Secret Consumer Scores

We all know that our FICO score has a huge impact on our finances. But did you know another number could be just as important and it's all very hush-hush? That's right, it's called your secret consumer score.

And most of us didn't even know or don't even know that we have this. Today, Kingdom Advisors President Rob West explains this little-known measurement and how it can affect your money. Then we'll take your calls at 800-525-7000.

800-525-7000. I'm Steve Moore. Secret consumer scores, next right here on MoneyWise Live. Alright Rob, this is a little eerie, a little spooky, learning that not just credit scoring groups are watching us. We sort of knew that, but others are keeping tabs on us as well as consumers. Well it is a little eerie, but I think most of us know that our buying habits can affect what ads we see, especially when online shopping. Somebody or some computer program is always watching.

But what can be unsettling is realizing that these consumer scores can impact other things, not just our buying decisions. And that this is really under the radar. In fact, Steve, another name for this is secret surveillance scores.

Wow. Okay, so who's doing the surveilling? Well, several companies in this space with names you've probably never heard of. Sift is one, Zeta Global is another, and Retail Equation is still another. You see, they compile huge amounts of data on you, mostly from online sources. And from that, they determine your secret consumer score, which they then sell to retailers and others who want information on your buying habits. Sift is probably the best known of these companies. They specialize in protecting companies against fraud, which of course isn't a bad thing in and of itself. Sift says it concentrates more on transactions than people.

Okay, what about the others? Yeah, Zeta Global rates your value as a customer and retailers use that data to determine what type of services they'll offer you and how they'll treat your requests and even complaints. They look at how many times you call a customer service line and then if you've recently been on a competitor's website. Retail Equation is another one that tries to identify customers committing fraud. Big retailers use it to determine whether they'll allow you to return an item you purchased. How do you commit fraud by just returning an item? Yeah, I imagine by things like using an item for a period of time without any intention of keeping it, possibly making false claims about defects. If you do that several times, it starts to lower your score. Return fraud actually is estimated to cost companies, listen to this, nearly $25 billion a year.

So that blue suit I bought for just one wedding and then sort of gave it back. Okay, I see I'm already on the list. What else should we be concerned about? Well, your secret consumer score could be used to determine what offers you receive, maybe even the prices you see when shopping online. It's also another measurement that some employers are using when making hiring decisions, factoring in where you live and what internet browser you use as indicators of whether you'll be a good employee. Talk about profiling. And some landlords are also using it to determine whether you're likely to pay the rent on time and how much you can afford in the way of future rent increases. Oh, you know, now it's really starting to have a financial impact. That's right.

And there are some other examples. A healthcare provider, Steve, and health insurance companies may use your secret consumer score to assess your value as a quote unquote investment. Not sure how that works since that industry is heavily regulated, but they're watching for some reason. And auto insurance companies could raise your rates if you use driving apps like EverDrive and DriveSmart and then you lower and then you score low with them indicating poor driving habits. Wow. Well, what, if anything, can we do about these secret consumer scores?

Yeah. Well, this is where this score really differs from your credit score. You can do a great deal to improve your credit score, like paying your bills on time, keeping your balances below 30 percent of your limit on credit cards, things like that. But with the secret consumer score, it's not as clear cut. Experts recommend, though, a few ideas. First, make sure you really shop around before making a major online purchase and be wary of ads you see while doing it because they're not likely to be the best deals out there. When you shop online, try using a privacy window in your browser so your shopping can't be tracked.

That way, the offers you see may not be based on your secret consumer score. And then number three, well, I'll tell you that one right up to the break. All right. Your calls next on MoneyWise Live with Rob West, 800-525-7000. Call right now.

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It is MoneyWise Live with Rob West. I'm Steve Moore. We're taking your calls today on anything financial, 800-525-7000. And if you're wondering if we have these secret consumer lists in front of us and whether your name's on it, well, we don't have these lists. We don't even know who keeps these lists. We don't, unfortunately.

Anything else? Yeah, but we did try to give some recommendations here. As we said, you really can improve your credit score by just trying to lean into, most importantly, paying your bills on time and a few other things. With that secret consumer score, it's not as clear-cut. We mentioned three things.

Well, the first two we said. Number one is make sure you really shop around before making a major online purchase and be wary of ads you see while doing it because they're not likely to be the best deals out there. And when you shop online, try using a privacy window in your browser so your shopping can't be tracked.

All modern browsers have the ability to toggle on a private browser and that way the offers you see may not be based on your secret consumer score because they may not know who you are. And finally, think about adjusting your privacy settings for your smartphone to prevent background data from being shared. One thing I noticed today, because as you know, Steve, we have an app now, the MoneyWise app.

Go ahead and give a plug. It's out there in your app store. Go download it. It's a digital envelope system. But I was in there looking at it because we got another five-star review today, which I was excited about. And there's a new screen on your app download page that tells you exactly what information may be being collected about you by that particular app. And so this is part of Apple's desire to become more transparent around privacy. And we're starting to hear about when apps are collecting information about you, tracking your behavior, collecting data from you.

They want to disclose that. And that's a good thing because privacy is more and more important all the time. But no, you're not saying that because we designed and invented this app that we're telling the app to go out and dig up information on people. No, no, not at all. I'm just saying that's a new disclosure on every app that Apple has added that I just noticed today, telling you what information may be collected about you by that particular app.

Completely different from our app, which is out there and we'd love for you to go get. Okay. And if you are that person and you know who you are, if you went out knowing your mother-in-law was coming to town and bought that crock pot and then tried to return it, they know who you are and we know who you are and it's just going to be embarrassing if that information comes out. The question is, does your mother-in-law know? 800-525-7000.

Let's see, Anoka, Minnesota. Hello, Karen. Good to have you with us today. How can we help you? Yeah, I was just wondering how to determine when you need enough financial advisor. My husband thinks we should find one and I'm not sure we need one. And then my second question is, I know you say to use a kingdom certified advisor and to interview them, but I don't know what questions to ask.

That's great. Yeah, a couple of thoughts, Karen. First of all, when to get a financial advisor. You know, I think, I mean, first of all, we have to talk about the different types of advisors. So we've got financial planners, we've got investment professionals and we've got insurance professionals, tax and accounting professionals, and then estate planning attorneys. You know, when it's time to do your will, update your will. If you think you need a trust, not to mention health care surrogates and living will, durable power of attorney. Obviously, those things really important that you have an attorney and estate planning attorney that draws those up. That's really critical as to taxes and accounting for most people.

I recommend just to take full advantage of every deduction opportunity to minimize taxes and yet pay the full amount you owe. I recommend just about everybody, unless you have a very simple situation, use a tax professional when it comes to insurance. I think any time you're going out looking to acquire insurance, everything from life insurance to health or long term care, having an independent agent who can look across all the companies, find the highest rated company that's the best fit for you from a cost standpoint is really key. The rest is around financial planning and investments. And, you know, I think as you are moving toward retirement, especially when you're in your peak earning years, having a financial planner that you can sit down with, even if it's not an ongoing relationship, but doing a comprehensive plan and then maybe updating that a couple of years later, I think is really key.

Just to give you peace of mind that you are on track and that you know what your financial finish line is and that you're working toward a goal. I think the other role a financial advisor can play, especially with a married couple, is third party accountability. Just to have somebody as a sounding board to perhaps ask the questions that aren't being asked. If one person is a little more familiar with and comfortable with financial affairs, usually they're the dominant person in making decisions and the other person can feel lost. Well, having that neutral third party advisor that's asking both husband and wife, regardless of which one is more comfortable than the other, how they feel and whether they feel like their, you know, personality and values and desires are being reflected in the plan. That's really key because oftentimes that can be lost. And then I think finally, you know, when you get up over, I'm going to say 100,000 in investable assets, certainly 200,000 in investable assets, I think having a competent professional who can really help to make those investment decisions and build the portfolio, not based on their objectives, but based on your goals, objectives, values, priorities is really key because that's a lot of money.

And so you don't want to put that on autopilot. I think having that professional to bring the expertise alongside you is really, really key. So I know that's not definitive, but hopefully it gives you some idea of when you need an advisor and what type. Now, the questions to ask, we do have a guide. If you go to kingdomadvisors.com and you click find an advisor, you'll see a downloadable PDF that has a number of questions that you can ask.

Hopefully that'll be a helpful resource to you, Karen. I think in general, you want to know what experience do you have? What is your track record? If we're talking about investments, where do I fit among the rest of your other clients? Am I a small fish among the rest of your clients? And therefore I'm going to be perhaps passed off to somebody else.

And who is that? Or am I going to be a core client? How do you want to communicate with me? And, you know, here's how I want to be communicated with.

And is that OK? And I think the other thing is I would want to make sure that that advisor is spending a lot of time getting to know you and asking you questions as opposed to trying to sell you on their process or anything else. Because really, at the end of the day, an advisor is to reflect what's important to you in the context of competent biblical financial advice. So I know that's a lot of information, but I hope it's helpful to you. Karen, God bless you. Thank you so much for calling us today.

Fort Lauderdale, Sarah, we appreciate your patience and what's on your mind. Hello, can you hear me? Yes, ma'am. Hello, can you hear me? We sure can.

Can you hear us? Yes, thank you. First of all, I love, love your show. Amazing. Love the jokes. My question is, this is a great topic for me. Ken, I'm not familiar with the consumer secret report, but I am familiar with the regular credit report and I have an amazing credit score. My score is 830. Wow.

It's amazing. But what I wanted to ask you is, if you file for an insurance claim, which I have to do because we were replacing our kitchen and we found mold while the kitchen was being replaced and we had to file a claim. The insurance company treated us very nicely and they went ahead and covered it. But they also said that they were dropping people in our area.

So we got dropped after they covered us. What I have noticed is, is that now it's very hard to find insurance and they're nitpicking at everything. So the question I have is, could the consumer score have been affected and where can I get a copy? Yeah, unfortunately, it's not something you can just buy or download like you can with the credit score from one of the three bureaus where through AnnualCreditReport.com, according to the legislation that came out in 2019, they have to provide it to you and at no cost. It's not the case with the secret consumer score that we've been talking about today.

Unfortunately, it's a bit more under wraps and not something that has a consumer facing component to it. And specifically related to insurance, Sarah, our team couldn't find anything about insurance claims specifically affecting your secret consumer score. But I wouldn't doubt it. I mean, we already know that the score keepers are reporting to the insurance companies. So why wouldn't the insurance companies report back to them? Again, I don't know that specifically, but I'm just saying in general, I wouldn't be surprised.

So bottom line is, I wouldn't be surprised if repeated insurance claims could affect your score. But based on our research and putting this program together today, we didn't come across that specifically. Zeta, anything else we can help you with? No, that's it. Thank you. Have a good day. All right. Thank you very much. God bless. Yeah, just that information just isn't available to the general public.

Hence the word secret when we when we discuss this or if you look it up on Google. But hey, I think at this point we probably need to take a break. You're listening to MoneyWise Live. We are indeed very live today because it's Friday and Friday always has a special, you know, a special feeling about it. So we're especially happy to have you with us today. If we can help you with that as you prepare for the weekend, give us a call.

Eight hundred five two five seven thousand eight hundred five two five seven thousand. We'd love to chat with you today. Much more after this. The financial wealth you leave behind could be the best thing that ever happened to your loved ones or the worst. In splitting heirs, giving your money and things to your children without ruining their lives. Ron Blue explains why it's important to make these decisions now instead of forcing your heirs to do it later.

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That's Christian credit counselors dot org or call eight hundred five five seven one nine eight five. Hebrews four twelve says for the word of God is quick and powerful and sharper than any two edged sword. Here's Beth Moore with a quick word. I want you to look at that phrase for a second. Treat as holy because what God finally got through to me was this that the thing of it is I treat you as holy. You don't treat you as holy. You don't treat you as holy.

You treat yourself cheaply, like you don't matter much, like you're not worth much. I treat you as holy. I want to ask you today, do you treat yourself as holy? God's word says you are. God's word says I am. Do we treat ourselves as such?

I tell you, it began to change the way I thought, because I'm telling you, if we stand before the crossroad of a of a huge decision, they could be destructive for us. There's nothing like sitting and asking myself to do that. Would I treat myself as holy? To be in that, to sell out to that particular environment, even for a little while, is that to treat myself as holy? You know, I think every now and then God wants to say to us, it's all about trying to find somebody who will treat you special.

And you know what? The biggest problem you've got is that you don't treat yourself like that. Does anybody hear what I'm saying to them today? Our problem is not how other people treat us.

Our problem is how often we have mistreated ourselves. Do we treat ourselves as the people who have been chosen, sanctified in Him, made distinctive? Treat yourself as holy, He says. You've been listening to Beth Moore with a quick word. The online experience is now available at BethMoore.org. Join Beth for Now That Faith Has Come, a study of Galatians, at BethMoore.org. See you next time for another quick word with Beth Moore. And welcome back to MoneyWise Live. It's always great speaking with you, whatever your concern, question or problem. And here's our phone number.

We have some open lines at 800-525-7000. We've been talking about some secret stuff, Rob. Any additional information on this concept? Well, yeah. Our team did come across the way that you can request the reports on you from each of the companies that we mentioned today. We mentioned SIFT and Zeta Global, Retail Equation, a few others. We're going to post that in our show notes today. Give us until tomorrow to do that. But in some cases, it's an email where you actually have to send an email and request the information they have about you. In other cases, there's actually an online form where you can request your report. But I was just reading about it a little while ago and a reporter actually got their hands on their SIFT report. It was 400 pages long and included things like every interaction with somebody that they had contacted on Airbnb and all of their orders through an online order delivery system and what IP address they use. I mean, fascinating information, what's being collected about you.

Yeah, whether or not you turned in your homework in the fourth grade, everything you've ever done is there. And who knew? Who knew? Good work to you, Rob, and also for our director of looking into secret stuff. And that's Jim Henry, who really does a lot of research for us. Great information and we'll try to get all that posted, at least the contact information posted on our website by tomorrow sometime.

MoneyWiseLive.org Let's go south to Naples, Florida. Zeta, what's your question for Rob? Oh, hello. Hi. Thank you for your program. It has helped me a lot in many ways for years.

And I had learned to budget by listening to your program. Oh, that's great. Yeah.

Well, I have a question. Is there a safe way to lack my home title? And where do I go to do that? Yeah. Are you talking about a service like LifeLock or something like that? Yeah, you know, like protect your home title so that nobody will get their hands on it and then begin, you know, using it as equity for long. Yeah, interesting.

Well, here's what I would recommend. You know, you can freeze your credit report at no cost beginning in 2019. And so that's something you could do that would prevent anybody from opening a new credit line in your name without your permission. Essentially, what happens is a four digit PIN number will be attached to your consumer credit report file. So if somebody tries to open an account or take out a home equity loan against your home and assume your identity and try to do that impersonating you, they would. There's no doubt that whoever was looking to extend that line would want to pull a copy of your credit report. And when they tried to do that, they would be asking that person for the PIN number, which they would not be able to provide. And that would stop it in its tracks. So you would need to contact each of the three credit bureaus, Experian, TransUnion and Equifax, and tell them that you'd like to put a freeze on your credit report. It's going to create a little bit of a hassle if you ever wanted to open an account, but certainly worthwhile to stop fraudsters.

That's probably the best way, Zeta. I'm not familiar with anything specifically about your home title apart from home title insurance. And that's really the purpose of it. You know, there's been some fraud in this area recently. But, you know, I don't know that there's anything necessary beyond the typical title insurance that you would normally get when you buy a home. In terms of lifelock, the service that's provided that will run you between $10 and $30 a month, they offer a legitimate service and can be helpful. I would say, though, for me, I'd limit it to only those people who have actually had their identity stolen.

Bottom line is they really can't do anything you can't do yourself. You can monitor your own credit rating and credit report at annualcreditreport.com. You can freeze your credit reports, like I mentioned. So I don't think it's a necessary expense of $10 to $30 a month given that you can do it yourself and especially if you've not actually had your identity compromised.

Zeta, a lot has been said and written about this type of insurance, title lock, a title lock fraud and this kind of thing. The jury seems to be out. But most people agree, as Rob just said, that it's unnecessary and seldom, seldom ever is an issue or a problem. We're glad you called today. Great question. We'll be right back. Thank you from the bottom of my heart. I couldn't have had the procedure I needed without CHM's help sharing the bills. That letter from a member displays Christian Health Care Ministries purpose to glorify God and serve his people. CHM is the original non-insurance voluntary health cost sharing ministry, enabling its members to share the cost of each other's medical bills.

Call 800-791-6225 or visit chministries.org. How should we as Christians think about investing? What if we could invest our money in a way that aligns with what we believe? At Eventide, we believe it is possible to love God and love our neighbor in the very practice of investing. We design investments for performance and a better world so you can invest for the future with a sense of wholeness and purpose. We call this investing that makes the world rejoice.

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More at moodypublishers.com. Siri, I need some help. What's up? Well, sometimes I feel like I can't get a handle on my money. I mean, where does it all go?

Hmm. It sounds like you need the MoneyWise app. It's a free app that will help you plan your budget and track your spending, like the $3 you spend every morning on coffee.

Well, not every morning. You'll also get access to free biblical financial advice. Sounds awesome. Let's do it. Okay. Searching for MoneyWise on the App Store.

Learn more at app.moneywise.com. With SRN News, I'm John Scott. Governors in some states have called out the National Guard, declared states of emergency, and closed their Capitol buildings over concerns about potentially violent demonstrations. Though details remain murky, demonstrations are expected at state capitals beginning on Sunday and leading up to President-Elect Joe Biden's inauguration on Wednesday. President-Elect Biden will use the Defense Production Act to expand the production of the COVID-19 vaccine and vaccination supplies as part of a wide-ranging plan to deliver on his pledge to vaccinate 100 million people in his first 100 days. Biden's first and perhaps biggest challenge in getting there will be addressing vaccine shortages in health systems across the United States.

Stocks closing lower on Wall Street, the Dow fell 177, the Nasdaq off 114 points, and the S&P was down 27. This is SRN News. Whether it's saving, giving, getting out of debt, managing what you have, investing what you have, we're here to discuss it with you and to help you with it if we may, give us a call first, 800-525-7000.

Let's go to, let's see, how about High Ridge, Missouri. John, welcome to the program. Yes, sir. Thank you for having me. You there, buddy? Yes. Can you hear me? Yes, sir. Go right ahead.

Okay. My wife is getting ready to retire, and she has a 403b and a 401k. And praise God, we are debt-free, but we have some investment opportunities.

And I was wondering if, should we go with like a line of credit, or should we take out a loan, or should we get into that retirement, or that, yeah, that retirement? Okay, so let's talk through this. You said your wife is retiring soon. Are you continuing to work?

I am. Okay. And how far away is her retirement? Her retirement is in one week. Oh, wow. Okay.

Tell her congratulations. What about you? How long do you plan to continue to work?

I have at least another 10 years. Okay, great. And what has she amassed roughly in these retirement accounts? Do you know? About $420,000.

Okay, wow. A significant amount of money. And what does she believe God has for her in this next season? Is she going to continue to work part-time somewhere else?

Just perhaps do other things? Yeah, she's already filling her calendar with volunteering at our church. There is a couple of food pantries in our area, and her father is in his 90s, so she's got time there. She'll be able to stand with him as well. And we have a new grandchild on the way. Wow, she's going to be busier than she's ever been, I suspect. She is. All right, have you run a budget based on your current expenses and how that will relate to what your new income will be after she stops working?

We have. Okay, and what is the shortfall? There actually isn't a shortfall. There is about $1,500 a month that we will have to be able to continue to do whatever. I mean, if that would go toward a payment or, you know, I'm not exactly sure.

Maybe we wouldn't have to take out a loan or a line of credit. Yeah, so what I'm hearing is she's going to stop working, she's no longer going to collect a paycheck, but you're still going to have $1,500 a month surplus with only your paycheck, is that right? Well, and whatever she would draw from that 401k.

Okay, I wasn't factoring that in. So how much were you planning on pulling out each month from the 401k? About $2,500. Okay. Yeah, that's a little more than I'd like to see you take. What I'd rather see you take is about $1,400 a month, $1,000 less, and that would be equal to about 4% a year on that $420,000.

Do you all have a financial advisor, an investment professional you work with? We are looking into that. You know, there's Kingdom Advisors not far from us.

Great. I've been listening to your show for a lot of years, and we were looking at going to them. Yeah, here's what I'd like to see you do. Take a hard look at that budget and really look for areas you can, you know, perhaps dial back on. Not that you necessarily have to, but if there's some obvious places, you want to get your expenses as low as possible. The good news is that based on 4% a year on $420,000, you should be able to pull out $1,400 a month without a problem and never impact the principal if it's managed on that basis to generate income. And, you know, there'll be a period of time where the stock allocation is down if the market is down, but you don't need to pull any of that out.

You'll let it ride. And over the long haul, you should be able to average that 4% or 5% a year, which will give you that $1,400, $1,500 a month. With that, you should be able to fund your lifestyle and still hang on to that $420,000. Now, that will not give you $1,500 a month extra, but it may give you $500 a month extra.

And I really don't see a need for a line of credit here, John. I mean, I think you all have plenty of assets. You're obviously still continuing to build your retirement assets over the next decade. And the good news is she can stop working, enjoy volunteering and serving in the church and family. You guys can convert her hard-earned savings to an income stream, and that should last the rest of your life. I think the key will be deciding at some point how much is enough and looking to increase your giving.

But at this point, I don't see the need for a line of credit, and I would definitely connect with that Certified Kingdom Advisor. John, are either of you getting close to retirement age when you would start to take the money from your Social Security? She is. She's two years away. Two years away. Well, Social Security is – well, she's 60 years old. Oh, okay. Yeah, so I think the key here is she's not going to experience any early withdrawal penalties on the 401K when she rolls it to an IRA.

But I would suggest she not take the Social Security at 62, which is going to mean about a 25% reduction from full retirement age, since you don't need the money, because you can be pulling that from the 401K and just let that continue to grow at about 8% a year. John, we wish you guys the best. It sounds like God has really blessed you, and you're moving in the right direction here.

Thanks so much. And if you're wondering about how to find a CKA, a Certified Kingdom Advisor, in your area, just visit our website, MoneyWiseLive.org, and look for the window maybe about halfway down the page, I think, and it says Connect – what's it say, Rob? Find a CKA. Find a CKA.

Okay. And if you're looking for Rob West's personal home phone number, well, you have to be on a special list to get that. Give me a call after the program today.

Hookset, New Hampshire. Deanna, thank you very much for calling. How can we help? Oh, hi. Hi. I have a question about – first of all, thank you for taking my call. You guys are great.

Thank you. I have a question about annuity. I'm 61. I'm probably going to retire at 67. I have a small 401K. I was advised to take half of that and put it in an annuity. I'm not real familiar with that. Is that wise?

Yeah, I don't know why you would do that necessarily. A 401K is essentially a tax deferral vehicle, so you get the tax deduction when the money goes in. It acts as like an umbrella. If you think of the taxes as the rain, the umbrella is over the assets, and they kind of bounce right off the side of the umbrella and don't touch the investments, which means the investments inside that 401K are growing without any drag of investments being paid on any profits you have along the way. Now, ultimately, the government gets paid because as you make withdrawals in retirement, it's going to come out as income.

You'll pay it federal income tax on it and state if you have it, but that's basically the way it works. Now, the annuity is kind of putting a tax deferral vehicle inside of a tax deferral vehicle. It's just not necessary. The only reason you do it is if you thought the investment returns, either in the protections on the downside or in the returns on the upside, were going to somehow be better than the 401K, but I just don't see it that way.

I think the cost in the investment strategies, not to mention the complexity of the annuity, is not as good as the investment options inside your 401K, so I just stick with the TSP personally. Diana, we hope that helps you. Thank you very much. We have to pause for a brief break, then we'll come back, take some more calls.

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Brenda, we know you've been holding a bid. I understand you may have to buy some boots in the coming days, huh? Yes, uh-huh. You're moving to Texas.

That's true. Cool. We are.

All right, good. Well, how can we help you with that move? My husband and I are selling our home in Florida and we're moving to Texas to live with our daughter and son-in-law and grandson in a multi-generational home. And our question is, we are going to give them some money towards the house and how do we do that tax-wise?

Because our name is not going to be on the mortgage. Hmm. What's the best way to do that? You're looking to give them part of the proceeds of the home you're selling in Tampa? Is that right? Yes. Yes, sir.

Okay. Yeah, well, as a couple, you can give each child up to $30,000 a year without having to file a gift tax form just based on the annual exemption of $15 each. Uh, $15 for you, $15 for your husband.

Are you looking to do more than $30,000? Yes, sir. And is it considered a gift if you're actually getting something in return?

Like, that's going to be our home. I mean, is that considered a gift? Okay, so basically they're buying the house? Yes, sir. Their name is going to be on the mortgage. Yeah.

Right. It still is a gift because you're not getting any title to that home, so you're essentially giving them a gift. They're going to turn around and take that gift and buy a home with it, and they're going to allow you to live there. You have no interest that's in that property that's coming back to you. So it is a gift, and then anything beyond $30,000 a year, you'd have to put against your annual lifetime gifting amount, which in 2020 was $11.5 million. Now, that certainly could change in the future, but clearly right now it's a number that's really high. So I think as you move forward, that's probably the best way to go, again, assuming you're not looking to take any interest in this.

You want to give them a set amount of money, and the first 30 would fall under the annual exemption, and then beyond that you'd have to fill out a gift tax form. Okay. All right. All right.

I hope I have the question. Okay, go ahead. I read up from an IRS, we can each give $15,000 to each of the children, so that would be $60,000, correct?

Well, $30,000 to each child from you and your wife times however many kids you're giving the money to. Right. Yes, sir. Okay. Yeah. All right.

That answers our question. Thank you so much. We appreciate it. Okay, Brenda. Yeah.

God bless you guys, and all the best in your move. I love it when husband and wife are both there, and they both get a chance at scooping you, Rob, just to make sure you know what you're talking about. All right.

And almost always he does. Almost. Gregory in Coral Springs, what's your question today? Hi, thank you for taking my call. God bless you and your ministry, guys. Thank you.

It's real quick. I'm a widow. I'm 61 years old. I have three grown children.

I own my home with which is about three quarters of it is I do have an equity. I just want to make sure that they get it. If something should happen to me, I do not have a will. And I was advised to do a trust in that way that they could just come aboard and take over the deed of something.

Lord would should call me home. And I was looking I was given fifteen fifteen hundred dollar that it would cost from an attorney at a state attorney. Would you say that that is about right? I'm kind of looking at how much it would cost me to do the trust is my question.

Yeah. You know, national average, I believe my team tells me is about 1000 to fifteen hundred dollars. So I think you're exactly right. Depending on your part of the country, South Florida is usually a little more expensive with most things.

So maybe on the higher end of that range at fifteen hundred would be about right. I think the question to ask is whether or not you need that revocable trust or a simple will could do the trick. I mean, obviously you can leave the home to the kids in your will would go through probate to be a part of the public record and and so forth.

But it doesn't you know, it would still get to them, assuming you had a valid will and force. Now, obviously, with a trust, there are some other benefits to consider. You avoid probate. And so, you know, the trust would make sure that that passes outside of probate. You know, it's not a part of the public record. So you can keep things private. You know, they're a little more costly. So, again, I would just talk to that estate planning attorney and just see whether a will will do the trick or whether there's some benefits you'd rather have with the trust.

But if you're looking to pick up a trust, it would probably run you somewhere around fifteen hundred dollars. Gregory, thank you very much. Quickly to Sandpoint, Idaho. Scott, what's on your mind, sir? Thank you for taking my call. Happy to.

God bless you guys. And I just recently retired and I my only income is Social Security and what I have for my 401k. I need to know if I have like one hundred and fifty thousand left on my home.

Should I pay my home off? Yeah, it's a great question, Scott. Congratulations on your retirement. What do you have in your 401k?

About eight hundred and fifteen thousand eight hundred eight hundred and fifteen thousand dollars. OK. And are you how much are you pulling out of that 401k to supplement your Social Security every month? I am pulling out about twenty six hundred dollars a month, but that's my RMD.

OK. All right. So that's what's required for you to be able to pull out. Four four percent is around twenty seven hundred. So you're kind of just under that threshold. Have you seen that portfolio continue to grow as you've been retired and pulling that twenty six hundred a month or is it declining?

I haven't been doing it long enough to know. OK. All right. Very good.

Well, I'm comfortable with that. Are you managing it yourself or do you have somebody else pick? I have somebody else managing it. OK.

Very good. And is that what do you actually need each month, Scott, to cover your bills? Is it a number less than twenty six hundred? No, it's more. OK. So when you add twenty six hundred Social Security.

I'm sorry. My Social Security and my my twenty six hundred dollar pretty much covers my expenses. I might be a little bit short.

A little bit short. OK. And so if you ever need more money, do you pull it out of the 401K or do you have an emergency reserve that you pull it from? I have an emergency reserve, but I would probably end up shortly pulling it out of my 401K. OK.

Very good. You know, I think you could go either way. I mean, you know, clearly, if you want to be debt free, you know, I think that's a great thing. It's going to reduce the overall amount you have need each month because the mortgage goes away. I would probably do it over a couple of years. I wouldn't want you to add one hundred and fifty thousand an income in one tax year because that's going to push at least a portion of your taxable income up into a higher bracket or two. And so by spreading that out over a few years, especially since there's not a problem here, meaning the Social Security plus the roughly twenty six, even if you bumped it up to twenty seven hundred dollars a month, you're still only pulling four percent a year out of that eight hundred and fifteen thousand, which is a number that should be very doable.

If it's invested properly with probably some modest allocation to stocks, maybe 30 percent, the rest in a fixed income strategy where it's really not taking a lot of risk, but generating enough in the way of the stock results plus the fixed income coming into the portfolio that you should be able to make that up. And that includes the mortgage. So, you know, you're on track to pay that off over how many years would you say you have left in the current payment plan? Oh, I know. Yeah, I just bought the house.

So I've got another twenty nine years to go. Okay. Okay.

All right. So I think obviously increasing that to say, what if you pulled out, you know, twenty five percent of that hundred and fifty thousand every year? I'd work with your tax preparer to figure out the ideal number. But I hear in your voice you'd like to be debt free. You'd like to have less that is required to fund your lifestyle every month. But as long as you don't feel a real conviction to be out of debt immediately and you know, you've got the assets that I'm comfortable with you waiting. I'd probably do it over the next four years just to not pay any more tax than is absolutely necessary.

But your tax preparer could run those numbers and wherever you come down, I'd certainly support. Scott, thank you very much. We appreciate your phone call today.

And with that, Rob, we're running close to being out of time. But I wanted to ask you about something, and that's something we mentioned very sparingly, and that is the need for the occasional financial help and donation. And we have a special tab on our Web site for those who would like to help us continue with this daily radio ministry.

Well, that's right. And we're so grateful for our callers, those that invite us into their stories via their questions every day. And we're so grateful to be a part of your life.

And many of you listen by appointment. You're here every afternoon when we're on the air. We just want to say thank you.

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You can set that up monthly or one time, whatever fits. And we would certainly be grateful. Thanks very much, Rob. And you and your family have a great weekend.

Thanks, Steve. MoneyWise Live, this program is a partnership between Moody Radio, MoneyWise Media and you. And thanks in advance for any financial help that you can provide us. Visit MoneyWiseLive.org. My thanks to our technical crew today, Amy, Dan, Aaron and Jim Henry. Hoping you and yours have a wonderful, safe weekend and that you'll come back and join us again Monday for a brand new edition of MoneyWise Live.