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Will or Trust or Both?

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
March 11, 2024 5:15 pm

Will or Trust or Both?

MoneyWise / Rob West and Steve Moore

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March 11, 2024 5:15 pm

Not everyone needs to have a trust in their estate plan. But everyone needs at least a will. And some folks might need both. On today's Faith & Finance Live, host Rob West will talk about what you need to create the best plan for how your estate will pass to your heirs. Then he’ll answer some calls and various financial questions. 

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Today's version of Faith in Finance Live is prerecorded, so our phone lines are not open. Did you hear about the guy who had major trust issues?

Yeah, it turns out his parents didn't leave him one. I'm Rob West. Getting aside, not everyone needs to have a trust in their estate plan, but everyone needs at least a will, and some folks might need both. We'll go over the whys and wherefores today. Then we have some great questions lined up for you.

But don't call in today because we're prerecorded. This is Faith in Finance Live, biblical wisdom for your financial decisions. Okay, this is a topic we like to revisit from time to time on the program because people ask about it frequently, and we're happy to do it because it allows us to urge you to plan ahead how your estate will pass to your heirs. We should probably start out by explaining the differences between wills and trusts.

They both do much the same thing. Distribute your assets after you die, but that's where the similarity ends because they do it in very different ways. A will can be a relatively simple document that names an executor and who will get what assets after you die. However, a will must go through the local probate court and becomes a matter of public record. If there are complications, the probate process can drag on and heirs won't have access to the estate's funds until things are cleared up. For that reason, we usually recommend you have an estate attorney draft your will to make sure your specific intentions are fulfilled and that the document goes through probate with minimum delays.

A will generally costs around $500 to draft, and we think it's worth every penny. Now, there are a couple of reasons why you need a will even if you have a trust. For one, a will allows you to designate a guardian for your minor children if something happens to both parents. The probate court must appoint a guardian, but naming your preference in your will can eliminate a lot of confusion and squabbling by family members over who will care for your kids. You can also name a conservator to manage the assets you're leaving to your kids until they become adults.

It can be the same person as the guardian or someone else. A will also enables you to disinherit individuals who might otherwise receive some of your assets if things aren't specifically listed in the will. A will also goes into effect only after you die while a trust is put in place and can dictate how your assets are managed while you're still alive. Now, there are two basic types of trusts, revocable or living, and irrevocable.

An irrevocable trust requires court approval to be altered or dissolved. A revocable trust does not, and you can change it any time you like while you're still alive. Maybe the biggest reason folks establish a trust is that they allow assets to pass to heirs without going through probate. And since the estate, or at least the part of the estate that's placed in the trust, doesn't go through probate, all of its transactions remain private.

So how does that work? Well, when you establish a trust, you become the trustmaker or grantor. You can then place assets in the trust, and the trust becomes the owner. You can also name a trustee who will manage the assets. Most often you would name yourself as the trustee, so you retain the control of the assets, allowing you to do whatever you want with them, just like you could if you still own them. Of course, you also name your beneficiaries and a successor trustee who will take over the management function when you die or become incapacitated, and that's another key advantage to a trust. If for any reason you're no longer able to manage the trust's assets, such as with Alzheimer's disease or some other malady, the successor trustee can immediately take over and continue to manage the assets for you and your beneficiaries. The successor trustee does not have to be appointed by a court, as does an executor named in a will.

This is also beneficial if you have minor children or children whom you feel aren't capable of managing money responsibly. The successor trustee can continue to manage their benefits until such a time as you designate in the trust language. That's not the case with a will. You can put a minimum age for inheritances in a will, but children are entitled to contest the provision and inherit the assets when they reach 18. So the question remains, do you need both a will and a trust? The answer would be yes, if you, for any of the reasons mentioned, have to set up a trust to manage your estate and you have minor children and need a will to name a guardian. And again, regardless of which way you decide to go, we recommend you have an estate attorney draw up the necessary documents.

You can find one with the certified kingdom advisor designation, someone who shares your Christian values at Just click find a professional. I hope that was helpful. Well, folks, we're going to head to a break, but let me remind you, we're out of the studio today. Our team is not here, so don't call in, but much more to come just around the corner on Faith and Finance Live. Stick around. So glad to have you with us today on Faith and Finance Live.

Our team is away today, so don't call in, but we lined up some great questions in advance and we'll be going to those here in just a moment. Let me also remind you that the advice that I give each day on this program is general in nature. We offer principles and ideas that apply at a high level. They are not personalized, so that's why you should always seek professional financial advice. And if you'd like to find a professional who shares your values, we of course here at Faith and Finance Live recommend the certified kingdom advisor designation. These are men and women who've met high standards and they've been trained to bring a biblical worldview of financial decision making.

You can find one at All right, let's get to our calls today that we've lined up for you. We'll begin in Iowa, Fort Dodge. Hi, Walt. Go ahead, sir.

Hi, Rob. I'm getting ready to retire this year and I have been very aggressive in my stocks. I've had 85% of my money invested in stocks and only 15% in bonds, but wanting to pull back right now is getting ready to retire here in mid year and just not really comfortable with the way the stock market might be going. I mean, we've recouped a lot the last year here, but just wanting some advice on what you think and if I should put more into mutual funds or what you think I should do at this point. Yeah, that's great, Walt. So what have you accumulated roughly?

I've got 1.8. All right. And you said how far off is retirement?

About six months. Okay, great. Yeah. And so have you worked up your retirement budget just to see what you think your total monthly expenses might be once you get to that point? Right in between my wife and my Social Security, we should be fine on that at this point. Okay. Social Security alone, are you also factoring in withdrawing something out of the retirement assets? No, just the Social Security loan. Oh, that's great.

Yeah. So obviously that can continue to build. You've got quite a bit of time before you'd have to take a required minimum distribution out of that if you roll it to an IRA. So you're in pretty good shape. You know, I think the key is you're probably to that point, I mean, I generally say the breakeven point on long-term care insurance is right about 2 million in assets.

I mean, you're there basically. So you can probably self-insure and not have that major expense. In terms of what we might think related to an asset allocation, I mean, a good rule of thumb is you would take 110 minus your age. So in this case, let's call that 70.

I mean, you'd be close. We talk about maybe a 40% allocation to stocks. If you want to be more conservative, you can certainly go down to 30%, which would put you at somewhere between 60% and 70% in bonds.

I'm glad to hear you weren't in bonds more heavily over the last year or two because they've done so poorly, but we are entering a season where bonds will do well as rates start to come down whenever that happens. And just given where the yields are right now, you can lock in some really high quality, short-term, corporate and government bonds either through mutual funds or direct ownership and I think do quite well. Perhaps add an asset allocation, a portion to precious metals up to 10%. If you did that, maybe you go 30% stocks and 10% in gold or something like that and then the balance 60% in stocks. I like mutual funds. You could use individual stocks as well. You could also use ETFs.

I think the big question is who's going to make those selections? Do you want to do that yourself or do you want to hire somebody to do that? At this point, I've been watching it myself and we go through Edward Jones and telling them what we want to do, but at this point, because of my age, I'd just like to get out of it and have a managed account. I think that's wise, Walt. The Bible certainly speaks very favorably about seeking wise counsel and the multitude of counselors and the benefits that come from that. You've worked your whole life to build up a substantial nest egg. You've put yourself in a position to be able to lean into whatever God has for you and your wife in this next season.

Your expenses are covered. It doesn't sound like you're trying to increase your lifestyle at all. You just want to be able to enjoy what God has given you. I think having somebody that can wake up every day thinking about that, take that pressure off you, obviously a lot of open communication. They need to really have the heart of a teacher and be very curious about what God's doing in your life so that this portfolio can reflect your goals and desires as a couple and really direct the investments accordingly.

But I think that makes a lot of sense. A lot of folks get concerned about the fees. There are legitimate fees there. On a portfolio like this, if you're paying 1% a year, that's nearly $20,000. Yet, I think the value of having somebody giving oversight to that, the incremental benefit just in terms of returns, but also protecting your assets is certainly worth that. I'd start now and interview maybe two or three advisors. If you don't have someone in mind, you could find one of our certified kingdom advisors there in Iowa on our website at Again, interview several of them. Find the one that you feel like is the best fit.

But I think overall, starting to dial down that stock portion down to that 30-40% target is probably a good starting point, and then obviously you and the advisor can dial that in a little more specifically. Does that all make sense? Yep, that helps a lot. Really appreciate it.

Happy to do it. Hey, I want to send you a book. There's a book by my good friend, Jeff Hainan. It's called An Uncommon Guide to Retirement, Finding God's Purpose in the Next Season of Life. It talks about the importance in early retirement of taking a sabbatical rest, listening to God's voice, rethinking worth in retirement, even family systems and leaving a legacy. I think it'll be a real encouragement to you and your wife.

So you stay on the line. We'll get your information. I'll get this in the mail to you as our gift. Thank you very much, Rob. Happy to do it. God bless you, sir. Let's go to Farmington, Missouri. Hi, Terry.

Go right ahead. Hey, I've got a question about even keeping the Part B for my husband. I'm assuming they take the first page of your income tax for income, but they don't take, we own the business, they do not take, or I've been told, the second page, which is all the deduction. So that puts my husband at an extreme high payment. And I don't know that it's even worth keeping this Part B.

Yes. Well, you certainly need to take a hard look at that because you're right. That income is going to affect what you end up paying for that.

And it can get pricey, especially if you have a high income. And so it's certainly worth factoring that in as you consider what the best option is for you all moving forward. Have you run your budget and just kind of looked at the impact of all of this? Yes, I don't feel like it is. I mean, it's almost $3,000 every two months for Irma and Part B. And I don't believe, I don't know, I don't believe that it's of any value. It's just draining. Yeah, yeah, yeah.

No, I get it. And so you, you know, you may need to get coverage outside of that, you know, just given that, you know, it is so costly. So, you know, I think I would do do your homework on that. Look around, just recognize that, you know, you're, you know, you've got to make all these numbers work and balance the budget in this season of life. And this certainly is a big part of that. And the Irma plus the Part B on top of it, you know, can can add up quickly and create some real problems there.

So I'd look at alternatives. Terry, thanks for calling. You guys are going to figure this out. We appreciate you checking in with us on the program today. Folks, we're going to take our first break here. And then when we come back, we've got some great questions lined up.

Matthew in Texas, we'll head to Arkansas and talk to Al. But before we head to our break, let me remind you, we're not here today. Our team is away from the studio, so don't call in. But we have some great questions we lined up in advance. This is Faith and Finance Live, and we'll be right back. Thanks so much for joining us today on Faith and Finance Live. I'm Rob West, your host. Hey, our team is away from the studio today. We're not here, but we've got some great questions that we lined up in advance.

I know you'll enjoy that. We'll get to it just a minute. Folks, have you checked out recently our website at

If not, I'd encourage you to do that. You'll find our community there where you can post questions and comments here from others that are on the stewardship journey as well. You can also access our content and check out the Faith Fi app.

It's at All right, back to the phones. We go to Texas. Matthew, how can we help you? Hi there. Thanks for taking my call today.

I just had a quick question. I'm involved in a family partnership where we have one general partner and two investment partners. We're eligible this year to qualify to convert to an S corp. And I just want to see what the advantages of that conversion would be. It's been a little hard to find information on that online.

Yeah, very good. You know, partnerships and S corps have a great deal of similarity because they're not subject to corporate level tax, which is obviously the main benefit. They both offer the limited liability protection as well. Now partnerships have a bit more flexibility, especially if someone's used to a regular paycheck and the holding, the withholding that goes along with it. S corps are great for active businesses because you can receive both the wages and the distributions that have different tax consequences. But the S corp is less flexible in its operation. Is this a real estate entity? No, it's a consulting business.

Okay, gotcha. Yeah, I mean, I think at the end of the day, it's really going to come down to the taxation. And do you all have a trusted CPA or accountant that you've been working with that could help you kind of crank through the numbers and determine which is going to be the most helpful to you? Yeah, actually, I'm the one working on my CPA. I just came from another country. So I'm still learning the tax rules down here and sort of didn't rack my brain to find information on this.

So yeah, very good. You know, I think the key is, you know, with the partnership, I mean, they're they're easy to form, there's nominal accounting requirements, certainly a lot less paperwork and management. But the, you know, they may be subject to the self employment taxation.

And, you know, you can't raise capital, which is often the biggest downsides. Whereas with the the S corp, you know, it can be a lot more flexible, you have the ability to distinguish between that which you're, you know, drawing out as as income, and that which you're, you know, taking as distributions which have the different taxation on that. So those are the primary differences in terms of liability.

They're very similar. So I think at the end of the day, as you just evaluate the business yourself and look at kind of how you want to divide up the income, you know, it's going to be there's going to be one that's a winner over the other just in terms of, you know, what the total tax liability is. So I think that really needs to be your focal point at this point.

You know, you certainly could check with an attorney just on, you know, making sure you have your basis covered from a liability standpoint. But at the end of the day, they both offer a lot of flexibility. They're both very similar.

They're both going to get past the corporate tax structure. And so really, it's going to come down to how you compensate yourself on that. But hopefully that's helpful to you. I know you're probably have a steep learning curve. And I can certainly get that, you know, perhaps getting a CPA or accountant to consult with you, just as you make this decision, you know, may be helpful just as you're getting up to speed on on a lot of the US tax code. But we appreciate you being on the program, Matthew, thanks for calling today. Let's go to Arkansas. Hi, Al, how can we help?

Thank you for taking my call. When I was 61, I had a advisor lawyer that did disability advise me to go ahead and start taking my social security at 62. And then at 62 and a half, we'd file for disability and whatnot. I've been self employed in remodeling construction for years, and I never have got to where I'm like wheelchair bound, you know, I'm 60, six and a half now almost 67. And you know, I got to pretty much take a pain pill if I'm going to work much of a day that kind of stuff in the back of the neck and all those things are just wore out. So at the time that he's talked to me at 62 after I'd already applied and my wife never had enough hours, so she's on social security with with me.

So we're not making that much of social security. But at 62 and a half, he says, Well, we've got to have something worse to claim on like your hands and things. I'm like, I'm not gonna lie about that.

You know, I've got issues, but I'm not gonna lie. Well, since that time, it's gotten to where I'm getting down where I just can't can't work. And I was wondering now at this age, is it too late to still try to apply for disability? Hmm, yeah, once you reach full retirement age, you can't file for Social Security disability benefits. I mean, there there is a situation where an early retiree can receive disability benefits to supplement their early retirement benefits. If the Social Security Administration approves their application, and then in that situation, they would receive early retirement benefits plus disability benefits. But the combined benefits can't exceed the benefit amount you're entitled to when you reach full retirement age, which is, you know, between 66 and 67.

For most folks, does that make sense? You know, if we hadn't gone on that council, I would have waited till now to go on disability but since we went on, I mean, not necessarily Social Security, but since we went ahead and I'll proceed. So scary at 62.

You know, we're stuck with that. Yeah, unfortunately, I mean, you could certainly apply or have you reached full retirement age? Well, I'm 67 and a half I mean, six and a half. Yeah.

So you may be there. It's going to depend on when you were born. Was that pre 1960? Yeah, I was 56.

Okay. So if you were born in 1956, it's gonna be 66 and four months. So you're past full retirement age. Which means you can apply for the disability benefits.

You could always, you know, call the Social Security Administration and just double check. But generally speaking, that's the way it works, unfortunately. That's all right. That gets us to continue to rely on the Lord for our kids. That's right. I love that. You know, Bill Bright used to say that often the founder of Campus Crusade now called crew he would never anything like this happened or came his way. He'd say, What an opportunity to trust God.

And I think that's a great perspective, no doubt. Hey, thanks for being along with us today, Al. God bless you, sir. Hey, folks, we're going to pause now for a brief break, but we'll be back with much more on today's Faith and Finance Live. This is Faith and Finance Live with Rob West. Hey, if you hear a phone number mentioned today, please ignore that number and don't call us because today's broadcast was previously recorded. But we think the upcoming information will help you and make you a wise steward of what God's given you.

So please stay tuned. I'm so thankful you've joined us today on Faith and Finance Live, where we apply the wisdom from God's Word to your financial decisions and choices. Before we head back to the phones, let me remind you, Faith and Finance Live is listener supported, which means we can only bring you this broadcast and all of the resources on the FaithFi app and at, our certified Christian financial counselors, all of the things we do as a result of your listener support. And so if you'd consider a one time gift or maybe becoming a financial partner, we'd certainly be grateful. It would help us reach more people with the message that God should be their ultimate treasure and then teaching them wise money management skills and principles. You can make a gift today at That's

Just click Give and thanks in advance. All right, we're going to head back to the phones. In our last segment, we were talking to a caller. Actually, her husband was self-employed because of a lot of that self-employment income. She was facing high Medicare Part B plus Irma payments and just concerned about how that would all fit into the budget.

Ashley in Louisiana is calling as a follow up to that. Ashley, I understand you're a Medicare insurance agent and you want to offer some advice. Go ahead. Yes, sir.

Good morning, Mr. Rob. I just wanted to say that if he is on group insurance and still has his group insurance and it's cheaper than his Irma, I would advise him to stay on that. The Irma's are re-evaluated every November and they go back two years. Now, I don't think, not that I know of, I don't think there's any other options once you get on Medicare for any other insurance unless you stay on group insurance. Yes, right. Yep. And so you've got to have that group insurance. Obviously, if that's cheaper, stick with it. But apart from that, you've unfortunately going to have to have that coverage. And I know it can be expensive that Irma, as you said, will change.

And so obviously your income will affect that. So that's good advice, Ashley. We appreciate you weighing in and hopefully Terry is still listening. Thanks for your call today. Let's go to Ohio. Hi, Lois.

How can we help? Hi. Yeah. Thanks for taking my call. Sure. I appreciate your program because of the biblical wisdom that we can get. We can get the math stuff other places, but I only get the wisdom from the Bible. That's right.

Thank you very much. So my question is, I am retired. I'm 65 and I have money in various accounts and I'm not sure how to begin drawing them down. I have a traditional IRA. I have a 401k. I have a small Roth IRA and a small inherited IRA. And I don't know what order I should start drawing the money down. Yeah, but typically the way we want to do that is we want to start with taxable account.

Doesn't sound like you have anything there. And then you want to go to the traditional IRA next. So the pre-tax money and then leave the the Roth for last because there's never going to be a required minimum on a Roth if you have one. In terms of the difference between just a straight IRA or a 401k that you may or may not roll over to an IRA versus an inherited IRA, you know, unless it was a spousal IRA, you probably want to pull from the inherited IRA first because you're going to have, you know, a window of time where that money has to come out usually 10 years, although the law has been changing on that as of late with the SECURE Act. So you may be able to take it out at a different schedule. But because it has to come out a little quicker typically than just a normal IRA where you're waiting for the required minimums at 75, I'd prioritize that first. So the order would be taxable accounts first, then inherited IRA, then regular IRA or 401k and then Roth if you have one. Does that make sense?

It does. The only hesitation I have is, and I didn't give you full information, I do have a brokerage account, taxable account. And the only reason that I hesitate to take from it first is if I leave it alone and I don't ever pull from it, then it's never going to be taxable, right?

Because it's going to have step up basis for my heirs. That's true. Yes. So just keep in mind, though, when you say pull from it, there's a difference between withdrawing and selling. So you're generating capital gains and losses every time a security is stock or a bond is sold inside the taxable account, regardless of whether you draw it out. So you're just through the course of the investment management, unless you just pick a portfolio and buy and hold it forever.

Through the course of buying and selling, you're generating those capital gains and losses, regardless of whether you take out the money. Are you clear on that? Yes. Yes, that is true. Yeah, that makes sense.

Yeah. So I wanted to make sure that was clear, but you're right. If you do a buy and hold strategy and you want to hang on to that, you would absolutely be able to transfer that with the step up in basis. What will often happen, though, in a situation like this, Lois, is that you will have invariably, through the course of the management, the buying and the selling, you'll have some things that you sell for a gain, you'll have other things you sell for a loss, and typically those will offset one another. Often you will have the opportunity to pull out some cash just through the normal course of buying and selling, and you can avoid the capital gains by having those gains and losses offset. So that does give you then the option, assuming you were going to sell anyway, to go ahead and take some of that money out to live on if you needed it. But all things being equal, again, if you're just going to buy and hold it forever, you're right.

That would benefit to your heirs through that step up. Okay. Okay. That makes good sense.

That clarifies it for me. Thank you so much. Excellent.

You're welcome. Thanks for calling today. We appreciate you being on the program. Let's go to Arkansas. Kevin, how can we help you, sir? Hey, Rob.

Thanks for taking the call. I'm trying to set up a high yield savings account for a human emergency fund. And you have mentioned before So kind of go there. But as you mentioned another website once before, I've been able to check for banks that you know, have a Christian values and all and I didn't get that one written down. I was wondering if you could get that to me again.

Yeah, so not not specifically to find the highest yield, but you're talking about values alignment? Yes. Okay, yeah. Couple of thoughts there. One would be if you're just looking for a banking partner that, you know, does in fact share your values and where a portion of the profits are going to fund Christian ministries around the globe, I would check out Christian Community Credit Union. Wonderful partners and underwriters here at this program. And you can learn more at That's The website though that you may have heard me mentioned is called inspire insight, inspire It's a free resource that allows you to search any publicly traded company or mutual fund and just, you know, look at the values alignment or lack thereof. It pulls from just an incredible number of data sources to be able to evaluate these companies in terms of, you know, the issues that that believers will often care about. And so you may or may not find the institution you're looking for there.

But certainly if it's one of the big publicly traded, you know, banks, you could and at least know who you're dealing with there. So inspire or for Christian Community Credit Union, Okay, yeah, I believe that inspire insight was the one I heard before. Excellent. Thanks, Kevin.

We appreciate your call today. Well, folks, we've got one more segment coming up. So still room for more questions. Luke's waiting patiently there in Texas.

We'll take Luke's question after the break about a whole life insurance policy. But let me remind you, we're out of the studio today. Our team is not here. So don't call in but much more to come just around the corner on faith and finance live.

Stick around. So glad to have you with us today on faith and finance live. By the way, we're not here today.

Our team is away from the studio. So don't call in but we lined up some great questions in advance. We'll get to those in just a moment. But first, let's take an email. By the way, you can send us a question if you'd like to at any time at moody slash finance. This comes from Brenda. She writes, I'm 62. My husband is 64. We have no plans to retire in the near future.

Lord willing, we have some savings and investments. Have we passed the window of time to take out long term care insurance? And is that the best way to finance any future long term care?

Yes, it is. If you have assets and this is most folks somewhere between two hundred thousand and two million, it is in the range where you should at least consider long term care insurance to cover the cost of health care. Remember, 70 percent plus of Americans will need long term care for some period of time.

Those who are over age 65. So there's a good likelihood that you're going to need to spend this money for a season and it's expensive. You know, full nursing care can run nine thousand ten thousand dollars a month. So the best way to avoid depleting your assets and relying on Medicaid is to have a policy that kicks in with a daily benefit.

Now, they're not all created equal. You have to know whether or not what kind of waiting period you're going to have, whether you're going to have an inflation rider. And the big one is, can I make it fit in my budget? You're probably right at the tail end where it may no longer fit. So you're going to look closely at it and make sure you can absorb those premium increases along the way.

Find an agent who specializes in this before you do it. All right. Let's go back to the phones. Luke is calling from Texas. Luke, I'm looking forward to taking your call. And let me ask, how can I help you today? Yes, sir. I was talking with a friend this morning.

We're both drug drivers. So he's 33, has two kids and recently bought a home. And, you know, he's just concerned about his finances. But I had told him, you know, he does not have a life insurance policy.

So, you know, I said, you know, never know when something might happen. Need to have insurance that would cover your family for this this home you bought and you know, to meet their needs in case something was to happen. So I already know, you know, a whole term is usually cheaper, but I don't know a good company to advise him to go to. Yeah, yeah, very good.

I think you gave him great counsel there, Luke. He absolutely needs a life insurance policy. Just to clarify the term. So there's whole life insurance, which is permanent insurance. And then there's term life insurance, which is for a specific period of time. Whole life is the insurance plus a savings vehicle. The term insurance is what I call pure insurance. So it's you're literally just paying the mortality expense based on the actuarial tables, which compute what is the cost of the insurance company to ensure his life, given his age and health status and the amount of coverage that he wants, the death benefit that would be paid to his wife. The benefit of the term insurance is it's far cheaper, about a fifth of the cost.

And which means he can get the amount of coverage he really needs, which at a minimum is 10 to 12 times his income payable to his wife, who would be without his income at his death. But then the other issue is that you keep it while you're working. And then the idea is that once you're moving into another season of life where you're no longer working, you drop it because you've built up the assets. If you were to pass away, you're not creating a hardship for anybody who's depending on you because you're not bringing in any more income. So it's an expense that's unnecessary at that point. And folks might say, well, you've been paying all this money, you didn't get any benefit from it. Well, the same is with your car insurance. I mean, you pay car insurance and you hope you don't ever have to use it, but you're glad you have it if you do.

And the same is true. You hope you don't have to use the life insurance, but you're also covering your family to make sure that your loved ones can maintain their lifestyle at your death. So that's what I would do is tell him to go find a term insurance policy. And, you know, I think the best place is through an independent agent who can go out and find, you know, the best policy for him. If he wants to use, you know, kind of one of the online tools, you know, he could certainly do that. There are some good ones out there where he could just go out and compare rates. You know, NerdWallet would be a great one to help. Policygenius is another one. And then a third one is called SelectQuote. So you know, there's a lot of great online tools out there that would help him find one.

But I don't think that replaces the benefit of finding an independent insurance agent who can go out and shop this around for him. Is that helpful? Yes, sir. I was writing this down as you speaking to me.

OK. Thank you very much. You're welcome.

Thanks on the information. Hey, we appreciate your call today. May the Lord bless you.

Let's go to Tennessee. Jeffrey, thanks for your patience. How can I help you?

Yes. I'm hoping to get a little bit of advice to find out if I'm doing the right thing, but I'm almost 68 years old. I am still working. I still got a mortgage that I will have probably for the for the rest of my life. But I do have some money, a little bit put in.

I don't know if I stayed the name of the company, but I got immunity with nationwide. I put four hundred dollars a month in into that. I'm probably looking to try to retire just as soon as I can.

I'm trying to figure out if I'm doing the right thing and if I got my money in the right place. Yeah. Yeah.

Very good. Jeffrey, certainly the annuity can be a great planning tool. Do you have the ability to stop those contributions, the premiums and then annuitize turn it into an income stream? Yes. That's that's what the game plan is, is that, you know, because I told them I'm hoping to retire at the age of 72 because that's when my wife will be collecting her total security. And they're they're saying that I'll get seven percent.

OK, on my return. Yeah. So so that's a great return.

Yeah. I mean, I'd be delighted. And then the opportunity for you to turn that in to an income stream back to you is a great opportunity. So I think the key for you right now is just to continue to build that up. And then, you know, the big thing is just looking at what are my expenses going to be when I stop working. And, you know, do I have enough coming in between Social Security and let's say this annuity payment or this income stream that you'd have from the annuity? Is that enough to meet my obligations?

And if not, do I need to keep working longer, you know, or what else could I do? Do I sell the house and downsize and, you know, try to pay for something with cash or, you know, the other option is once you get to 50 percent equity in the home, you could turn that into a reverse mortgage. Do you are you familiar with that idea?

I have heard heard about that and I checked into it once. But but like at the time, I didn't have enough equity into the home. But I am I am pretty sure that I have enough equity now.

OK. So you would you would kind of recommend that is to look into the reverse mortgage? I think it's an option to consider as a planning tool. You know, I'm not one who says automatically let's tap, you know, every dollar out of the equity of our home.

I value the idea. We see it certainly seen in scripture of being debt free. And, you know, there's there's real warnings around the use of debt. The difference with the home equity conversion mortgage or the reverse mortgage is that there's no personal guarantee. So essentially the government is guaranteeing that the only thing that you will ever have to use to satisfy the mortgage is the home. And, you know, if you sell it at some point, you can't owe more than what you get for the sale of the home. The same is true for your heirs if you were to pass the home on. So the if there's ever a shortfall there, normally with a traditional mortgage, you're responsible for that. In the case of the reverse mortgage, the government is responsible for it.

So you're really not obligating yourself. You're just putting the home up as collateral. Now, the other thing is a lot of people think about reverse mortgages in terms of taking money out and and growing the balance by pulling it out, plus the interest rate.

You don't have to. One option for a reverse mortgage is just to stop paying them, making the payments. So as long as you have the 50 percent equity, you may not take any more cash out as a lump sum or an income stream. But what it would do is it would eliminate your payments because the reverse mortgage would pay off your first mortgage with a reverse mortgage. You don't have to pay anything in as long as you keep the taxes and the insurance paid, which now eliminates that major expense for your budget. Now, whatever that balance is that you owe, it's going to grow because there's an interest rate in there that's competitive and some fees. But it helps your quality of life because now you no longer have that payment in this season of life. And so that takes a lot of pressure off. Does that make sense?

Oh, yeah, it most definitely does. And I appreciate the information. Here's where I would go to learn more.

Our friends at Movement Mortgage could help you understand this a bit more. They're wonderful. They're a Christ centered company. They're just they're building movement schools all over the globe.

They're just amazing. Movement dot com slash faith. Are you do you use the Internet, Jeffrey?

Yes, I do. OK. Movement dot com slash faith. And they'll they'll get in touch with you and just explain it to you. And again, I'm not saying it's the only solution, but it's a solution or a part of the solution, I think, that should at least be considered as you think through this next season of life. So appreciate you being on the program, my friend. May the Lord bless you. And if we can ever serve you in any other way in the future, don't hesitate to reach out while we're about out of time today. Before we go, let me remind us why we do what we do here on this program every day. We gather for Faith and Finance Live because we recognize we all have a high calling. We're money managers for the King of Kings, which means we're to be found faithful as we manage God's resources, faithfulness, obedience over a long period of time, applying the wisdom of God's word to every area of our lives.

And that includes our finances. So thanks for being here today. Thanks for calling and for writing and for your emails. We love to do what we do and serving you to be wise stewards of God's money. I want to say thanks to my team today.

Clara, Deb, Amy and Jim couldn't do it without them. Faith and Finance Live is a partnership between FaithFi and Moody Radio. We'll see you next time. God bless you. Bye bye.
Whisper: medium.en / 2024-03-11 19:57:36 / 2024-03-11 20:14:19 / 17

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