Marriage and the Bottom Line

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Learn more at eventideinvestments.com. and obtains favor from the Lord. Proverbs 1822.

Hi, I'm Rob West. God's word speaks of the many blessings of marriage, companionship, comfort, and loyalty to name a few. But did you know that some marital blessings are financial? I'll talk about that today and then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is faith and finance, biblical wisdom for your financial journey. Studies consistently show that married people fare better financially than single people, significantly better. Here's what's disturbing. Despite the many benefits of tying the knot, the marriage rate in America continues to fall. According to the Census Bureau, the percentage of adults living with a spouse decreased from 52% to 50% over the past decade.

Now that's not a big drop, but it shows that a decades-long trend is continuing. In 1960, 67% of adults were married. This means that a growing number of Americans, especially millennials, those born from 1977 to 1995, are missing out on the financial benefits of marriage.

Only 44% of millennials are choosing to marry these days. They may be unaware of the relationship between a person's marital status and household wealth. The Census Bureau reports that the media net worth of married couple households is greater at all age levels than that of households headed by unmarried people. Well, no kidding, especially if both spouses are working. But get this, married heads of household have a net worth nine times greater than unmarried female householders and three times more than unmarried male householders.

Now, a couple of disclaimers. First, this isn't always the case. We're talking about averages here. Obviously, some single people can be quite well off. Second, we're not suggesting that everyone should be married. Jesus wasn't married.

Paul wasn't married and he recommended against marriage for those who were single and already called into the ministry of the very early church. Okay, it goes without saying that single parents are under a great deal more financial strain than our married couples and are far more likely to experience poverty. Several years ago, the Los Angeles Times ran an op-ed titled The Single Mom Catastrophe.

It pointed out the challenges for single moms and society as a whole. For example, in 1965, only 7% of American children were born to unmarried women. These days, around 40% of all births in the US happen outside of marriage and 25% of parents living with a child are unmarried. Of course, it's only logical that single parents face a greater financial challenge than married couples with the family's potential earnings cut in half or more. But even married households with only one spouse working are better off than a single parent. Again, on average, they don't have child care costs and other expenses. Only around 10% of married couples are classified as poor by government standards, while 40% of single mother families are living below the poverty line. Obviously, marriage is financially beneficial to women, especially women with children. But what about men? Studies show that what's good for the goose is good for the gander too. Married men have more incentive to work harder and longer, putting in more hours than unmarried men.

On average, single men work fewer hours, earn less money, and even receive fewer promotions than married men. We can boil all this down to four key decisions in life. First, graduate from high school. Yes, I know that studies consistently show that, on average, you'll have more earning potential with a college degree. But college isn't for everybody, so at least get a high school education. Second, get a job.

That one's pretty obvious. Third, like we've been saying, get married. And last, if the Lord allows you to have children, wait until you're at least 21 to do so. For a married couple, the whole is greater than the sum of the parts. By joining together, their strength is more than doubled.

None of this should be surprising. Marriage was, of course, ordained by God to be a blessing to us. Let me finish with Ecclesiastes 4, where it teaches, Two are better than one, because they have a good return for their labor. For if either of them falls, the other one will lift up his companion.

But woe to the one who falls when there is not another to lift him up. We want to encourage you in your marriage journey, especially as it relates to finances, and let me direct you back to our website for all the helpful resources you'll find at faithfi.com, many of them on money and marriage. All right, we're going to take a quick break, and we come back. Your questions at 800-525-7000. That's 800-525-7000. I'm Rob West, and this is Faith and Finance.

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It's available on desktop or mobile. Simply go to faithfi.com and click app to get started. Welcome back to Faith and Finance. I'm Rob West. We're taking your calls and questions today. Let's head right back to the phones to Newcastle, PA. Lynn, go right ahead.

Hi. I wanted to get your opinion on whole life insurance. We're really good on kind of checking off the boxes of all our savings and even estate planning, and is there any place for whole life? Yeah.

I mean, there is a place. I mean, generally, let's say you're behind on retirement savings and you're looking for a way to really maximize your tax-deferred investment opportunities, and maybe you max out a plan at work or you don't have one, and so life insurance can be another way to save in a tax-deferred environment. But apart from some real isolated cases, I'm just not a big fan of whole life insurance because you're mixing insurance and investing, and it just tends to be more complicated. It's more expensive.

I mean, my preferred way to go about these two things would be to separate them. And then for your life insurance, you just buy pure term insurance, which is the least expensive. It allows you to get the coverage you need while you need it, which is during your working years. At a minimum, you need 10 to 12 times your incomes. If you're making $60,000 a year, you need at least $600,000 to $800,000. If you're making $80,000 a year, you might want a million dollars in life insurance. And then on top of that, some people add the cost of paying off the mortgage, maybe a college education paying off debt.

And term insurance is the most cost-effective way to buy the true amount that you need. And then you save in tax deferred vehicles that are pure investments. So you're not getting the drag of the fees and expenses and you can get a better rate of return through a 401k or IRA or both. Maybe you have a self-employed situation, you're saving through a SEP IRA or something like that.

That would be my preferred approach because when you reach that season of life where you've reached your accumulation goal and you've answered the question, how much is enough? Then you can drop the life insurance because there's not a risk there. If you're married and one spouse passes away, the other spouse is not counting on that income because there is no income. You're living off of retirement assets and social security and the kids aren't depending on you anymore, that kind of thing. So unless there's a lifelong dependent, like a special needs child, or again, you know, you're looking for extra tax deferred savings vehicles.

I really like term insurance over the whole life. Does that make sense? Oh, great.

Yes. I appreciate the explanation. All right. Thanks, Lynn. We appreciate your call today. God bless you. Let's go to Illinois. Hi, Donna.

How can I help? Hi. So social security question here. All right. Yep. So my husband's eligible to draw and he's a lower wage earner and I'm not eligible for another like four years. So I'm just, we're just trying to figure out if it makes sense for him to, I know there's something with like the spouses, um, so social security as well, like part of being part of his payment. So I kind of read through some of the rules and I wasn't clear on how it all works. Yeah.

Yeah. Um, so the key is he can take either his own benefit based on his work record, or he can take a spousal benefit based on yours. And the most he'd be able to get on a spousal benefit is 50% of yours. So the question is, and that's if he waits until full retirement age, if he takes it at 62, then he's going to get a reduced amount, you know, 50% is the max, so maybe he gets 30% or, or something like that because it's going to be reduced for him taking it early. Um, so I think the key is, um, you know, one option is he could, if he, if he believes that, uh, you know, getting, uh, you know, the, his benefit down the road will be the higher amount and he's still working. Um, he could, you know, once you start taking yours, he could get the spousal benefit and then switch, or he could do the opposite of that. He could start taking his own. And then, you know, once you start collecting, then if it makes sense, he could switch to his spousal benefit on you, but it really just depends upon which is going to be the higher. He can't collect both. He can collect the higher of the two.

So what I would probably do Donna is connect with the social security administration, SSA.gov, schedule a meeting, uh, and determine, uh, you know, what is the appropriate path forward, um, you know, based on his actual work record and based on yours as a spousal benefit, and then determine which one is going to be the higher and the appropriate time to take either of them just in order to maximize them. Does that make sense? Yeah. Perfect. Yeah.

Yep. Very good. Uh, appreciate your call.

SSA.gov is where you want to go and, uh, they'll be able to get you the information. You could schedule an in-person or a virtual, uh, visit. Thanks for your call today. Uh, let's go to Naples and, uh, welcome Mary. Hi there. Hi there. Thank you for taking my call. Sure.

I have a question. I am retiring in four months and, um, I'm trying to do a budget. I am debt-free. I have no debt whatsoever other than my regular monthly expenses. My question is what is taxed?

I'll be drawing social security, but I'll also be, um, receiving, uh, Florida retirement as well, FRS. Yeah. But I can't seem to get a straight answer from anyone as to what's taxed. Are they taxed?

Yeah. Uh, so your pension is taxed, uh, as ordinary income and will contribute to any other earned income for the calendar year. Um, with regard to social security, uh, you have, it depends upon how much earned income you have. Um, and so it, it really just, you know, depends upon ultimately where that's going to be. Do you file as an individual or do you file a joint return? Individual. I'm widowed.

Okay. So if you were, um, income, your combined income, um, in is between 25 and 34,000, then you'd pay income tax on up to 50% of your benefits. If you're over 34,000, it would go on up to 85% of your benefits. Social security benefits would be taxable.

Um, so it would be a matter of determining that, uh, that adjusted gross income as to, you know, based on the FRS, the pension that you're receiving, uh, plus any other earned income, uh, you know, kind of where that allows you to fall in terms of how much income you have and what percentage of, if any of your social security benefits, um, you know, would, would be taxable. So what I would probably do, Mary, is do you normally prepare your own return? I do not. I have a CPA. Okay.

Yeah. I just schedule a visit. Uh, given that, you know, anytime we've got a major change come in, like you do when you retire, it's, it's a good idea just to do some pre-planning. So I'd go ahead and schedule a visit with your CPA and just do some tax planning and help your and ask your tax professional to determine exactly what will be taxable based on your, your actual FRS record and what's going to be coming in plus what you're going to get from social security. They can tell you, they can do an estimate, an estimate on, on what you'll be needing to pay. And then that'll help you determine exactly how much income you'll have left so that you can build your budget around it. And having that specific information, I think will be a really important planning tool.

So I'd get that, uh, appointment schedule with your CPA sooner rather than later, and just let them know you want to do some tax planning, giving, uh, given your upcoming retirement. I hope that helps you, Mary. Thanks for your call today. We appreciate it.

Folks. We're going to take a quick break. When we come back, uh, your questions on anything financial, we're going to head to Ford Meyers and talk to Daniel next about a mortgage and what percent of your income it should be. Stay with us.

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Open enrollment is here. So make the switch today with potential cost savings up to 40% Christian healthcare ministries at chministries.org slash faith buy. We are grateful for support from sound mind investing in the faith and finance program. If you have money in a retirement account or just a general investing account, you know, the stock market can sometimes seem like a rollercoaster, but it is possible to enjoy both profit and peace of mind and investing. No matter what's happening in the market, you can see a short video webinar on that topic at soundmindinvesting.org since 1990 sound mind investing has sought to offer financial wisdom for living. Well, soundmindinvesting.org. Welcome back to faith and finance. I'm Rob West.

This is the program where the 2,300 verses on money and possessions found in God's word intersect with today's financial decisions and choices. The number to get in on the conversation, 800-525-7000. That's 800-525-7000. Let's head to the phones to Fort Myers, Florida. Hi, Daniel. Go ahead, sir. Hey, hi.

How you doing? Thank you. Thank you so much for taking the call. Thank you for calling. Absolutely.

So, here's the thing. I know it might be details involved, but just a question about housing right now. The thing is, thank God we don't have, the only debts we have is our car.

I'm talking, we have my wife and I. And the thing is, the market, the people saying, you know, their percentage interest will go down, so their prices will go up. And if we decide to purchase a house right now, it will be like 45 or a piece of income, roughly. So, I don't know if it's wise enough to 45% of our income for a house.

I'm always trying to have my mindset to 30% roughly, but what do you think about the 45? And this is wise to wait or I don't know. I know you have a question.

Yeah, no, I appreciate the question, though. And here's the thing. I mean, I wouldn't try to get into or buy a house you really can't afford out of fear that you might miss out on increases. You know, we've seen a tremendous rise in home prices, and largely because we just don't have enough homes in this country for the demand that exists. You know, they're trying to remedy that and we have new home starts that are increasing. And that's why the housing prices have held up despite this rapid increase in interest rates. But you, your payment, principal interest, taxes, and insurance, if it's 45% of your take home pay, you're just really going to struggle, Daniel, to cover everything else.

I mean, my recommended percentage is 25%, not even 30%. So, I wouldn't make a premature purchase because, you know, because you think housing prices are going to continue to go higher. I don't think there's any reason to believe they're going to go, you know, we're going to see as rapid of an increase, even with the interest rates coming down, as we did a few years ago, pre-pandemic. I think we're going to see more modest growth. And I think the key for you right now is to try to focus on, you know, getting a bigger down payment so that you're borrowing less. And, you know, hopefully, you know, maybe in time, you've got income that's growing, maybe you're getting raises and bonuses, things like that. Maybe you find a better paying job along the way.

But, you know, that would be a major red flag for me with you buying a house at 45%. Thanks for your call, sir. Let's go to Chicago. Hi, Sarah.

How can I help? Hi, Rob. Thank you for taking my call. So, I just have a question regarding a rental property that my husband and I own. So, this was like the first house that we purchased, you know, we got married 22 years ago. So, unfortunately, it's not paid off. And now we're at the age where we have two kids in college.

All right. I'm just trying to get your information, you know, like, have you, if you don't mind weighing in on the situation, is now the right time to sell? Because I'm concerned about, you know, FAFSA and all that huge cash. But as far as like freeing up that money where we're not really getting a return, I never expected that the same renter would be there for nine years.

And she has been and she's been taking, you know, great care of the house. But we really haven't we really haven't been seeing any type of profit on it. So, you know, now just with the huge burden of college and not wanting to incur debt, I am thinking now might be the right time but wanted your opinion. Yeah, I think it's a great question. I mean, obviously, given that it's not it's not cash flowing, that is a consideration. Now, what the benefit here is that even though you haven't had much in the way of profit, obviously, the home has been appreciating, I would expect, and the mortgage is being paid by somebody else. So you've got an asset that's appreciating. And as long as you've been able to cover the debt service and the expenses, the property insurance and the taxes and, you know, any kind of repairs or maintenance along the way, then somebody else has been funding that asset that has been appreciating over time. Now the question is, what's the best use of that asset? And given that you've got this major expense coming up, the question is, you know, do you take on debt, which would be at a high interest rate, and you're not going to get, you know, a return a guaranteed return equal to, you know, what you would be paying in student loan interest, that's for sure, on the house. So I think this probably is the time with a, you know, still a very robust housing market, despite these high interest rates. And especially given that there's not throwing off income that you're counting on, it's just been an appreciating asset, it probably is the time to take this liquidate it, pay the capital gains tax, and then, you know, get it invested in a more passive investment strategy, where a portion of it, you know, could have a time horizon of, let's say, the next five or five years or so until that second one graduates, where you can systematically pull it out and pay for college debt free.

I think that makes sense. You know, the only other thing to consider is just, you know, are there other ways to pay for college and let's not miss those. So, you know, our kids work, you know, worked really hard. And, you know, they we turned, you know, they turn their bedrooms into a college out college application, scholarship factory there for a while, and they applied for every scholarship and grant known to man. And, you know, you can encourage them to work in the summer and, you know, maybe in their latter years of college, maybe they're getting some part time work to help to pay. So I would look for ways without borrowing that you can offset the cost of college without feeling like you have to write the full check.

But at the same time, given what you're describing about the house, I think seeing this as a source to pay for whatever you're going to cover is probably better than taking on student loans. Yeah. Okay. So I just was wondering if there were any other questions or, you know, things that we just didn't consider, but I don't think so. Because I mean, yeah, is it appreciating?

Yeah, it's probably done well. But I think that at the end of the day, because it's not throwing off income, it's really just, are we better off letting this home continue to appreciate because the value is the value and it's going to grow? Or, you know, and in order to do that, we'd have to borrow to pay for college and with, you know, student loan rates where they are right now. I mean, you're talking 9% plus. And so are you going to get a guaranteed 9% a year growth in that home? No, you're not.

You're not going to get anywhere close to that is certainly not going to be guaranteed. So I think given that it makes more sense for you to take this asset and shift it into stocks and bonds with a portion kind of earmarked for college than it does to continue to let it just grow and let that renter service the debt and take on a high interest student loan payment. Yeah, that makes sense. Well, I appreciate your input. Okay.

Well, thanks for calling. I appreciate it and all the best to you as you enter a really exciting season of life with your kiddos heading off to college. Well, once again, our time went by way too fast, but tune in next time and we'll do it all over again. Before we go, I'd like to thank our incredible production team, Amy, Devin, Jim, Robert, Brandy, Rob, and Ben. Couldn't do it without them. Have a great rest of your day and I'll see you again next time for another edition of Faith and Finance. Faith and Finance is provided by Faithfi and listeners like you. Thank you.