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Faith & Finance Live - Are We Asking the Right Questions About Investing? · Utah's Hope

0:04
S1: The following program was prerecorded. So our phone lines are
0:07
S1: not open.
0:08
S2: Generosity is only part of the stewardship story. The money
0:12
S2: we save and invest can also reflect what we believe. Hi,
0:16
S2: I'm Rob West. For many Christians, conversations about money often
0:20
S2: center on one question how much should I give? But
0:23
S2: faithful stewardship goes further. It includes every resource God has
0:27
S2: entrusted to us and how we put those resources to work. Today,
0:31
S2: Amy Minnick joins us to explore some important questions we
0:35
S2: may be overlooking. Then we'll have some great calls lined up.
0:38
S2: But since we're not live today, please hold your calls
0:42
S2: until next time. This is faith and finance. Live biblical
0:45
S2: wisdom for your financial decisions. Our guest today is my
0:51
S2: friend Amy Minnick, co-founder, Chief Impact Officer, and General counsel
0:55
S2: of Impact Foundation, where she helps Christians align their investments
1:00
S2: with their faith to promote human flourishing. She also serves
1:03
S2: on the board of the Association for Christian Investing. Amy,
1:07
S2: great to have you with us.
1:08
S3: Thanks, Rob. I'm happy to be here.
1:11
S2: Amy. Christians have traditionally approached generosity by asking three questions.
1:16
S2: What should I give? How should I give? And where
1:19
S2: should I give? But I know you believe. There's a
1:22
S2: fourth question we should be asking. So share that with us.
1:25
S3: Well, if we believe God owns everything and we're his stewards,
1:30
S3: then we have to be asking, what would God have
1:33
S3: me do with everything I own before I give it away? MM.
1:37
S3: The other questions that we've been asking, where, why and
1:40
S3: how are really important. But God's going to call us
1:44
S3: to account for everything we own, everything we do, everything
1:47
S3: that we have. And it is our absolute joy and
1:50
S3: privilege to share with him everything, not just the dollars
1:55
S3: that we can grant to charity.
1:57
S2: Mhm. Yeah. So this isn't about replacing generosity, is it?
2:01
S3: Absolutely not. God, for some reason, has designed his economy
2:05
S3: to run on the fuel of our generosity. Yeah. He
2:08
S3: delights in us giving our things away, making grants to charity.
2:12
S3: But faithful giving is also about how we use what
2:17
S3: we keep behind. Recognising that generosity as much part of
2:20
S3: a larger stewardship responsibility. It includes our savings, our investments,
2:25
S3: our businesses and really everything we think we own that
2:28
S3: God has entrusted to us.
2:30
S2: Yeah, it's holistic, and that raises another question. We typically
2:34
S2: think of businesses as creating products and providing services, and
2:39
S2: of course, generating jobs and earning profits. But can the
2:42
S2: work of a business itself also advance God's purposes?
2:47
S3: Absolutely. God has given his people certain abilities. He made
2:53
S3: Jesus to be a carpenter. He's made me to be
2:56
S3: a lawyer. Um, it's not who I am, but it's
2:59
S3: what I do. Out of who he created me to be.
3:02
S3: And if the work that I do as a lawyer
3:04
S3: or the work that you do. Rob running Kingdom Advisors
3:07
S3: and doing this radio program, if the work we do
3:10
S3: every day has the ability to bring him glory and
3:13
S3: make him smile, then a collection of a whole bunch
3:16
S3: of people working together to do something can also be
3:19
S3: about bringing glory to the Lord and building his kingdom.
3:22
S3: Business is so much more than just generating profits that
3:26
S3: can be given away. You know, we spend eight hours
3:30
S3: a day or more at work and our employees spend
3:34
S3: that much time at work. So if we're creating jobs
3:37
S3: that allow people to express themselves as God created them
3:41
S3: to be. Yes. To encounter the truth of Scripture, potentially
3:46
S3: to serve customers well and to love one another well.
3:50
S3: That's a place where the kingdom of God happens to
3:53
S3: look a lot like what I think he designed it
3:55
S3: to be on earth as it is in heaven.
3:58
S2: Yeah, it's a beautiful picture. And the output should be
4:01
S2: equally as reflective of Creator God creating goods and services
4:06
S2: that are good and that serve people. And it's really
4:10
S2: how God has created his virtuous cycle of economic productivity. Well,
4:15
S2: in the latest issue of Faithful Steward magazine, you point
4:18
S2: out that charity alone can't solve every complex problem. So
4:22
S2: how can Christians think about then charitable giving and investing
4:26
S2: as complementary approaches without diminishing the importance of either?
4:31
S3: That is a great question. Charity is essential, especially in
4:35
S3: moments of crisis. If somebody is starving, we should probably
4:40
S3: give them a meal. Yeah. When there's a disaster, war, famine,
4:44
S3: immediate relief has to come and it has to be
4:47
S3: probably free. If somebody has nothing to offer. But if
4:51
S3: we're looking at how to make a long term change
4:54
S3: in the world. That's where we need to introduce the
4:56
S3: idea of business.
4:57
S2: Mhm. Well, we're going to continue to unpack that after
5:00
S2: the break. It's a big idea, and it gives us
5:02
S2: a more holistic view of how we think about everything
5:06
S2: God has placed in our hands, and whether in some
5:09
S2: cases it makes sense to give charitably, in other cases,
5:12
S2: invest strategically. But all under the Lordship of Christ. Amy
5:16
S2: Minnick here today, we're talking about asking the right questions
5:19
S2: about investing. We'll be right back. Generosity is certainly part
5:40
S2: of our stewardship story, but the money we save and
5:43
S2: invest can also reflect what we believe. Amy Minnick is
5:47
S2: here today. Amy is co-founder, chief impact officer and general
5:50
S2: counsel of Impact Foundation, where they help Christians align their
5:54
S2: investments with their faith to promote human flourishing. And Amy,
5:59
S2: before the break, you were talking about the fact that absolutely,
6:03
S2: we should be givers as an overflow of God's grace.
6:06
S2: We should be living a generous life. And there are
6:09
S2: appropriate times to give charitably, to help somebody in need
6:13
S2: and to love our neighbor. But there are also times
6:17
S2: where we should think about investing in a similar way
6:20
S2: promoting human flourishing. Right?
6:23
S3: Absolutely. I saw it first hand in a tiny village
6:28
S3: in rural southern Ethiopia, near the border of Kenya. And
6:33
S3: there was a group of people who, because of famine,
6:36
S3: drought and some political instability, they were starving. And the
6:41
S3: aid came and was dropped off on the back of
6:44
S3: the truck, and it literally saved their lives. But three
6:47
S3: years of aid being given meant that people had lost
6:51
S3: the ability to work, and kids were not learning the
6:55
S3: same skills that for generations, for thousands of years, people
6:59
S3: had been learning in this village. The opportunity to create
7:03
S3: jobs and provide some training. That's really what they needed
7:07
S3: after their basic needs were met. And the only thing
7:10
S3: that creates long term, scalable jobs is business.
7:13
S2: Mhm. Yeah, that's exactly right. And so if a business
7:16
S2: can advance God's purposes through its work, then for us
7:21
S2: as Christ followers, how should that shape the way we
7:24
S2: think about investing in business?
7:26
S3: Well, first, it means that investing isn't spiritually neutral. Every
7:30
S3: choice we make about where we put our dollars says
7:33
S3: something about what we value. And that's true for investments
7:37
S3: as well. And Christians have been engaged in impact investing
7:41
S3: for over a decade, intentionally placing capital in businesses to
7:45
S3: create a measurable social and spiritual impact. In fact, all
7:51
S3: of our investments have an impact, and some of that
7:54
S3: impact is aligned with our values and some isn't. So
7:58
S3: when we think about whether we're supporting businesses that honor people,
8:01
S3: serve customers well, and contribute to human flourishing, that's when
8:04
S3: we know that we're asking the right questions about how
8:08
S3: we can invest. Yeah, it's a much broader conversation about
8:12
S3: faithful stewardship than when we're just writing a check to
8:15
S3: a charity.
8:16
S2: Mhm. Amy, what about accessibility? Uh, for the average investor
8:21
S2: to the types of investments that you're describing? Because when
8:24
S2: we think about investing, we might think, well, that's the
8:27
S2: exchange traded fund I bought in my brokerage account or the,
8:30
S2: the menu of mutual funds I have in my 401 K.
8:34
S2: Are we seeing more awareness and product that leans into
8:39
S2: the direction you're describing here?
8:41
S3: Thankfully we are. There are tremendous asset managers who are
8:46
S3: faithfully deploying their client dollars in ways that advance the gospel.
8:52
S3: And that occurs in three primary functions. One is screening
8:55
S3: out certain stocks that are just never going to align.
8:59
S3: The next is engaging in dialogue with companies where we
9:03
S3: need to. And then third, embracing the kinds of investments
9:07
S3: that really move the needle in significant ways.
9:10
S2: Yeah. Well, and you touch on these through several questions
9:15
S2: that you encourage Christ followers to ask as they think
9:19
S2: about aligning their investments with their faith. What are some
9:23
S2: of those questions?
9:24
S3: I think first, it starts with just asking the Lord,
9:28
S3: how have you wired me? How have you made me?
9:32
S3: And then going from there to, okay, what do I have?
9:36
S3: Taking stock of you know, the Lord asked Moses, what's
9:39
S3: in your hand? And Moses said, A staff. And that's
9:41
S3: what God chose to use to lead his people out
9:44
S3: of Israel. For us, I probably am not going to
9:47
S3: hold a staff, but I should take stock of what
9:49
S3: it is that I do own. Yes. And then the
9:51
S3: next question from there is, okay, Lord, given how you've
9:54
S3: wired me and what you've given me to steward, how
9:58
S3: would you have me deploy these dollars? How would you
10:00
S3: have me steward what you've entrusted to me?
10:04
S2: Yeah, I think that's exactly right. And then we can
10:06
S2: begin to overlay that with the various approaches you just described,
10:10
S2: where perhaps we're avoiding certain industries in other cases, screening
10:14
S2: in companies that are doing exactly what you're describing here,
10:17
S2: promoting human flourishing. Or thirdly, and maybe alongside that, engaging
10:22
S2: in dialogue with these companies about meaningful change. And so
10:26
S2: there are a growing number of options available now that
10:30
S2: raises though, Amy, another important question, and that is about
10:33
S2: financial returns. So how should Christians balance the desire for
10:38
S2: strong investment performance with the opportunity to accomplish good through
10:43
S2: their investments?
10:45
S3: There's a really important tension there, and I think we
10:48
S3: need to name the tension because otherwise we're going to
10:51
S3: have a hard time processing it well. So I've watched
10:54
S3: people answer this question in different ways, and there's no
10:58
S3: right answer for how much return should my investments be getting?
11:03
S3: What we have to consider is when I'm looking at
11:06
S3: sacrificing market rate return, am I doing that because it
11:10
S3: promises greater impact and potential stewardship? AM I being more
11:15
S3: faithful by sacrificing market rate return, or am I creating
11:19
S3: an unnecessary compromise? I want to make sure that I'm
11:22
S3: if I'm sacrificing return, it's for the sake of accomplishing
11:25
S3: something good in the world, not just enabling bad behavior.
11:30
S3: On the other hand, it might not be the case
11:32
S3: that pursuing the strongest possible financial return is truly faithful.
11:38
S3: It might be that pursuing the strongest financial return is
11:41
S3: actually about my need to prove myself as an investor
11:46
S3: or potentially fuel some greed. Those are difficult questions to
11:50
S3: deal with, but thankfully the Lord is very kind. When
11:54
S3: we ask these questions before him.
11:56
S2: Yeah, I think that's exactly right. And well said. You
11:59
S2: also make an important distinction, Amy, between and we've talked
12:02
S2: about this a bit, but you make the distinction between
12:05
S2: investing personal capital and using charitable dollars for impact investing.
12:11
S2: Why does that distinction matter?
12:14
S3: Well, first, let's frame the question in dollar terms. There's
12:19
S3: over $1 trillion that have been set aside in private
12:22
S3: foundations and donor advised funds. People have gotten a tax
12:25
S3: deduction on it, and it's invested in something waiting to
12:29
S3: be granted out. As we think about those dollars that
12:32
S3: we've already given away that we're never going to be
12:34
S3: able to use to send our kids to college or
12:36
S3: buy a home, we have a real immediate stewardship responsibility
12:42
S3: because we intended to do something with them. And if
12:45
S3: we're not investing them in a way that advances God's kingdom,
12:49
S3: we should ask ourselves why I'm not granting it. It's
12:52
S3: invested in something. Do I even know where it's invested? Um,
12:57
S3: and then our personal capital has a different sort of
12:59
S3: set of requirements for it, because we are intending to
13:04
S3: use those dollars to care for our family, to send
13:06
S3: our kids to college, potentially to provide for a child
13:11
S3: or family member who's never going to be able to
13:13
S3: live independently. And those dollars have a stewardship responsibility with
13:18
S3: a slightly different need requirement on them. And so oftentimes
13:22
S3: we'll see people willing to sacrifice financial return on their
13:25
S3: charitable dollars, whereas that might not necessarily be feasible for
13:30
S3: their personal investment dollars. We need them to return a certain, um,
13:34
S3: at a certain rate so that we can do the
13:36
S3: things that God has called us to do in stewarding
13:39
S3: our families. Well.
13:40
S2: Mhm. Well, this is, uh, perhaps a brand new idea
13:44
S2: for a lot of people listening today. So, folks, I
13:46
S2: would encourage you to learn more. And the best place
13:49
S2: to start is to check out the incredible work of
13:51
S2: the Impact Foundation. You can learn more when you go
13:54
S2: to impact foundation.org, and look how you can easily invest
14:00
S2: charitable capital to create the economic, social, and spiritual transformation
14:06
S2: that Amy has been describing today. Again, that's Impact foundation.org. Amy,
14:10
S2: thanks for your time.
14:11
S3: Thank you. Rob.
14:12
S2: All right. We're going to head to a break, so
14:14
S2: don't go anywhere. Still a lot more to come. Even
14:17
S2: though we're away from the studio today and you shouldn't
14:19
S2: call in. We have some great questions that you're really
14:22
S2: going to enjoy as we continue to apply God's wisdom
14:25
S2: to your financial decisions. We'll be right back. Thrilled to
14:35
S2: have you with us today on Faith and Finance Live.
14:38
S2: By the way, we're not here today. Our team is
14:40
S2: away from the studio, so don't call in. But we
14:42
S2: have lined up some wonderful questions that I know you'll
14:45
S2: enjoy that we'll get to in just a bit. Uh,
14:47
S2: before we head to the phones in the news, you
14:49
S2: might think earning half $1 million a year would bring
14:52
S2: peace to your finances, but a Goldman Sachs survey found
14:56
S2: that nearly 37% of Americans earning more than $500,000 annually
15:02
S2: say they're living paycheck to paycheck. Even more surprising, 46%
15:07
S2: make only minimum payments or less on their credit cards,
15:11
S2: and 80% have delayed major financial goals. Now, here's the
15:16
S2: reality for many as income increases, so do expenses. Bigger homes,
15:21
S2: nicer cars, more expensive lifestyles can leave even high earners
15:26
S2: feeling financially stretched. I know it's hard to believe if
15:30
S2: you're in, you're not in that spot. You might think
15:33
S2: if I had half $1 million, that would not be
15:35
S2: a problem. Nevertheless, the the data says otherwise. This reveals,
15:40
S2: of course, the deeper issue. There's always the issue beneath
15:44
S2: the issue, right? Money, Ron Blue often says, is like
15:48
S2: an iceberg. The 10% above the water line is the
15:52
S2: money management. It's the things that we do with the
15:55
S2: money that we can see tangibly. But the 90% of
15:58
S2: the mass of the iceberg below the water line are
16:02
S2: the values, the why, what it's doing to our hearts,
16:06
S2: how money intersects with the human heart, which we know
16:09
S2: money issues are hard issues. And so what the deeper
16:13
S2: issue is, is that more money can't fix what hasn't
16:17
S2: been addressed in the heart. Ecclesiastes 510 reminds us that
16:21
S2: whoever loves money never has enough. If we're looking to
16:25
S2: money for the security, the satisfaction, the peace that only
16:29
S2: God can provide, no amount will ever feel like enough.
16:33
S2: And if we haven't learned contentment and why stewardship with
16:38
S2: what we have today. He who has been faithful with
16:41
S2: a little will be faithful with much. You remember that? Well,
16:44
S2: then a bigger paycheck won't automatically change that. Here's the reality.
16:48
S2: True peace isn't found in having more money. It's found
16:52
S2: in trusting God, knowing he is enough so that money
16:57
S2: doesn't have to be. Wow. That's a big idea. One
17:00
S2: that's easy to articulate, a lot harder to live by.
17:05
S2: And yet it is true. Jesus is our ultimate treasure. Money.
17:10
S2: A powerful and good tool. So long as we don't
17:13
S2: place it on the throne of our lives now, we
17:18
S2: don't tangibly do that, right? We would say, no, of
17:20
S2: course I wouldn't do that. But in practice and in
17:23
S2: our thought life is money the ruler of our lives. Well,
17:28
S2: that's very easy for that to be the case, especially
17:30
S2: in the most prosperous nation in the history of the world.
17:33
S2: And yet we need to be on our guard there.
17:35
S2: So hopefully each day on this program, we can encourage
17:39
S2: you and remind you of these truths. I'm talking to
17:42
S2: myself at the same time so that we can be
17:45
S2: found faithful with what passes through our hands. It's not
17:48
S2: a matter of how much or how little you have.
17:50
S2: It's what is faithfulness look like today with what I
17:54
S2: have right now. All right, let's get to our calls.
17:57
S2: We have lined up. Let's go to Texas to begin. Jim.
18:01
S2: Go ahead.
18:03
S4: Hi there.
18:05
S2: Thanks for your call today, Jim, I sure can.
18:08
S4: Okay. My father in law has some doubly bonds that
18:13
S4: matured in, uh, 23. And so they're just sitting there
18:18
S4: earning nothing. But he has a very substantial income. And
18:23
S4: so he was going to simply give those to us
18:27
S4: and let us cash them in. And then we would
18:30
S4: gain the, uh, tax liability for that? Is that something
18:35
S4: that can be done?
18:39
S2: Uh, yeah. So what is his situation currently? He was
18:43
S2: going to give them to you or at death.
18:48
S4: Uh, either way, we were trying to figure out the
18:51
S4: best way. He is, uh, 99 years old and he's
18:55
S4: on hospice, but, uh, he's probably going to live another
19:00
S4: year or two there. Uh, mind is totally intact, so
19:05
S4: we're in good shape for that. Okay. But we just
19:08
S4: didn't know whether. I mean, his retirement incomes make him
19:12
S4: have to pay taxes as it is pretty heavily.
19:16
S2: Yes. Got it. All right. So yeah, a couple of
19:19
S2: thoughts here just based on this. Um, you know, these
19:22
S2: have already matured. So they're not earning any more interest.
19:26
S2: And because he has a higher income now and only
19:29
S2: expects to live, uh, a couple of years if he
19:32
S2: holds them when he passes the way. The bonds, of course,
19:35
S2: become part of his estate, and then the heirs will
19:39
S2: owe the, uh, you know, income tax on all the
19:42
S2: accrued interest when they cash them in. That tax does
19:45
S2: not disappear at death. The executor can choose to report
19:50
S2: the interest on his final tax return instead of pushing
19:53
S2: it to the heirs. But either way, someone's going to
19:56
S2: pay the tax. Um, so since they're no longer growing,
19:59
S2: they're really not helping him financially. And if his income
20:04
S2: is high but the errors are in lower brackets, it
20:08
S2: can make sense to let the heirs inherit and pay
20:11
S2: the tax when they redeem them. Um, you know, if
20:14
S2: he prefers to simplify the estate and avoid that burden
20:18
S2: on them, then he could cash them in. Now pay
20:20
S2: the tax himself and gift the net proceeds. So the
20:25
S2: bonds aren't going to earn another penny. It's really about
20:28
S2: who pays the tax. Either him now or you and
20:32
S2: your the the other heirs later. And again, if if
20:37
S2: there if you all are in lower tax brackets holding.
20:39
S2: And let. Letting you all inherit them could make some sense,
20:43
S2: but I think, um, you know, there's, there's really no
20:46
S2: benefit to keeping them, at least financially. It's really a
20:49
S2: tax timing question at the end of the day.
20:52
S4: Very good. Incidentally, I went to one of the Kingdom
20:55
S4: advisors and he was incredibly good at, uh, giving us
21:00
S4: some really good advice. He just didn't know exactly on
21:03
S4: the double bonds. He wasn't up on those particular things.
21:06
S4: And so, um, but anyway, he was excellent. We're going
21:10
S4: to use him.
21:11
S2: Oh, I'm so glad to hear that, Jim. Thanks for
21:13
S2: that testimony. That's really encouraging. Yeah. You know, I think
21:16
S2: at the end of the day on these, um, you know,
21:19
S2: the original owner is the one who owes the tax
21:23
S2: on all that interest, even if they're given away. Um,
21:26
S2: so I think, uh, you know, that gifting does not
21:29
S2: eliminate that tag. So I think at this point, it
21:31
S2: really is just a function of who is going to
21:33
S2: pay the tax, him or you all. And that should
21:37
S2: drive the decision. Great to hear from you sir. Delighted
21:39
S2: you found a certified Kingdom advisor there in Texas. By
21:42
S2: the way folks, again, if you'd like to find a
21:44
S2: K a in your area, just go to faith.com. Right
21:47
S2: there at the top of the page it says find
21:49
S2: a k a. Back with more questions after this. Stick around. Hey,
22:04
S2: great to have you with us today on Faith and
22:06
S2: Finance Live. I'm Rob West, your host. Our team is
22:09
S2: away from the studio today, so don't call in. But
22:12
S2: coming up a little later, we'll have more of your
22:14
S2: questions right here on the program. Hey, let me take
22:18
S2: a moment to mention the Faith Fi app. We'd love
22:22
S2: for you to download it. Just head to your app
22:24
S2: store wherever you download apps and search for Faith Fi.
22:28
S2: That's faith fi. You can manage your money. You can
22:30
S2: access the best content in biblical finance, podcasts, articles and videos.
22:36
S2: You can also participate in our faith fi community, where
22:39
S2: you can post questions and get answers from others on
22:42
S2: their stewardship journey. You'll find it in your App Store.
22:45
S2: Just search for faith fi or if it's easier. Head
22:48
S2: to our website at faith fi.com. That's faith fi.com, and
22:53
S2: you'll see the app right there on the home page.
22:56
S2: All right, back to the phones. We go in New York. Maria,
22:59
S2: we're so grateful for your call. How can I help you?
23:02
S5: I am also so very grateful for your program. And
23:06
S5: the first question I have is how do you calculate
23:10
S5: the QCD? I'm 71, so I need to take care
23:13
S5: of that. And number two is how do you vet
23:18
S5: the organization that you are donating to? Because sometimes they're corrupt.
23:24
S2: Yes.
23:24
S5: Those are the two questions. And thank you so much.
23:27
S2: Well thank you Maria. That's very kind and I'm delighted
23:29
S2: you called today. Let's start with the first question. You
23:32
S2: said QCD do you actually mean required minimum distribution that
23:36
S2: you're going to handle through a QCD. When you said
23:39
S2: how do I calculate it. What number are you trying
23:41
S2: to calculate?
23:42
S5: What I'm trying to calculate is the connection between the
23:47
S5: Maggie and then the Irma. And then your q c,
23:50
S5: D is the only way to balance that off.
23:54
S2: Ah. Got it. Okay. Very good. So you're not. Yeah.
23:57
S2: You mentioned your uh 72. Right. So you don't have
24:00
S2: a required minimum quite yet, correct.
24:02
S5: Yes. But I'm trying to, you know, already bring my
24:08
S5: whatever it is down.
24:10
S2: Yeah.
24:11
S5: I want to do it while I am aware of
24:14
S5: who I'm giving it to.
24:16
S2: Yeah. Makes sense. I love this idea, Maria. And kudos
24:19
S2: to you for thinking through this at this level. Um,
24:22
S2: so yes, a qualified charitable distribution is an excellent way
24:26
S2: to manage the Medicare Irma surcharges by reducing the income
24:33
S2: Medicare uses to calculate premiums. And, you know, the QCD
24:38
S2: is a great way to do that. So the key
24:39
S2: is to understand the connection between your what you said, Maggie,
24:44
S2: the modified adjusted gross income, the Irma, which is the
24:48
S2: income related monthly adjustment amount and the QCD. We're at
24:52
S2: alphabet soup here, qualified charitable distribution and how they work together.
24:57
S2: So the modified adjusted gross income for Medicare Irma purposes, generally,
25:05
S2: your adjusted gross income, your AGI is the factor that
25:10
S2: determines whether or not you will have a surcharge on
25:13
S2: your Medicare two years later. Irma is that amount the
25:17
S2: additional Medicare Part B and D premium charged when your
25:22
S2: modified adjusted gross income exceeds certain thresholds, and then the
25:27
S2: qualified charitable distribution is from an IRA, and that allows
25:31
S2: it to be excluded from your taxable income. Now a QCD. Um,
25:37
S2: you know, can lower AGI, the adjusted gross income, which
25:41
S2: then lowers the Medicare, uh, modified adjusted gross income to
25:46
S2: keep you below the threshold. So really, it's going to
25:50
S2: come down to, um, what those thresholds are. Are you
25:55
S2: a single filer?
25:57
S5: Yeah. I think for me it's 109.
26:00
S2: Yes. That's right. 109 or less would be once you
26:04
S2: get over 109 then you're going to add 200 this
26:08
S2: year at least for 2026 premiums. You're going to add $202.90.
26:14
S2: So you need to keep that modified adjusted gross income
26:17
S2: below 109,000. Um, so that would allow you to, you know,
26:23
S2: direct some money to charity. Um, from, uh, dollars. You were,
26:29
S2: you know, normally taking out of your IRA to satisfy
26:33
S2: your RMD. And instead of doing that, send it straight
26:37
S2: to the charity, thereby not adding to your taxable income
26:42
S2: for the year, but also allowing you to satisfy the
26:45
S2: required minimum such that, uh, you know, you wouldn't trigger that, uh,
26:51
S2: that premium.
26:52
S5: Mhm.
26:53
S2: Yeah.
26:54
S5: So explanation I, I could follow it now.
26:58
S2: Excellent. Well, I'm glad to hear it. And, uh, we're
27:01
S2: so thrilled that you're thinking this way and this is
27:03
S2: going to allow you to give more money to, uh,
27:05
S2: to God's purposes through your, your giving. So that's great. Uh,
27:10
S2: the second question you asked was related to ultimately, uh,
27:14
S2: how do you determine if the organization you're giving to, uh,
27:17
S2: you know, is worthy of that? And I love the
27:20
S2: idea that you're thinking about some due diligence before you
27:24
S2: make a substantial donation. There's several ways to evaluate whether
27:29
S2: a ministry's trustworthy. One would be an organization called Charity navigator.
27:36
S2: Charity navigator. They have a website and they review the
27:39
S2: financial health. They do provide some accountability. They evaluate leadership
27:45
S2: and impact. And so Charity navigator would be a good one.
27:50
S2: The second one that I would mention is EFA what
27:54
S2: people call for for short. It stands for the Evangelical
27:58
S2: Council for Financial Accountability. For instance, Kingdom Advisors and Faith Fi.
28:04
S2: We have the IFA certification, which just simply means we
28:08
S2: have to meet high standards. We need to have an
28:11
S2: independent audit every year. We need to, you know, comply
28:15
S2: with their rules and regulations to get the seal of
28:19
S2: approval for financial accountability. Well, SFA certified would be a
28:24
S2: great thing for you to require for any ministry you're
28:28
S2: giving to apart from your local church, which typically they
28:31
S2: won't use the certification. So I would say those two
28:35
S2: things would be a good starting place. Charity navigator and ECFA.
28:40
S2: Now Jesus taught that we can recognize people by their
28:44
S2: fruit in Matthew seven. So I think we would want
28:46
S2: to ask, does this organization demonstrate biblical integrity? Is the
28:51
S2: leadership transparent? Does its work genuinely reflect Christ's love and
28:56
S2: compassion and truth? Is there evidence that the donations are
29:00
S2: making a meaningful difference? And I realize those questions are
29:04
S2: more subjective versus the objective measure of the charity navigator
29:10
S2: and the certification. But I think it is important for you,
29:14
S2: you know, to look at that. One other consideration depending
29:19
S2: on how large the gift is. I think you want
29:22
S2: to know, does the organization have the capacity to manage
29:27
S2: my gift? And what percentage of the annual budget would
29:31
S2: it be? Now, that may not be a factor, but
29:34
S2: in some cases where it's a small church or a
29:37
S2: small organization or we're making a major gift, we could
29:41
S2: end up giving something that would be substantial in terms
29:44
S2: of the total percentage of the budget. And we just
29:46
S2: want to know that they're prepared for that in terms
29:48
S2: of they know what to do with it, they're going
29:50
S2: to manage it wisely. They don't become dependent on it,
29:53
S2: those kinds of things. But I think from a really
29:55
S2: practical standpoint, I would probably start with Charity navigator and
29:59
S2: the certification. Is that helpful?
30:02
S5: Yes, very much so. Very helpful, because I think sometimes
30:06
S5: you overthink it to the point where you don't do
30:08
S5: anything for fear that it will go get wasted.
30:13
S2: Yeah, I think that's right. You know, I think the
30:15
S2: key idea here is that. You know, we want to
30:18
S2: handle charitable gifts honorably. And, you know, just as we're
30:23
S2: stewards of what passes through our hands that we spend,
30:25
S2: we also should be good stewards of what we give. Now,
30:28
S2: at the end of the day, if you've done your
30:30
S2: part to check these Charity navigator rating, you look at Hkfa,
30:35
S2: you talk to the ministry, you're evaluating the fruit. At
30:38
S2: the end of the day, you make the gift and
30:40
S2: you leave it up to the Lord as to how
30:42
S2: it's going to be used. But I think there is
30:45
S2: a role in good stewardship to do your part before
30:48
S2: you make the gift, and that's precisely what you're getting at.
30:51
S2: Lord bless you, Maria. Thanks for calling today. Lorraine coming
30:54
S2: your way after the break. Stick around. So glad to
31:05
S2: have you with us today on Faith and Finance Live.
31:08
S2: Our team is away today, so don't call in. But
31:10
S2: we lined up some great questions in advance and we'll
31:13
S2: be going to those here in just a moment. Let
31:16
S2: me also remind you that the advice that I give
31:18
S2: each day on this program is general in nature. We
31:22
S2: offer principles and ideas that apply at a high level.
31:26
S2: They are not personalized. So that's why you should always
31:29
S2: seek professional financial advice. And if you'd like to find
31:33
S2: a professional who shares your values, we of course, here
31:36
S2: at Faith and Finance Live recommend the Certified Kingdom Advisor designation.
31:40
S2: These are men and women who've met high standards, and
31:43
S2: they've been trained to bring a biblical worldview of financial
31:46
S2: decision making. You can find 1@faith.com. Let's go out to Texas. Lorraine,
31:50
S2: how can we help?
31:51
S6: Hi there. First, I want to say thanks so much
31:53
S6: for your program. It's just I love how you clearly
31:56
S6: explain things and make it simple to understand. So appreciate that.
31:59
S2: Well thank you.
32:00
S6: Uh, my question is about 529 accounts. Um, basically the
32:04
S6: question is, is it possible to transfer the ownership of
32:08
S6: an account to someone who is not the original beneficiaries?
32:13
S6: And let me just give you some background. So my
32:15
S6: parents had set up some accounts for their grandkids, and
32:19
S6: now they want to kind of get out of being
32:21
S6: in the middle of that or just having those accounts.
32:23
S6: And they want the parents of the grandkids to own
32:27
S6: the accounts and then to do with it what we want. Now,
32:31
S6: we may or may not be actually using them for
32:33
S6: educational expenses because the kids have grown and, you know,
32:36
S6: we could give them to their grandkids. But my parents
32:39
S6: want to leave that all up to us. So, um,
32:43
S6: it's kind of complicated. I hope that makes sense.
32:45
S2: It does.
32:46
S6: Yeah.
32:47
S2: Okay, great. Yeah. And you've you've pointed out a really
32:49
S2: important distinction there because we need to distinguish between the
32:53
S2: account owner and the beneficiary. So the account owner, which
32:57
S2: is your what you're referring to is the person who
32:59
S2: controls the account, makes the investment decisions and determines the withdrawals.
33:04
S2: The beneficiary is the person who's qualified educational expenses the
33:09
S2: money is intended to pay. Uh, and so, you know,
33:12
S2: based on your question here, yes. If the grandparents established
33:16
S2: the 529 for their grandchildren, they can often transfer ownership
33:20
S2: of those accounts to the grandchildren's parents without changing the beneficiaries.
33:26
S2: It's fairly common. And so essentially what would happen is,
33:30
S2: you know, the transfer would take place, the beneficiaries could
33:34
S2: remain unchanged. The money stays in the existing 529. And
33:38
S2: then the parents, you and perhaps your siblings would then
33:42
S2: now control the investment decisions, the withdrawals, the future account
33:46
S2: management in terms of any tax consequences. Generally, a straightforward
33:50
S2: change of account ownership, you know, doesn't trigger any kind
33:54
S2: of tax whatsoever. Um, it could have gift tax implications
34:00
S2: where you would just need to report it to the IRS,
34:02
S2: but it wouldn't be taxable. Um, you know, some states
34:06
S2: have restrictions or special consequences when account ownership changes. So
34:10
S2: you may just want to check on that. But essentially
34:13
S2: what would happen is the grandparent would contact the 529
34:16
S2: plan administrator and just ask, can we transfer account ownership
34:21
S2: from us to the parents of the beneficiaries while keeping
34:25
S2: the grandchildren as designated beneficiaries? They would provide the appropriate
34:30
S2: change of owner paperwork and explain, you know, whether the
34:33
S2: the plan permits the transfer because each plan has their
34:36
S2: own rules and regulations, although again, it shouldn't be a problem. Um,
34:40
S2: and then if the grandparents primarily just want to ensure
34:43
S2: the parents can take it over, if something happens, then
34:47
S2: they could name them as successor account owners. But in
34:50
S2: your case, it sounds like they want them to have
34:52
S2: full ownership and that can absolutely be done. Does that
34:56
S2: make sense?
34:57
S6: It does. And I just realized, as you were explaining
35:00
S6: that I failed to include an important fact. Um, so
35:03
S6: originally we've got seven grandkids, but only four accounts. And
35:08
S6: those accounts, Um, are four different grandkids. So in my case,
35:13
S6: my parents that went on for my son, it still
35:16
S6: got money in it. But that what my parents want
35:19
S6: to do is divide that account up into four equal
35:23
S6: amounts for all of the siblings, for my siblings?
35:26
S2: Yes.
35:26
S6: Does that make sense?
35:27
S2: Yes. So they want they want to be able to
35:30
S2: break it up at the same time that they change
35:33
S2: the ownership.
35:34
S6: Right. Right.
35:36
S2: Yeah.
35:36
S6: And of course, the cost basis is different. And the
35:38
S6: cost the earnings are different. So tax implications, if it
35:41
S6: gets withdrawn without being used for educational purpose would be
35:44
S6: different for all of them.
35:46
S2: Yeah. No that's right. I mean hopefully it would be
35:48
S2: used for qualified educational expenses. Um you know, or taken
35:52
S2: out based on scholarships or grants on a pro-rata basis.
35:55
S2: And that wouldn't be, you know, needed. But yes, essentially
36:00
S2: they can divide the money in the four existing five,
36:03
S2: two nines among all seven grandchildren. They don't need to
36:07
S2: cash out the accounts or pay taxes. Um, so the
36:11
S2: important distinction is that transferring ownership and dividing the money
36:16
S2: among the beneficiaries are two different transactions. So, um, you
36:20
S2: would probably want to open additional 529 and they could
36:25
S2: do it, or you could do it for the three
36:27
S2: grandchildren that don't currently have one. And then they would
36:31
S2: transfer portions of the existing account. So most five two
36:34
S2: nines allow partial transfers to another 529 account for an
36:39
S2: eligible family member of the original beneficiary, and then keep
36:44
S2: the money invested, because that's a properly structured 529 to
36:48
S2: 529 transfer. So that avoids any kind of withdrawal whatsoever.
36:53
S2: And then, um, you know, once the funds are divided,
36:55
S2: then the grandparents could request that the parents, you know,
36:59
S2: be replaced or that they would be replaced by the
37:02
S2: parents as now owners of the four accounts.
37:06
S6: Is there any limit to the amount that can be transferred?
37:09
S6: And I'm thinking of the gift. I think it's about
37:12
S6: $19,000 that a family member can make. Is that restriction
37:16
S6: in place for the transfer of funds from a 529?
37:20
S2: Uh, yeah. So I mean, there's no fixed federal dollar
37:23
S2: limit on transferring money between five, 29 accounts in terms
37:28
S2: of the gift tax limits for this year, it's 19,000.
37:31
S2: So a married couple, two grandparents could transfer 38,000 to
37:37
S2: any one individual. Um, you know, the five year, 529
37:41
S2: contribution election, uh, you know, has them at somewhere between
37:45
S2: 100 and $200,000 that they can put in as a max.
37:49
S2: But essentially, you know, when you, uh, you're moving money
37:53
S2: from one grandchild to another, um, you know, that there's
37:58
S2: no gift tax implications of that. Uh, as long as
38:02
S2: they're in the, in the same generation. Um, and then
38:05
S2: new money going in if they go above the $38,000
38:09
S2: per beneficiary. You know, as a couple, then they would
38:12
S2: just need to report it, uh, on a gift tax
38:15
S2: form so the IRS can use it against their lifetime exclusion.
38:19
S6: Yes. Okay. Okay. Very good. Well, thank you so much.
38:22
S6: I appreciate your insights and helpful.
38:23
S2: Absolutely. Thanks for your call today. By the way, folks,
38:26
S2: you know, we love the 529 plan. If you have
38:29
S2: earmarked the money for college related expenses now, that can
38:33
S2: be K to 12 before college. It can be in college.
38:38
S2: It could also be a trade school. You know, more
38:41
S2: and more students are thinking about trade schools and vocational training,
38:45
S2: not just traditional four year colleges. So, you know, they
38:49
S2: want to become an electrician or a plumber or Hvac
38:52
S2: certification or a welding program, or an automotive technician or
38:55
S2: cosmetology school or nursing certificate programs, apprenticeship programs, you know,
39:01
S2: those all generally qualify As programs and certifications that 529
39:08
S2: plans can cover. In addition to tuition and fees and
39:11
S2: books and supplies and equipment and room and board as well,
39:15
S2: as long as you're at least enrolled half time. So
39:19
S2: just keep in mind there's a wide range of uses there,
39:21
S2: even if they're not necessarily committed to going to a
39:24
S2: traditional four year school. And there's something really powerful about
39:30
S2: being able to put this money in after tax, like
39:32
S2: a Roth IRA, have it grow tax free, hopefully for,
39:36
S2: you know, 10 or 20 years and then being able
39:39
S2: to pull it out without any tax paid on that
39:42
S2: gain again, so long as it's used for qualified educational expenses.
39:46
S2: And keep in mind we can pass it to another beneficiary.
39:49
S2: If one doesn't need it, we can take it out
39:52
S2: equal to scholarships and grants that are awarded on a
39:55
S2: pro rata basis. So that's helpful. And then now you
39:58
S2: have the ability to put over time up to the
40:01
S2: annual limits a total of 35,000 into a Roth IRA
40:06
S2: if they don't need it, which, you know, is huge because,
40:09
S2: you know, we talk all the time about just the
40:11
S2: power of that Roth IRA to be something that if
40:14
S2: that money is in there for decades. Wow. The, the
40:18
S2: compounding effect of that also tax free to be able
40:21
S2: to be used for retirement is really significant. So just
40:24
S2: a lot to consider there. By the way, if you
40:27
S2: want to pick the 529 plan, that's best for you.
40:29
S2: Keep in mind you don't have to use your state's
40:32
S2: 529 plan. Now, there may be a reason to do
40:35
S2: just that, and it often comes down to whether your
40:39
S2: state offers benefits. Often, a state income tax deduction for
40:45
S2: use of their 529. And even if their performance isn't
40:49
S2: the best, historically speaking, it still may prove to be
40:53
S2: best to stay in your state. But it may not be.
40:56
S2: They may have lousy performance, or they may not offer
41:01
S2: any kind of benefit. So the way to evaluate that,
41:03
S2: I've found that the website savingforcollege.com. savingforcollege.com is really the
41:09
S2: best way to get in there. Run the scenarios, figure
41:13
S2: out how much you need to save, and then do
41:15
S2: the evaluation of the plan, starting with your state and
41:20
S2: then looking at, you know, the other states that have
41:23
S2: had better performance. Um, you know, and it does change
41:28
S2: from year to year. For instance, I was just reading
41:31
S2: the other day that the, the best 529 from a
41:34
S2: performance standpoint and a ranking standpoint have been the last
41:39
S2: few years, Utah, Alaska, Pennsylvania, Massachusetts and Illinois, just based
41:45
S2: on low fees, flexible investments, and strong performance. But again,
41:50
S2: savingforcollege.com can help you sort all of that out. All right.
41:54
S2: Hope that helps. Hey, we're out of time today. Let
41:57
S2: me just mention quickly we're slightly behind on our support
42:02
S2: for this point in our fiscal year. Um, and so
42:07
S2: we would love if you would consider, if you enjoy
42:09
S2: the program, you found something helpful. Would you consider making
42:12
S2: a gift today? You can do that on a one
42:14
S2: time basis to help us reach more people with this
42:17
S2: message and support our work, or you can consider becoming
42:20
S2: a partner. All of that can be done at faith fi.com/give.
42:25
S2: You can help us get caught up today. Maybe you
42:28
S2: can make a $250 gift, or perhaps you're somebody who
42:31
S2: could do a $2,500 gift. All of it goes to
42:34
S2: help support this work, to equip God's people to manage
42:37
S2: God's money God's way. Again, that website, faith fi.com/give. Would
42:43
S2: you consider a one time or gift or recurring partner gift?
42:47
S2: We would certainly be grateful. Hey, faith and Finance Live
42:50
S2: is a ministry of Faith, Fi and Moody Radio. Thanks
42:53
S2: to my team today and we'll see you tomorrow. Come
42:55
S2: back and join us then. Bye bye.