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Heart Break IRA’s

Finishing Well / Hans Scheil
The Truth Network Radio
April 13, 2019 8:30 am

Heart Break IRA’s

Finishing Well / Hans Scheil

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April 13, 2019 8:30 am

Proverbs 13:12 says “Hope deferred makes the heart sick, but a longing fulfilled is a tree of life.” With IRA’s, or individual retirement accounts, hope, or money, deferred allows your longings to be fulfilled when you retire. These hopes include a comfortable retirement, with travel and fun, and providing for your family. Robby talks about how his dad wanted to go to Hawaii with his wife, but after she passed, he instead got to go with his children. This was his hope deferred.


One thing most people where not hoping for is paying taxes on the money in their IRA, but someone is going to be paying these taxes. That is why RMDs, or Required Minimum Distributions, now exist, so that people do not just hold this money in their account until they pass. If your children or spouse inherit this money, it is likely they are going to take the money in a lump sum, and pay a much larger tax bill than if this money was taken out over time. There are some strategies you can put into place now to make the tax bill much more manageable.


The first is QCDs, or Qualified Charitable Distributions, which we talk about a lot on this show. If your hope for this money was to give back to the kingdom, and you are over 70 ½, you can start implementing this today to not only give money to the church, but also satisfy your RMDs and reduce your taxes!


Another strategy involves life insurance. Hans discusses policies that, over the years, will drain your IRA to pay the premium on a life insurance policy. You pay taxes on the amount coming out, and the rest goes to pay the life insurance bill. Ultimately, when you pass, your family is going to receive more money than they would have if you just left the IRA, as life insurance benefits are tax free. In this situation, you still have control over the money, as the cash value of the policy is still available to you. There are even policies that will allow you to access the death benefit early to pay for long term care costs!


It is so important when you are doing this planning that you find someone who is looking out for things that you are not even thinking about and makes sure your family is taken care of.


Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on CardinalGuide.com for free!


You can contact Hans and Cardinal by emailing hans@cardinalguide.com or calling 919-535-8261. Learn more at CardinalGuide.com.

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You're listening to the Truth Network and TruthNetwork.com. Welcome to finishing well brought to you by Cardinal Certified financial planner belonged to Schild, best-selling author and financial planner helping families finish well over 40 years of finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started with finishing well. They finishing well.

We're talking about heartbreak, IRAs, and you might say probably what the world heartbreak IRA investment, retirement account is what IRA is, but you look at Proverbs Solomon.

He knew about IRS as he wrote hope deferred makes the heart sick. This is Proverbs 1312 hope deferred makes the heart sick, but a longing fulfilled is a tree of life which you try to get to the idea of the whole IRA thing to begin with it when you started investing this money.

You and I hope right for what the purpose of the money was, which is a comfortable, desirable return right and that you wouldn't have to worry about money. And in that unit you would be able to live your retirement years and and have fun and I out.

I couldn't help but think of my own bad situation again your list and the harm Schild certified financial planner and and I kind of the helper that is not such an expert at all. But anyway, my dad's case.

My dad lived 88 Best Way here couple weeks ago but II think of the joy that he had in his retirement know based on what his hope was fulfilled and he'd really wanted to travel with his wife and his wife had passed away. By the time he moved here a few years ago and so he said well I can't travel with Teresa that was really hoping when I retired but so we said what that will go with it civic because I want to go to Hawaii and so you know that's one of the joys that I think you know that made his heart in archery life was that we all got to enjoy what it was that he originally was hoping for when he set up his retirement sure it so he finished and we passed in your his executor, and you really discovered within a week of his death were you were just reading these financial statements. Getting ready to do your job as executor and you knew that most of this money was passing your brothers and sisters that you discovered how much of his money was really in IRAs is I showed you how to read it just right there on the top of the thing is actually shocking to me and Bob Hall or what and and that changed a lot of things that I realize well. These are all a time and these are IRAs which have tax implications yes Read the Scripture. I don't know if you need to read it, you can probably quote it well. It is a hope deferred. Next, the heartsick, but a longing fulfilled is the tree of life, so what does that mean and how does that relate to RMD's were required minimum distributions and I really started out in the show we we want to keep part of the show teaching.

Teaching sometimes can be boring now and I'm reading my workbook. The second book that we had published the complete Cardinal guide to planning for and living in retirement. In the workbook on page 63 and reading. The IRA section getting ready for today show and I see these charts that show it. Each age which are required minimum distribution that starts following age 70 1/2 was to say age 70 and every time I get on the first of all, this is so misunderstood I've been over it with you several times on the show and it was like I was giving you new news just a few minutes ago yeah yeah because no I don't think in letters, IRA, and I don't necessarily think about, things are in a 401(k). Those were words that you know obviously the been used from in retirement accounts, but understanding no overdoing all this many shows that when were talking about, and IRA were talking about some somebody invested with is a tax shelter essentially to allow their investment to grow for retirement without having to pay tax on that income at the time that it was originally put in elicits a Roth IRA. We talked about this before, but regular IRAs are essentially money that's an investment that is never had the income tax paid on it and because of that the government is saying okay guys it's time to start paying your tax and with that you get these newsletters called RMD the required minute minimum distributions. So let's look through those three words we know.

The third one is distribution means you know in the first one is required. So this is a required distribution. The middle one is minimum. This is the government saying. By the time you reach age 70. You are required to take a minimum amount you can look on page 63 to see what that is like in your first year of distributions might be a good time actually to mention that if you go to Cardinal guide.com and you click on the seven or stab this section on IRAs in the workbook is free. You can download page 63 so that you will is, after all, you have been was go to Cardinal guide.com seven worries tab you know there it's in the IRAs was right there and read the whole book. It no charge both the book and the workbook. You can also send me an email or a note or something on the website and I'll send one out to you and you can also buy it on Amazon it's not very expensive so if you look at age 70. Mean your first years of the let's say your request RMD person you're denied taking any money out of their penne tax until I have to and then when I have to I'm gonna take just the minimum about what is that amount or whatever your balance was on December 31 of last year 2018. Whenever the balance and they have to send it to your IRA custodian he would take it times 3.65% so that incentive in so she had $200,000 in your IRA you have to pull out about $7000 Mike Glover $7000 and then your taxes on that would depending on your bracket know that would be to $3000 between federal and state the boy you thought you were making people take out $1 million or something and people get mad about their making me take them out, and that's not getting back to that what we hope you know what why did you not essentially invest this money. What was the hope you know I continue the anti-hope okay pay in taxes so people can answer that question say what day when I won hoping for his attachment. I got news for you. Either you or your spouse after you die or your kids after you die somebodies and pay the taxes on right if they do it all at once is going to be a whole lot bigger bill so when these things were set up they really they actually didn't even have this rule when they were first set is this is RMD required minimum distribution came in later the same.

We working or have to really require people to start drawing out of this thing.

My point is, which you just try to take us back to is what's your hope what what what what your plan. What would you need this first full you have to wait till your 70 if you're over 59 1/2. You can take money out of these things and you can just pay the taxes and you spend the money as you wish. Not because you put that money in there was some type of hope and in the thing I can't help but note that note use it while you still can enjoy it because you know when you get to be 88. Like my daddy could no longer walk and do things that he would live in Jott joined Hawaii near as much at 88 as he enjoyed it. 86. What is so if you look at this chart and you seeing at age 70 is 3.65% and your father for his last minimum distribution which you're going to have to do for him in the year he died, which is this year at age 88. It's just 7.88% so you can see what he's got so much accumulated because my guess is he is only pull the minimum out this all along. In been anything in years and he was earning more in some years, and he was full and outs of the things been going up. I was talk about what is hope was not in the homicide and migrate eat you know his hope was to leave that to my brothers and sisters really what's mean it. My dad was a lot about having you know in the state to to turnover of minnows and inheritance that came from him that was a big deal to him and it was a big deal to God to heat heat. He wanted his kids have a big inheritance at and so with that hope heading actually gotten your advice a number years before those minimum distributions. Mike brothers and sisters wouldn't be getting the tax bill that they're fixing it right yeah so they're each can have the opportunity to deferred even further. But his experience tells me anything that I work with people on this all the time clients pass away, and then their children coming million asked me what to do with all this stuff and I thought times are recommended deferring and the other question is how much can I get that they need the money, usually in their 40s 50s 60s and they need the money and so if there is $50,000 come into thinking you get $50,000. They're going to get about 30 in about 20 of its and after going to tax and if they don't withhold that much of the distribution, probably by the time they add that 50 grand on top of their regular income with her still working until tech.

It's gonna be 20 is or have a big tax year and that all look the let's say maybe could be prevented but it certainly could be mitigated.

So there's a way to have your IRA if that's your true desire with it is to pass it on to your kids, there's better ways to do this yet in one of those.

I think it's just sheer genius really did.

As I look at I want wow if you done that you know Mike, it might my brothers and sisters would've gotten probably more money and got it tax-free. When we come back or organ to talk about that for sure because we were doing questions and forcing them to pay the bill, somehow semantically get to go to break, but before we do that we want to mention again that this show was brought to by Cardinal guide Cardinal guide.com is the website where you can course get the free download of today's chapter on IRAs at the seven worries tab.

We also want to say that wow if you're one dead like you got going to Walmart now some and you want to make sure you hear how you can capitalize on this RMD. This required minimum distribution. Well, you can just say hey Siri play the finishing well podcast or you can say hey Alexa, when you get home tonight. Play me the finishing well podcast is to be up there this afternoon. You can hear the rest of the show in all the previous shows right there on our podcast and the sieving via have a question you want to ask you something is good Cardinal guide.com my phone numbers. There is also a messaging thing that you can go on in my assistance on that all the time.

He sent one in now should be on it in about five minutes is for one minute.

So were were available if you want to ask any questions or want us to cover something on the show was today show heartbreak. The first IRAs to get back to that in just a minute so please think Hans and I would love to take our show on the road to your church, Sunday school, Christian or civic group. Here's a chance for you to advance the kingdom through financial resources and leveraging Hahn's expertise and qualified charitable contributions veterans aid and attendance IRA Social Security care and long-term care. Just go to Cardinal guide.com and contact Tom to schedule a live recording of finishing well at your church Christian or civic group contact Tomczyk Cardinal guide.com that's Cardinal guide.com welcome back to finishing well in today show heartbreak, IRAs, and it kinda based on this proverb that Solomon wrote Proverbs 1312 hope deferred makes the heart sick by the longing fulfilled is the tree of life and in and I want an opportunity really people that have worked so hard and invest all these monies in IRAs.

You know this is really a phenomenal resource to really to bring a tree of life and your family and in somebody not that money buys happiness, but certainly party or hope would require that I would guess at this point in your life in six of which are longing with this money, and it what you really need to ask yourself. That's what I'm getting ask you when I get together with you and you know Wheatley you could be a necessity as well as a longing that you may need to draw from this IRA account to live. And then these minimum distributions are not really an issue for you. If you're younger than 70, or just retiring. At that point are younger and then he gets Social Security and you get some other savings, but this could be a big picture of the income that would recreate for you and then working a back check that to make sure it all meets with minimum distributions, but for people when their longing is for retirement income. They generally don't need to be listening to this whole thing that the people were talking to year, which is a lot of people are the accumulators. The people that the monies there and they're afraid to touch it.

My left those people that their longing was to build the kingdom of God and so they they want to use this money for the kingdom of theirs strategies there that know you have an IQ CD we can consider them once your 70 1/2 week in you know I can help you do this is you doing it you can give up $200,000 a year to the church directly from your IRA won't even show up in your tax return and counts as a minimum distributions help and so there's really a trail iPhone that month so that might be part of your longing and we can factor that in there and then you might want to give some money to your kids, will you still alive if that's what you are ultimately wanting to pass it to them then you can make these withdrawals in a real conservative manner, but we make these withdrawals and then you pay the tax and then you give the difference tax-free to your kids or their grandkids are the intended beneficiaries of and that's another way to go right that the that one genius idea that really and I wish my data taken advantage of, was using those RMD the required Mr. minimum distributions to invest in something else for your is life insurance right so even if you're up in your 70s and you been doing this minimum distribution, thing, or even in your early 80s.

If you're health is reasonable guy. It could even be you could. Some would call it poor health. It's amazing what these life insurance comes will do visits to stay with someone in their 70s we can set up a life insurance policy that will effectively it will empty your IRA over the years and you're gonna pay the taxes each year on that distribution and you take the net amount and you use it to purchase life insurance or pay the premium on a life insurance policy and ultimately your kids are going to your beneficiaries or through your kids or grandkids or whomever organ you receive more than they would have out of the IRA with a minimum distributions taken out and I do not have faith that this text is tax-free life insurance benefits are tax-free. So that's fairly simple to set it up. We have about 100.

Life insurance companies that we that all have about 15 to 20 different products. I would begin to start talking about them on the we have all the selections because everybody's needs are different but the whole concept is to take much more than the minimum and drain the IRA over some period of years, and when the IRAs empty the life insurance premium stop and then you still have control over the money because those cash values inside of the life insurance policy are accessible to you if you needed me a lot of that's why you don't want to give your money away in retirement as you figure later on you might need in just across the whole thing over, we could take that life insurance policy, which is an intended death benefit and put some long-term care benefits on there so that you could access that death benefit yourself tax-free to prevent Emily would unite you say you bet.

Actually, believe me. Having understood long-term care from the standpoint of your family there access and the benefits so that so that your cared for, well, and it takes so much pressure off of them in their own guilt and whatever is there dealing with seeing how you're being taken care of as a result of having you know this hope not deferred, but you don't know being able to have this tree of life. Actually while you're still out.

Well, you don't have to do this with your whole IRA either. If you have a substantial IRA and what I don't want to see happen is you just take the minimum then you do better in investment performance and the amount you taken, I'd like see that happen, but she have a big accumulated balance at your death and then your kids need the money so they don't deferred further and there's a huge tax bill and this is coming gets wiped out or severely dented. I'd really like to sit down with you and figure out maybe was just part of it that that there's better ways to pass on money than through the beneficiary of an iron right this is fascinating to me how what looks like a painless idea of RMD can really be a huge blessing at at being able to to take this investment and use it the way you would plan our God plan with you to do it is just awesome was hearing about what the benefits were and you had that one client that I want your first guides when you start your new company that really it played out wonderfully for him. Oh yeah, I mean he's he's Marshall in the book here and he goes through several chapters. The original guide in. We took what was about 500 grand and IRA money and then we apportioned about 200,000 of it to a second to die life insurance that paid for long-term care for he and his wife.

We took the other 300,000 and we put it into something that should enough the premiums for a life insurance policy is conveyed tax-free benefits to their kids. And then there was another hidden IRA of about 300,000 that he was keeping off to the side sky was a dentist and he had been very successful very frugal smart saver and death.

He wanted to give that other IRA to admissions Bible missions to China. We want to get Bibles into China and after his death. I helped his son do that answer.

Just think of the beauty of what happened. I mean with that how God leverage that money for the kingdom. I mean, his son got way more as a result of the life insurance within the tax bill.

He would've gotten with IRA money. All this money went to Bibles in a plus in a the joy that you hadn't taken part in that building the kingdom through. Oh yeah I eat. I took some of the commissions that iron we talked about that and I use part of it to go to and slot to learn how to do all the stuff and then I also took part of the game to the missions to China as well and Dr. Bob is really he was big time on that we need to get Bibles and turn in that Asians needed.

You know they needed to hear the word of God. So now I'm Arizona stories on China and these people know the whole church of hundreds of people having one Bible for the entire church in you know they know 30 days before you ever see the word of God again. And these people are in outcry and and and and then the day they get it there and complete rejoicing. Take the day off from work.

If that's the day they got the word of God in their house. When you think of what the leverage was for the kingdom, you know, based on know how God gave this man wisdom, but the cool thing was, he passed it along to you because that's how you found out about Ed's lot of it now. Think of all the people to learn about UCD through this radio show in different ways that God leverage the same information now to consider to to build the kingdom and something went yeah I enjoy every time somebody takes even if it's a small piece of their IRA and it puts it in the queue CD because first of all, that's money that the kingdom might've never seen, and then second of all if is money that the kingdom would've seen.

I know that my clients are now getting a tax advantage gift that they wouldn't otherwise get got received just giving in the normal way so it's you know it's great that so it's it's worth taking a hard look and what are my hopes and what was what was it that I was really hoping for, you know, when I began to make this investment, realizing that God has in mind for you for that to be a tree of life I eat eat not having in mind that your hope is deferred heat he's having in mind that you realize that hope and you get to see that while you can still enjoy a lot of folks are somewhat scared by their IRA balances. They never in their wildest dreams imagine that they would accumulate this much money in some ways it scares people. And then people just naturally want to avoid taxes and taxes are inevitable so we can sit down with you.

We got a look at Social Security check. You look at your IRA balance look at any other money you have coming in. Look at what your expenses are most of the time we end up recommending to people, increase distributions from their IRAs and going in pan.

Some of the tax.

Now and enough for me personally it's I feel so blessed to sit down with some electrons and I never talk to him. He doesn't say not obligate make sure we have money set aside if you need a roof on your house or this happens that he's always been honest same for my own experience that you can't help but feel good about somebody that's always try to think about the things you're not thinking about make sure that your families taken care of and that everything is planned out accordingly so that you don't have hope deferred benefit that you you can live out what God you know was designed for use as there is a real opportunity for all of you listening because I know this man's heart.

You can go to his website and you and you can say Hans I got this question dislike. He described to me that wholeheartedly he wants to help you and and and so you got this question. Are you want a free book or or whatever it is that that that what they can do for you.

It's cardinal guide. Don't forget the guide after the little bird.

Cardinal guide.com again. There you can find the podcast. If you are unable to hear the beginning of the show today and I don't forget you just say hey Siri Alice in the finishing well with certified financial planner Hans Ali early next say the certified financial planner, I did on my phone for Hans a little while ago and he was like wow this is cool is how easy is that now we have offices in Durham is our home office.

We got an office held by the airport in Greensboro. We have an office in Charlotte just moved into a new and larger location there. And frankly, over half our clients. We never meet in person or we seldom meet them in person. We do business over the phone.

You can now we can do just about everything we need to do everything we need to do with electronic applications in Pennsylvania and Ohio and we God just looking at a map, got 11 clients on Hawaii really have to know that 68 hopes not of 68 in California down in Florida. We have almost 100 been there all over places like Iowa. We've got 59 clients or something. I grew up and was just somehow. It's possible there so well you can see the opportunity but that God is afforded us and we thank you so much for list of the Truth Network for less than two finishing well and will be back next week same time fixation. We hope you enjoyed finishing well brought you by Cardinal guide.com visit Cardinal guide.com for free downloads of the show or previous shows on topics such as Social Security, Medicare, IRAs, long-term care and life insurance, investments and taxes as well as constant best-selling book, the complete Cardinal guide to planning for and living in retirement and the workbook once again for dozens of free resources past shows you get Hans will go to Cardinal guide.com if you have a question, comment or suggestion for future shows. Click on the finishing well radio show on the website and send us a word. Once again that's Cardinal guide.com Cardinal guide.com


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