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Faith & Finance Live - Faith-Based Investing: Separating Fact from Fiction · CIAM Radio

0:08
S1: You may know how your retirement investments are performing, but
0:12
S1: do you know what they're actually supporting? Hi, I'm Rob West.
0:16
S1: Faith based investing is about more than avoiding certain companies.
0:20
S1: It's an opportunity to align our investments more closely with
0:23
S1: our Christian convictions. But does that mean sacrificing returns? And
0:27
S1: can one investor really make a difference? Today, Mark Regier
0:31
S1: joins us to explore what faithful stewardship looks like in
0:34
S1: our investment portfolios. And then we'll take your calls at
0:38
S1: 800 525 7000. This is faith and finance live. Biblical
0:43
S1: wisdom for your financial decisions. Well it's always a pleasure
0:51
S1: to welcome back Mark Regier, vice president of stewardship investing
0:54
S1: at Praxis Investment Management. Mark has more than 25 years
0:59
S1: of experience in faith based investing, helping investors align their
1:02
S1: financial decisions with their values. And he's just the person
1:06
S1: to help us separate fact from fiction when it comes
1:09
S1: to faith based investing. Mark, great to have you back.
1:12
S2: Hey, it's great to be back.
1:14
S1: Mark. I think many Christians unintentionally separate their faith from
1:18
S1: their financial decisions, especially when it comes to investing. They
1:22
S1: may be intentional about how they earn, spend, and give,
1:25
S1: but their retirement accounts are often on autopilot. So how
1:29
S1: would you encourage them to take a more thoughtful approach
1:32
S1: to what they're investing in?
1:34
S2: I think the first thing is to step back and
1:37
S2: take a broader view. Psalm 241 reminds us that the
1:41
S2: earth is the Lord's and the fullness thereof, the world
1:44
S2: and those who dwell therein. So really, the concept is
1:48
S2: that everything belongs to God, and we're called to be
1:50
S2: faithful stewards of what he's entrusted to us. So when
1:54
S2: we think about it that way, our investments are just
1:57
S2: the same as every part of our life, where we
1:59
S2: ask the Lord to have ownership and control over what
2:03
S2: we do. And one of the most important things when
2:06
S2: we think about investing is that we are actually part
2:09
S2: owners of these businesses that we're investing in. And so
2:12
S2: there's a responsibility to be knowledgeable and to be engaged
2:16
S2: with them and the impact that they're having on people's
2:19
S2: lives all over the world. Our faith should influence every
2:22
S2: financial decision we make, and investing is no exception.
2:26
S1: Yeah, I think that's right. Now, when people hear the
2:29
S1: term faith based investing, they often assume, Mark, that it's
2:32
S1: simply about avoiding certain companies or industries, and that's part
2:35
S1: of it. But is there more to it than that?
2:38
S2: Certainly, screening is a foundational part of what faith based
2:43
S2: and investing is, and it's certainly the thing that most
2:45
S2: people start with when they start thinking about how to
2:48
S2: integrate their faith and their investments, but they can do
2:51
S2: so much more at practice. We like to look for
2:53
S2: opportunities for making positive impact in the world through the
2:58
S2: investments that we hold. This can include engaging companies as shareholders.
3:04
S2: It can mean investing in communities through community investments or
3:09
S2: through impact bonds. There's just a wide range of opportunities.
3:13
S2: In fact, we have found seven different strategies that are
3:17
S2: part of our impact approach to investing with our faith
3:21
S2: in mind.
3:22
S1: Mhm. Yeah. Another misconception, Mark, is around the returns. Many
3:27
S1: think that investing according to your faith means sacrificing returns.
3:31
S1: Is that true?
3:33
S2: Uh, we certainly don't think that it is. And I
3:35
S2: think most studies have shown that investing in alignment with
3:38
S2: your values doesn't have to have a negative impact on
3:42
S2: your returns. It's partly accountable to what you how you
3:45
S2: approach that sort of process. Um, at Praxis, we use
3:49
S2: portfolio optimization to help us apply our investment screens while
3:53
S2: also seeking to keep performance closely aligned with the appropriate benchmarks. Uh,
3:58
S2: this is, uh, important for portfolios for everyday investors in particular,
4:03
S2: where you need them to grow on a regular basis
4:06
S2: and to basically keep pace with the markets and to
4:09
S2: generate the types of returns that families and individuals need
4:13
S2: to have. And, uh, we think this is just, uh,
4:17
S2: critical in terms of making a difference in people's lives
4:20
S2: as well as in the world around us.
4:23
S1: Mark, just 45 seconds left for someone who's brand new
4:26
S1: to this idea, what's one first step they can take?
4:30
S2: Well, you know, we think that the best opportunity that
4:33
S2: people have is to, first of all, speak with their
4:36
S2: financial advisor, with faith. You can search for a k,
4:39
S2: a somebody who's knowledgeable in how investments align with faith
4:43
S2: values and understand what your own values are. Um, and that's,
4:48
S2: I think the best way one can, can be involved
4:51
S2: in this work.
4:52
S1: Yeah, no doubt about that. You can head to find ack.com.
4:56
S1: And then of course, if you want to learn more
4:58
S1: about Praxis, an incredible partner of ours here at Faith
5:01
S1: Fi and a leader in faith based investing, just go
5:04
S1: to Praxis investments.com. That's PRAXIS invest.com. All right. Your calls
5:13
S1: are next, 800 525 7000. We'll be right back.
5:33
S3: The opinions offered during this program represent the personal or
5:37
S3: professional opinions of the participants given for informational purposes only.
5:41
S3: Any information provided is not intended to replace advice from
5:45
S3: a financial, medical, legal or other professional who understands your
5:49
S3: specific situation.
5:57
S1: Great to have you with us today on Faith and
5:59
S1: Finance Live. I'm Rob West. Well, looking forward to taking
6:02
S1: your calls and questions today. The number to call is
6:04
S1: 800 525 7000. That's 800 525 7000. We're ready to
6:11
S1: dive into your questions here in just a moment and
6:14
S1: help you think about managing God's money God's way here
6:18
S1: in Chicago today where I'm broadcasting from, uh, had the
6:22
S1: privilege of speaking to a couple of hundred advisors and
6:26
S1: other ministry leaders this morning. And what a treat to
6:29
S1: be able to talk to them about managing God's money,
6:32
S1: and specifically the unique leveraged role of the advisor who's
6:36
S1: stepping into a client relationship and bringing wisdom from above.
6:41
S1: We talked about, among other things, the fact that the
6:43
S1: Bible speaks so clearly to so many of these topics,
6:47
S1: 2300 verses in God's Word the deal with money and
6:51
S1: possessions and that really money issues are hard issues. You know,
6:55
S1: we're dealing with those issues that are beneath the surface.
6:58
S1: I love the picture that Ron Blue, who's a frequent
7:01
S1: contributor here, paints when he says it's like an iceberg.
7:04
S1: You know, that 10% that's above the water line is
7:07
S1: really the how. It's the decisions you're making every day
7:11
S1: as you give, save and spend. But really, the mass
7:13
S1: of that iceberg, the other 90% is below the water line.
7:17
S1: You can't see it, but it's really the most important part.
7:20
S1: That's the why. That's our values. That's what drives that 10%
7:25
S1: above the water line. And so if we're managing money
7:29
S1: the way we should, our decisions are an accurate reflection
7:34
S1: of what's going on beneath the surface. You know, if
7:37
S1: we want to lean into God's design in our lives
7:40
S1: and the ability to participate in his activity, if that's
7:43
S1: what's most important to us, then we need to order
7:45
S1: our lives in such a way that our money management
7:48
S1: decisions reflect that. You know, if we want to be
7:51
S1: a part of advancing the gospel, we would be generous givers.
7:54
S1: If we want to love our family well, we want
7:57
S1: to teach them the ways of God and pass our
8:00
S1: faith down, our faith legacy by telling the stories of
8:03
S1: how God has been faithful in our lives and how
8:06
S1: we've trusted him through difficult circumstances, how we placed our
8:09
S1: trust in him as Lord and Savior. You can't do
8:12
S1: that for them, but you can tell those stories. You
8:15
S1: can talk about it. You can put it on the doorpost.
8:17
S1: And as you're walking down the street through the normal
8:20
S1: course of life, you can share about the truth and
8:24
S1: the reality of our need for a savior. And then
8:27
S1: you can begin to lean into those areas, like understanding
8:30
S1: that God owns it all and we're stewards. This is
8:33
S1: the opportunity we have as we allow our values to
8:37
S1: be reflected in our financial decisions. The late Larry Burkett,
8:41
S1: who actually would broadcast here on Moody Radio, he would
8:44
S1: often say that the way we manage Money is the
8:47
S1: clearest indicator, the clearest indicator into what's going on in
8:51
S1: our lives spiritually. Wow. Now that may stop us in
8:55
S1: our tracks. But think about that for a second. It's
8:57
S1: that barometer. It's that working out of your faith and
9:01
S1: your values in the most tangible way, because we all
9:05
S1: spend money every day. And so as we spend and
9:09
S1: save and give, we're actually working out our values in
9:12
S1: real time. Now, you may say, wait a minute, Rob.
9:14
S1: I'm in a really difficult season right now. And that
9:17
S1: absolutely may be true. And the question is, what is
9:20
S1: faithfulness look like today with what God has placed in
9:24
S1: my hands in these circumstances, at this moment, with this income,
9:29
S1: with these challenges that I've just walked through, or maybe
9:31
S1: you're still walking through. What does faithfulness look like today?
9:35
S1: And here's the reality. It's not a matter of feeling
9:39
S1: bad or guilty of what we've done in the past,
9:42
S1: the mistakes we've made. My goal here is not to
9:44
S1: shame you in any way because I've made just as
9:46
S1: many mistakes as you have. The key is how do
9:49
S1: we move forward from here, understanding that we've been given
9:53
S1: a high calling as money managers of the King of Kings,
9:57
S1: and to manage faithfully with what we have right now,
10:00
S1: not when the bonus comes, not when the stock market
10:02
S1: reaches a certain level. Not when we get to the
10:05
S1: next job or the job after that. No. What is
10:07
S1: faithfulness look like right now, in this moment? That's what
10:12
S1: we want. And our goal is to come alongside you
10:15
S1: and cheer you on and to point you back to
10:17
S1: God's Word and to remind you that God loves you
10:19
S1: and that Jesus is your ultimate treasure. And that money
10:23
S1: is a beautiful gift. It's actually a powerful tool for
10:26
S1: good in your life. It's not meant to frustrate you.
10:30
S1: Certainly not meant to drive a wedge between you and
10:32
S1: your spouse, even though that can happen. But we've got
10:36
S1: to be careful because money is good so long as
10:39
S1: it's a tool and Jesus is our treasure, and faithfulness
10:43
S1: is our goal, and we know God owns it all.
10:46
S1: And then we put money in its proper place, and
10:49
S1: our work becomes an offering to the Lord. That's the
10:51
S1: way God designed it. And that's what we want to
10:54
S1: help you do. Now along that journey, you're going to
10:56
S1: have very specific questions. As you give, save, and spend,
10:59
S1: you're going to want to pay off some debt. You're
11:01
S1: going to want to get out from under the credit
11:03
S1: card debt. That came because of the mistakes you made
11:05
S1: in the past, or that unexpected medical event happened, and
11:09
S1: you didn't have the resources and it went on the
11:11
S1: credit card. Or maybe for you, you're just trying to give,
11:14
S1: but you're wondering, what's the balance between giving and saving?
11:17
S1: Perhaps you're wondering how much is enough for retirement? I'm
11:21
S1: not on track. What do I do? Any of those
11:24
S1: questions and more, including preparing the next steward or getting
11:27
S1: that credit score to finally break into the 700 seconds.
11:30
S1: Whatever you're dealing with today, we'd love to hear from you.
11:33
S1: Here's the thing. We're going to dive into those questions
11:35
S1: in the next segment. So now is the time to call.
11:38
S1: If you've got a question financially, any topic and you're
11:41
S1: near a phone, grab it 800 525 7800 525 7000.
11:49
S1: We've got some lines open today, and we will begin
11:51
S1: to take those questions here in just a moment. In
11:54
S1: the news today, inheriting an IRA can provide a significant
11:58
S1: financial blessing. But here's the thing. Without careful planning, taxes
12:02
S1: could take a substantial portion. According to Vanguard, the average
12:07
S1: inherited IRA is or beneficiary that is is 59 years
12:12
S1: old and receives an account worth approximately $128,000. Now, under
12:18
S1: the ten year rule, most adult children who inherit an
12:22
S1: IRA must empty the account within ten years of the
12:25
S1: original owner's death. For traditional IRAs, those withdrawals generally count
12:31
S1: as taxable income that potentially pushes beneficiaries into higher brackets. Remember,
12:36
S1: it's likely during perhaps the prime of their working years. Now,
12:41
S1: financial experts recommend several strategies to minimize that tax burden.
12:46
S1: Among others, plan withdrawal strategically. So spread them out over
12:50
S1: the ten years. Don't take all of it in one year,
12:53
S1: whether it's early or late. We want to spread it out.
12:56
S1: That potentially takes the larger withdrawals and allows us to
13:00
S1: do them during the lower income years. If you're going
13:02
S1: to have some along that ten year period, some beneficiaries
13:07
S1: have to take annual required minimum distributions. But if you're
13:11
S1: not required to do so, let's still spread it out.
13:14
S1: Number two can consider beneficiaries tax brackets. So those leaving
13:19
S1: an inheritance might allocate more tax deferred assets to heirs
13:24
S1: with lower incomes. That's part of the planning strategy. That's
13:28
S1: where a certified Kingdom advisor can really can be very helpful.
13:33
S1: Find acka.com if you need an advisor. Now here's the
13:36
S1: third one. And this is big. We talk about this
13:38
S1: a lot. Evaluate Roth conversions. This is where we convert
13:43
S1: a traditional IRA to Roth during lower income retirement years,
13:48
S1: so that when heirs take it out, there may be
13:51
S1: no taxes. If it's in a Roth, there won't be.
13:53
S1: And then they get a tax free. Incredible. Hey, listen
13:56
S1: for guidance on navigating all of this. Again, connecting with
14:00
S1: a certified Kingdom advisor could be a game changer. You
14:03
S1: can find one in your area. Find aka.com. All right.
14:08
S1: We're going to take a break. When we come back,
14:10
S1: we're going to dive into your questions. The lines are open.
14:12
S1: Now's the time to call 800 525 7000. That's 800
14:18
S1: 525 7000. This is Faith in Finance Live. I'm Rob West,
14:23
S1: and we'll be right back. Hey, thanks for joining us
14:33
S1: today on Faith in Finance Live. I'm traveling today. I'm
14:36
S1: on the road. I'm not in my normal studio. It
14:38
S1: might sound slightly different, but nevertheless, I'm here and looking
14:41
S1: forward to taking your calls. Calls are coming in. We
14:43
S1: do have some lines open, so if you have a
14:45
S1: financial question, call right now 800 525 7000. We would
14:50
S1: love to hear from you today. That's 800 525 7000.
14:54
S1: You can call right now. Uh let's see. Antoinette is
14:57
S1: in Illinois, South Holland to be exact. Antoinette. Go ahead.
15:01
S4: Hi. How are you, Rob?
15:03
S1: I'm great. Thank you for calling.
15:05
S4: Yes, I was just wondering, and I think I kind
15:08
S4: of know the answer to this, but at my age,
15:11
S4: I am 64 years old. And, um, let's see, I
15:16
S4: am 64 years old and I don't have a retirement
15:21
S4: savings excuse. Oh, sorry about that. Is your ambulance going by?
15:25
S4: No problem. Um, yeah. So it's 64 years old. I
15:29
S4: don't have a retirement fund. And so I was just wondering,
15:33
S4: am I going to be working till I'm 80 years old?
15:36
S4: Are there any. What are my options?
15:38
S1: Sure, sure. Let me ask a couple of questions. Do
15:40
S1: you own a home?
15:42
S4: Uh, yes we do.
15:43
S1: Okay. Do you have any debt on it?
15:46
S4: We are still. We are still, um, in the paying stages. Um,
15:52
S4: I think we owe, like over 65,000 on it.
15:56
S1: Okay. What do you think it's worth roughly? Antoinette.
15:59
S4: So a lot of people are, a lot of investors
16:01
S4: are saying, oh, 200,000 $250,000, but the house does have
16:06
S4: some maintenance that, you know, some issues that need, you know, attention.
16:11
S4: And so I don't think it would go, as, you know,
16:14
S4: as high as what they're estimating. So sure, maybe, I
16:17
S4: don't know, maybe just just $200,000. Okay.
16:21
S1: Yeah. Very good. And do you all plan to stay
16:24
S1: there for as long as you can?
16:27
S4: Well, the initial thought was that, you know, with so
16:29
S4: many things going wrong in the House that we would consider,
16:32
S4: you know, moving out and moving into something different, maybe
16:35
S4: more of a senior type of situation, but then, you know,
16:38
S4: and getting the equity out and, you know, using that to.
16:41
S4: But I don't even know how that will work. I
16:45
S4: don't even know because at my age, I'm 64. At
16:48
S4: my age, I think I'm ready to just kind of
16:51
S4: do things a little less strenuously, you know, or a
16:54
S4: little less problematic, if you will.
16:56
S1: Yes. Yes. Okay. Well that's helpful. Well, here's a few thoughts. Um,
17:01
S1: you know, I think the priority is if you have
17:03
S1: the ability to, to be, to start saving immediately, and
17:07
S1: then we want to maximize your remaining working years and
17:11
S1: then develop a realistic plan for Social Security. So the
17:15
S1: good news is, even at 64, it's not too late
17:18
S1: to make meaningful progress toward retirement. Now, yes, you may
17:22
S1: need to work a little bit longer. You might need
17:25
S1: to look at what it looks like to reduce expenses
17:27
S1: right now. And then perhaps you look at maybe some
17:31
S1: part time work during retirement during that next season once
17:36
S1: you transition away from full time work. So here's a
17:39
S1: few of those levers you could consider. First would be
17:42
S1: delaying Social Security. If you could delay Social Security until
17:46
S1: age 70, and maybe your plan is okay, I'm going
17:49
S1: to work for the next six years. Why age 70? Well,
17:53
S1: that's the point at which you would get the maximum
17:56
S1: Social Security benefit. So every year you wait beyond full
18:00
S1: retirement age, which is how you get, you know, what
18:03
S1: you would be entitled to based on what they call
18:05
S1: your high 35, your 35 highest years of earnings every
18:09
S1: year beyond that, which is going to be for you
18:11
S1: age 67, you're going to get 8% added to that check.
18:16
S1: And so if you wait until age 70, that's a 24%
18:20
S1: increase over what you would have received at 67. That's
18:24
S1: a big deal because that means you're going to get
18:26
S1: a check 24% higher for the rest of your life,
18:29
S1: not to mention the cost of living adjustments on top
18:32
S1: of it. So that would be helpful. I think number one,
18:35
S1: number two is what if we started to invest immediately?
18:39
S1: What if you all dialed back your spending and you
18:42
S1: looked at an opportunity to say, what could we free
18:45
S1: up on a monthly basis that you could put into
18:48
S1: a 401 K or an IRA, maybe a Roth IRA
18:51
S1: that could begin growing to establish some sort of nest egg?
18:56
S1: And then if you continue working until age 70, hopefully
19:00
S1: while your Social Security benefit is increasing, you know, we're
19:03
S1: building that retirement savings and we're avoiding drawing on anything else,
19:09
S1: you know, even a $500 a month after, you know,
19:13
S1: from now until age 70 with even a 5% return
19:18
S1: would be about, you know, $50,000 you could put away.
19:22
S1: And if you got 7%, you know, we'd be talking 75,000.
19:26
S1: That would be a nice little nest egg that you
19:28
S1: could have. The other thing you could do is put
19:32
S1: a reverse mortgage on the house. At the very least,
19:36
S1: what that could do is eliminate the mortgage payment, which
19:39
S1: might allow you to save between now and age 70. Um,
19:43
S1: but if you were going to move, we wouldn't want
19:44
S1: to do that. The cost would be prohibitive. But if
19:47
S1: you guys said, no, we're happy with this house, especially
19:50
S1: if we could make some of the repairs. Well, that
19:52
S1: could be an option because once you get past age
19:56
S1: 62 and you have at least 50% equity in your home,
19:59
S1: which you have quite a bit more than that, even
20:01
S1: at a $200,000 valuation. What that would allow you to
20:05
S1: do is eliminate the current mortgage payment and give you
20:09
S1: a line of credit that you could tap into so
20:11
S1: that you could make some of those repairs. And if
20:14
S1: the house was in good working order and you didn't
20:17
S1: have the mortgage payment, could that allow you to save
20:20
S1: between now and age 70 and be to the place
20:23
S1: then in six years, where you've got enough to live
20:26
S1: on between Social Security and what you could put away
20:29
S1: over the next six years. Could that be enough for
20:32
S1: you all to maintain your lifestyle? Or maybe some reduced
20:36
S1: lifestyle with some part time work, you know, into your 90s?
20:40
S1: That could be an option. But give me your thoughts
20:42
S1: on all that.
20:44
S4: Well, and I certainly definitely want to, uh, because obviously
20:49
S4: as we get older, I don't know what that would
20:52
S4: look like for us if we'll need to move into
20:55
S4: some type of retirement situation or whatever. And I just
20:58
S4: kind of wanted to be in a situation because if
21:00
S4: we take out a reverse mortgage, would we, would we
21:05
S4: get the, the, the, the interest rate that we have now,
21:08
S4: which is 3.25.
21:10
S1: Or you would not.
21:11
S4: Whatever.
21:11
S1: The. No, it would be whatever the prevailing rate is.
21:14
S1: So you'd probably want to wait and continue to enjoy
21:17
S1: that current rate until 70. And maybe that's the point.
21:21
S1: You do it and you decide at that point, do
21:24
S1: we want to stay in the home or do we
21:26
S1: want to, you know, move out to something like you said,
21:29
S1: that might be a little bit more, you know, friendly
21:31
S1: to people in their fourth quarter of life. A community
21:34
S1: where you have some of those community aspects that you
21:37
S1: can tap into, maybe less upkeep on the home, things
21:40
S1: like that. So I agree with that low interest rate.
21:43
S1: You probably want to leave that right there, but it
21:46
S1: could be an option down the road for this property
21:49
S1: or maybe another one that's a little more friendly to
21:52
S1: senior living. Antoinette. I hope that helps. Thanks for your call.
21:55
S1: We'll be right back. Great to have you with us
22:06
S1: today on Faith and Finance Live. I'm Rob West. We're
22:09
S1: taking your questions today. We still have room for you.
22:11
S1: If you've got a call or a call, you need
22:14
S1: to make a call. If you have a question, anything financial,
22:17
S1: 800 525 7000. I'm not in my studio today traveling
22:21
S1: actually in Chicago. I'm speaking at a breakfast this morning
22:24
S1: here through tonight and I'll be back in the studio tomorrow.
22:28
S1: So I know it sounds a little different. Thanks for
22:30
S1: bearing with us today as I'm on the road, but
22:33
S1: so thrilled to be able to take your questions today.
22:35
S1: So if there's something on your mind today that you're
22:37
S1: wrestling with financially, uh, we'd love to hear from you.
22:40
S1: Call right now at 800 525 7000 again, that's 800
22:45
S1: 525 7000. Whether it's paying down debt investments, balancing that budget,
22:50
S1: whatever's on your mind, you can call right now. Let's
22:53
S1: go out to California. Hi, Heather. Go ahead.
22:56
S5: Hi there. How are you?
22:58
S1: I'm doing great. Thanks for your call.
23:00
S5: Great. Uh, my question has to do with, um, we
23:03
S5: have two accounts. One is an inherited IRA that I
23:08
S5: got and, um, it is, um, I'm at the seven
23:12
S5: year mark of pulling out the money. Like it was
23:15
S5: actually at the beginning of the show. Um, and we've
23:17
S5: had a strategy for it, but it's, it's, it's a
23:20
S5: fixed annuity and it's not making any money, but it's
23:26
S5: still mostly there because of what we've done, how we've
23:28
S5: pulled it out. Um, and then we have another one
23:32
S5: that is, um, pretty decent size that is also in
23:35
S5: a fixed annuity. And both of them, the annuity that
23:38
S5: went that they went into, it was supposed to earn
23:41
S5: no less than 2% on average and up to 5%.
23:46
S5: It hasn't even reached the 2%. What can we do
23:50
S5: when it is time for? I think we have to
23:53
S5: wait till it's surrenderable or we have to wait. The
23:57
S5: difference between how much money we could make on it.
24:00
S5: If we go ahead and just bite the bullet and
24:03
S5: lose money when we take it out early.
24:05
S1: Yeah. So do you have a sense of what those
24:07
S1: surrender penalties would be right now?
24:11
S5: I do not.
24:12
S1: Okay. Yeah. But, you know, there would be.
24:16
S5: Um, the one for sure. There would be. The other
24:19
S5: one is up in like a couple months. Okay. Where
24:22
S5: I could actually move it, even though I still am
24:25
S5: supposed to pull all the money out by a certain time,
24:28
S5: I could pull, I could move it and do something
24:30
S5: different with it next year. The other one I think
24:32
S5: is in three years.
24:34
S1: Got it. Yeah. So I think there's really three things
24:37
S1: to look at here. One is the inherited IRAs withdrawal deadline.
24:41
S1: Why the annuity isn't earning its advertised minimum. And then
24:46
S1: whether surrendering surrendering either annuity makes financial sense. Um we
24:51
S1: want to understand the guarantees, the surrender charges and the
24:54
S1: tax consequences. So you're at year seven. Um, and so
24:59
S1: you just need to, to make sure that, you know,
25:02
S1: if you're a non-spouse beneficiary, which it sounds like you
25:05
S1: are under the ten year rule, then you've got to
25:07
S1: empty that by December 31st of the 10th year. Um,
25:11
S1: and so just make sure you know what that timing is, um,
25:15
S1: based on the date of death so that you can, uh,
25:18
S1: you know, make sure your withdrawal strategy syncs up with
25:21
S1: that on the fixed annuity. In terms of why it
25:23
S1: isn't earning the 2%. I would investigate that with the
25:27
S1: insurance company. I mean, if if it guarantees a minimum
25:30
S1: of 2%, we need to determine exactly, you know, what
25:33
S1: that guarantee applies to if it's not working that way. And,
25:38
S1: you know, they could they may be contractually required to
25:41
S1: credit at least 2%, you know, annually to a specified
25:45
S1: account value. Um, it may apply to a calculation, um,
25:50
S1: you know, over multiple years rather than an individual year. Um,
25:54
S1: and so you just need to understand the fine print there.
25:57
S1: A guaranteed minimum value is not necessarily the same thing
26:00
S1: as a guaranteed annual return on the account balance. And
26:04
S1: so you'd probably just want to check with them on that, uh,
26:07
S1: on the annuity without the surrender charges. This is what
26:10
S1: I would evaluate first for potential changes, because obviously you
26:14
S1: could keep it if you like the guaranteed return and
26:17
S1: other benefits, you know, are or competitive. That could make sense,
26:21
S1: but I would suspect that it's going to be better
26:24
S1: for you to move it for a better investment. And
26:27
S1: depending on your risk tolerance, I'd probably look at, you know,
26:31
S1: rolling that out to an an, an inherited IRA that
26:35
S1: could be managed, you know, with a far more lucrative
26:39
S1: return in mind that still balances, you know, the risk
26:42
S1: return spectrum that fits for you. How much time is
26:46
S1: left on that other inherited IRA?
26:50
S5: Um, it's not an inherited IRA. The other one is
26:52
S5: just an annuity.
26:53
S1: Oh, okay. Just a straight annuity.
26:55
S5: And invested it. Yeah. Got it. And I are both 61.
26:58
S1: Okay.
26:59
S5: Um, so, I don't know. Our risk factor is probably
27:04
S5: not real great, but at the same time, we're losing money.
27:07
S5: Just letting it sit there by the cost of inflation.
27:10
S1: Sure. Is it a qualified annuity? Meaning it was put
27:13
S1: in with pre-tax money or is it a non-qualified.
27:17
S5: I'm not 100% sure.
27:20
S1: Okay, well, if it's a qualified annuity and it was
27:23
S1: pre-tax money that went in, you would roll it out
27:25
S1: to an IRA. Not an inherited IRA, just a straight IRA.
27:29
S1: If it was after tax money, then you'd, you know,
27:31
S1: could consider just moving it into at least another product
27:35
S1: that has a better rate of return. You could do
27:37
S1: far better than that. What do you think your average
27:40
S1: return has been on that other non inherited IRA annuity.
27:44
S5: It's been the same amount. It's been maybe not even 1%. Wow.
27:49
S5: It's been like a half a percent.
27:51
S1: Okay. Yeah. I mean, so you definitely need to make
27:53
S1: a change there because even if you stay on the
27:55
S1: most conservative end of the risk spectrum, you know, you
27:59
S1: could do triple that. I mean, you should be able
28:01
S1: to do four plus percent, uh, you know, probably even
28:05
S1: 5 or 6%. I know, you know, there's some fixed
28:07
S1: annuities right now that are, you know, have, uh, A+
28:10
S1: ratings that are paying, you know, north of five, some
28:14
S1: even 6% for 5 or 7 years. So there are
28:18
S1: options there that could do far better without taking really
28:21
S1: any more risk. I think the other option is looking at,
28:25
S1: you know, going into a stock and bond portfolio. You
28:28
S1: don't have to be unnecessarily risky. You know, at 60,
28:32
S1: I would say you typically as a starting point would
28:35
S1: want to think about a 50/50 portfolio where 50% is
28:39
S1: in stocks, 50% is in bonds. The idea is even
28:42
S1: if we got into a recession and the stock portion
28:44
S1: was down 20 or 30%, you'd wait it out. And
28:48
S1: even once you need to begin drawing on that to
28:50
S1: maybe supplement for retirement, you know, and somewhere between 5
28:54
S1: and 10 years from now, uh, you know, you'd have
28:57
S1: that bond portion that's increasing over time or CDs or,
29:01
S1: you know, whatever it is, but it's essentially, you know,
29:04
S1: income generating fixed income type investments that could, you know,
29:09
S1: provide the income you need without you having to touch
29:12
S1: the investments in the stocks and that gives you the
29:16
S1: growth component. Um, now again, if you say, listen, we
29:19
S1: just don't want any part of that. I, I certainly
29:21
S1: understand that you're the steward. But that's where at least
29:24
S1: we would look at. If you want a guaranteed product
29:27
S1: from an insurance company, let's look for one that's far better,
29:30
S1: you know, than what you have today. There's no reason
29:32
S1: you should be settling for these kinds of returns. Uh,
29:35
S1: I would suggest that you connect with a certified Kingdom advisor. Heather,
29:39
S1: are you guys open to working with an advisor just
29:42
S1: to hear some other ideas?
29:44
S5: Yeah, sure.
29:46
S1: Okay. Um, we recommend the CK a designation. It's the
29:49
S1: only designation in the financial services industry for advisors that
29:53
S1: have met the high standards around a biblical worldview, a
29:57
S1: pastor and client reference statement of faith, at least ten
29:59
S1: years experience, a regulatory review. I mean, we kind of
30:03
S1: put them through the wringer, so to speak, uh, to
30:05
S1: make sure that they meet a high standard and they're
30:08
S1: going to share your values as a Christ follower. So
30:10
S1: you would just had to find acka.com. Find ack.com. I'd
30:16
S1: probably interview 2 or 3. And just be real clear
30:19
S1: about what you're looking for, because they're going to want
30:21
S1: to get to know you kind of what what your
30:24
S1: story is, where God is taking you, what your risk
30:26
S1: tolerance is. And then they could lay out some options
30:29
S1: that match that, that allow you to reposition this so
30:33
S1: that it fits your goals and objectives, doesn't add risk unnecessarily,
30:38
S1: but gets a far better return than you've been experiencing
30:40
S1: to date. So hopefully that helps. Again, that website find ack.com.
30:46
S1: Thanks for your call today. We appreciate it. Betty. Tanya
30:48
S1: coming your way after the break. 800 525 7000. We'll
30:53
S1: be right back. Thanks for joining us today on Faith
31:03
S1: and Finance Live. I'm Rob West. We're taking your questions today.
31:06
S1: We've got room for you at 800 525 7000. Hey,
31:10
S1: we're just 16,000 away from our campaign goal this week,
31:14
S1: and we need your help to get there. A gift
31:16
S1: of any amount at faith fi.com/give between now and October 31st.
31:22
S1: So Saturday, we'll send you a copy of Field Guide
31:25
S1: number two that just launched this week. How do I
31:29
S1: prepare the next steward? We've had over a thousand of
31:33
S1: them go out the door just this week. We're so
31:35
S1: thrilled to be able to put it in your hands
31:37
S1: to help you think about passing wisdom before wealth. The
31:41
S1: exercises to pass both financial wealth, but also spiritual character
31:46
S1: and relational wealth as well to the next steward. It's
31:50
S1: our gift to you with a gift of any amount
31:52
S1: to faith fi. Between now and Saturday night, we're 16,000
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31:59
S1: would step in. You could make a one time gift
32:01
S1: or consider becoming a partner as well. All the details
32:04
S1: faith fi.com/give. Let's go to Illinois. Betty, thanks for your patience.
32:08
S1: Go ahead.
32:10
S6: Hi. I hope I don't say too much because I'm
32:13
S6: very overwhelmed about who to speak to and about the issue. MM.
32:17
S6: And she said you would guide me.
32:19
S5: So.
32:20
S1: I'd be happy to. Don't don't be nervous.
32:23
S6: I am nervous, but. And you think because I'm the
32:25
S6: biggest ham when it comes around to my family. Um,
32:29
S6: but I am retired and I'm working for DoorDash because
32:34
S6: I currently lost my job due to undue amount stress.
32:37
S6: You don't need to know that. But that's what it is.
32:40
S6: Paycheck to paycheck. I have my two adult sons living
32:43
S6: with me and my husband, but we all have to
32:50
S6: pull our money together in order to have a decent
32:53
S6: income doing this. But the problem is I, with the
32:59
S6: income I was making, I have a leased car. 400.
33:03
S6: It ends up being almost 700 just to keep it,
33:06
S6: I owe. Keep it till June and I want to get.
33:10
S6: Everybody keeps telling me, oh, go to HELOC, oh, get
33:13
S6: a reverse mortgage for seniors, blah blah blah. Okay, you
33:16
S6: get my point. And then I'm overwhelmed like a Rolodex
33:19
S6: file just spinning. And then my cousin had told me
33:23
S6: to call you and she said, oh, you can get
33:25
S6: a free loan and then you don't have to pay
33:27
S6: it back. Well, I can't find that easy to believe.
33:32
S6: And that's what brought me to you. Okay, I need
33:35
S6: to fix a 20 year old air conditioner or furnace.
33:39
S6: Might go any minute. Our patio door. So, as you understand,
33:43
S6: I need to fix it. The home. It is an
33:46
S6: investment for my sons. AM I talking too much? Sorry.
33:50
S1: No you're not. You're doing great. And I appreciate all
33:53
S1: that background because that's helpful. Go ahead.
33:55
S6: And then I it's a three floors home townhome. It.
34:01
S6: God has blessed me with this. Yeah. And we only
34:04
S6: owe from it's worth like 320, maybe more. And then
34:09
S6: we only. 0159 I don't want to put myself back
34:13
S6: into trouble. I pay my bills. My Fico score is 8.6. Yeah. Um,
34:18
S6: so where do I stand? What do I need to
34:21
S6: do to, to have one bill and feel like I
34:25
S6: could sleep at night?
34:26
S1: Yeah, yeah. So as you pull your resources, I mean,
34:30
S1: what is the, what does that look like right now?
34:32
S1: Are you guys, you know, you're just barely covering all
34:35
S1: the expenses with everybody pitching in together.
34:38
S6: According to everybody. Yeah, but I know I have money
34:42
S6: left over and so does my son and sons and ex,
34:47
S6: so I it's hard for me to go, you owe
34:50
S6: this and you owe that because I'm the like the
34:53
S6: big accountant, which I got D's in consumer math. So
34:57
S6: you'd have to speak to me as if I'm, you know. Yeah.
35:02
S6: Grade school because when you give me too much information.
35:05
S6: I won't get it. And I just need something straightforward.
35:09
S6: I need to fix this place because I might be
35:12
S6: going into, you know, a senior living. Where I can,
35:17
S6: you know, I don't care if I live in a
35:18
S6: little mini type, you know, mobile home. Not that I
35:23
S6: want it. I love my home. I love this, but yeah,
35:27
S6: it's a lot of stairs.
35:29
S1: Sure. Well, here's the thing. I mean, I, I don't
35:31
S1: think a reverse option, a reverse mortgage is right for you.
35:34
S1: I mean, to your to your friend's point, you know,
35:37
S1: could you eliminate your mortgage payment on the 159 that
35:41
S1: you owe with a reverse? Yeah. You qualify for a
35:45
S1: federally insured home equity conversion mortgage, which is what they
35:48
S1: what's called a reverse. As long as you're 62 and
35:51
S1: you have at least 50% equity, you could essentially have
35:54
S1: a reverse mortgage pay off your current forward mortgage, and
35:58
S1: that mortgage payment would go away. Now, when she said,
36:00
S1: you don't have to pay it back, I think what
36:02
S1: she meant was the payment becomes optional. You absolutely have
36:06
S1: to pay it back. It's a loan and it's going
36:08
S1: to grow with fees and interest. It's just that most people,
36:12
S1: if they haven't saved enough for this season of life,
36:15
S1: that mortgage payment is the thing that, you know, really
36:19
S1: causing their budget not to work, or they have expenses
36:23
S1: that they can't cover because Social Security alone isn't enough
36:26
S1: and they're sitting on a lot of home equity. And
36:28
S1: so either to pull it out as a monthly check
36:30
S1: or get a line of credit where they don't have
36:33
S1: to make the payment that, you know, causes them to
36:36
S1: be able to enjoy this season of life. Because now
36:39
S1: they got a little breathing room, they've got enough to
36:41
S1: live on. And then when they pass away or move
36:44
S1: out from the home permanently, the mortgage is due, but
36:47
S1: there's equity to pay it off. And then whatever remains
36:50
S1: goes to your estate, to your heirs, because normally the
36:53
S1: heirs don't want the house anyway. And so this idea
36:56
S1: that we'd be kind of trying to, you know, go
37:00
S1: paycheck to paycheck, Social security check to Social Security. Check
37:03
S1: just to keep food on the table. When we've got
37:05
S1: 2 or 3 or $400,000 in the house, that's when
37:08
S1: a reverse mortgage can make sense. The reason I don't
37:11
S1: think it makes sense here is, number one. You know,
37:14
S1: you might be moving out here because this is not
37:17
S1: an ideal place for you to be, you know, aging
37:20
S1: because of the number of stairs. Number two, I don't
37:22
S1: think you can afford this. And I think, you know,
37:25
S1: as much as we love our kids, you've got to
37:27
S1: start with, you know, as the steward of what God
37:30
S1: has entrusted to you, what is the right situation for me?
37:34
S1: And it sounds like, you know, you getting into something
37:36
S1: smaller that you can afford on your own, maybe that
37:39
S1: you buy with cash from the equity in that townhome
37:43
S1: that's smaller, or maybe going into an apartment of some
37:46
S1: kind before you make the move to something more permanent,
37:50
S1: you know, for a retirement home, um, you know, is
37:53
S1: probably better because then you're not depending on two other people,
37:56
S1: one of whom is your ex to try to figure out,
37:59
S1: you know, how we're going to put all these pieces together?
38:02
S1: That's just a lot of weight on you because you're
38:05
S1: carrying all these other people at the same time, and
38:07
S1: you're not in a financial position to do it. And
38:10
S1: so I guess we've got to start with, what is
38:13
S1: your goal for that townhouse? I heard you say it's
38:16
S1: for my boys. So you you want to eventually give
38:18
S1: it to them. Is that right?
38:20
S6: Well, when we die, you know. Yes. That's the that's
38:24
S6: the thing. And then we were thinking, let's pay this
38:26
S6: off in seven years. But then they want fees and
38:29
S6: all these things. Oh, we'll show you the secrets on
38:31
S6: how to pay your house off in 3 to 7 years.
38:34
S1: Yeah. You don't want that. That's called a velocity mortgage
38:37
S1: with a home equity loan that requires a lot of
38:39
S1: cash flow and it's high risk. I wouldn't touch that.
38:41
S1: Thank you. If you want to, if you want to
38:43
S1: pay off the mortgage, you need to do it the
38:45
S1: right way, which is we got to send extra every
38:48
S1: month toward the principal. But I'm not hearing that you
38:51
S1: have that margin. And I guess I'm also wondering, you know,
38:54
S1: is your ex husband. I mean, are you all truly
38:56
S1: dividing this up such that you all everybody's doing their
39:01
S1: part because it doesn't sound like you're in a financial
39:04
S1: position to do a whole lot more than that. And
39:06
S1: I just want to make sure that, you know, we're
39:08
S1: actually moving in a direction that's that's sustainable long term.
39:12
S6: Okay, let's put it this way. I pay an extra
39:16
S6: 100 and I pay biweekly to put towards the principal,
39:20
S6: but now I'm going to have to take it back
39:23
S6: because of me not having work. Yeah, I want that
39:27
S6: extra money back. I don't care if the house is
39:29
S6: kept for 30 years. I told my son, you get married,
39:32
S6: you've got something, and then you, one of you goes
39:35
S6: on your own way. Then do what you want to do.
39:37
S6: When I'm gone right now, I want to stay here.
39:40
S6: And I'm healthy right now to go up and down stairs.
39:43
S6: And I love the neighborhood. It's beautiful and I want that.
39:48
S6: I want my sons here to save their money and
39:52
S6: be able to have a future for their family. So
39:56
S6: I don't want to be by myself. That's what my
39:59
S6: one son said. Oh, you should just go off and
40:01
S6: move by. No. What, are you trying to put me
40:03
S6: in the glue factory?
40:04
S1: Yeah, I understand that you want to be near your
40:07
S1: family and your blessing them at the same time. That's great.
40:10
S1: All right, here's what I'd like to do. If you're
40:12
S1: up for it, Betty, I want to connect you with
40:15
S1: one of our certified Christian financial counselors so that we
40:18
S1: have a team of people that are trained just to
40:21
S1: work on spending plans and budgets and, you know, debt,
40:25
S1: debt repayment, things like that, personal finance things. And I want,
40:30
S1: if you're willing for them to get into the numbers
40:33
S1: with you and help you put together a plan and
40:36
S1: a budget so you can see everything on paper and
40:40
S1: understand whether you can truly afford to maintain this home.
40:44
S1: It's more than you and I can do together in
40:46
S1: 4 or 5 minutes on the radio. It's going to
40:48
S1: take some serious work. We would be happy to pay
40:51
S1: for it. Won't cost you anything, but I think it's
40:53
S1: going to give you the clarity you need to figure
40:56
S1: out what you need to do moving forward. And if
40:59
S1: you can stay in that home, great. But if you can't,
41:02
S1: it's just not sustainable. You know, you need to know that,
41:05
S1: but you also need to be able to replace the car. And,
41:08
S1: you know, you're going to have to take out a
41:09
S1: loan to do that, probably a normal auto loan. And
41:13
S1: that's got to fit into the budget too, plus everything else.
41:16
S1: And we just need to make sure that all that's
41:18
S1: going to work.
41:19
S6: Yeah. Sounds really good.
41:21
S1: Okay. All right. So here's what we're going to do.
41:23
S1: You stay on the line. My team will get your information.
41:25
S1: We'll get a certified Christian financial counselor in touch with you.
41:29
S1: They're going to probably schedule 2 or 3 meetings with
41:31
S1: you virtually to get you set up on a budget,
41:34
S1: look at all the numbers and just bring an objective
41:37
S1: third parties perspective to where you're at today, such that
41:41
S1: you can make some decisions about where you need to
41:43
S1: go from here. And it's not going to cost you
41:46
S1: a dime. Okay.
41:48
S6: It's hard to believe even Christians, I mean, my mother
41:51
S6: in law used to give her money away to all
41:54
S6: the prosperity preachers, and I don't mind the stewardship of
41:58
S6: my money and giving where God wants me to give
42:01
S6: and I want. I don't want that story. You know
42:04
S6: about this. The pence, the guy that buried his dollar. Yes.
42:08
S1: Yeah. You want to be a good steward, I hear that. Well, no,
42:11
S1: this is this is just a way we can bless you.
42:13
S1: That's all it is. I just want to. I don't
42:15
S1: want anything from you. You don't need to make a gift.
42:17
S1: You don't need to pay anything. We just want to
42:19
S1: be a blessing to you. The key is clarity. You
42:22
S1: need to know, where am I at today? Where am
42:25
S1: I headed? And is this going to work? And then,
42:28
S1: you know, we can take it from there and they're
42:30
S1: going to help you do that and kind of sort
42:31
S1: all of this out and just consider it our gift
42:34
S1: to you. Betty, thanks for your call today. Lord bless you.
42:37
S1: And if I can help further, don't hesitate to reach out. Tanya. Roger,
42:40
S1: I'm so sorry. Let's see if we can get you
42:43
S1: scheduled for tomorrow's broadcast. I'd be delighted to talk to you.
42:46
S1: Big thanks to my team today. Josh Taylor to here
42:48
S1: in Omaha. We'll see you tomorrow.