --> 00:01:29,090 S1: the birds of the air. These tiny creatures, no incomes, 22 00:01:29,090 --> 00:01:32,730 S1: no savings accounts. They don't stress over tomorrow's food or 23 00:01:32,770 --> 00:01:37,890 S1: next month's shelter. Yet Jesus says, your heavenly father feeds them, 24 00:01:37,890 --> 00:01:42,250 S1: not their father. Your father, the one who watches over creation, 25 00:01:42,250 --> 00:01:46,050 S1: watches over you. Jesus isn't telling us not to work. 26 00:01:46,050 --> 00:01:49,690 S1: He's telling us not to worry. Because behind every paycheck, 27 00:01:49,690 --> 00:01:55,010 S1: every opportunity, every act of diligence, stands a God who provides. 28 00:01:55,130 --> 00:01:57,210 S1: This is the heartbeat of one of the days in 29 00:01:57,210 --> 00:02:01,150 S1: my new devotional, Our Ultimate Treasure A 21 Day Journey, 30 00:02:01,150 --> 00:02:05,309 S1: helping you anchor your financial life in God's character. And 31 00:02:05,310 --> 00:02:09,390 S1: today's theme is simple and transformative. God is our provider. 32 00:02:09,630 --> 00:02:13,550 S1: We see this truth woven through the entire story of Scripture. 33 00:02:13,830 --> 00:02:17,510 S1: Consider Abraham in Genesis 22. He stands on a mountain 34 00:02:17,510 --> 00:02:22,190 S1: in agonizing obedience, ready to offer his son Isaac at 35 00:02:22,190 --> 00:02:25,630 S1: the very moment of surrender. God provides a ram caught 36 00:02:25,630 --> 00:02:29,870 S1: in a thicket. Abraham names the place the Lord will provide, 37 00:02:29,870 --> 00:02:33,710 S1: not the Lord once provided, but the Lord will. His 38 00:02:33,710 --> 00:02:37,350 S1: provision came at the exact moment it was needed. Then 39 00:02:37,350 --> 00:02:41,030 S1: there's the widow of Zarephath in first Kings 17, down 40 00:02:41,030 --> 00:02:44,710 S1: to her final handful of flour and last drops of oil, 41 00:02:44,710 --> 00:02:48,310 S1: one meal left. God sends Elijah, asks her to trust 42 00:02:48,310 --> 00:02:51,710 S1: him with what little she has, and she does. And 43 00:02:51,710 --> 00:02:55,310 S1: day after day, her jar and jug never run empty. 44 00:02:55,669 --> 00:02:59,680 S1: God didn't give her an overflowing pantry. He gave her enough. 45 00:03:00,040 --> 00:03:03,240 S1: Enough to sustain her. Enough to show she was seen. 46 00:03:03,600 --> 00:03:07,120 S1: And think of Peter worried about paying the temple tax. 47 00:03:07,120 --> 00:03:10,280 S1: Jesus sends him to cast a line, and the first 48 00:03:10,280 --> 00:03:13,880 S1: fish he catches carries a coin in its mouth, just 49 00:03:13,880 --> 00:03:17,480 S1: enough to meet the need. Not excess, not luxury, but 50 00:03:17,480 --> 00:03:22,720 S1: precise personal provision from beginning to end. Scripture shows us 51 00:03:22,720 --> 00:03:26,680 S1: that God Himself is the source of all we have. Yes, 52 00:03:26,680 --> 00:03:30,200 S1: he uses our work, our planning, and our effort, but 53 00:03:30,200 --> 00:03:34,440 S1: he stands behind them as the true provider. Paul captures 54 00:03:34,440 --> 00:03:38,600 S1: this beautifully in Philippians 419 My God will supply every 55 00:03:38,600 --> 00:03:41,080 S1: need of yours according to his riches in glory in 56 00:03:41,080 --> 00:03:44,880 S1: Christ Jesus. He wasn't writing to wealthy believers. He was 57 00:03:44,880 --> 00:03:48,720 S1: writing to a church that gave generously even when resources 58 00:03:48,720 --> 00:03:53,400 S1: were scarce. Reminding them that God's supply flows from his glory, 59 00:03:53,440 --> 00:03:56,780 S1: not from their bank accounts. God gives us what we need, 60 00:03:56,820 --> 00:04:00,020 S1: not always what we want. Not always when we expect it. 61 00:04:00,020 --> 00:04:04,260 S1: But his provision is wise, intentional, and rooted in his love. 62 00:04:04,460 --> 00:04:09,500 S1: And then Jesus makes this truth unmistakably clear in John 635, 63 00:04:09,780 --> 00:04:12,620 S1: I am the bread of life. He doesn't only provide 64 00:04:12,620 --> 00:04:16,380 S1: for us, he is our provision. The greatest gift God 65 00:04:16,380 --> 00:04:20,300 S1: gives is not material, it's himself. Peace doesn't come from 66 00:04:20,300 --> 00:04:24,980 S1: perfect circumstances. Peace comes from the presence of a faithful God. 67 00:04:25,180 --> 00:04:27,620 S1: So let me ask you, where do you need to 68 00:04:27,660 --> 00:04:32,140 S1: trust his provision today? Where are you? Stretch. Then where 69 00:04:32,140 --> 00:04:35,620 S1: does worry whisper that you're all alone? Where do you 70 00:04:35,620 --> 00:04:38,060 S1: need to be reminded that you have a Heavenly Father 71 00:04:38,060 --> 00:04:43,700 S1: who provides, not reluctantly, but joyfully. Bring those needs to him. 72 00:04:43,860 --> 00:04:47,460 S1: Ask for wisdom, for peace, for strength, and stay open 73 00:04:47,460 --> 00:04:52,299 S1: to the unexpected ways he may provide through people opportunities, 74 00:04:52,300 --> 00:04:56,270 S1: quiet moments, or renewed perspective. And if you want to 75 00:04:56,310 --> 00:04:59,390 S1: explore this truth more deeply, I'd love for you to 76 00:04:59,430 --> 00:05:03,229 S1: walk through my new devotional, Our Ultimate Treasure. It's a 77 00:05:03,230 --> 00:05:06,070 S1: 21 day journey designed to help you explore what it 78 00:05:06,070 --> 00:05:10,030 S1: means to put Christ first in your finances and your life. 79 00:05:10,190 --> 00:05:13,950 S1: You can pre-order it today at Faith. Just click shop. 80 00:05:14,150 --> 00:05:18,870 S1: That's faith. Com just click shop. All right. Your calls 81 00:05:18,870 --> 00:05:23,710 S1: are next 800 525 7000. I'm Rob Weston. This is 82 00:05:23,710 --> 00:05:26,310 S1: Faith and finance live. We'll be right back. 83 00:05:34,430 --> 00:05:37,790 S2: The opinions offered during this program represent the personal or 84 00:05:37,790 --> 00:05:42,630 S2: professional opinions of the participants, given for informational purposes only. 85 00:05:42,830 --> 00:05:46,430 S2: Any information provided is not intended to replace advice from 86 00:05:46,430 --> 00:05:51,229 S2: a financial, medical, legal or other professional who understands your 87 00:05:51,230 --> 00:05:52,760 S2: specific situation. 88 00:05:58,880 --> 00:06:01,560 S1: I'm Rob West. This is faith in finance. Live. I'm 89 00:06:01,560 --> 00:06:04,279 S1: so glad you're along with us today. Really looking forward 90 00:06:04,279 --> 00:06:08,000 S1: to tackling whatever financial questions you have on your mind today, 91 00:06:08,240 --> 00:06:10,400 S1: which just simply means now is the time for you 92 00:06:10,400 --> 00:06:14,760 S1: to call. Here's the number 800 525 7000. The lines 93 00:06:14,760 --> 00:06:17,080 S1: are open. I'm here and ready to go. The only 94 00:06:17,120 --> 00:06:21,640 S1: thing we need is you again. 800 525 7000. We 95 00:06:21,680 --> 00:06:25,440 S1: dedicate this hour each day to helping you live out, uh, 96 00:06:25,440 --> 00:06:28,680 S1: faithful stewardship. You know, after we give our lives to Jesus, 97 00:06:28,680 --> 00:06:32,000 S1: it's really about stewardship of our time and our talents 98 00:06:32,000 --> 00:06:35,480 S1: and God's word. And, yes, God's money that he entrusts 99 00:06:35,520 --> 00:06:39,560 S1: to us for our management. And we look to God's 100 00:06:39,560 --> 00:06:42,600 S1: Word to manage those resources. But in the midst of 101 00:06:42,600 --> 00:06:45,600 S1: those very practical decisions you're making every day, we want 102 00:06:45,640 --> 00:06:47,640 S1: to be here to cheer you on, to provide some 103 00:06:47,640 --> 00:06:50,400 S1: community for you, to share with you some great thoughts 104 00:06:50,400 --> 00:06:54,140 S1: and content along the way, but also to address those questions. 105 00:06:54,140 --> 00:06:56,500 S1: So there's something going on in your financial life. Go 106 00:06:56,500 --> 00:06:58,940 S1: ahead and call right now. We've got lines open, but 107 00:06:58,940 --> 00:07:02,020 S1: that won't last for long. The number again is 800 108 00:07:02,220 --> 00:07:06,420 S1: 525 7000. You can call right now. Let's dive in. 109 00:07:06,460 --> 00:07:08,339 S1: Ryan is in Oklahoma. Go ahead. 110 00:07:09,660 --> 00:07:13,420 S3: Yeah. I was just curious what an irrevocable trust is. 111 00:07:14,060 --> 00:07:20,100 S1: Mm. Yeah. Good question. So an irrevocable trust, uh, is, uh, 112 00:07:20,260 --> 00:07:24,780 S1: basically a trust. And once you have placed assets into it, 113 00:07:24,940 --> 00:07:28,820 S1: you can't change it or take them back, except in 114 00:07:28,820 --> 00:07:31,860 S1: rare cases. Uh, now, why would you do that? Well, 115 00:07:31,860 --> 00:07:36,660 S1: it removes those assets from your taxable estate. Um, so 116 00:07:36,700 --> 00:07:41,340 S1: there's potential for estate tax savings. Now, this is less 117 00:07:41,340 --> 00:07:45,620 S1: likely for folks because, you know, these the estate taxes 118 00:07:45,620 --> 00:07:48,980 S1: don't kick in until you get up above $13 million. 119 00:07:48,980 --> 00:07:52,510 S1: So you have to have quite a big estate for 120 00:07:52,550 --> 00:07:55,910 S1: estate taxes to apply. But that's one of the reasons, 121 00:07:55,910 --> 00:07:59,270 S1: one of the primary reasons, it also protects the assets 122 00:07:59,270 --> 00:08:03,710 S1: from creditors or lawsuits. And sometimes it's used for long 123 00:08:03,750 --> 00:08:08,110 S1: term care in Medicaid planning. Uh, now the downside is 124 00:08:08,110 --> 00:08:11,910 S1: you do give up control permanently, and it's more complex 125 00:08:11,910 --> 00:08:17,350 S1: and costly to set up as opposed to a revocable trust. 126 00:08:17,350 --> 00:08:20,510 S1: So what I was just talking about is irrevocable. A 127 00:08:20,550 --> 00:08:23,430 S1: revocable trust is a trust you set up where you 128 00:08:23,470 --> 00:08:27,910 S1: keep control, meaning you can change it, add or remove assets, 129 00:08:27,910 --> 00:08:31,590 S1: and even cancel it at any time. Now, there are 130 00:08:31,590 --> 00:08:35,910 S1: no tax advantages and no protection from creditors or nursing 131 00:08:35,910 --> 00:08:41,110 S1: home costs, but folks often use these for avoiding probate. 132 00:08:41,470 --> 00:08:43,870 S1: So the assets that are titled in the name of 133 00:08:43,870 --> 00:08:49,040 S1: the trust pass privately and efficiently to errors. It lets 134 00:08:49,040 --> 00:08:53,560 S1: you stay in control, and it's useful for managing assets 135 00:08:53,559 --> 00:08:58,200 S1: either before your death, if you become incapacitated, or after 136 00:08:58,200 --> 00:09:01,920 S1: your death if you want your assets to be distributed 137 00:09:01,920 --> 00:09:05,199 S1: over time. Let's say you have heirs, but they're not 138 00:09:05,200 --> 00:09:07,520 S1: old enough to receive the assets, and you want it 139 00:09:07,520 --> 00:09:11,760 S1: to be the trustee to distribute it at certain ages, 140 00:09:11,760 --> 00:09:14,840 S1: or when they graduate from college or, you know, something 141 00:09:14,840 --> 00:09:18,320 S1: like that. But give me any follow up questions you have. 142 00:09:19,679 --> 00:09:23,080 S3: I think you've got it. They figure out what it is. So. 143 00:09:23,360 --> 00:09:27,640 S1: Okay. Very good. Bottom line is a revocable trusts are 144 00:09:27,640 --> 00:09:32,720 S1: usually to avoid probate and keep control of assets. Irrevocable. 145 00:09:32,720 --> 00:09:37,760 S1: Trusts are usually to reduce estate taxes and protect assets 146 00:09:37,760 --> 00:09:41,160 S1: from creditors. I mean, I think that's the simplest explanation. Ryan, 147 00:09:41,160 --> 00:09:44,960 S1: thanks for your call. God bless you, sir. Concord, New Hampshire. Sylvia. 148 00:09:44,960 --> 00:09:45,520 S1: Go ahead. 149 00:09:46,700 --> 00:09:49,540 S4: Hi, Rob. Thanks for taking my call. Yes, ma'am. I 150 00:09:49,580 --> 00:09:53,500 S4: am 64 and I am working full time. I have 151 00:09:53,500 --> 00:09:58,900 S4: an HSA. My husband is 66 and he is going 152 00:09:58,940 --> 00:10:03,620 S4: to be collecting his Social security pension when he turns 67. 153 00:10:03,740 --> 00:10:06,780 S4: The question I have is I am approaching my highest 154 00:10:06,780 --> 00:10:10,820 S4: earning years in my job, and I am not sure 155 00:10:10,820 --> 00:10:14,339 S4: if I should continue to contribute the maximum amount to 156 00:10:14,380 --> 00:10:18,620 S4: my HSA, or if I should not do that, because 157 00:10:18,620 --> 00:10:22,460 S4: it seems to be reducing my Social Security benefit. 158 00:10:23,059 --> 00:10:26,300 S1: Hmm. Got it. Well, let's talk about this. So first 159 00:10:26,300 --> 00:10:30,860 S1: of all, HSA contributions at age 64, as long as 160 00:10:30,860 --> 00:10:33,780 S1: you're not enrolled in Medicare, which you wouldn't be now. 161 00:10:33,980 --> 00:10:38,300 S1: But if you continue working beyond 65 and you have, uh, 162 00:10:38,420 --> 00:10:40,980 S1: you know, health care coverage through your employer and there's 163 00:10:40,980 --> 00:10:45,309 S1: more than 20 employees, um, then if you're not in Medicare, 164 00:10:45,309 --> 00:10:48,710 S1: you can contribute to a health savings account. Once you 165 00:10:48,750 --> 00:10:51,390 S1: sign up for Medicare Part A or B, you've got 166 00:10:51,429 --> 00:10:55,230 S1: to stop those HSA contributions. Okay, so that's the first thing. 167 00:10:55,390 --> 00:10:59,590 S1: Second is the impact on Social Security. HSA contributions don't 168 00:10:59,630 --> 00:11:04,470 S1: reduce your future Social Security benefit. Social security is based 169 00:11:04,470 --> 00:11:08,310 S1: on your highest 35 years of earnings, not whether you 170 00:11:08,309 --> 00:11:11,350 S1: put money in an HSA. So it may lower your 171 00:11:11,350 --> 00:11:15,829 S1: taxable income today, but it does not lower your covered 172 00:11:15,830 --> 00:11:19,990 S1: wages for Social Security. So the reason that you you 173 00:11:20,030 --> 00:11:23,670 S1: would want to continue is that money goes in tax free, 174 00:11:23,710 --> 00:11:26,630 S1: grows tax free, and comes out tax free as long 175 00:11:26,630 --> 00:11:31,790 S1: as you use it for qualified medical expenses. And after 65, 176 00:11:31,790 --> 00:11:35,869 S1: you can even use it for non-medical expenses without the penalty, 177 00:11:35,870 --> 00:11:39,270 S1: although it would be subject to ordinary income tax. So 178 00:11:39,270 --> 00:11:41,950 S1: it really makes it one of the best retirement savings 179 00:11:41,950 --> 00:11:45,690 S1: tools for health care costs around. And so especially if 180 00:11:45,690 --> 00:11:48,330 S1: you're healthy and you're able to max it out and 181 00:11:48,330 --> 00:11:51,689 S1: let it just grow, even invest it. I love you 182 00:11:51,730 --> 00:11:54,809 S1: continuing to contribute to this and seeing it as one 183 00:11:54,809 --> 00:11:58,809 S1: additional retirement vehicle to tap into in that season. 184 00:11:59,970 --> 00:12:01,650 S4: Can I ask a follow up question? 185 00:12:01,850 --> 00:12:03,410 S5: Of course. Yeah. Go ahead. 186 00:12:03,809 --> 00:12:07,530 S4: So when you say it's my earnings for Social Security, 187 00:12:08,170 --> 00:12:11,250 S4: when I read the fine print on my Social Security statement, 188 00:12:11,530 --> 00:12:14,850 S4: it says that the earnings are reported by my employer. 189 00:12:15,490 --> 00:12:18,809 S4: And if I think that they're not correct, I was 190 00:12:18,809 --> 00:12:22,570 S4: told I can call the beginning of the next year, 191 00:12:22,570 --> 00:12:26,890 S4: 2026 and January to to let them know what if 192 00:12:26,890 --> 00:12:29,170 S4: I think the earnings are not correct? Because when I 193 00:12:29,170 --> 00:12:34,650 S4: look at my Social Security income, you know, the, the long, um, 194 00:12:34,890 --> 00:12:37,410 S4: list of what you've earned over the years, it seems 195 00:12:37,410 --> 00:12:40,490 S4: to be going down and it seems to be connected 196 00:12:40,770 --> 00:12:42,660 S4: to my HSA contributions. 197 00:12:43,740 --> 00:12:49,660 S1: Interesting. Yeah. Um, well, I mean, you do have that ability. Um, 198 00:12:49,660 --> 00:12:52,980 S1: and so each year, your employer reports your wages to 199 00:12:53,020 --> 00:12:58,500 S1: Social Security via your W-2 and Social Security. Uh, you know, 200 00:12:58,540 --> 00:13:02,380 S1: uses those reported earnings to calculate what's called your average 201 00:13:02,380 --> 00:13:06,620 S1: indexed monthly earnings and then ultimately your benefit. And so 202 00:13:06,620 --> 00:13:12,180 S1: if earnings are misreported or incorrect, then your future benefits, uh, 203 00:13:12,340 --> 00:13:16,340 S1: you know, are could be lower. Um, and so usually 204 00:13:16,340 --> 00:13:20,340 S1: they're reported the year after they're earned. So you know, 205 00:13:20,420 --> 00:13:26,300 S1: your 2024 earnings won't appear until 2025. Um, and, you know, 206 00:13:26,340 --> 00:13:30,380 S1: if you already have 35 years of solid earnings, um, 207 00:13:30,580 --> 00:13:33,500 S1: you know, New Year's may not increase your benefit much 208 00:13:33,620 --> 00:13:37,660 S1: unless they're higher than earlier years. But you're saying that 209 00:13:37,660 --> 00:13:41,110 S1: you you don't think that they match the W-2 or 210 00:13:41,790 --> 00:13:43,150 S1: have you compared the two? 211 00:13:43,990 --> 00:13:46,270 S4: Yeah, I guess I need to know which box to 212 00:13:46,309 --> 00:13:49,710 S4: look at on the on the on the W-2 that 213 00:13:49,710 --> 00:13:50,630 S4: they're using. 214 00:13:51,110 --> 00:13:56,309 S1: Okay. Yeah. Um, so when you look at your W-2, uh, 215 00:13:56,309 --> 00:14:01,030 S1: basically the it's box three, which is the Social Security wages, 216 00:14:01,030 --> 00:14:05,630 S1: this is the Social Security Administration amount that they use 217 00:14:05,630 --> 00:14:09,309 S1: to correct credit your earnings record. And then in box 218 00:14:09,309 --> 00:14:13,310 S1: four it shows the Social Security tax withheld. Um, but 219 00:14:13,309 --> 00:14:15,990 S1: it's going to be uh, that box three, that's the 220 00:14:15,990 --> 00:14:19,670 S1: wages that you're looking for uh, on your W-2 for 221 00:14:19,670 --> 00:14:22,190 S1: that year. So I would check that against what you're 222 00:14:22,190 --> 00:14:25,430 S1: seeing online. Hope that helps. Sylvia, thanks for your call. 223 00:14:25,430 --> 00:14:36,270 S1: We'll be right back. Thanks for joining us today on 224 00:14:36,270 --> 00:14:38,870 S1: Faith and Finance Live. We've got some great questions coming 225 00:14:38,970 --> 00:14:41,010 S1: up here. Looks like we have one line open though. 226 00:14:41,010 --> 00:14:42,970 S1: So if you have a financial question, now would be 227 00:14:43,010 --> 00:14:45,530 S1: a great time to get in on the conversation. Just 228 00:14:45,530 --> 00:14:51,810 S1: call 800 525 7000. Again that's 800 525 7000. Let's 229 00:14:51,810 --> 00:14:54,010 S1: head to South Carolina. Hi, John. Go ahead sir. 230 00:14:55,290 --> 00:15:00,730 S6: Yes, sir. Um, um, my question about a year ago, 231 00:15:00,730 --> 00:15:03,810 S6: I had money and, you know, and I won and 232 00:15:03,810 --> 00:15:07,450 S6: I got disabled, and, um, I lost a lot of money, 233 00:15:07,490 --> 00:15:09,890 S6: you know, when the market dropped and everything wasn't much 234 00:15:09,930 --> 00:15:11,850 S6: in there. So I was out of work for years, 235 00:15:11,850 --> 00:15:13,530 S6: and I finally took it out of there and put 236 00:15:13,530 --> 00:15:17,730 S6: it in an IRA. But it's not making anything. And 237 00:15:17,770 --> 00:15:20,410 S6: some of my other told me maybe take it out 238 00:15:20,410 --> 00:15:22,330 S6: and put it like in a saving. So I was 239 00:15:22,330 --> 00:15:24,890 S6: wondering if I get taxed on that if I did that. 240 00:15:25,810 --> 00:15:28,850 S1: Yeah, it's a good question. Uh, you would be that 241 00:15:28,850 --> 00:15:32,450 S1: that would be a taxable event if you moved IRA 242 00:15:32,490 --> 00:15:36,970 S1: money into a regular savings account. Uh, an IRA is a, 243 00:15:36,970 --> 00:15:40,260 S1: as you know, a tax advantaged retirement account. And once 244 00:15:40,260 --> 00:15:42,740 S1: the money comes out, which would have to which would 245 00:15:42,740 --> 00:15:45,340 S1: be what happened if you moved it to a savings account, 246 00:15:45,340 --> 00:15:49,260 S1: it would be considered a distribution, uh, which loses its 247 00:15:49,260 --> 00:15:52,740 S1: IRA status. And so that full amount would be added 248 00:15:52,740 --> 00:15:56,860 S1: to your ordinary income in the year of the, the 249 00:15:56,860 --> 00:16:01,340 S1: transfer or what's called the distribution. Um, and then if 250 00:16:01,340 --> 00:16:04,580 S1: you're under 59.5, there'd be a 10% penalty on top 251 00:16:04,580 --> 00:16:05,060 S1: of it. 252 00:16:06,140 --> 00:16:09,100 S6: Yes, sir. I'm 67. So that's why I was wondering. 253 00:16:09,220 --> 00:16:11,900 S1: Got it. Now, the other option is, if you don't 254 00:16:11,900 --> 00:16:15,020 S1: need this money, you know, perhaps you need to look 255 00:16:15,020 --> 00:16:18,900 S1: at not the institution you know, or the type of account, 256 00:16:18,900 --> 00:16:22,700 S1: but really more about the investments inside of it. I mean, 257 00:16:22,740 --> 00:16:25,300 S1: you've got with an IRA, you've got an unlimited number 258 00:16:25,300 --> 00:16:27,780 S1: of investment options. You could have it in a money market, 259 00:16:27,780 --> 00:16:31,380 S1: which would be like a savings account, because it's basically 260 00:16:31,380 --> 00:16:35,940 S1: very stable and paying you a typical yield equal to 261 00:16:36,200 --> 00:16:39,000 S1: probably something close to what high yield savings accounts are 262 00:16:39,000 --> 00:16:42,200 S1: paying all the way, you know, to stocks and bonds 263 00:16:42,200 --> 00:16:46,520 S1: and even, you know, gold investments, things like that. So 264 00:16:46,680 --> 00:16:49,400 S1: if you're just looking for more return, it really comes 265 00:16:49,400 --> 00:16:51,680 S1: down to how much risk are you willing to take, 266 00:16:52,000 --> 00:16:54,640 S1: and then what are the right investments that match that 267 00:16:54,640 --> 00:16:58,280 S1: risk tolerance and time horizon that might get this growing 268 00:16:58,280 --> 00:17:01,280 S1: for you in a way that you haven't experienced previously, 269 00:17:01,640 --> 00:17:03,480 S1: and you should be able to do that right inside 270 00:17:03,480 --> 00:17:07,000 S1: the IRA. Now, if you, you know, have another reason 271 00:17:07,000 --> 00:17:09,840 S1: to access the money because you need it for something, well, then, 272 00:17:10,080 --> 00:17:13,200 S1: you know, you transfer it out and pay the tax. But, um, 273 00:17:13,240 --> 00:17:14,720 S1: you know, it could be it just needs to be 274 00:17:14,720 --> 00:17:17,960 S1: repositioned into other investments. 275 00:17:19,160 --> 00:17:21,520 S6: Um, that what a bank that I have it at 276 00:17:22,000 --> 00:17:24,920 S6: said it wasn't enough to invest. So I mean, it's 277 00:17:24,920 --> 00:17:27,920 S6: like $50,000. And they said there ain't enough for them 278 00:17:27,920 --> 00:17:28,840 S6: to invest it. 279 00:17:28,840 --> 00:17:31,000 S1: So $50,000. 280 00:17:32,080 --> 00:17:32,840 S6: Yes, sir. 281 00:17:32,880 --> 00:17:35,730 S1: Yeah. No, you certainly could invest it, I think. You know, 282 00:17:35,770 --> 00:17:37,449 S1: it's really just. Where are you at? I mean, if 283 00:17:37,490 --> 00:17:39,810 S1: you rolled it over, where is it right now? Who 284 00:17:39,810 --> 00:17:40,890 S1: is the custodian? 285 00:17:42,090 --> 00:17:45,290 S6: Um, first citizens, um, South Carolina here. 286 00:17:45,369 --> 00:17:47,570 S1: Okay. Yeah. So you're at a bank, so you'd probably 287 00:17:47,570 --> 00:17:50,730 S1: want to be at, um, you know, a brokerage firm. 288 00:17:50,730 --> 00:17:53,330 S1: I'd roll it to, like, a Schwab or a fidelity. 289 00:17:53,730 --> 00:17:57,570 S1: And 50,000 is plenty to invest. You can invest with 290 00:17:57,609 --> 00:18:00,970 S1: far less than that. And you could pick a high quality, 291 00:18:01,250 --> 00:18:03,330 S1: you know, mutual fund, maybe one of the faith based 292 00:18:03,330 --> 00:18:07,650 S1: investing funds. You could invest it in indexes. Um, you know, 293 00:18:07,690 --> 00:18:11,050 S1: you could even use fractional shares and invest in regular stocks. 294 00:18:11,050 --> 00:18:13,290 S1: I probably wouldn't do that. I'd probably use a mutual 295 00:18:13,290 --> 00:18:17,650 S1: fund or an ETF, but you absolutely could invest 50,000. 296 00:18:18,690 --> 00:18:21,930 S6: Oh okay. Okay. And my next question was what's the 297 00:18:21,930 --> 00:18:24,490 S6: reverse mortgage. Because my house is paid for. 298 00:18:24,490 --> 00:18:28,410 S1: So yeah. Got it. So a reverse mortgage or what's 299 00:18:28,450 --> 00:18:31,609 S1: known as a home equity conversion mortgage, which is basically 300 00:18:31,609 --> 00:18:35,900 S1: the long the more formal name for reverse is the 301 00:18:35,900 --> 00:18:39,500 S1: official government backed reverse mortgage program. And that's what you 302 00:18:39,500 --> 00:18:42,020 S1: would want to do if you considered reverse. As long 303 00:18:42,020 --> 00:18:44,619 S1: as you're 62, which you are, and you have at 304 00:18:44,660 --> 00:18:48,500 S1: least 50% equity, which you do, then instead of making 305 00:18:48,500 --> 00:18:52,020 S1: payments to the bank, the bank pays you and payments 306 00:18:52,060 --> 00:18:56,780 S1: back to them become optional while you're living and in 307 00:18:56,780 --> 00:19:01,340 S1: the house. Um, and so you're tapping into that home equity. 308 00:19:01,740 --> 00:19:04,420 S1: You still own the home. You have to keep paying 309 00:19:04,420 --> 00:19:08,379 S1: property taxes and insurance and maintenance, but they let you 310 00:19:08,380 --> 00:19:12,700 S1: access that equity, which is after tax equity, because you've 311 00:19:12,700 --> 00:19:15,340 S1: already paid the tax on it. And so you can 312 00:19:15,340 --> 00:19:18,420 S1: get that money out, um, you know, by way of 313 00:19:18,420 --> 00:19:22,220 S1: either a line of credit, a monthly check for life, um, 314 00:19:22,420 --> 00:19:25,500 S1: you know, or by paying off an existing mortgage, although 315 00:19:25,500 --> 00:19:28,060 S1: you don't have one, most people get it as a 316 00:19:28,060 --> 00:19:31,300 S1: line of credit, which just means there's a sum of 317 00:19:31,300 --> 00:19:34,840 S1: money available, generally equal to about half of the value 318 00:19:34,840 --> 00:19:37,440 S1: of the home. That line of credit probably is going 319 00:19:37,480 --> 00:19:40,920 S1: to increase over time as your home appreciates. And then 320 00:19:40,920 --> 00:19:43,840 S1: you draw money out when you need it. And you 321 00:19:43,840 --> 00:19:46,680 S1: don't ever have to make a payment. Now, the balance 322 00:19:46,680 --> 00:19:49,960 S1: that you draw out is going to grow over time 323 00:19:50,080 --> 00:19:53,880 S1: because there's interest and there's some fees. But then when 324 00:19:53,880 --> 00:19:56,920 S1: you pass away or move, the house is sold. And 325 00:19:56,920 --> 00:19:59,800 S1: just like a forward mortgage, whatever is owed to the 326 00:19:59,840 --> 00:20:02,119 S1: to the lender gets paid out of the proceeds of 327 00:20:02,119 --> 00:20:04,720 S1: the home. And then the rest is available for your 328 00:20:04,720 --> 00:20:08,359 S1: heirs or to be given to to charity. So that's 329 00:20:08,359 --> 00:20:10,800 S1: generally the way it works. Does that make sense though? 330 00:20:12,080 --> 00:20:14,760 S6: That makes a lot of sense. You answered all my questions. 331 00:20:14,920 --> 00:20:15,640 S5: All right. 332 00:20:15,640 --> 00:20:18,120 S1: Listen, if you want to connect with somebody who can 333 00:20:18,119 --> 00:20:20,960 S1: help you understand exactly what that would look like in 334 00:20:20,960 --> 00:20:24,320 S1: your situation, our team would be happy to connect you 335 00:20:24,320 --> 00:20:26,080 S1: with someone. Just hang on the line, okay? 336 00:20:27,040 --> 00:20:27,960 S6: Okay. Thank you. 337 00:20:28,119 --> 00:20:31,449 S1: All right. John, God bless you, my friend. Uh. Kent, Ohio. Chris. 338 00:20:31,490 --> 00:20:32,010 S1: Go ahead. 339 00:20:33,010 --> 00:20:36,929 S7: Hi. Thanks for taking my call. I would like to 340 00:20:36,970 --> 00:20:42,090 S7: know your recommendations on two different things. Number one, do 341 00:20:42,090 --> 00:20:49,010 S7: you recommend having an umbrella policy on your home as 342 00:20:49,170 --> 00:20:51,650 S7: opposed to just the regular home insurance? 343 00:20:52,490 --> 00:20:55,929 S1: Yeah, but an umbrella policy wouldn't be on your home. 344 00:20:55,930 --> 00:20:58,850 S1: It would be on you personally, but it would include 345 00:20:59,250 --> 00:21:03,690 S1: any liability related to your home. So an umbrella policy, 346 00:21:03,730 --> 00:21:06,889 S1: which I do recommend, and I have one for myself, 347 00:21:07,369 --> 00:21:12,490 S1: provides extra liability insurance that sits on top of your 348 00:21:12,490 --> 00:21:16,690 S1: auto and your homeowner's policies. And it kicks in if 349 00:21:16,690 --> 00:21:21,450 S1: you're sued and your regular insurance limits are maxed out 350 00:21:21,810 --> 00:21:25,690 S1: and it's usually sold in increments of $1 million. So 351 00:21:25,730 --> 00:21:29,220 S1: if you had a major car accident, let's say, you know, 352 00:21:29,260 --> 00:21:34,460 S1: that involved an injury. Uh, someone was hurt on your property. Um, 353 00:21:34,540 --> 00:21:37,899 S1: you know, other situations where you had incidents away from 354 00:21:37,900 --> 00:21:42,700 S1: the home. It provides that extra coverage that, you know, 355 00:21:42,740 --> 00:21:45,820 S1: very easily could come into play and just gives you 356 00:21:45,820 --> 00:21:50,180 S1: at a very low cost, you know, extra, uh, insurance. 357 00:21:50,500 --> 00:21:53,690 S1: And it's not a whole lot of money, typically 150 358 00:21:53,690 --> 00:21:57,420 S1: to $300 for $1 million worth of coverage. Stay right there. 359 00:21:57,420 --> 00:22:06,260 S1: We'll be right back. Great to have you with us 360 00:22:06,260 --> 00:22:09,060 S1: today on Faith and finance live here on Moody Radio. Well, 361 00:22:09,100 --> 00:22:12,740 S1: in the mail yesterday I got my Faithful Steward magazine. 362 00:22:12,740 --> 00:22:15,660 S1: That's right. I get one mailed to me too. It's 363 00:22:15,660 --> 00:22:20,700 S1: the third issue of Faithful Steward for, uh, this, uh, 364 00:22:20,740 --> 00:22:26,620 S1: fall season. September, October and November. Uh, the theme for this, uh, 365 00:22:26,619 --> 00:22:30,440 S1: issue is your work matters. We have an incredible article 366 00:22:30,480 --> 00:22:34,479 S1: on really God's design for work, the biblical account of 367 00:22:34,480 --> 00:22:37,000 S1: how we should think about our work and whether or 368 00:22:37,000 --> 00:22:40,160 S1: not our work needs a new story. And Tom Nelson, 369 00:22:40,280 --> 00:22:43,360 S1: pastor and founder of Made to Flourish, did just a 370 00:22:43,359 --> 00:22:47,040 S1: fabulous job on this feature article. The other features in 371 00:22:47,080 --> 00:22:51,160 S1: this issue is tithing a fresh look at an ancient practice. 372 00:22:51,200 --> 00:22:54,480 S1: We take a deep dive into all the passages around 373 00:22:54,480 --> 00:22:56,840 S1: the tithe and help you think about the tithe as 374 00:22:57,040 --> 00:23:00,480 S1: as New Testament believers, we have an incredible article on 375 00:23:00,480 --> 00:23:05,159 S1: financial next steps after losing a spouse. Um, how, uh, 376 00:23:05,280 --> 00:23:09,200 S1: our view of God shapes our stewardship. Six great money dates. 377 00:23:09,200 --> 00:23:11,760 S1: We actually give you six ideas to go on a 378 00:23:11,760 --> 00:23:14,920 S1: money date and actually have some fun and enjoy your spouse, 379 00:23:14,920 --> 00:23:19,080 S1: and also tackle some important financial topics at the same time. 380 00:23:19,280 --> 00:23:22,720 S1: Creating a shared vision for blended family finances. Whether or 381 00:23:22,720 --> 00:23:27,649 S1: not it's okay for married couples to have separate checking accounts. Um, 382 00:23:27,970 --> 00:23:30,850 S1: generosity through the ages. And then Ron Blue has a 383 00:23:30,850 --> 00:23:34,010 S1: great Q&A on is it okay to be unequally yoked 384 00:23:34,010 --> 00:23:38,050 S1: in business, not in marriage? What about in business? That 385 00:23:38,050 --> 00:23:40,889 S1: and more in this current issue of Faithful Steward? And listen, 386 00:23:40,890 --> 00:23:43,770 S1: if you love the program, an incredible way to help 387 00:23:43,770 --> 00:23:46,729 S1: us fund faith and finance live and everything we do 388 00:23:46,730 --> 00:23:49,290 S1: at Faith Fi is to become a partner. When you 389 00:23:49,290 --> 00:23:52,050 S1: do that, you'll get every issue of Faithful Steward mailed 390 00:23:52,050 --> 00:23:54,890 S1: to your door and all of our new studies and 391 00:23:54,890 --> 00:23:59,330 S1: devotionals and our new devotional due out, um, at the 392 00:23:59,330 --> 00:24:02,129 S1: beginning of the year, uh, is going to be incredible. 393 00:24:02,130 --> 00:24:03,810 S1: I won't tell you too much about it, but I'm 394 00:24:03,810 --> 00:24:06,570 S1: really excited about it. So just head to our website. Faith. 395 00:24:08,250 --> 00:24:13,649 S1: That's faith. Partner to learn more. Partner. Support us at 396 00:24:13,650 --> 00:24:18,010 S1: $35 a month or more, or 400 or more per year. 397 00:24:18,250 --> 00:24:21,169 S1: And it all goes to helping us reach more people 398 00:24:21,170 --> 00:24:25,790 S1: with the message of biblical stewardship. Again, that website. Com 399 00:24:25,790 --> 00:24:30,109 S1: slash partner. All right, let's head back to the phones. Plainfield, Illinois. Hi, Agnes. 400 00:24:30,150 --> 00:24:30,670 S1: Go ahead. 401 00:24:31,470 --> 00:24:36,830 S8: Yeah. Uh, thanks for getting my call. I have my sister. Uh, 402 00:24:36,869 --> 00:24:40,830 S8: she's not knowledgeable. She has this amount of money in 403 00:24:40,830 --> 00:24:44,390 S8: savings account in the bank. It's not eating anything. Uh, 404 00:24:44,390 --> 00:24:48,550 S8: my name is on it. She doesn't have email address. Uh, 405 00:24:48,590 --> 00:24:53,950 S8: can I use the, um, saving account to fund high 406 00:24:53,990 --> 00:24:57,669 S8: yielding online savings account so that she can be getting 407 00:24:57,670 --> 00:25:02,629 S8: some interest paid in it? Uh, sure. If I put 408 00:25:02,630 --> 00:25:06,149 S8: my name and her name, if I use her name 409 00:25:06,150 --> 00:25:09,590 S8: and then put my name as the secondary and I 410 00:25:09,590 --> 00:25:13,150 S8: use my email, is that okay to use to monitor 411 00:25:13,190 --> 00:25:16,270 S8: the the account and then to pay this money from 412 00:25:16,310 --> 00:25:20,230 S8: her saving into this saving, high yielding saving account. Is 413 00:25:20,230 --> 00:25:20,869 S8: it possible. 414 00:25:21,670 --> 00:25:24,600 S1: Yeah. Let's tackle each of those. So first of all, 415 00:25:24,600 --> 00:25:29,520 S1: opening a high yield savings account. Most online banks require 416 00:25:29,520 --> 00:25:33,960 S1: you to link a checking account for transfers. Some will 417 00:25:33,960 --> 00:25:39,640 S1: allow linking an existing savings account, but it's less common. Uh, 418 00:25:39,840 --> 00:25:43,560 S1: you'll need the routing and account numbers of your current 419 00:25:43,560 --> 00:25:46,800 S1: savings to try linking it, but I would check with 420 00:25:46,800 --> 00:25:49,800 S1: them before you open the account to make sure that 421 00:25:49,800 --> 00:25:54,600 S1: it doesn't require a checking account versus savings. Now, if 422 00:25:54,600 --> 00:25:58,520 S1: the bank you select requires checking, then it may mean 423 00:25:58,520 --> 00:26:02,120 S1: that you have to open a basic checking account at 424 00:26:02,119 --> 00:26:05,120 S1: your current at her current brick and mortar bank in 425 00:26:05,119 --> 00:26:07,480 S1: order to make it happen, but it's not going to 426 00:26:07,480 --> 00:26:11,120 S1: be absolutely necessary. There's just going to be fewer options, 427 00:26:11,119 --> 00:26:13,920 S1: and you're going to want to ask that question. Second, 428 00:26:13,920 --> 00:26:18,120 S1: moving money in. Yeah. If the online bank accepts your 429 00:26:18,160 --> 00:26:22,050 S1: saving or her savings account as the funding source, then yes, 430 00:26:22,050 --> 00:26:25,730 S1: you would link it electronically with the account number and 431 00:26:25,730 --> 00:26:28,610 S1: the routing number, and then she'd be able to transfer 432 00:26:28,650 --> 00:26:31,729 S1: that money straight from the brick and mortar savings to 433 00:26:31,770 --> 00:26:35,889 S1: the online savings in terms of monitoring. You know, banks 434 00:26:35,890 --> 00:26:41,050 S1: generally don't allow a non-owner to log in and monitor 435 00:26:41,050 --> 00:26:45,890 S1: unless they're a joint account holder or an authorized user, maybe, 436 00:26:45,930 --> 00:26:50,090 S1: or an agent with legal documentation like a power of attorney. 437 00:26:50,450 --> 00:26:52,330 S1: So what you can do is you can help her 438 00:26:52,330 --> 00:26:55,210 S1: set it up in person or online. You can show 439 00:26:55,210 --> 00:26:57,930 S1: her how to log in. You could ask the bank 440 00:26:57,930 --> 00:27:01,770 S1: if they have a view only access for joint owners, 441 00:27:01,770 --> 00:27:04,450 S1: but that's not going to be available for outside family 442 00:27:04,450 --> 00:27:08,770 S1: members as a normal practice. Does that make sense? 443 00:27:09,810 --> 00:27:12,609 S8: It makes sense, but she doesn't have that knowledge of 444 00:27:12,770 --> 00:27:16,930 S8: going to log in. And even if I show her, 445 00:27:17,050 --> 00:27:22,950 S8: she doesn't have that Confidence and to do it. So 446 00:27:22,990 --> 00:27:25,550 S8: I was thinking, if I can use my email address, 447 00:27:25,590 --> 00:27:28,630 S8: it's my name is attached to the account as well 448 00:27:28,910 --> 00:27:31,590 S8: and then open it in her name and then in 449 00:27:31,590 --> 00:27:34,429 S8: my name. But you said they are not going to 450 00:27:34,470 --> 00:27:35,470 S8: allow that. So that. 451 00:27:35,510 --> 00:27:39,470 S1: Well, if it's a joint account, meaning you all are co-owners, 452 00:27:39,470 --> 00:27:42,150 S1: your name's on the account and her name's on the account, 453 00:27:42,350 --> 00:27:45,190 S1: then absolutely. You'd be able to get your own login. 454 00:27:45,390 --> 00:27:48,550 S1: I'm just saying, if it's in her name only, you're 455 00:27:48,550 --> 00:27:52,910 S1: probably not going to be able to get access to it. Um, well, 456 00:27:52,990 --> 00:27:55,470 S1: if it's if it's an individual account and you're not 457 00:27:55,470 --> 00:27:56,469 S1: listed on it. 458 00:27:56,990 --> 00:27:58,710 S8: Yeah. She put my name on it. 459 00:27:58,750 --> 00:28:01,949 S1: Okay, well, then that's no problem. Yeah. Then if your 460 00:28:01,950 --> 00:28:02,709 S1: joint name. 461 00:28:03,310 --> 00:28:07,110 S8: Yeah, I can withdraw money for her and everything, but 462 00:28:07,150 --> 00:28:09,350 S8: my name is Cindy. My name is Cindy. 463 00:28:10,109 --> 00:28:11,950 S1: Then you're going to be able to get a login. 464 00:28:11,950 --> 00:28:13,790 S1: So that's not going to be any problem. So now 465 00:28:13,790 --> 00:28:15,990 S1: the next step is to find the bank that's right 466 00:28:15,990 --> 00:28:20,320 S1: for you. Uh, the online bank. and go ahead and 467 00:28:20,320 --> 00:28:23,440 S1: get that account open in both of your names. And 468 00:28:23,440 --> 00:28:25,760 S1: then you're just going to want to ask the question, 469 00:28:25,920 --> 00:28:29,440 S1: can I use a savings account as the funding account, 470 00:28:29,440 --> 00:28:32,080 S1: or does it have to be checking. And you know, 471 00:28:32,080 --> 00:28:33,600 S1: you're going to want to know that before you go 472 00:28:33,600 --> 00:28:35,720 S1: through with it. Let me also mention more and more 473 00:28:35,720 --> 00:28:38,680 S1: of our listeners are wanting to align their their Christian 474 00:28:38,680 --> 00:28:42,680 S1: values with their banking partner, and they're choosing an organization 475 00:28:42,680 --> 00:28:45,280 S1: like Christian Community Credit Union, which happens to be the 476 00:28:45,280 --> 00:28:47,680 S1: biggest in this space, because they want to know that 477 00:28:47,680 --> 00:28:50,760 S1: they're doing business with somebody that shares their values and 478 00:28:50,800 --> 00:28:55,240 S1: even supports Christian ministries and churches. And there's a special 479 00:28:55,240 --> 00:28:58,840 S1: offer going right on right now for faithful listeners, um, 480 00:28:58,920 --> 00:29:01,680 S1: at Christian Community Credit Union. And so that might be 481 00:29:01,680 --> 00:29:06,000 S1: worth looking at as well. Just go to faith banking. 482 00:29:06,280 --> 00:29:11,320 S1: That's faithful banking. They offer the same high yield savings, 483 00:29:11,320 --> 00:29:13,760 S1: and you can get up to $400 as a bonus 484 00:29:13,920 --> 00:29:17,420 S1: when you use the keyword faith fi. So hopefully that helps. Agnes, 485 00:29:17,420 --> 00:29:19,420 S1: thanks for your call today. You sound like a wonderful 486 00:29:19,420 --> 00:29:22,140 S1: sister to North Carolina. Hi, Nancy. Go ahead. 487 00:29:22,980 --> 00:29:24,420 S9: Hey. How are you doing, Rob? 488 00:29:24,460 --> 00:29:25,940 S1: I'm doing great. Thanks for your call. 489 00:29:26,700 --> 00:29:30,340 S9: Good. Thank you. Um, my husband and I are 65 490 00:29:30,420 --> 00:29:34,260 S9: this year, and we're both collecting Social Security, so we'll 491 00:29:34,260 --> 00:29:38,980 S9: both qualify for the 65 year old, um, deduction when 492 00:29:38,980 --> 00:29:42,780 S9: we file our taxes for 2025. Yeah, and it looks 493 00:29:42,780 --> 00:29:46,820 S9: like we're both qualified for the $6,000 each additional deduction 494 00:29:46,820 --> 00:29:50,740 S9: for the next four years. So my question to you is, um, 495 00:29:50,780 --> 00:29:54,540 S9: if we take out after I ran the numbers and 496 00:29:54,540 --> 00:29:57,580 S9: thank you for the government for making it so hard. Um, 497 00:29:57,940 --> 00:30:00,820 S9: the how can we collect? Can we can collect or 498 00:30:00,860 --> 00:30:04,340 S9: take out $20,000 out of our 401 K and not 499 00:30:04,340 --> 00:30:07,100 S9: have to pay taxes on it. And if we do 500 00:30:07,100 --> 00:30:09,260 S9: that for the next four years, along with the payments 501 00:30:09,260 --> 00:30:11,219 S9: that we make on our house, we can pay our 502 00:30:11,220 --> 00:30:14,460 S9: house off. So the question is, is that a good 503 00:30:14,460 --> 00:30:18,430 S9: idea to take out that money and take advantage of 504 00:30:18,430 --> 00:30:21,950 S9: the tax free part and then have. And then lose 505 00:30:21,950 --> 00:30:24,350 S9: the opportunity to make more money in our 401 K. 506 00:30:24,710 --> 00:30:28,190 S1: Yeah, yeah. So that's going to be the trade off is. Yeah. 507 00:30:28,270 --> 00:30:32,270 S1: Even if you are in a situation, uh, where the 508 00:30:32,270 --> 00:30:36,150 S1: taxable income is under the standard deduction. Which to your 509 00:30:36,150 --> 00:30:39,229 S1: point you get a little extra room there at 65 510 00:30:39,390 --> 00:30:42,390 S1: or older, even though it may not create a tax bill. 511 00:30:42,390 --> 00:30:46,150 S1: There's the opportunity cost of this money not continuing to 512 00:30:46,190 --> 00:30:49,070 S1: grow in a tax deferred environment. So let's do this. 513 00:30:49,070 --> 00:30:50,950 S1: I've got to take a quick break. But when I 514 00:30:50,990 --> 00:30:53,910 S1: come back, we'll tackle that trade off and talk about 515 00:30:53,910 --> 00:30:56,550 S1: where you go from here. This is faith in finance. Live. 516 00:30:56,590 --> 00:31:04,430 S1: Stay with us. Great to have you with us today 517 00:31:04,430 --> 00:31:06,709 S1: on Faith and finance. Live here in our final segment 518 00:31:06,710 --> 00:31:09,390 S1: today we'll get to as many calls as we can. 519 00:31:09,430 --> 00:31:12,230 S1: Before the break, we were talking to Nancy in North Carolina. 520 00:31:12,270 --> 00:31:16,360 S1: She and her husband are both 65. They're collecting Social Security, 521 00:31:16,560 --> 00:31:22,040 S1: and with the higher standard deduction that's available for somebody 522 00:31:22,080 --> 00:31:27,200 S1: 65 years or older. Um, you she's wondering, does it 523 00:31:27,200 --> 00:31:31,560 S1: make sense to start pulling money out of her 401 K, uh, 524 00:31:31,560 --> 00:31:34,800 S1: 20,000 a year for the next four years? Because if 525 00:31:34,800 --> 00:31:40,680 S1: she can stay under that 32,600 for married filing jointly, um, 526 00:31:40,760 --> 00:31:45,280 S1: in 2025, then the withdrawals will not create a tax bill. 527 00:31:45,280 --> 00:31:47,680 S1: And she's wondering if that makes sense. Now. Why would 528 00:31:47,680 --> 00:31:50,640 S1: she want to do that? Well, uh, the reason she 529 00:31:50,640 --> 00:31:53,280 S1: would want to do that is because then it's no 530 00:31:53,280 --> 00:31:57,080 S1: longer subject to the required minimums, which would be perhaps 531 00:31:57,080 --> 00:32:02,280 S1: taxable later, especially if these, uh, deductions are lowered in 532 00:32:02,320 --> 00:32:05,080 S1: future years and we don't know whether they will or 533 00:32:05,080 --> 00:32:08,280 S1: will not be. Um, and so she could essentially start 534 00:32:08,280 --> 00:32:12,480 S1: moving that money out now without having the tax liability. Um, 535 00:32:12,580 --> 00:32:14,980 S1: And Nancy, you know, here's what I would say. I mean, 536 00:32:15,020 --> 00:32:17,739 S1: number one is if you were going to convert it 537 00:32:17,740 --> 00:32:20,460 S1: to a Roth, I think that might be the best 538 00:32:20,460 --> 00:32:24,740 S1: of both worlds, because essentially, you know, you would be 539 00:32:24,780 --> 00:32:30,140 S1: able to stay under that standard deduction, do a Roth conversion. 540 00:32:30,460 --> 00:32:34,380 S1: It keeps it in that now tax free environment. Um, 541 00:32:34,860 --> 00:32:38,940 S1: and you could convert up to 32,600 and have no 542 00:32:38,940 --> 00:32:43,180 S1: federal income tax. Um, and so that would be a 543 00:32:43,180 --> 00:32:45,340 S1: great option that allows you to kind of do the 544 00:32:45,340 --> 00:32:48,940 S1: best of both worlds. And in the future, um, you know, 545 00:32:48,980 --> 00:32:52,500 S1: you wouldn't have any kind of required minimums. Now you 546 00:32:52,500 --> 00:32:56,540 S1: need to also make sure you don't if you're on Medicare, 547 00:32:56,540 --> 00:32:59,980 S1: you need to make sure you don't accidentally push yourself 548 00:32:59,980 --> 00:33:04,140 S1: into either taxable Social Security benefits that are not being 549 00:33:04,180 --> 00:33:08,820 S1: taxed today, or higher Medicare premiums through something called Irma, 550 00:33:09,220 --> 00:33:13,470 S1: which is the thresholds that make those Medicare premiums more 551 00:33:13,470 --> 00:33:17,070 S1: expensive if you have more taxable income. So you need 552 00:33:17,070 --> 00:33:20,430 S1: to check those. Um, I think the other consideration I'll 553 00:33:20,430 --> 00:33:22,030 S1: just throw out and then I'll get your thoughts on 554 00:33:22,030 --> 00:33:25,190 S1: all this is, you know, you if you're not going 555 00:33:25,230 --> 00:33:27,630 S1: to put it into the Roth, you need to compare 556 00:33:27,990 --> 00:33:31,750 S1: the benefit of taking the money now tax free, um, 557 00:33:32,070 --> 00:33:36,670 S1: and shrinking the 401 K before the required minimums versus 558 00:33:36,870 --> 00:33:39,750 S1: what I'll call the opportunity cost for leaving the money 559 00:33:39,750 --> 00:33:43,910 S1: in there and growing it tax deferred. And you would 560 00:33:43,910 --> 00:33:47,630 S1: just need to look at, you know, the, the potential 561 00:33:47,630 --> 00:33:51,910 S1: of the growth, um, that you were giving up versus 562 00:33:51,910 --> 00:33:56,230 S1: the potential tax on that money down the road. And, 563 00:33:56,270 --> 00:33:58,830 S1: you know, those are both going to be guesses as 564 00:33:58,830 --> 00:34:02,390 S1: to what that tax rate is and what the, you know, 565 00:34:02,430 --> 00:34:05,030 S1: the the benefit of that tax deferred growth is going 566 00:34:05,070 --> 00:34:08,790 S1: to be on unknown returns because we're anticipating them. They're 567 00:34:08,790 --> 00:34:12,009 S1: not real. Um, so, you know, I would say that 568 00:34:12,010 --> 00:34:14,370 S1: probably the, the best case scenario is for you to 569 00:34:14,370 --> 00:34:16,969 S1: do the Roth conversion, but give me your thoughts on 570 00:34:16,969 --> 00:34:17,570 S1: all that. 571 00:34:18,489 --> 00:34:22,090 S9: Well, it's it's it's extremely complicated when you start putting 572 00:34:22,090 --> 00:34:25,570 S9: all of it together. Our original plan was to take 573 00:34:25,610 --> 00:34:29,370 S9: out $12,000 a year. And we knew we could do 574 00:34:29,370 --> 00:34:33,730 S9: that tax free because I ran the numbers. Um, and 575 00:34:33,730 --> 00:34:39,009 S9: then all these extra, um, deductions came in line from Trump's, 576 00:34:39,330 --> 00:34:43,890 S9: you know, big, big better bill. And, um, we were 577 00:34:43,890 --> 00:34:46,050 S9: going to take that money and put it in our 578 00:34:46,090 --> 00:34:49,810 S9: high yield savings where we knew we were going to get, um, 579 00:34:50,090 --> 00:34:54,810 S9: you know, four ish percent and start kind of taking 580 00:34:54,810 --> 00:34:57,730 S9: out the 401 since we never know where that's going 581 00:34:57,770 --> 00:35:00,529 S9: to really go up and down in the market. And 582 00:35:00,530 --> 00:35:03,049 S9: we knew we could get 4% at least as long 583 00:35:03,050 --> 00:35:05,850 S9: as that stays stable. So it was kind of a 584 00:35:05,890 --> 00:35:07,770 S9: give or take. We you know, we were just trying 585 00:35:07,770 --> 00:35:12,140 S9: to say, okay, is it worth for the four years? 586 00:35:12,180 --> 00:35:14,180 S9: You know, when we get this where we can get 587 00:35:14,180 --> 00:35:16,739 S9: it tax free, go on and just get rid of 588 00:35:16,739 --> 00:35:18,540 S9: the house payment? You know what I'm saying? 589 00:35:18,820 --> 00:35:21,739 S1: Yeah, yeah. And so you would take this and apply 590 00:35:21,739 --> 00:35:23,859 S1: it directly to the mortgage. How much do you owe 591 00:35:23,980 --> 00:35:25,380 S1: on the mortgage at this point? 592 00:35:26,100 --> 00:35:29,980 S9: Um, I ran the numbers. I did mortgage calculator. And 593 00:35:29,980 --> 00:35:32,900 S9: with the $20,000 in four years, we could pay the 594 00:35:32,900 --> 00:35:35,420 S9: house off. And it's $99,000 right now. 595 00:35:35,780 --> 00:35:38,819 S1: Okay. Yeah. Yeah. And then have you looked? Are you 596 00:35:38,820 --> 00:35:40,540 S1: on Medicare right now? 597 00:35:40,739 --> 00:35:41,419 S9: Yes. 598 00:35:41,460 --> 00:35:43,660 S1: Okay. And have you looked at that piece of it 599 00:35:43,660 --> 00:35:46,540 S1: just to understand whether or not that would create an 600 00:35:46,580 --> 00:35:48,220 S1: Irma situation? Yeah. 601 00:35:48,700 --> 00:35:52,700 S9: Oh, it's not an. Oh, yeah. It does. The government's 602 00:35:52,700 --> 00:35:54,220 S9: done a doozy on us. 603 00:35:54,260 --> 00:35:58,180 S1: Yeah. Okay. Well, if you can avoid that, and then 604 00:35:58,180 --> 00:36:00,219 S1: you could get the house paid off and get rid 605 00:36:00,260 --> 00:36:03,620 S1: of the payment by paying it off in full. I 606 00:36:03,660 --> 00:36:06,020 S1: like that a lot. If you were doing it just 607 00:36:06,020 --> 00:36:08,910 S1: to stick it in your savings to earn the the 4%. 608 00:36:08,910 --> 00:36:11,230 S1: I wouldn't do that because those rates are coming down 609 00:36:11,510 --> 00:36:13,870 S1: and you'd do much better getting that. If you didn't 610 00:36:13,870 --> 00:36:15,950 S1: need the money. I'd rather you leave it right where 611 00:36:15,950 --> 00:36:19,270 S1: it is, or convert it to a Roth and invest it. 612 00:36:19,270 --> 00:36:21,950 S1: Because even at 65, if you're in good health, you 613 00:36:21,950 --> 00:36:24,750 S1: know you need to take a 2030 year time horizon 614 00:36:24,750 --> 00:36:28,390 S1: on this money, um, and get it working for you. 615 00:36:28,390 --> 00:36:30,310 S1: But if you want the peace of mind of paying 616 00:36:30,310 --> 00:36:32,029 S1: off the house, and you're going to get rid of 617 00:36:32,030 --> 00:36:35,430 S1: your largest monthly expense, there's some real value there. And 618 00:36:35,430 --> 00:36:37,670 S1: I think, you know, go for that, especially if you 619 00:36:37,670 --> 00:36:40,310 S1: can do it without paying any taxes or kicking in 620 00:36:40,310 --> 00:36:42,950 S1: the Irma. But if it's just to stick it in savings, 621 00:36:42,950 --> 00:36:44,910 S1: I wouldn't do that in my opinion. 622 00:36:45,710 --> 00:36:47,270 S9: Okay. Good deal. Sounds good. 623 00:36:47,830 --> 00:36:50,750 S1: Okay, Nancy. You're welcome. Thanks for your call. God bless. Uh, 624 00:36:50,750 --> 00:36:52,630 S1: Crystal Lake, Illinois. Bob. Go ahead. 625 00:36:54,030 --> 00:36:54,670 S6: 2030. 626 00:36:54,710 --> 00:36:59,230 S10: Hi, Bob. Uh, uh, so, uh, the question I have 627 00:36:59,750 --> 00:37:06,169 S10: is regarding to, um, A41K um, Account I had with 628 00:37:06,170 --> 00:37:09,290 S10: my former employer, but I no longer work for them. Uh, 629 00:37:09,290 --> 00:37:11,850 S10: so I'm trying to figure out what's the best. What's 630 00:37:11,850 --> 00:37:14,450 S10: the best course of action to take with that money. 631 00:37:14,450 --> 00:37:18,410 S10: So one advisor, uh, advised me to move it from 632 00:37:18,410 --> 00:37:22,210 S10: the former from the, uh, for one K into a 633 00:37:22,210 --> 00:37:27,730 S10: traditional IRA. My question is one. Is it a wise move? Uh. 634 00:37:27,730 --> 00:37:31,969 S10: And two, could I withdraw some cash in the process 635 00:37:31,969 --> 00:37:35,290 S10: of that transfer, uh, without paying penalty? 636 00:37:36,890 --> 00:37:40,090 S1: Uh, no. You would, you would not. What is your age? 637 00:37:41,570 --> 00:37:43,169 S10: Uh, I am currently 34. 638 00:37:43,650 --> 00:37:47,890 S1: Okay. Yeah. So if you're under 59.5 or by leaving 639 00:37:47,890 --> 00:37:51,890 S1: your employer, even if the rule of 55 applied, you're 640 00:37:51,890 --> 00:37:55,890 S1: automatically going to have a penalty of 10% plus the 641 00:37:55,890 --> 00:37:59,450 S1: amount that you pull out of that 401 K as 642 00:37:59,450 --> 00:38:02,850 S1: a distribution is going to be taxable to you. So 643 00:38:02,850 --> 00:38:04,580 S1: that's going to be to be expensive money. I mean, 644 00:38:04,580 --> 00:38:08,380 S1: that's probably 35% right off the top between the taxes 645 00:38:08,380 --> 00:38:12,580 S1: and the penalty at a minimum. Um, and so, you know, 646 00:38:12,620 --> 00:38:14,299 S1: if you want to roll it to an IRA, I 647 00:38:14,300 --> 00:38:16,739 S1: think that's great because that gives you more control over 648 00:38:16,739 --> 00:38:21,060 S1: the investment options and, you know, less potential fees depending 649 00:38:21,060 --> 00:38:24,420 S1: on how you choose to, you know, manage that. Um, 650 00:38:24,739 --> 00:38:27,220 S1: but if you take it out as a distribution, rather 651 00:38:27,219 --> 00:38:30,540 S1: than rolling it to an IRA, uh, you're absolutely going 652 00:38:30,540 --> 00:38:32,180 S1: to have a penalty and taxes. 653 00:38:33,660 --> 00:38:36,859 S10: Okay. So basically, I can go with the, uh, that, 654 00:38:36,860 --> 00:38:40,419 S10: that transfer from, uh, for one with IRA, and that's 655 00:38:40,420 --> 00:38:42,660 S10: going to be a better option for for the money. 656 00:38:43,020 --> 00:38:45,020 S1: That's right. Because that's going to keep it in a 657 00:38:45,020 --> 00:38:48,779 S1: tax deferred environment. So no taxes due. Uh, but it's 658 00:38:48,780 --> 00:38:51,140 S1: just going to give you more flexibility because now instead 659 00:38:51,140 --> 00:38:53,739 S1: of just being limited to the menu of investments in 660 00:38:53,739 --> 00:38:57,780 S1: the 401 K, you can essentially invest in anything stocks, bonds, 661 00:38:57,780 --> 00:39:01,740 S1: mutual funds, precious metals. You know, even through a self-directed IRA, 662 00:39:01,780 --> 00:39:03,790 S1: you could put it in real estate ventures if you 663 00:39:03,790 --> 00:39:06,790 S1: wanted to. So yeah, you've got a lot more control 664 00:39:06,790 --> 00:39:10,350 S1: and flexibility and and control over the costs. When you 665 00:39:10,350 --> 00:39:12,910 S1: roll it to that IRA and you are not creating 666 00:39:12,910 --> 00:39:14,590 S1: a taxable event at that point. 667 00:39:15,710 --> 00:39:18,589 S10: So once I move it to the IRA, am I 668 00:39:18,630 --> 00:39:21,870 S10: able to contribute to it? I guess because I move it, 669 00:39:21,910 --> 00:39:25,710 S10: it hasn't been IRA contribution. Am I still able to 670 00:39:25,710 --> 00:39:29,230 S10: contribute more to it this year and moving forward? 671 00:39:29,590 --> 00:39:32,190 S1: Absolutely. As long as you have earned income up to 672 00:39:32,230 --> 00:39:34,510 S1: the amount you put in, you certainly can. 673 00:39:35,790 --> 00:39:38,670 S10: Okay. Sounds good. That's very helpful. Thank you so much. 674 00:39:38,830 --> 00:39:41,629 S1: All right. Thanks, Bob. Appreciate your call. Uh, Betty is 675 00:39:41,630 --> 00:39:43,270 S1: in Chicago. Hi, Betty. Go ahead. 676 00:39:44,150 --> 00:39:49,230 S11: Hi. Thank you. Um, I purchased a house in 2019, 677 00:39:49,230 --> 00:39:54,510 S11: so it's been six years. Um, my husband's retired. I'm 60. 678 00:39:55,030 --> 00:40:00,710 S11: The value of the property is about 595,000 to 600,000 679 00:40:00,890 --> 00:40:07,570 S11: right now. Um, we put in about 60,000. Um, but 680 00:40:07,770 --> 00:40:11,210 S11: we need a loan to fix some repairs that were 681 00:40:11,210 --> 00:40:14,609 S11: not disclosed when we purchased the house. So we need 682 00:40:14,650 --> 00:40:21,370 S11: 20 to $30,000, um, because our basement keeps flooding. 683 00:40:21,810 --> 00:40:24,090 S1: Mhm. Yeah, I know how difficult that is. 684 00:40:24,570 --> 00:40:27,370 S11: And we have both have really good credits. So I 685 00:40:27,370 --> 00:40:29,730 S11: wanted to know what's the best option as far as 686 00:40:29,770 --> 00:40:31,130 S11: getting a loan out there. 687 00:40:31,410 --> 00:40:35,009 S1: Yeah sure. So your current mortgage what do you owe 688 00:40:35,010 --> 00:40:35,490 S1: on it. 689 00:40:36,170 --> 00:40:40,690 S11: About 427,000 maybe. 690 00:40:41,010 --> 00:40:43,090 S1: All right. And you probably have a pretty good rate 691 00:40:43,090 --> 00:40:43,569 S1: on that. 692 00:40:44,730 --> 00:40:47,170 S11: It's 373,000. 693 00:40:47,330 --> 00:40:49,649 S1: Okay. And you probably got a pretty good rate. Is 694 00:40:49,650 --> 00:40:50,210 S1: that right? 695 00:40:50,890 --> 00:40:55,170 S11: Yeah. We got a, I think a two and a half. 696 00:40:55,450 --> 00:40:59,290 S1: Wow. Yeah. Incredible. Um, so you don't want to touch that. 697 00:40:59,340 --> 00:41:02,620 S1: So really what you probably want to do is a 698 00:41:02,660 --> 00:41:06,419 S1: home equity line of credit. Uh, so it works like 699 00:41:06,420 --> 00:41:10,060 S1: a credit card secured by your house. Um, it's going 700 00:41:10,100 --> 00:41:13,899 S1: to be a variable rate. Um, and the good news 701 00:41:13,900 --> 00:41:16,460 S1: about that is, as interest rates come down and it 702 00:41:16,460 --> 00:41:19,220 S1: looks like they will be coming down, then the rate 703 00:41:19,219 --> 00:41:24,300 S1: on the line of credit will fall with interest rates. And, 704 00:41:24,340 --> 00:41:26,380 S1: you know, it gives you the ability to access the 705 00:41:26,380 --> 00:41:28,819 S1: money as you need it. So let's say you were 706 00:41:28,820 --> 00:41:33,339 S1: to get $100,000 line of credit. Uh, or maybe 50,000, 707 00:41:33,380 --> 00:41:35,660 S1: whatever you wanted to do there and whatever the bank 708 00:41:35,660 --> 00:41:38,780 S1: would approve. You don't have to. Now, in some cases, 709 00:41:38,780 --> 00:41:41,339 S1: they'll give you a better rate if you take a 710 00:41:41,340 --> 00:41:45,220 S1: certain amount at closing. So maybe you get a $50,000 711 00:41:45,219 --> 00:41:47,660 S1: line and you take $10,000 at closing, and they're going 712 00:41:47,700 --> 00:41:50,980 S1: to knock, you know, a 10th of 1% off the 713 00:41:50,980 --> 00:41:54,620 S1: interest rate. But then from that point forward, you don't 714 00:41:54,660 --> 00:41:57,220 S1: take the money against the line until you need it 715 00:41:57,500 --> 00:42:00,320 S1: and you pay it back, and then it becomes available 716 00:42:00,320 --> 00:42:03,960 S1: to you again. And so that's usually, you know, the 717 00:42:04,000 --> 00:42:06,080 S1: best way to do it. It's going to be secured 718 00:42:06,080 --> 00:42:09,640 S1: by your home. Um, and you know, it will allow 719 00:42:09,640 --> 00:42:12,480 S1: you to tap into that money as essentially a second 720 00:42:12,480 --> 00:42:17,440 S1: mortgage as you need to for those repairs. And then, 721 00:42:17,480 --> 00:42:20,759 S1: you know, you'll pay it back over time and eventually 722 00:42:20,760 --> 00:42:23,359 S1: pay it off. Um, I would look for a home 723 00:42:23,360 --> 00:42:28,360 S1: equity line of credit lender that offers, uh, no closing 724 00:42:28,360 --> 00:42:32,359 S1: costs and no fees. And there are there are many 725 00:42:32,360 --> 00:42:34,040 S1: of them out there. I know Bank of America had 726 00:42:34,040 --> 00:42:37,439 S1: some special offers like that recently, and there's probably others. 727 00:42:37,440 --> 00:42:39,719 S1: So shop it around and see what you can find. 728 00:42:39,719 --> 00:42:42,399 S1: But you want a home equity line of credit. Thanks 729 00:42:42,400 --> 00:42:46,839 S1: for your call, Betty. Big thanks to my team today. Josh, Jim, Omar, Tahira. 730 00:42:47,080 --> 00:42:49,760 S1: Faith and Finance Live is a partnership between Moody Radio 731 00:42:49,760 --> 00:42:52,000 S1: and Faith fi. If you want to support us, become 732 00:42:52,000 --> 00:42:55,640 S1: a partner at Faith. Com. We'll see you tomorrow.