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Faith & Finance Live - Should AI Help Manage Your Money? · CIAM Radio

0:02
S1: Today's version of faith and finance live is pre-recorded, so
0:06
S1: our phone lines are not open. Artificial intelligence can help
0:10
S1: you build a budget, explain an investment, or compare financial
0:13
S1: options in seconds. But how much should you trust it
0:16
S1: with your money? Hi, I'm Rob West. AI is quickly
0:20
S1: becoming part of everyday life, including the way we manage
0:23
S1: our finances. And like any tool, it can be used
0:26
S1: wisely or unwisely. So how should Christians think about AI
0:31
S1: and money? Then we have some great calls lined up,
0:34
S1: but we won't be taking your live calls today because
0:36
S1: we're pre-recorded. This is faith and finance live. Biblical wisdom
0:41
S1: for your financial decisions. When new technology arrives, we can
0:51
S1: be tempted toward one of two extremes. We can either
0:54
S1: embrace it without much thought, or we can become suspicious
0:58
S1: of it and want nothing to do with it. But
1:01
S1: as stewards, we should ask a better question how can
1:04
S1: we use this tool wisely and faithfully? AI can already
1:08
S1: be remarkably helpful with financial information. You can ask it
1:12
S1: to explain the difference between a Roth IRA and a
1:14
S1: traditional IRA. Define a complicated financial term. Suggest categories for
1:20
S1: a spending plan. Compare debt payoff strategies, or help you
1:24
S1: prepare questions for a financial professional use. That way, AI
1:28
S1: can be a valuable research assistant. But there's an important
1:32
S1: difference between having information and exercising wisdom. Proverbs 1415 says
1:39
S1: the simple believes everything, but the prudent gives thought to
1:42
S1: his steps. That's a helpful principle. In an age of
1:46
S1: artificial intelligence, AI can gather, organize, summarize, and analyze information
1:52
S1: remarkably quickly. But having more information doesn't remove our responsibility
1:57
S1: to consider carefully what's true and how we should respond.
2:01
S1: Biblical wisdom is more than knowing facts. It's applying truth
2:05
S1: faithfully before God. And that requires something. No technology can
2:09
S1: provide spiritual discernment. AI might help you calculate whether you
2:14
S1: can afford a larger home, but it can't determine whether
2:17
S1: buying it reflects wise stewardship or simply a desire for more.
2:21
S1: It can compare to investment strategies, but it can't decide
2:25
S1: what faithfulness should look like in your particular circumstances. It
2:29
S1: can calculate how much room you have to give, but
2:32
S1: it can't worship God through generosity. That doesn't make AI bad.
2:37
S1: It simply means we need to keep the tool in
2:40
S1: its proper place. And a few practical guardrails can help
2:43
S1: us do that. First, verify important financial information. AI can
2:48
S1: sound confident even when the information is incomplete, outdated, or
2:52
S1: even wrong. The more significant the decision, the more important
2:56
S1: it is to confirm what you're seeing with reliable sources
2:59
S1: or a qualified professional. Second, protect your privacy. Be cautious
3:04
S1: about entering account numbers, Social security numbers, passwords, tax documents,
3:09
S1: or other sensitive financial information into an AI system. And
3:14
S1: remember that criminals can use AI to voice cloning. Convincing
3:19
S1: fake images and videos and personalized scams are becoming easier
3:23
S1: to create. If you receive an unexpected request involving money,
3:27
S1: even if it appears to come from someone you know,
3:30
S1: verify it through another trusted channel before acting. But perhaps
3:34
S1: the most important guardrail is this. Don't surrender your responsibility
3:39
S1: to think. AI promises efficiency and that can be useful.
3:44
S1: But efficiency isn't always the highest good. Some financial decisions
3:49
S1: require prayer, patience, conversation wise counsel, and time. That's especially
3:55
S1: true when money intersects with marriage, family, generosity, fear, competing priorities,
4:01
S1: or the question of how much is enough. AI can
4:05
S1: help you reach a goal more efficiently, but you still
4:08
S1: have to decide whether it's the right goal. A wise
4:11
S1: financial professional like a certified Kingdom advisor can understand family
4:15
S1: dynamics that don't fit neatly into a spreadsheet. Ask questions
4:19
S1: you may not have considered and walk with you through
4:22
S1: decisions over time. And a professional who understands biblical stewardship
4:27
S1: can help you think beyond simply maximizing wealth toward faithfully
4:32
S1: managing what God has entrusted to you. To start working
4:35
S1: with a K in your area, go to find ak.com.
4:40
S1: And this is something we're thinking about carefully at fortify
4:43
S1: as well in the future. The Faith Fi app will
4:46
S1: include optional AI features designed to make certain parts of
4:50
S1: money management easier. For example, AI could streamline routine tasks
4:54
S1: or use your past spending patterns to suggest starting a budget.
4:58
S1: Of course, users will be able to choose whether to
5:01
S1: turn those features on or off. Either way, the principle
5:05
S1: remains the same the technology serves the steward, not the
5:09
S1: other way around. By the way, if you want to
5:11
S1: check out the Faith VI app, just go to faith fi.com/app.
5:15
S1: That's faith fi.com/app. Back with your questions after this. Stick around.
5:35
S1: This is the program where we help you navigate the
5:38
S1: financial journey you're on. Here's one of the things we recognize.
5:42
S1: Your money management and mine tell a story about what's
5:46
S1: most important to us as we think about that daily
5:50
S1: spending of God's money as we allocate capital in very
5:55
S1: short term decisions, just monthly and daily spending or longer
5:58
S1: term decisions, how we invest or how we give. We're
6:02
S1: reflecting our values and our priorities. And remember Jesus said,
6:06
S1: where your treasure is, there your heart will be also.
6:09
S1: Now what's interesting about that is you could very easily say, well, that,
6:13
S1: you know, directionally, when I allocate God's money, my heart
6:17
S1: will naturally follow. And I think that's true to a degree.
6:20
S1: We certainly see that our heart will move and gravitate
6:25
S1: toward those things that we allocate money to. But what
6:28
S1: if Jesus was getting at something deeper? What if it
6:31
S1: was that the way we allocate money is really the
6:34
S1: clearest reflection of our affections? And what does that say about,
6:40
S1: really the affections of our heart? Could those things that
6:44
S1: are here and now, the temporal actually become the affections
6:48
S1: that crowd out our affection that should be solely dedicated
6:52
S1: to God. Now, that doesn't mean we can't enjoy God's money.
6:55
S1: It was intended to be enjoyed. It's right there in
6:58
S1: God's Word. In First Timothy, among other places, we see
7:02
S1: enjoyment as part of God's design. He created it. He's
7:05
S1: the author of Delight and Enjoyment. So there's nothing wrong
7:08
S1: with enjoying God's resources as long as he remains. Our
7:12
S1: ultimate affection, our ultimate treasure and money is a tool
7:16
S1: to accomplish his purposes. We put everything in its proper place,
7:21
S1: its proper order. We don't worship the creation over the creator.
7:25
S1: We worship the creator and allow the creation to be
7:28
S1: something to use to glorify God and to promote human flourishing,
7:33
S1: and to love our neighbors and to provide for our
7:35
S1: families and yes, to enjoy. And when we get all
7:38
S1: of that right, well, then these decisions that we make
7:42
S1: every day begin to reflect what's most important to us.
7:45
S1: I hope that's an encouragement to you today. Uh, before
7:48
S1: we head to the phones in the news. Despite increased
7:51
S1: cyber security spending, U.S. data breaches are on track to
7:55
S1: exceed last year's record. More than 471 million victim notices
8:00
S1: were tied to data compromises in the first half of 2026.
8:05
S1: That's according to the Identity Theft Resource Center, a breach
8:09
S1: involving education platform canvas. You might be familiar with it.
8:13
S1: My kids use it for their education. That accounted for
8:17
S1: 275 million notices. The Itrc also recorded 1803 incidents during
8:26
S1: the period, compared with 1732 a year earlier. Artificial intelligence
8:32
S1: is contributing to the rise. IBM found that 1 in
8:36
S1: 4 breaches between March of 2025 and February 2026 involved AI.
8:42
S1: That's up 56% from the prior year. Malicious insider incidents
8:47
S1: are also increasing sharply, with 21 reported in the first
8:52
S1: half of 2026 versus just three in all of 2025.
8:57
S1: For consumers, experts recommend regularly reviewing credit reports, using credit
9:03
S1: monitoring services and considering fraud alerts on those credit monitoring services.
9:08
S1: I would say, you know, if you have been the
9:10
S1: victim of a breach and you have that free to,
9:13
S1: you absolutely take advantage of it. Otherwise, you can use
9:16
S1: most of the free safeguards to protect yourself, the strongest
9:21
S1: of which is the credit freeze. Now, this needs to
9:23
S1: be done with all three credit bureaus Equifax, Experian, TransUnion
9:28
S1: that can prevent criminals from opening new accounts in your name.
9:31
S1: So if they did compromise and access your data, perhaps
9:34
S1: on the dark web, and use that to attempt to
9:37
S1: open or take out a loan in your name, they'd
9:41
S1: be stopped in their tracks with that credit freeze, primarily
9:44
S1: because in order for that new account to be open,
9:47
S1: the lender is going to want to check your credit. Well,
9:49
S1: they'd be unable to do so because the pin number
9:52
S1: would be required and the fraudster would not have it.
9:55
S1: They're free, but they have to be temporarily lifted when
9:59
S1: applying for legitimate credit. So that's the only hassle factor.
10:02
S1: But hopefully you're not doing that very often. Maybe buying
10:05
S1: a car every few years or some other need for credit,
10:09
S1: but that credit freeze is going to be your strongest tool.
10:13
S1: Beyond that, I would say strong, unique passwords. And I
10:17
S1: know this is easy to do, but don't use the
10:20
S1: same password across accounts. Check out a password manager like
10:24
S1: LastPass or one password, or even the one built into
10:29
S1: the Mac operating system or Google, because that's going to
10:33
S1: help you generate unique long passwords and then be able
10:38
S1: to call them up quickly as you need them. I
10:40
S1: realize that can be a hassle. Pay particular attention to
10:43
S1: your email and financial accounts, because access to email can
10:47
S1: allow a thief to reset passwords elsewhere and use that, uh,
10:52
S1: that password reset feature, uh, with your email address to
10:57
S1: be able to get in and change it. Uh, also
11:00
S1: just a few others. And then we'll dive into some
11:02
S1: questions here. Uh, turn on two factor authentication. So you
11:07
S1: enable it on email, banking, investment credit card and other accounts. Uh,
11:12
S1: you could use an authenticator app or a security key
11:14
S1: that's preferable to text message codes. But if you don't
11:19
S1: do anything, just make sure you at least do the
11:21
S1: text message codes for the two factor authentication. That's going
11:24
S1: to make sure that even if they have your password,
11:27
S1: you're going to stop them from getting in because they're
11:29
S1: not going to be able to get that second source
11:31
S1: of authentication. Be extremely cautious with personal information. This is
11:36
S1: another big one. Never give out your Social Security number, passwords,
11:40
S1: account numbers, verification codes. If someone calls unexpectedly, texts you
11:47
S1: or emails you asking for them. I don't care how
11:50
S1: good the person sounds or how accurate it looks, you know,
11:54
S1: just because they can get that logo up at the
11:57
S1: top of the email that matches, you know, the company
12:00
S1: you do business with doesn't mean it's legitimate. So if
12:04
S1: they ask you, uh, you know, for your personal information,
12:07
S1: especially if there's any urgency involved, I would just hang
12:10
S1: up close or delete the email and then go to
12:13
S1: them directly using a trusted phone number or email address,
12:17
S1: and then finally monitor your financial life. You're going to
12:20
S1: want to regularly review bank and credit card transactions, bills
12:23
S1: and credit reports. Yes, it's some extra work, but it's
12:26
S1: worth it. Uh, unexpected accounts or charges or withdrawals or
12:30
S1: bills can be early signs that someone is using your
12:33
S1: identity and you want to stay on top of that.
12:35
S1: So hopefully that gives you a few things to think
12:37
S1: about today as you're trying to stay safe. I realize
12:41
S1: these problems are on the rise, and we want to
12:43
S1: help you avoid them as best we can. All right,
12:45
S1: let's dive in. We're going to start in Texas today. Brent.
12:48
S1: Go ahead sir.
12:49
S2: Yes, sir. I have several retirement accounts, and I am
12:54
S2: a registered nurse that is susceptible to having my accounts
12:59
S2: confiscated because of lawsuits. How can I protect those?
13:04
S1: MM. Yeah. Uh, do you have anything going on actively,
13:07
S1: or is this just trying to anticipate any problems?
13:10
S2: Uh, no. Not actively. Just I am fixing to be 62,
13:14
S2: and I just want to make sure that I have
13:17
S2: something to leave my wife and my family.
13:20
S1: Yeah. No, I totally get that. You know, as you
13:23
S1: think about this, um, in terms of protection and being sued,
13:27
S1: which would be likely what you're talking about here. Um,
13:30
S1: you know, you want to separate your professional liability protection
13:34
S1: from protecting the assets you've already accumulated. The good news
13:38
S1: is your retirement accounts are among the best protected assets.
13:43
S1: So employer sponsored retirement plans are covered by something called ERISA.
13:48
S1: ERISA and this is the strongest federal protection against ordinary creditors.
13:55
S1: You know, there are exceptions, but very few of them.
13:59
S1: I mean, generally it would be like a domestic relations
14:02
S1: order on a divorce or a federal claim. Um, but
14:06
S1: you have a lot of protections kind of already built
14:09
S1: in from creditors and lawsuits where you're covered by ERISA
14:14
S1: and that would apply to your retirement accounts. But I'll
14:18
S1: mention a few other ideas. Uh, I'm up against a
14:21
S1: break here, so I'll do this, Brent, right after the
14:24
S1: break and, uh, maybe give you a few things to
14:26
S1: think about back after this. Stay with us.
14:38
S3: This is faith and in finance. Live with Rob West. Hey,
14:41
S3: if you hear a phone number mentioned today, please ignore
14:44
S3: that number. And don't call us because today's broadcast was
14:48
S3: previously recorded, but we think the upcoming information will help
14:51
S3: you and make you a wise steward of what God's
14:54
S3: given you. So please stay tuned.
14:57
S4: Before the break, we were talking.
14:58
S1: To Brent in Texas. Brent is 61. He's a registered nurse,
15:03
S1: has a traditional IRA, a 401, K a 403 B,
15:07
S1: and wondering, you know, with regard to those accounts, um,
15:11
S1: how does he protect himself against potential lawsuits to make
15:15
S1: sure he's got something for the future? And I was
15:18
S1: saying before the break, Brent, first of all, the good
15:20
S1: news is that retirement accounts for the most part, and
15:23
S1: we'll talk about how they vary are covered by ERISA, uh,
15:28
S1: especially the 401 K and the 403 B, and those
15:31
S1: have the strongest federal protections against ordinary creditors. Um, in
15:36
S1: terms of the exceptions, let me just kind of run
15:38
S1: through this here real quick. Uh, a private employer, 401
15:42
S1: K or a 403 B, are they going to be
15:44
S1: the strongest with that ERISA protection, uh, from lawsuits? Uh,
15:49
S1: and you know, the 403 B, which would be common
15:52
S1: for a private hospital or a nonprofit, very strong ERISA coverage,
15:57
S1: private pension, the same thing the government 401 K.
16:01
S4: Or 403.
16:01
S1: B different rules. Government plans aren't covered by ERISA. You've
16:05
S1: got the applicable federal and state law, uh, traditional IRAs,
16:10
S1: some protection, but different. So strong federal protection in a bankruptcy.
16:15
S1: But outside of bankruptcy, the state law becomes most important. Um,
16:20
S1: so I guess the only thing I would say is
16:22
S1: you might want to investigate before moving to a 403 B,
16:26
S1: let's say, to an IRA, because you don't want to
16:29
S1: assume that the rollover preserves every protection in every situation. Now,
16:34
S1: once you are beyond your working years and you know,
16:38
S1: that's no longer a concern or at least less of
16:40
S1: a concern related to a lawsuit, then you might want
16:43
S1: to roll that 401 K or 403 B into the
16:46
S1: IRA just for simplicity and having everything managed in one place.
16:50
S1: So that's something to consider. Now, what do you do
16:52
S1: beyond the protections afforded to you related to those retirement plans? Well,
16:57
S1: I would just say make sure you have adequate professional
17:00
S1: liability and malpractice coverage. Uh, you know, even if your
17:04
S1: employer provides coverage, you might want to understand exactly what
17:07
S1: it covers and where an individual nursing professional liability policy
17:12
S1: makes sense. I would always carry a personal umbrella policy.
17:16
S1: We have one, uh, you know, that's going to address
17:19
S1: another category of risk, maybe an auto accident, someone injured
17:23
S1: in your home. Uh, you know, you're going to want
17:25
S1: to make sure that you've got something that goes beyond
17:28
S1: the standard limits of a homeowner's or an auto liability policy.
17:32
S1: That's where the umbrella policy comes in. And then, you know,
17:36
S1: I would just say for significant wealth, you could look
17:39
S1: to an estate planning attorney for asset protection. But apart
17:43
S1: from that, those are probably the main steps you'd want
17:46
S1: to take. Is that helpful, though? Brent.
17:48
S2: Yes.
17:49
S1: Okay. Very good. Well, well, listen, hopefully we've given you
17:52
S1: a few things to think about. If we can help
17:54
S1: further along the way. Don't hesitate to reach out. Lord
17:56
S1: bless you, sir. Thanks for being on the program. Let's
17:58
S1: go to Louisiana. Hi, Lynn. Go ahead.
18:01
S5: Hi. Um, thank you all for allowing us to answer
18:04
S5: these questions or ask these questions. Yes, ma'am. Answers for
18:07
S5: these questions. But, um, anyway, we have two businesses, um,
18:12
S5: two separate businesses. One is a service business, one's a
18:15
S5: rental business and the service business is completely paid for
18:19
S5: land and everything. My son runs it and we're thinking
18:23
S5: about selling it to him that way because, you know,
18:26
S5: it's just, it's costing us in a sense, because I
18:30
S5: don't have any overhead and that those type of expenses.
18:33
S5: And then the rental property pays off, um, probably around December.
18:41
S5: And we're looking into a few options, but do not
18:45
S5: know exactly what to do because when it fails or
18:49
S5: if it sells or whatever, it will probably be somewhere
18:53
S5: around $2 million. And I know that I have to
18:56
S5: do something because if not, I will have a lot
18:59
S5: of taxes that I have to pay. So I don't
19:01
S5: really want to outright sell it and not be able
19:04
S5: to put that money somewhere else or, you know, lose
19:08
S5: more of it than I could put up because it
19:09
S5: is my retirement. Um, and also we have looked into,
19:14
S5: you know, maybe owner financing it, which is how we
19:17
S5: were able to do it. But nowadays that's real scary.
19:21
S1: Mhm. Yeah. Uh, give me the, the estate planning decisions
19:26
S1: you've already made on this. Did I hear you say
19:28
S1: on the service business, you said it's paid for completely
19:32
S1: and your son runs it and you're looking to sell
19:34
S1: it to him very soon. Did I understand that right?
19:38
S5: Yeah. You know, that way he can. Because I know
19:41
S5: when you start a new business, um, you have more
19:46
S5: deductions and different things you can do, you know, and
19:50
S5: he wouldn't be losing so much money. Yeah. Because of
19:53
S5: where we're at, you know, we've had it forever.
19:55
S1: Okay. So you're mainly looking for how do you minimize
19:59
S1: the taxes on the rental property versus your versus questions
20:04
S1: around how do you efficiently transfer this at death to heirs?
20:08
S1: Is that right?
20:09
S5: Yes.
20:10
S1: Okay. Yeah. Very good. Um, so in terms of, uh,
20:14
S1: you know, this, this business, this $2 million rental property, um,
20:18
S1: you know, in terms of the, um, the rental property,
20:23
S1: you're going to want to, uh, you know, consider where
20:26
S1: you go from here in terms of your next investment opportunity,
20:30
S1: you know, what you're going to do with the money? Um,
20:33
S1: you know, if it's worth $2 million when it's paid
20:36
S1: off in December, um, you know, if you want to
20:39
S1: stay invested in real estate, then that's of course where
20:42
S1: the 1031 exchange would be great because you'd want to
20:46
S1: have that structured so you could defer that capital gain. Um,
20:50
S1: if you sold a $2 million rental and, you know,
20:54
S1: you didn't want to go into something else, um, then
20:57
S1: the owner financing isn't crazy, but the concern is legitimate.
21:01
S1: I mean, that can, uh, potentially spread the eligible taxable
21:06
S1: gain over several years, which is a real benefit. And,
21:09
S1: you know, if you receive at least one payment after
21:12
S1: the year of the sale, the transaction may qualify for
21:15
S1: an installment sale agreement, but there is risk. Instead of
21:19
S1: having that $2 million safely in your hands, you're becoming
21:22
S1: the buyer's lender. Uh, so if you consider it, you'd
21:26
S1: want to have an attorney involved and want to understand
21:28
S1: things like the buyer's credit worthiness of substantial down payment,
21:33
S1: the interest rate, the collateral, the personal guarantees where appropriate.
21:37
S1: And then what happens? And this is huge. If the
21:40
S1: buyer defaults, um, it doesn't make the tax disappear, but
21:44
S1: of course it spreads it out, which is a real benefit.
21:47
S1: Now I have a few other thoughts that I'll share
21:50
S1: with you right after this break. So stay right there
21:53
S1: and we'll pick it up on the other side. We'll
21:54
S1: be right back. I'm so thankful you're joining us today
22:06
S1: on Faith and Finance Live. I'm Rob West. Hey, just
22:09
S1: a quick reminder our team is away from the studio today.
22:12
S1: So don't call in. But in just a few moments,
22:14
S1: we're going to get to some questions that we lined
22:17
S1: up in advance that I know you'll find very interesting.
22:20
S1: But let me take a moment just to invite you
22:23
S1: first to be a supporter of this ministry here at
22:25
S1: Faith Fi. You know, we bring you this broadcast every
22:28
S1: day as a listener supported ministry only because of your
22:32
S1: generous support. So maybe you listen regularly. Perhaps you count
22:37
S1: on this program. Maybe you've been able to apply some
22:39
S1: of the wisdom from God's Word that you've heard in
22:42
S1: your financial life, or it's just help you to be
22:45
S1: that wise and faithful steward, and you'd like to be
22:48
S1: a part of our team. Well, one way you can
22:50
S1: do that is by investing in this work through a
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S1: one time gift, or even by becoming a faithful partner.
22:56
S1: I just invite you to join us on this journey.
23:00
S1: When you head to Faith fi.com and click give, a
23:02
S1: gift of any amount would be a big help. Again,
23:05
S1: that's faith fi.com. And just click give and let me
23:08
S1: say thank you in advance. Your gift will make a
23:11
S1: huge difference. All right, let's head back to the phones
23:15
S1: before the break. We were talking to Lynn in Louisiana.
23:18
S1: She's got a couple of businesses. She and her husband, uh,
23:20
S1: a service business, a rental business. The service business is
23:24
S1: on its way to being completely paid off or already is.
23:29
S1: And they're looking to sell it to their son that
23:33
S1: runs it. The rental property is going to be really
23:35
S1: paid off in December. It'll be worth a couple of
23:37
S1: million dollars. They want to sell it, but they don't
23:40
S1: want to pay a lot of taxes. And just wondering
23:42
S1: the best way to do that. And I was saying,
23:44
S1: even though I understand your concern about owner financing, there
23:48
S1: is a way to do that, especially if you get
23:50
S1: an attorney involved and kind of deal with all of the,
23:53
S1: the various issues and personal guarantees and, and buyer defaults
23:58
S1: in advance and check the buyer's credit worthiness. But I
24:01
S1: would say, you know, that's probably your one of your
24:04
S1: best tools to spread out that tax hit that you're
24:08
S1: going to take on that. I would say second, you know,
24:11
S1: get your tax basis before doing anything. You may already
24:14
S1: know it, but, you know, understand what that basis is.
24:17
S1: And because it's a rental depreciation matters, of course. But
24:21
S1: I think, you know, knowing exactly what you are going
24:25
S1: to have to pay. Um, and really looking at those, uh,
24:29
S1: those details is going to make the decision much clearer
24:32
S1: on the front end. Don't overlook charitable planning either. The
24:36
S1: extent to which you have charitable intentions could allow a
24:39
S1: lot of this, even, you know, by giving a portion
24:42
S1: of the property away before the sale could allow you
24:44
S1: to avoid tax on it altogether. And maybe you do
24:47
S1: several years worth of giving instead of out of checking
24:51
S1: or savings like you would have done. Maybe you do
24:53
S1: it from the sale of this property, and you can
24:56
S1: give a percentage of that property to a donor advised
24:58
S1: fund before the sale. And then that portion, you would
25:02
S1: not pay any capital gains tax on, and you could
25:04
S1: give it away over time based on however you were
25:07
S1: planning to give charitably anyway, and maybe you just replace
25:11
S1: it with the proceeds from the sale or at least
25:13
S1: part of it. So, uh, is that helpful though? Lynn.
25:16
S5: Yes, yes, that's a, that's a really good thought because
25:19
S5: we do a lot of charitable giving. So that would be, uh,
25:23
S5: I guess I didn't realize you could do it in
25:25
S5: that manner.
25:26
S1: Yeah. And our friends at the National Christian Foundation could
25:29
S1: be a real help here. So you could go to
25:31
S1: NCF giving.com. Uh, it was founded by Larry Burkett and
25:35
S1: Ron Blue. You know, they give away billions every year.
25:38
S1: It's the largest Christian charity, but they exist to serve
25:42
S1: believers in their giving intent not to formulate their own
25:46
S1: giving strategy. So they're just the the vehicle. And if
25:50
S1: you opened it, what they call a giving fund, it's
25:52
S1: essentially a donor advised fund. You could, before the sale,
25:56
S1: gift a portion of this property, whatever percent you want
26:00
S1: to your donor advised fund. And then when it's sold,
26:03
S1: that portion would immediately fund the donor advised fund, would
26:07
S1: skip the capital gains. And then just like a checking
26:10
S1: account online, you'd log in and whenever you want to
26:12
S1: gift it out to a 501 C three ministry, your church, um,
26:17
S1: you know, a couple of clicks of a button and
26:18
S1: it's gone, but it doesn't have to happen in that year.
26:22
S1: You can do it over whatever time period you want,
26:24
S1: and the extent to which there's money in there that's
26:27
S1: going to be there for a while. You can even
26:28
S1: invest it inside the donor advised fund. Now the returns
26:32
S1: just create more money for giving. You can't pull it
26:35
S1: out for your own use, but it's a really effective
26:37
S1: tool and it's very inexpensive.
26:40
S5: Okay.
26:41
S1: Yeah.
26:42
S5: All right. Well thank you.
26:43
S1: All right. Lynn, listen, all the best to you and
26:45
S1: your husband. You guys, I think, have built quite a
26:48
S1: portfolio here. And I love that you're being really thoughtful
26:50
S1: about how to structure this to be a good steward,
26:53
S1: save on taxes and, uh, you know, be wise in
26:55
S1: your estate planning and giving call anytime if we can help. Uh,
26:58
S1: let's go out to Texas. John. Go ahead sir.
27:01
S6: Hey, how you doing today?
27:03
S1: Great, thanks.
27:03
S6: I really enjoy your show. You know that? You guys
27:06
S6: got so much good information. Uh. Thank you. Um, but, uh, uh, the, uh,
27:11
S6: my my my thing is, I, I'm, I'm about ten
27:15
S6: years out from retirement, you know, but, uh, when I
27:18
S6: started kind of getting rid of that, we have, you know,
27:22
S6: and consolidate it and, uh, start doing improvements on my house.
27:26
S6: And I went to, um, my house is paid off.
27:29
S6: I want to take some equity out. I just want
27:31
S6: to know what the best option would be to do that.
27:35
S6: Would it be a HELOC or an equity, uh, plan or,
27:40
S6: you know, just, uh, a conventional, you know, uh, mortgage loan.
27:45
S6: I'm not too sure what are the benefits of each?
27:48
S1: Yeah, yeah, it's a, it's a great question. And I think,
27:52
S1: you know, the goal is you don't want to enter retirement,
27:56
S1: you know, with a big debt. You want to keep
27:58
S1: your fixed expenses manageable. And so let's try to borrow
28:02
S1: as little as we can. Uh, and the HELOC is
28:04
S1: a great way to do that home equity line of
28:06
S1: credit because, you know, the improvements, uh, probably are going
28:12
S1: to have costs that come in stages. And that's really
28:15
S1: one of the best features of the HELOC is you
28:18
S1: get the line, but you don't have to take it
28:21
S1: until you need it. And there's a variable rate, which
28:25
S1: is good because rates are elevated right now, and we
28:27
S1: expect over the next few years for rates to slowly
28:30
S1: come down and you'll get those lower rates with that
28:33
S1: variable versus the fixed rate. But the key idea is
28:37
S1: I think you borrow as little as possible. You don't
28:39
S1: borrow it till you need it, and then you focus
28:41
S1: on paying it back so you can get back to
28:43
S1: a place where you're debt free versus the home equity loan,
28:48
S1: which is a, a known one time amount that you
28:51
S1: get at closing and a fixed rate. And then a
28:54
S1: new mortgage would be, you know, they're going to typically
28:56
S1: have minimums. So, you know, that would be where you
28:59
S1: have a very large borrowing need requiring a long repayment period. But,
29:04
S1: you know, hopefully that's not the case here, which is
29:07
S1: where I think the HELOC is, is best suited. And
29:10
S1: then obviously smaller improvements wherever you can support it out
29:13
S1: of current cash flow, that would be even better. But
29:15
S1: you don't want to drain your liquidity. You want to
29:18
S1: keep plenty of reserves. And so again, that's where I
29:21
S1: think the HELOC would be the winner here.
29:24
S6: Okay. Yeah, that really helps out, you know, because my
29:27
S6: plan is to, to take it out. You know, they
29:30
S6: give 30 year or 15 years. But, you know, my
29:33
S6: plan is to double up on my payments for maybe
29:37
S6: five years. So yes, as quick as I can.
29:40
S1: I think that's great. Yeah. And that that would really,
29:42
S1: I think, support the HELOC. And I love that idea
29:45
S1: that while you're working, you got good cash flow. Let's
29:47
S1: try to really knock this thing out so that you're
29:50
S1: entering retirement debt free or close to it. And, you know,
29:54
S1: we're keeping those fixed expenses manageable. Uh, John, great question.
29:58
S1: We appreciate your call. If I can help further, let
30:00
S1: us know. Uh, let's go to Arkansas. Hi, Rob. Go ahead.
30:03
S7: Okay, so I got a question to ask you. Then
30:05
S7: I want to do a follow up statement. Okay. Okay.
30:08
S1: Uh, by the way, let me just tell you, I've
30:09
S1: got 30s. So give me the question and then I'll
30:12
S1: answer it on the other side of the break.
30:14
S7: Cool. Okay. The question is, is you were talking about
30:17
S7: not using the same password. What I wanted to know
30:20
S7: is that on all my accounts and everything, I use
30:23
S7: my fingerprint. How secure do you think that is?
30:26
S1: Ah, yeah. Uh. Definitely secure. It's a good security practice.
30:31
S1: It's much better than leaving your phone unlocked or relying
30:35
S1: on a simple pin. It's not enough by itself, but
30:39
S1: I like it. It's strong. That paired with a strong
30:42
S1: password of at least six digits is a good baseline.
30:45
S1: We'll pick up the rest of your question on the
30:47
S1: other side of the break. Much more to come. Just
30:49
S1: around the corner. Stick around. So glad to have you
31:05
S1: with us today on Faith and Finance Live. Our team
31:08
S1: is away today, so don't call in. But we lined
31:11
S1: up some great questions in advance and we'll be going
31:13
S1: to those here in just a moment. Let me also
31:16
S1: remind you that the advice that I give each day
31:18
S1: on this program is general in nature. We offer principles
31:23
S1: and ideas that apply at a high level. They are
31:26
S1: not personalized. So that's why you should always seek professional
31:30
S1: financial advice. And if you'd like to find a professional
31:33
S1: who shares your values, we of course, here at Faith
31:36
S1: and Finance Live recommend the Certified Kingdom Advisor designation. These
31:40
S1: are men and women who've met high standards, and they've
31:43
S1: been trained to bring a biblical worldview of financial decision making.
31:47
S1: You can find 1@faith.com. Before the break, we were talking
31:50
S1: to Rob about security and identity theft. And Rob, you
31:54
S1: were asking a great question about the fingerprint security. And, uh,
31:57
S1: you know, just to recap, I think that's a great idea.
31:59
S1: That is much better than leaving the phone unlocked, either
32:03
S1: the fingerprint or the facial face ID that comes with
32:08
S1: the Apple devices, paired with a strong password of at
32:11
S1: least six characters, I think is a great starting point. Obviously,
32:15
S1: you've got to go beyond that, and we've talked about
32:17
S1: some of those best practices early in the program, but
32:19
S1: did you have a follow up question on that or
32:21
S1: another thought?
32:22
S7: Two things I wanted to touch up on that real
32:25
S7: quick that, uh, yes, uh, some of my accounts, uh, do,
32:28
S7: do a two step verification, but I also have one
32:31
S7: account that automatically forces me to password every six months.
32:36
S7: And I think that's a good step. Uh, it's sometimes
32:40
S7: it's hard for us older people to remember passwords and everything, but, uh,
32:44
S7: so the other one thing I wanted to touch on
32:47
S7: Rob was that, uh, I've been getting some, uh, scam alerts. Uh,
32:52
S7: they claim to be from TransUnion and the other two
32:55
S7: credit bureaus, but they're saying that a change has been
32:58
S7: identified on your TransUnion credit report. Click on this website
33:03
S7: to do that. I do not suggest anybody does that,
33:06
S7: because that tells me that they're attempting to get your, your, uh,
33:11
S7: your Social Security number and any other valuable information that's
33:15
S7: going to break the security for you to be scammed
33:18
S7: on and somebody gets your money.
33:21
S1: Oh, it's such a great point, Rob. It can't be
33:23
S1: said enough. I'm glad you called that out because, yeah,
33:25
S1: I mean, the best practice here is just don't ever
33:28
S1: give any information to anyone, phone, text, web where you
33:33
S1: didn't initiate the contact using known and verifiable contact data.
33:40
S1: So unless you're getting the phone number from the trusted
33:43
S1: website and calling customer service yourself, or you navigating in
33:47
S1: your browser, not clicking a link, but, you know, to
33:50
S1: your institution's primary domain, and then engaging with them further
33:55
S1: or reaching out to the Social Security. Yeah. Inbound requests
33:59
S1: for personal information is just an automatic no, no matter
34:03
S1: how good it looks, don't trust the caller ID by itself.
34:06
S1: Don't trust an email that looks legit or somebody that sounds,
34:11
S1: you know, like they they are legitimate because even the
34:14
S1: AI now is making these calls, whereas the, you know,
34:18
S1: broken English and, you know, the problems with the emails,
34:21
S1: you could spot these things. They look identical to the
34:24
S1: real thing now. And so we just need to, you know,
34:27
S1: not respond at all to those inbound requests. So that's
34:30
S1: a great thought, Rob, and I appreciate you calling that
34:33
S1: out today. Thanks for being on the show, sir. Let's
34:35
S1: head down to Florida. Jay. Go ahead.
34:37
S8: Hi, Rob. I know the show's coming up to the end,
34:41
S8: so I'll try to be quick. Um, so my question
34:43
S8: is concerning, uh, the correct way to set up a
34:48
S8: 401 K with your employer. The correct way to set
34:51
S8: up your contributions when you started later in life. So I'm,
34:56
S8: I'm 53 and I've only been contributing to this 401
35:00
S8: K for a little over two years. I don't, I've
35:03
S8: never had a 401 K. So this is the only
35:06
S8: money that I have in there. Yeah. So uh, when,
35:10
S8: we originally set it up, I set it up as
35:13
S8: pre-tax because the um, the representative, the advisor for the,
35:18
S8: for the company said, yeah, you don't, you don't have
35:20
S8: a lot of money, you're not going to contribute a lot.
35:22
S8: So that's fine. Pre-tax. So now I'm coming up on, uh,
35:25
S8: two and a half years and I've got more than
35:27
S8: $22,000 in there, but I've always been contributing pre-tax. So
35:33
S8: the thinking, the thinking was that, okay, I'll be working
35:35
S8: for another, you know, ten, 15 years when I retire,
35:39
S8: I won't be working. So my tax bracket will be different.
35:44
S8: So why not just contribute now all you can even,
35:48
S8: you know, pre-tax because then, uh, it won't hit that
35:52
S8: hard when I start withdrawing, uh, after I retire because
35:56
S8: my tax bracket will be lower. So, uh, you know,
36:00
S8: that's how we set it up now, but I am
36:03
S8: so unclear as to whether that is the appropriate way
36:06
S8: to have set it up.
36:07
S9: Yeah. And if I.
36:08
S8: Should change it to deduct the taxes before, even though
36:11
S8: I only have ten years of contribution.
36:14
S9: Yeah.
36:14
S8: Maybe available.
36:16
S1: Yeah, it's a great question. And the conventional wisdom is
36:18
S1: just what you said, that older workers should be funneling
36:22
S1: most of their contribution in traditional accounts because they're at
36:25
S1: the peak of their earning years. And so that tax
36:28
S1: deduction is more valuable today with your earning power and
36:33
S1: what your wages are versus in retirement, when you pull
36:37
S1: it out of the pre-tax and, you know, hopefully you're
36:40
S1: at a lower bracket because you're not earning as much
36:42
S1: because now you're retired. The only thing that doesn't factor
36:46
S1: in is the risk of rising tax rates, which most
36:50
S1: people would, you know, believe just based on what we know, that,
36:54
S1: you know, we're probably at the low end of what
36:57
S1: the potential tax rates are in the future under a
37:01
S1: different administration. And there's no way to know what those
37:04
S1: are going to be in the future. But there's a
37:06
S1: decent chance that they're going to be higher and maybe
37:08
S1: quite a bit higher than they are today for a
37:11
S1: variety of reasons. And this was the subject of a
37:15
S1: study from some researchers in the University of Arizona several
37:19
S1: years ago. And they were looking at this. They studied
37:22
S1: this very thing, and they came up with a rule
37:24
S1: of thumb that produced with the thousands of people that
37:29
S1: they looked at their actual situation that produced a near
37:33
S1: ideal result, and that was to do a combination of
37:37
S1: the two. And what their rule of thumb is, is
37:40
S1: that you add 20 to your age, and then you
37:43
S1: put that percent into the traditional account, and then you
37:47
S1: put the rest in the after tax. So at 50
37:51
S1: you would add 50. You would add 20 to your age.
37:54
S1: So you'd come up with 70. So in your case, 70%
37:57
S1: would go into the pre-tax and 30% would go into
38:01
S1: the after tax. And that would just give you a
38:03
S1: second bucket of funds that's growing, that would give you
38:06
S1: something to pull from in the event during retirement, if
38:10
S1: you were in a we had much higher tax rates.
38:13
S1: Does that make sense?
38:14
S8: Thank you. It does. Thank you Rob.
38:16
S1: All right. God bless you, Jay. Thanks for calling. Let's
38:19
S1: go to Minnesota Danny. Go ahead.
38:22
S10: Hey, Rob. I just started collecting Social Security. I'm 63,
38:26
S10: so I had to take it for physical reasons. Okay.
38:30
S10: The understanding of not paying taxes on it. How does
38:33
S10: that work exactly? So if I'm getting $1,000 a month,
38:37
S10: do I have to pay 20 or 30% of that
38:40
S10: or is it tax free?
38:41
S1: Yeah, it's a great question. So, um, there's a little
38:44
S1: confusion about that because President Trump was campaigning on this
38:48
S1: idea of eliminating taxes for Social Security, but once it
38:52
S1: made its way through into what is now the one big,
38:55
S1: beautiful bill law, it didn't quite come out the way
38:58
S1: he intended. Uh, so essentially what happened is the new
39:02
S1: law created a special $6,000 senior tax deduction. And the
39:08
S1: reason that a lot of people say that it eliminates
39:11
S1: tax on Social Security is because that $6,000 senior tax
39:16
S1: deduction that's new effectively wipes out Social Security for many retirees.
39:22
S1: And so that specific deduction is strictly limited to taxpayers
39:27
S1: 65 and older. Um so since you're only 63, you're
39:33
S1: subject to the old rules until your next birthday. And
39:37
S1: so that means if your provisional income, which is your
39:39
S1: adjusted gross income, plus any nontaxable interest, plus 50% of
39:45
S1: your Social Security, if it's over $25,000 as a single
39:50
S1: filer or 32,000 as a married filer, then you will
39:55
S1: owe taxes on up to 85% of your benefits.
40:00
S10: So $1,000. I'm looking at only $200 to live on. Basically.
40:05
S1: Uh, help me with that.
40:07
S10: Well, if I'm making $1,000 in Social Security, you're saying
40:10
S10: I have to put aside. I can get taxed for 85%
40:14
S10: of it.
40:14
S1: Well, it would be considered taxable income, but I don't
40:17
S1: think you're going to go over the threshold. So you're
40:19
S1: not working any longer. Right.
40:21
S10: I am doing very minimally though. Yeah. Way under the
40:25
S10: allotted amount. So I don't go over that, you know.
40:27
S1: Yeah. So are you a single filer or married filing jointly?
40:33
S10: Uh, jointly. Yeah. Married.
40:34
S1: Okay. Yeah. So you have up to 32,000 in income
40:39
S1: or do you have. If so, if you were to take.
40:41
S1: So you're getting how much are you getting from Social Security?
40:44
S10: Yeah. 1091.
40:46
S1: Okay. So 1000 1091 is your Social Security. We take
40:51
S1: half of that. Okay. And so that's $545. And we
40:56
S1: multiply that by 12. That's $6,500. Okay. Well you get
41:00
S1: up to 32,000 in provisional income before you pay any
41:05
S1: taxes on your Social Security. So are you getting beyond
41:08
S1: your Social Security another $25,000 in income?
41:13
S10: No, not even close.
41:15
S1: So then you're way under, which means your your Social
41:17
S1: security is not taxable at all.
41:20
S10: But then my wife's income would be included in that
41:23
S10: because we file jointly. Correct.
41:25
S1: Absolutely. Yeah.
41:27
S10: Yeah. And she makes under probably under 40,000 a year.
41:31
S10: So we're living very minimally. And that would affect it.
41:35
S1: Yeah. But but what you're telling me is if she
41:37
S1: makes around 40 and then you've got another 6500 because
41:40
S1: we count half of your Social Security, uh, you're going
41:43
S1: to be over the 32,000. So you're a poor some
41:46
S1: portion between 50 and 85% of your social security is
41:50
S1: going to be taxable. Now, that doesn't mean it's 85%
41:53
S1: of your Social Security. It means 85% of your Social
41:57
S1: Security is taxable as income. But if you're in the 22% bracket,
42:03
S1: that's just 22% of that portion. Okay. So it's not
42:06
S1: the whole thing. It's just going to be added to
42:08
S1: your income. So here's what I would recommend you do.
42:10
S1: I'd get with a CPA and just have that CPA
42:15
S1: estimate your tax liability because you don't want it to
42:17
S1: catch you by surprise, but it's not going to be
42:19
S1: the full amount. It's going to be a very small
42:22
S1: amount of a portion of your Social Security. Thanks for
42:26
S1: your call today. Hey, let me say a big thanks
42:28
S1: to my team today, Amy, and to here. And Dan
42:31
S1: and Jim couldn't do it without him. Thank you for
42:33
S1: being along with us today. Faith and Finance Live is
42:36
S1: a partnership between Moody Radio and Faith fi. By the way,
42:40
S1: if you want to check us out on the web,
42:41
S1: you can do that at faith fi.com. Download the Faith
42:44
S1: V app while you're there. It's great to use for
42:46
S1: your budget in the meantime. May the Lord bless you
42:48
S1: and we'll see you next time. Bye bye.