SECURE Act 2.0

This is Doug Hastings, Vice President of Moody Radio, and we're thankful for support from our listeners and businesses like United Faith Mortgage.

Let's call it the couch cushion dash. This is the moment when you need a tip for the pizza man, a few bucks for your kid's lunch, or you can't say no to the sweet eight-year-old and her Thin Mints. But you've got no cash and no other options but to tear apart the house searching for hidden money. It's Ryan from United Faith Mortgage, and it's funny how we can usually find a way to scrounge together a few bucks hidden around our house. Shame on you if it's from your kid's piggy banks.

For many listeners though, there's enough money sitting inside your home to buy a swimming pool full of Thin Mints. Home values have gone up across the country the last few years, leaving many of us with a good chunk of equity tucked inside our homes that we could cash out to use for life. If you'd like us to help, we are United Faith Mortgage. Remember the SECURE Act that President Trump signed into law in 2019? It made it easier for Americans to save for retirement. Now Congress is preparing to upgrade that legislation.

Hi, I'm Rob West. They're calling it the SECURE Act 2.0, and lawmakers are saying it will make it easier for the American family to prepare for a financially secure retirement. I'll talk about that first today and then take your calls at 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, where biblical wisdom meets today's financial decisions. Okay, so this new legislation is officially called the Securing a Strong Retirement Act of 2021. It's already been approved by the House Ways and Means Committee, and the full House is expected to vote on it soon.

Now, normally we wouldn't report on pending legislation because an awful lot of it just doesn't go anywhere, but the SECURE Act 2.0 has broad bipartisan support in both the House and the Senate, and stands a good chance of landing on President Biden's desk later this year, where he's likely to sign it. Retirement advocacy groups and the financial services industry also appear to favor the new bill. So what does it mean for you, and how might it change the way you save for retirement? Well, for one thing, it would allow you more time to salt away contributions to your 401k or traditional IRA before you have to start taking required minimum distributions and pay taxes on those withdrawals. The original SECURE Act raised the age for RMDs from 70 to 72, and that was considered a major improvement. But now, the SECURE Act 2.0 would raise the age for RMDs from 72 to 75. That would be extremely helpful because Americans are living longer, and the change would give more flexibility to build up a bigger nest egg before having to make withdrawals. And here's another key feature, almost hard to believe. The bill would exempt retirees from taking RMD for life if the sum of all of their retirement account balances is less than $100,000 when they reach age 75.

And that may not be the end of it. There may be growing support on Capitol Hill to get rid of the required minimum distributions completely, but don't look for that in this legislation. Alright, here's another key provision. It would actually push employers to make enrollment in retirement plans the default position for new workers. They'd automatically be enrolled, but could opt out if desired. Right now, employers aren't required to implement automatic enrollment, but research shows that those that do have higher rates of participation in retirement plans.

Many countries, such as the UK, Australia, and Israel, have mandatory retirement savings programs. Lawmakers say that automatic enrollment would get millions more workers starting to save for retirement at an earlier age, which is key for allowing investments time to grow. There's another provision in the SECURE Act 2.0 that would help workers pay off student loans while still saving for retirement. You see, it would enable workers to pay back their loans instead of contributing to their retirement plan, but they could still receive employer contributions. In other words, getting a so-called matching contribution without putting anything into a retirement account.

Imagine that! The legislation has a few other provisions as well. It would give additional tax breaks to low-income workers who save for retirement under the savers credit, and would peg that credit to inflation. The bill would also create a national database for lost retirement accounts. Yes, retirement accounts do get lost.

Tens of thousands of them, in fact. It happens when workers move from one company to another, and then another, and eventually lose track of the money they left behind. Currently, workers age 50 and up have a special catch-up provision for contributing to their retirement plans. The bill would increase those amounts and tie them to inflation. Now, while all this is good news for workers who have employer-sponsored plans, it doesn't do anything for the one-third of U.S. workers who don't. The solution, advocates say, is a national option for workers whose jobs don't come with a retirement plan. Several states have already set up similar programs on that level. So, there you have it. Everything you need to know for now about the SECURE Act 2.0. If it's signed into law as expected, it could help a lot more people save a lot of money for retirement.

And keep in mind, the big idea here is not to build bigger barns. It's to recognize we should set aside a portion of what God entrusts to us for the future so we can provide for our families and continue to give throughout our lives. Your calls are next, 800-525-7000. That's 800-525-7000. I'm Rob West. You're listening to MoneyWise Live, where biblical wisdom meets today's financial decisions.

Stay with us. Much more, including your calls, just around the corner. Thanks for joining us today on MoneyWise Live.

I'm Rob West. So glad you're all here with us today. We'll be taking your calls straight ahead.

Here's the number, 800-525-7000. We have some open lines. We'd love to hear from you. Whatever's on your mind, financially speaking, we'll run it through the lens of biblical wisdom and talk about how we can move you forward in the next couple of weeks. Talk about how we can move you forward to experience God's best. You know, when we recognize God owns it all and that we're a steward and that money is a tool and we should hold it loosely, it changes everything because every spending decision becomes a spiritual decision. It's a question of our money being an accurate barometer of reflection or reflection of what's going on in our hearts. You know, it says what we value.

It also really says where we've placed our trust. And, you know, in my experience, our financial journey is one of the key ways that God shapes our spiritual journey. You know, if we just look at the parable of the sowers, we'll see quickly that if something's going to choke out the word from having a 30, 60, 100-fold return in our lives, well, Jesus said to the disciples, the cares of this world, the deceitfulness of riches and the desires for other things.

I would say two and a half of those are probably money related at a minimum. So that means if something's going to dethrone God from first position in our lives, it might most often be money. And so if that's the case, what can we do to loosen the grip of money over our lives and really see it as a tool to accomplish God's purposes? Well, there's nothing better than generosity to really help us to posture ourselves to be givers so that God's provision doesn't stop with us, but we become a pipeline into God's activity. And yes, we're to provide for ourselves, but we're certainly to be generous to others to the ability that we have.

Remember, the Bible says each according to his ability. So it's systematic based on how God has prospered us that we certainly want to be a blessing to others around us. That's really the framework, if you will, through which we look at everything here on this program. And it's why we talk about money every day, not so we can build bigger barns, but so ultimately we can live in a more intimate relationship with the Father.

That's what it's all about. Hey, we want to take your calls and questions today. The number 800-525-7000. That's 800-525-7000. We're going to start today in Lockport, Illinois. Richard, your first step. How can I help you, sir?

Hi, thanks for taking my call. My wife inherited the money and she's so scared of the upcoming monetary collapse of our country that she's now doing a lot of prepper buying and buying lots of gold and silver. I was just wondering what you guys thought about that.

You know, I'm not a big fan of that approach, Richard. I mean, I understand that, you know, there are some challenges we have on the horizon, notably the spending that's going on in this country, the debt that we've got that's been growing astronomically. You know, as of late, you know, we've seen a bump in inflation. The Fed says it's transitory. That is that they believe it'll be short lived as a result of the economy reopening and supply constraints that will work themselves through the system and that they can manage inflation. That because corporate earnings are good and we have a strong consumer, we should see the market continue to move to higher ground. Now, could we get into a recession?

Absolutely. They tend to be cyclical and we haven't seen one apart from a self-induced recession that was very short lived last year as a result of the pandemic. But I still believe that the very best place for you to be with your long term money, and that's really the only money that should be invested 10 years plus, is in a properly diversified stock and bond portfolio. And beyond that, probably in real property and real estate where you could generate an income not in highly concentrated positions in gold or silver, the precious metals. Most financial advisors will tell you 10 percent max in precious metals.

I'd probably move that more toward five. Keep in mind, it may serve as a hedge against inflation and insurance against financial calamity. But the historical returns are just not there. You know, if you went back 200 years and put ten thousand dollars in gold, ten thousand in bonds, ten thousand in stocks, it doesn't even compare in terms of where you'd be today. And so you have less return over every pretty much every reasonable historical period. You could go back and track and you have more volatility. You know, the other challenge is if currency became absolutely worthless and you'd have to go to a pretty far extreme for that to be the case.

But let's play that out. We'd all have to resort to trading goods to survive. What value is gold at that point? You know, and it only earns money when you sell it. So it can't provide an income, which makes it a challenging investment. So I think at that point we have to say, OK, we should have a position because, again, it's a store of value when things are performing poorly or headed down, heading down. It tends to do better, although that hasn't really been the case as of late with the spike in inflation. And we should have really our serious long term investment money, I believe, in a stock and bond portfolio. When we get and when we get to a certain level, I would say, you know, at least north of one hundred thousand, maybe two hundred thousand in investable assets.

I would really seek some wise counsel in terms of having some professional management, unless you're skilled or really have the time to do that yourself by choosing your own mutual funds or ETFs or even individual equities. So I know I'm throwing a lot at you there, Richard. Tell me your thoughts. Well, I tend to agree with you. I tried to talk to her about her fears of the collapse of our monetary system because I told her, I said, if you're stuck holding this gold and no money to buy it back, what good is it to you? Almost like what you said about trading goods instead of money. But she said, whatever, whatever the system reset, it'll be worth a lot of money and then we'll be able to sell it. But I guess she's she's really planning on the total collapse of things.

Yeah, yeah. And obviously, if that were to play out, you know, everybody would kind of be in the same boat there and it would be very difficult with a bar of silver or even coins to turn that into anything. You know, you could obviously trade it, but, you know, it becomes challenging at that point. I think the key is to recognize that, you know, we are responsible to be found faithful with what passes through our hands. And if we and it may sound overly simplistic, but I believe if we follow these biblical principles, spending less than we earn, avoiding the use of debt, having some margin, setting long term goals and giving generously and we take a long term view. You know, I like seeing ultimately the United States succeeding and I believe we have the strongest economy in the world. Yes, we have some challenges. I think we'll address those. And, you know, could we end up with a debt crisis down the road? Well, we could if we continue on this trajectory, but I think we could work that through the system as well. We have a tendency to make the hard choices when our backs are against the wall. And, you know, I would just rather see you in that kind of position longer term with a properly diversified stock and bond portfolio or real estate as opposed to putting, you know, everything you have or a good portion of it in gold.

I just don't think the data is on your side in terms of how that will perform, even in the event of some real challenges down the road. So I would make that a matter of prayer at the end of the day, you and she together are the stewards of God's resources that have been entrusted to you. And so I want you to develop a conviction around that, seek some wise counsel and then move forward with confidence. And we appreciate your call today. Let's head next to Grand Haven, Michigan. Before we do, let me mention, though, we do have some lines open. We'd love to hear from you today. Whatever's on your mind financially. 800-525-7000. Julie is up next. Go right ahead.

Hi. I'm just turning 62 and I lost my husband two years ago. And I was wondering, I get his pension, I get my pension and I get his Social Security. This combined income is maybe thirty thousand a year. I'm not combined in both my husband and my pension due to the fact that I get health insurance through his pension and it's a very good health insurance.

Should I keep up with this pace? I do have at least six months to a year in emergency savings. I was just wondering what your thoughts on my situation.

Yeah. So specifically about the Social Security portion or the pension, help me with exactly what it is, the decision you're trying to make. Yeah, the pensions that I am. I do work with a certified financial planner and he goes to our church.

He's very good. And he allocates, you know, so much a month for myself. Everything's paid. I have no debt. The good Lord has really provided me in a good, stable income at this point in my life without my husband.

So I was kind of wondering, where should I should I keep going at what I'm doing? Maybe my income is maybe just about twenty five hundred a month. OK, very good. Well, you know, I think the key is, you know, as you collect his pension, you're not taking yours. And so at some you're wondering if at some point you should switch over to collecting your pension. Is that right? I am collecting my pension, his pension, my pension and his Social Security. OK, very good.

Yeah. Well, I mean, it sounds like you're on a great trajectory here. I mean, you're in a really strong financial footing. You've got your spending plan dialed in. Sounds like, you know, you have the income you need. I would continue earning those pensions as you have been. I like the fact that you have good, high quality health insurance. That's going to be key, especially as you move forward. And then, you know, you'll want to look at what to do with Social Security. You can, of course, continue to collect the survivor benefit and then apply for your own benefits when you reach full retirement age and take whichever one is more.

And so the Social Security administration will give you the benefit of whichever one is higher. But it sounds like you're very well positioned. You're getting some godly counsel. I think you're doing a great job, Julie. So I appreciate you listening and calling, but I would say just stay the course with exactly the plan and trajectory you've been on. And let's just pray that God will continue to bless your efforts.

I'm confident he will as you're making some really wise decisions. Thanks for your call today. Well, folks, thanks for being with us. We have a lot more to come here on MoneyWise Live today.

A couple of lines open. Here's the number 800-525-7000. We could talk about giving, investments, maybe your credit score, paying off debt, whatever's on your mind, let us know. We'll apply the truth of God's word to your financial situation. Thanks for stopping by today. Much more to come on MoneyWise Live.

Stay with us. So glad you've tuned in today to MoneyWise Live. I'm Rob West. This is the program where we look at your finances through the lens of Scripture. Hey, let me remind you MoneyWise Live and MoneyWise Media is brought to you in our partnership with Moody Radio and because of your generous financial support. We do what we do right here on this broadcast and through the MoneyWise app that you can download in your app store and on the web with the best content from all of the leading biblical finance voices in our space. Plus our MoneyWise coaches serving hundreds and hundreds of God's people every day with one-on-one coaching relationships and answering your questions by email. All of that is a result of your generous support and as we head toward the end of the month here in May and into the summer months, which are always a bit leaner. I would just ask that you'd prayerfully consider if you consider yourself a part of the MoneyWise family, a gift to the ministry, whatever you might be able to do, of course, beyond your giving to your local church. Whether that's one time or a monthly gift, we'd certainly be grateful. Here's how you do it. Just head to our website moneywiselive.org, click the donate button and you can give quickly and safely and we would certainly appreciate it. All right, let's head back to the phones.

It looks like all the wines are full. So if you're getting a busy signal, I would wait just a little while and we'll see if we can get to you a little later in the program. Next up in Zephyr Hills, Florida is Jay. Welcome to the program. How can I help you, sir? Thank you much. First, I need to tell you I thoroughly enjoy your program.

Helpful, practical, enjoyable. Thank you, Jay. I appreciate that. I was interested in, I have a Fidelity investment through our denominational program with Fidelity Investments. I called and spoke to them about having the required minimum distribution money channeled directly to a church or college. And they indicated that since it's a 403B plan, I could not do that. If it were an IRA, it would be possible to do that. And I wanted to ask you about whether that's a possibility or feasible, what you might have to say about that.

Yes, very good. A question first. Did you say you're retired, therefore you're not connected to the organization? I'm still retired. I am retired. I'm still part of the denomination and so on, but I've retired a number of years ago.

Very good. Yeah, well, the information you got is correct. The tax code does not allow what are called qualified charitable distributions from an employee-sponsored plan like a 403B. But they absolutely can be made from an IRA. And once you separate from service, you're then able to roll that 403B out to an IRA. That's not a taxable event. You would not receive the money.

You'd complete the surrender paperwork. You could open a new IRA right there at Fidelity or another institution and the 403B assets, once they were liquidated, would just be transferred in as cash. And again, not generating any kind of taxable event, but then they could be redeployed based on the investment strategy that you or an investment professional that you hire would determine. At that point, you absolutely could begin satisfying your required minimum distribution each year through a qualified charitable distribution, essentially where you would have the money go directly from the IRA to your church or, as you said, maybe a college. When they receive that, they would then get the full value of that amount for their activities or ministry. And you would receive the benefit of making sure that that RMD was satisfied for the year. And then you'd get to deduct the full amount, which keep in mind, if you were to take that distribution yourself, that'd be a taxable event. And then you'd have to give a smaller amount at that point.

But you actually get the full deduction by making it directly through the QCD. Just a few seconds left. Does that make sense, Jay? Yes, it sounds fine.

How about I get in touch with ambassadors? Yeah, let's do this. I'll talk to you offline about that and answer your questions. We're going to hit a break here. Appreciate your listening and thanks for your encouragement today. Folks, more to come on MoneyWise. We're going to be talking about forbearances on mortgages with Tenley just around the corner, as well as perhaps you.

Stay with us. Thanks for tuning in to MoneyWise Live today. I'm Rob West. Just before the break, we were talking to Jay, a retired pastor from a Nazarene church, delightful gentleman. And he was looking to make a qualified charitable distribution to satisfy his required minimum and give generously.

I love it. Just after the break, he was asking how he could connect with a certified kingdom advisor. And if you'd like to connect with a CKA, that is a financial professional who's obtained the designation that I believe is the gold standard for biblically wise financial advice. You can do that on our website. I directed Jay to MoneyWiseLive.org and asked him just to click the button, find a CKA.

And you can do that as well. Put in your zip code. You'll find a listing of those financial professionals in five disciplines. Financial planning, investments, tax and accounting, insurance and estate planning attorneys. You can select any one or all of the five. You'll find the CKAs in your area.

I'd interview two or three and find the one that's the best fit. If you're looking for a financial professional offering advice that aligns with your values and priorities as a Christian. All right.

Let's head back to the phones. In just a moment, we're going to be talking to Margaret in Fort Myers about her mortgage, whether she should refinance. Jerry in Lake Wells has a stock she bought back in the 90s.

Can't find the information, wants to know how to trace it. But first, Naples, Florida. Tenley, I understand you have a question about a forbearance plan. Is that right? Yes, sir. Thank you for taking my call. And Jay, I really have learned a lot from your program.

My question is this. I was put on a forbearance plan with my mortgage company like at the end of 2020. As of the beginning of the month, I was about six or seven months behind, but I was able to catch up about half that.

So now I have at least three months and going on a fourth. What they told me is that I need to owe about three months in payments in order to be put on a loan modification plan with the mortgage company. My question is, should I do that or should I go ahead and pay all of the back mortgage payments that are due and then hope for a refinance? However, my credit score is not in good shape right now, so I don't know if that's even possible.

Yes. Well, you know, the benefit, Tenley, of the modification would be if you can no longer afford to make the regular payments. So keep in mind, you'd have to, you know, eventually get caught up on the amount that's in arrears. But then you'd have kind of that same monthly payment that you had prior to all of this. And if you're not in a position where you could get favorable terms on a refi because your credit has been damaged through all of this, then we probably shouldn't count on that anytime soon. And I'd want to make sure you're in a position that's sustainable based on the income that you have, where you're really dialed into that spending plan.

You've cut back every possible way. I want you to have a mortgage payment, principal interest, taxes and insurance that you can afford within your budget so we don't get into this situation again in the future. Do you feel like a modification is necessary or do you feel like once you got this amount in arrears paid back that you could handle it? I could probably handle it, but it's a little tight because I have my own business. And so that income is it's not a steady, secure job.

So, you know, it kind of varies with the weather, actually. So, yeah, I think I could handle it, but I'm not sure what are the ramifications of a loan modification, though? Does it extend the terms of the loan additional years or is it a bigger hit on my credit score? Not necessarily a bigger hit on your credit score, but it's going to be more costly in the end because not only will you have the fees that often are accompanied by the loan modification, but then with a lesser monthly payment, it's just going to extend out how long it takes to repay it, which means more interest over time. So if you can afford it, you know, continuing that either through a repayment plan, you know, where you pay more than your regular payment each month to cover that amount in arrears and then getting back to your regular payment at some point down the road when that's paid off, that's the best case scenario.

It's the least expensive and it's going to keep you on the same track to get this mortgage paid off in the same term that you originally had. So if that's what you can afford, I would say that's going to give you the best scenario. I just want to make sure that you're not setting yourself up for failure because it's, you know, it's too high in your current reality. I have no idea what happened with your business and, you know, through the pandemic and whether that's recovered. But, you know, I just don't want you to continue to find yourself in this situation where you're struggling. But clearly, if you can, through a repayment plan, get that amount in arrears paid back and then move forward with your current monthly payment, that's going to ensure that you pay the least amount of interest possible.

So I would take another hard look at your budget, talk to them about the options that you have, and then I would proceed from there. Does that make sense? Yes.

Perfect sense. Thank you so much. I appreciate your input. Okay. Listen, don't be discouraged.

Keep up the good work. You were six or seven months behind. You've already caught halfway back up.

That's not easy to do. And so, Tenley, I believe you can do this. So you just stay at it and trust the Lord for his provision. Continue to honor him. And I believe he will walk alongside you every step of the way. And we appreciate your call today.

Let's head just north a bit to Fort Myers, Florida. Margaret, how can I assist you? Yes, I listen to you. I have a question about my mortgage. I owe a hundred thousand and some change. I don't remember my interest with what not. It's open five. They keep sending me information about the finance is going to be lower.

It's going to be like two, two, seven, five, two, seven, two, three, something. But the thing is, when I was calculated this year, if I pay the way I'm paying this year because I'm paying more to my principal, if I pay the way I'm paying in four years, I should be paying. So I don't know what to do if I have to refinance it.

I can save money or or just keep what I'm doing so I can finish it in four years instead of 15 years. Yes. And so you believe that based on the amount you're sending right now, you could have this paid off in, did you say four years?

Yes. Okay. How much extra are you sending every month?

Because this year when I get my income, it was almost $10,000. I sent the whole thing. And every time I'm sending payment now I'm paying $2,000 extra. Okay. Wow. That's incredible.

So this year that's what I've been doing. I almost pay almost $25,000 this year to my principal. Margaret, that's incredible.

That is absolutely incredible. No, you should just stay on this current track because the cost of refinancing would not be worth it because you're not going to be in this mortgage long enough for you to realize the benefit that you would get through the lower interest rate because you'd have to spend quite a bit just to refinance and out-of-pocket costs. And, you know, the rate at which you're going, the amount you're adding to your mortgage, it's not going to work to your favor.

You'll barely make any money plus you'll have to go through the hassle of finding the right mortgage and so forth. So I just stay on this course. You're going to be out of debt in no time and you're going to be delighted, Margaret, when you have no mortgage. When you tear that up, do you promise you'll call me and tell me when that day comes? Yes, I will. Okay.

We'll celebrate together. Is that what you were looking for? Does that make sense? Yes. Yes, that's what I want to make sure because I'm like, they keep sending me papers. I'm like, what to do? I don't know what to do.

Yeah. I send them a call to find out. Yeah, my dad used to say, put that in file 13, which means right in the trash, okay?

Maybe you ought to shred it first. But, hey, we appreciate you listening and thanks for your call today. You know, it's so much fun to walk on this journey with you all, be invited into your stories every day as we talk about what God's doing in your lives and apply biblical truth to what's going on in your finances. We'll do that with some other folks just around the corner. This is MoneyWise Live, where biblical wisdom intersects with today's financial decisions. Stay with us. More to come just around the corner. We're grateful you've decided to tune in today on MoneyWise Live.

I'm Rob West. Hey, imagine this. Imagine if right there in your pocket you had at any given time the knowledge of where you stood in every one of your budget categories, how much was left to spend for the month, and you and your spouse were on the same page. And then you also had access to the best content in Christian finance, so if you had a few minutes or you were on the treadmill, you could pull it up and start reading or listening to a great podcast or a broadcast archive of MoneyWise Live.

Or imagine if you had a question and you could just jump in and post that somewhere, and other Christians and trained coaches would respond to those questions from a biblical perspective. Well, you can have all three of those in the MoneyWise app. We'd love for you to download it if you haven't already. You'll find it in your app store. Just search for MoneyWise Biblical Finance, and it's a free download. Let's head to Lake Wells, Florida. Jerry, you've been incredibly patient.

How can I help you today? Yes, I bought some stock and I lost track of it. It was split and then apparently sold to another company, and I'm trying to find out how to track it down. Yeah, the good news is you still own the stock even if you can't find the certificate, and companies have different procedures for reclaiming stock ownership. So you'll need to contact the current company, the ultimate owner that you said it was purchased, so contact that company, and specifically contact their investor relations department. You'll find a phone number for that on their website. Every publicly traded company has information about investor relations and how to contact them on their website, and they'll tell you the steps you need to take.

Basically, it typically looks like this. You state the facts surrounding the loss in an affidavit. You'd buy an indemnity bond to protect the corporation and the transfer agent against the possibility that the loss certificate may be presented later.

The bond usually costs one to three percent of the current market value of the missing certificates, and then the owner has to request a new certificate before an innocent purchaser acquires it, and then at that point it would be issued. So I would go on the website of that new company that bought this company that you previously had shares of stock in, contact investor relations, tell them what's going on, and they will walk you through the steps to move forward. Does that make sense, Jeri? It sure does. All righty. We appreciate your call today. Thank you very much. May the Lord bless you. Let's head to Fort Lauderdale, Florida, my hometown. Barbara, thank you for your patience. How can I help you? Hi.

Good afternoon. My question is that I have decided to wait till I'm 70 to collect the Social Security so I can get that eight percent a year extra, because I'm of age now, but I'm going to try to wait as much as possible. But my question is, do I need to call them each year and say, I'd like that eight percent? Or do they give it to you automatically? No, it automatically happens, but the benefits won't automatically start until you request them and sign up to start receiving your benefits. But that eight percent will automatically be added so long as you have it. Now, the only exception to that is if you took benefits after receiving full retirement age, but then you voluntarily suspended them to earn the delayed credits of eight percent a year. Was that your situation?

No, I haven't taken anything yet. You've never collected. Okay. Yeah, that's a very small group. So, yeah, in your case, yes, the eight percent is automatically being added every year.

But you do need to go online once you get to that point and begin request or request receiving benefits at that point so that those checks will automatically start. Okay. Oh, okay. I just want to, if I ask you one other quick question. Yeah, I'd have to charge you for that one. This first one. No, I'm just kidding. You go right ahead.

How can I help you? Anyways, when I do collect the Social Security at age 70, which is my prospect, I want to know. My husband, I heard he could actually collect or apply for Social Security under me because he gets a pension, but he gets a pension. He doesn't get Social Security. So someone said, well, he can collect under your Social Security as well and get maybe a half or whatever I'm going to be getting.

So I was a little confused about that. So in other words, could he get his pension plus apply under my Social Security when I get it? I get my own Social Security. Yeah. So what they're talking about is a spousal benefit.

Yeah. So he could go after a spousal benefit. The question is just which one is going to be higher. And so often folks will apply for a spousal benefit while they wait for their Social Security to continue to grow. At that point, you could switch to the one that pays the higher amount. So here's what I would do. I'd head over to SSA dot gov and schedule a virtual visit or a meeting with someone from the Social Security administration and just kind of talk through with specific numbers based on your situation.

What's possible for both you and your husband as you start to collect and they'll walk you through all of that so that you can maximize whatever you are entitled to. And Barbara, we appreciate your call today to Spokane, Washington. Leo, you're next up. What's on your mind? Yeah, hello.

I have a question about when I have to start doing the required distributions for tax purposes or withdraw any money out of my IRA or variable annuity. How would I figure the tithe on that? Because it's done well over the years. Yeah, very good. Do that. Well, I think there's a couple of approaches on that, Leo. I appreciate you wanting to apply the principle of the tithe, which is on the increase. You know, as you give according to what God has prospered you now, the increase in a retirement account is a little more challenging because when we receive income, it's just obvious we total up everything we've received and we give a tithe on that.

You've got a couple of approaches. One would be just as you take money out, you go ahead and calculate a tithe and pay it out at that point. Now, the argument for that could be that, well, a portion of this is a return of what you've put into it. And if you were tithing on the gross amount of your income and then you were taking a portion of what you had tithed on already and directing that into a retirement account that you're now taking it out of, then you're in a sense tithing again.

But you can't outgive God. So I would have no problem with you doing that if that was where you landed. If, though, you said, no, I'd rather just tithe on the true increase, not what I had put into it, then I think perhaps the simplest step would be to from this point forward say, OK, I'm going to track the realized gains inside that portfolio, even though they're not taxable because they're in a tax deferred environment. I'm going to track the realized gains every year, meaning what I sell appreciated securities for inside the account. And then based on that amount each year, I'm going to tithe. So, you know, that could be challenging depending on how much gain you have in any given year, because you're not automatically taking that amount out.

You're only going to take out what you have to take out. So you're going to have to kind of work that through what works for you practically in terms of the cash flow that you have available. But I think you either have to go one of two approaches, just everything I would draw, even though a portion of that is a return of what I've already put in and therefore tithed on, I'm going to give to the Lord. Or I really just want to look at each year, you know, what is my true realized gain for all the holdings in the portfolio and then calculate a tithe on that. And then maybe you could keep a running total and just give as you're able to give against that number.

That gets somewhat complicated, Leo. Did you follow, though? It does. Yeah, I did. But would the brokerage firm be able to help in that regard? Oh, absolutely.

Yeah. What you would because remember, that's not a taxable event. So typically they're not looking at that very closely. But what I would say is, yeah, you would absolutely at the end of the year or quarterly, but I'd probably do it annually. You just call them and say, hey, I want to know inside my retirement account, what are my realized gains for the year?

And they could total that up, give you that number, and then you could you could give against that number. OK, wonderful. Yeah, great. Thank you.

All right, Leo. God bless you, sir. We appreciate your call. Our final caller today is going to be from Cleveland, Ohio.

Edward, how can I assist you? Yeah, I'm about six, seven years away from retirement. I have about twenty thousand dollars in a home equity loan.

That's about it. I own my home other than that. I don't have any other debt and would love to be like a snowbird and wonder how wise it would be to take some of the 401k that I have to put down money before I retire for a second property. Yeah.

So you're looking to borrow against that 401k or just take a withdrawal? What were you thinking? Well, I could I could I'm at the age where I could just take it.

I guess fifty nine and a half. You could take it. Well, absolutely. Well, it's not a great idea for a couple of reasons. Number one is it tends to be expensive money in the sense that whatever you take out is going to be added to your taxable income for the year. And if you're looking to buy a piece of real estate, that could be a lot of money and it could push a portion of that up into a higher tax bracket than even you're paying right now.

You know, I think that's the first issue. The second is then obviously that money is no longer available to continue to work for you. But you'd have to determine whether that makes sense to you. How much would you be looking to take out? So, you know, I was looking at like properties in Florida that were running around one hundred and ninety, one hundred eighty five, but taking out 20 percent so I wouldn't have to pay any of the.

Well, I mean, you certainly could do that. I think the key is you just need to look at your overall financial position and make sure that you can afford to do that in terms of understanding what is my true need. What are my expenses going to be in retirement and how am I going to cover those through Social Security and whatever other retirement assets you have, including this account that you'd be pulling from.

And can you cover all of your obligations, including the additional expense associated with the second home, based on all of those things? And if the answer is yes, well, then that's great. And then, you know, if you're looking to pull only 20 or 30 thousand out, just recognize that you're going to want to make sure to set aside that portion that will need to be paid for the tax.

But there's no problem with that. I mean, I think that's a good plan. Again, as long as it fits into your overall financial plan and what you're trying to accomplish. But don't get caught off guard with the tax that's going to be due.

You want to go and get that paid in probably before you file. We appreciate you calling today, Edward. Well, that's going to do it for us. So glad that you stopped by today. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Let me say thank you to my amazing team today, producing Amy Rios, engineering Dan Anderson. Our call screener today was Eric Tidwell and providing research was Jim Henry.

I'm Rob West. We'll look for you back here tomorrow as we continue to apply God's word to your financial situation. I hope you'll come back and join us. May the Lord bless you. Bye bye.