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Get your copy when you become a FaithFie partner with a gift of $35 a month or $400 a year at faithfi.com. Whether to buy a house or go to college are major financial decisions, but so is deciding when to take Social Security. Hi, I'm Rob West.
It's true. Tens of thousands of dollars, if not more, are on the line when deciding when to start taking Social Security benefits. Eddie Holland joins us today to help you make that decision. 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. Well, we're excited to have Eddie Holland with us today. Eddie's a senior private wealth advisor and partner of Blue Trust in Greenville, South Carolina. He's also a CPA, a certified financial planner, and a certified kingdom advisor.
So a triple threat, so to speak. Eddie, great to have you on the program. Rob, thank you so much.
I'm honored to be your guest. Eddie, this is a topic we get so often related to when to take Social Security benefits. Now, we usually advise folks to put off taking Social Security benefits at least until full retirement age, which is now 66 or 67. But we realize that isn't always the best for everyone. So I'd love for you to weigh in on what folks should consider when making this decision.
Sure. And I'll start out by prefacing that this is not an exhaustive list, just some things to consider. I think the first thing people need to consider, Rob, is understanding that if they take Social Security before full retirement age, they will be subject to a reduction. However, delaying past their full retirement age, they will receive an annual increase that equals 8%.
That's what Social Security calls a delayed retirement credit. So those are very important things to consider. Another consideration is cash flow needs. If someone retires, then there's obviously going to be potentially cash needs that arise.
So they may start taking Social Security earlier than full retirement age because there's cash needs, income needs that they need to replace. We have some clients that we've advised that needed to pay down debt. And so if you have debt payment that you need to consider, that's another factor.
We've had clients that have said, I just want to increase my charitable giving. And so I want to draw Social Security, start giving more even in retirement or potentially as a legacy gift. So that's another consideration. One other factor to consider, and I don't mean to be morbid, but health is obviously a consideration. People that don't have longevity in their family line, they may start taking Social Security benefits a little earlier. Others that plan to live a long time or feel like they're very healthy. Generally speaking, the longer you live, the more you benefit by delaying Social Security at least until full retirement age and possibly even later until age 70.
Another factor, Rob, that I'll mention, I'll mention a couple more and then one that maybe is a little more nuanced. Legacy goals and inheritance. Most of the time you can't pass Social Security benefits on to kids or charity, but you can your portfolio. So some clients have said, I want to earmark my portfolio for giving or for inheritance reasons, and I want to start drawing Social Security now. Everybody loves to talk about taxes, but income tax is a component to consider.
Federal income tax guidelines state that Social Security could be subject to tax. So we've had some clients delay Social Security until a year where they're going to be in a lower tax bracket. And then one of the more nuanced strategies that really came up a couple of years ago, Rob, was when the market was down significantly. We had had clients that had retired prior to full retirement age. They were starting to draw from their portfolio. They wanted to delay Social Security.
Well, the market did not cooperate, had significant market drop. What the client then at that point decided was, can I stop or pause my Social Security benefit? If you are younger than full retirement age and you have started drawing Social Security within the first 12 months, you can do what Social Security calls a withdrawal. So you can withdraw your application, but a withdrawal application simply means I had a 12-month free look period. I don't want to draw it. I want to have what in golfing terms is a mulligan. I don't want to start drawing it. I want to pay it back. And it's as if you never drew it. The benefit of that is that you can turn it back on at a later point and you're able to potentially act as if you never drew it.
Now, that's a very nuanced strategy, something to consider before actually making that decision. That was so helpful. We're obviously going to have to have you back, but you gave us some really important things to think about as you consider the right age to start taking Social Security benefits. Eddie, we appreciate you stopping by today, my friend. Rob, thanks for having me. That was Eddie Holland of BlueTrust in Greenville, South Carolina, back with your calls and questions on the other side of this break. The number to call is 800-525-7000. By the way, you don't have to call, just send an email. AskRob at Faith, the letters F-I dot com.
We'll be back after this. Have you ever wondered where your money goes when you deposit it in a bank? Christian Community Credit Union believes in helping advance God's kingdom through everyday financial transactions. For over 67 years, they have provided values-aligned banking solutions to thousands of Christians and ministries. Consider Christian Community Credit Union as your banking institution by visiting joinchristiancommunity.com. Membership eligibility required. Each account is insured up to $250,000.
This institution is not federally insured. Great to have you with us today on Faith in Finance. We're looking forward to taking your calls and questions today. That number 800-525-7000.
That's 800-525-7000. Whatever you're wrestling with in your financial life today, we'd love to hear from you. Whether it's a spending plan, maybe it's your investments, perhaps it's debt repayment. Maybe you're trying to think through your wealth transfer process. Will or trust.
How much is too much for the kids? We'd love to tackle any of those questions or conversations. Just call right now. We've got some lines open. Calls are coming in, but we've got room for you at the moment.
800-525-7000. Three questions that we should all ask and answer, especially as Christ followers. The first question is, how much is enough? The second question is, how much is enough for the kids? And the third question is, what do I do with the rest?
Those are really three key questions we all need to wrestle with in our financial lives as we consider how we should handle what God has entrusted to us. We talk a lot about this idea, speaking to that first question of how much is enough. We talk a lot about finish lines. We talk about routinely the process for setting your first finish line. But thinking that your finish line is set in stone for life is enough to deter many people from setting one at all.
What a loss, considering that a lifestyle finish line is one of the most liberating financial decisions you can make. And there's several situations, I think, where it's worth reevaluating your finish line to ensure that it's still accomplishing its purpose. So first might be an annual review. Some givers adjust their finish line annually to keep in line with inflation. That's a logical approach.
There's not a right or wrong way to do this. The second would be family changes. Any change in the number of people you're financially responsible for is likely to affect the cost of maintaining the same lifestyle. Third, moving to a new region.
The cost of living can vary quite a bit. Any move should prompt a second look at your finish line. In some cases, the same finish line may cost even less than it did before you moved. Major life events, some major events, we're talking about maybe a child heading to college or prolonged change in health may temporarily affect housing spending or even household spending overall.
And so that might warrant another look at your finish line. You know, we talked recently about all the resources you're in control of that, you know, we can bucket into personal spending and planning for the future. And then we have taxes and of course, building God's kingdom through our generosity. Well, a lifestyle finish line guides your personal spending month to month, longer term planning, like emergency savings and retirement planning and investing.
Well, that fits into the planning for future bucket. However, your lifestyle finish line doesn't govern these types of assets. So instead, I would say planning for the future is really best managed with a net worth finish line. And that's where you're simply defining a maximum limit on the total assets that you are willing to keep in your name.
And I think it's a direct counter to the bigger Barnes mentality of the rich fool in Luke 12, 16 to 21. So we're talking about really two kinds of finish lines when we're answering this question, how much is enough, it's that lifestyle finish line. And then it's that balance sheet or that net worth finish line.
Now, I think there are three points of really spiritual wrestling, if you will, when we set that net worth finish line, and I think it has to do first with the lifestyle. So knowing where you're going to cap lifestyle spending makes it easy to know how much you'll need to live on in the future because you've already protected yourself from lifestyle creep. I think the second issue is wealth transfer, knowing how much you're going to leave or desire to leave to any heirs helps you plan for the future now.
And so think about establishing that wealth transfer finish line by limiting how much you intend to pass on. And then I think there's that conservative margin. So the future is never certain and it can be wise to plan for the worst. However, many people plan for far more margin than they could ever need out of fear. And your advisor likely has many tools to help you put this particular part of the equation in perspective. And I think once you have wrestled through these questions, well, I think at that point, you and or your advisor, or, you know, the both of you together, preferably can really establish that net worth finish line and determine what am I ultimately saving toward. And when I'm on track, or I've met it, well, now I have the opportunity to do even more giving what a great opportunity to have.
Let's see, we'll go to St. Louis, Bobby, go ahead. Hello, I think the bottom line for us is how much is enough. My wife is still working to 71. And I have 10 properties, including the one I live in, because of COVID.
And a flood. We've been rehabbing for the last couple of years. So only one or I just just about to rent two out of the, I guess I'd have six more to get going, which are about ready to go. But the bottom line is her wife's still working. And I said to her earlier, our personal expenditures are so much less than our business expenses. That if we just hold things as they are, without even fixing them all up, even though it would get much less, we might be better off.
Yeah. And so are you wanting to I mean, there's a couple of sides to this equation, you know, one side is maximizing the value of the asset, just as good stewardship, whether or not you need the money or, you know, after you sell it, you give it away. The other side of it is just the hassle factor of that, you know, process of construction and renovation, I realize, you know, that's probably not something you're looking to take on right now. And so, you know, you could just sell them as is and unload them. Could you make a case that, you know, with just some really thoughtful and even minor repairs or renovations for certain strategic things you could perhaps generate a little bit more possibly, but I don't think there's anything wrong with selling them as is I think the key is, what is that plan? You've already said, you know, how much is enough? And I think that's the right question to be asking in this season of life, with 10 homes and income that far exceeds your expenses.
I think it's really all about a finish line. Sounds like you've already set that finish line with regard to your lifestyle. I think the next finish line is regarding accumulation, just your balance sheet. And to the extent you've already exceeded that, you know, what does it look like to start giving some of this away now to get it into the kingdom? But give me your thoughts on all that and if you had any specific questions that I didn't address. Well, the first thing that you did address is the maximizing the potential profit versus the hassle factor.
I get probably four postcards a week at least from other investors that want to buy my property because they want to maximize it. Yes. But the hassle factor and part of that hassle is my wife is still working. Yeah. And she's 71, has started to have severe arthritis. And, you know, we're getting into dental implants, no life-threatening issues, but dental implants. And there are some, you know, it's getting harder physically. Yes. And I used to administer missionary and I got dragged out to be doing that. Yes, yes.
Well, and I think there's something to be said about that. I mean, you know, one option might be you get a realtor in there or a couple of them just given the number of properties and just look at what are the things we can do at a minimum, you know, maybe boosting the curb appeal and, you know, fresh pain and flooring. You know, if the repairs exceed 10 to 15% of the home value and you're in a hot market, you know, as is saves time, but may cut the price by 20 to 30%. So I think getting a real estate professional alongside maybe a contractor who would look at the whole portfolio of homes and maybe even come in and manage, you know, some somewhat minor renovations just to deal with some of the glaring issues might help you maximize the value and begin to sell those off.
We'll finish up off the air. Stay right there. We'll be right back. . Are you a financial professional looking to grow your practice while offering advice that aligns with your Christian values? By becoming a Certified Kingdom Advisor, you'll gain the biblical wisdom and professional credibility to serve clients who are seeking faith-based financial guidance. Each year, more than 75,000 people search for a Certified Kingdom Advisor. Join our community and share your expertise with clients looking for someone who shares their faith and values.
Start your journey today by going to kingdomadvisors.com get certified. We are grateful for support from Crossmark Global Investments. They are a faith-based firm with a goal of offering values-based investments to help align financial choices and faith, ensuring a portfolio that reflects what matters most. Crossmark does this through investment solutions that span the capital market spectrum from large cap to small cap strategies, including equity, fixed income, and balance strategies. They are led by industry veteran Bob Doll, CFA, a regular guest on the Faith and Finance Program.
More information is available at crossmarkglobal.com. Well, we got a few more lines open than we normally do at this point in the program, so it'd be a great day for you to call. You have a financial question, call right now 800-525-7000. Let's head to the phones, Northwest Indiana. Hi, Bob. Go ahead, sir. Hey, Rob. I really appreciate you taking my phone call.
Just kind of giving you our information. My wife's going to be 61. I'll be turning 58, looking to retire probably September of this year. Got a paid-off house, paid-off vehicles. Got a nest egg of probably right around $2 million. And I've got an employer-funded term life insurance policy for the rest of my life for $35,000. And I get a decent defined pension. And probably the best thing is that our medical's paid for. The question is, I have one opportunity to get an additional $20,000 term life insurance policy for either 10 years or 15 years with no medical history.
And my situation is, in my family's history, there's not a lot of longevity in men's life. So I was just curious. I kind of did the math. It'd be about $3,300 to get that $20,000 policy for 10 years or like $7,600 for a 15 year. I guess what's weighing on me is I realized in the big scope, it's only like $20,000. But is there a point, and I know I just threw a lot at you, but is there a point where you kind of look at the figures I gave you and kind of go, $20,000 really isn't going to move the needle really for anything you wouldn't bother? It's just more paperwork?
Or what's your thoughts? Yeah, I appreciate all the background. It actually is helpful. And you've obviously done a great job positioning yourself for this season of life. Yeah, I'm on board with kind of that last sentiment you shared there, which is, you know, at the end of the day, you've got, you know, the money saved, you've got your income in place. You don't need life insurance at this point.
I mean, essentially, if something were to happen to you, it's not going to create a hardship for your wife, I don't think. I mean, let me ask, are you still working? Or are you fully retired? Yeah, no, I'm still working.
I plan on working hiring in September. And my wife, she's still working and are empty nesters. So yeah, okay. So if something were to happen to you, I mean, it's not really going to change her situation in terms of her inability to continue to fund her lifestyle, right?
Because she'd have her income, she could, you know, eventually get social security, but she'd have all of your retirement assets as well. Exactly. Yep.
Yeah. So I feel like, you know, this is just an added expense, even though, you know, they may be offering it to you at a really attractive price, just because it's a part of, you know, work benefit of some kind. But I just don't think it's necessary. It adds complexity and add some cost, I think you could probably find a better use of that money. And, you know, you really don't need it, because the purpose of life insurance is to offset a risk that exists in the event of your death with regard to a loved one or a dependent.
And that just doesn't exist today. So there's really not a need for this insurance. And I think given the amount, you know, in your financial position, I just don't think it's necessary. Okay, Rob, I gave me some, you know, I'll be able to sleep good.
And I thought I made the decision in about two weeks. So I just appreciate I'm just trying to be a good steward and, you know, prepare my family in the future. But thank you for your time. I really appreciate it.
It gives me some closure on it. So good deal. Happy to do it, Bob. Hey, I'd love to send you something.
You sound like a guy who values what it looks like to be a faithful steward. We would love to send you a copy of our magazine just so you could enjoy some of those articles. So if you're interested, stay on the line. We'll get your information, get that in the mail to you. Thanks for calling today. To Akron, Ohio.
Constance, how can I help? Oh, hi. I have assets, but I don't work. I was wondering if I could gift RMD to my church and then not have to be cleared on my income tax for 2026. That is true. Yes, as long as you're 70 and a half or older. So if you're not yet 70 and a half, you would not be able to do that. But if you are, then yes, you could make a what's called a qualified charitable distribution. And this is an IRA, is that right?
It's an RMD. Well, right. But what type of required minimum distribution, but from what type of account? Is it an individual retirement account or a 401k? No, the 401k. Yes. Okay. All right. Got it.
Yeah. So unfortunately, the, the way to satisfy that RMD by transferring it directly to your church, which is, is possible is only possible from an IRA and individual retirement account, not from a 401k. So what would have to happen is you would have to roll the 401k over to an IRA, which is not a taxable event. You would, as long as you separate from employment, you should be able to roll that 401k to an IRA. It stays in a tax deferred environment, but as soon as it gets into the IRA, that opens up the ability for you then to do what's called a qualified charitable distribution, which is the means by which you transfer money directly from an IRA to a charity. You don't add it to your taxable income like you would with every other distribution.
And it satisfies your RMD. So long as you transfer enough money that you at least meet the minimum required, you know, the required minimum for the year. Does that make sense?
That makes sense. One other thing, what if it's in annuities? Can I consider that? If I'm, Oh, I don't get an RMD from an annuity though, do I know? Well, if it's pre-tax, you certainly would, but in terms of the qualified charitable distribution, you would need to have it in an IRA.
It cannot be made directly from an annuity contract. Oh, I understand. All right.
Well, thank you so much for your help. Happy to do it. Thanks for your call, Constance. We appreciate you being on the program today. Let's head to Chicago real quick. Molly, unfortunately, I only have about a minute left. I understand you're taking early retirement from the government and you're wondering about what to do with that thrift savings. How much do you have in there?
I think it's a little over a million less. I checked. It's been a while. Yeah, no problem. And are you planning to go get another job or retire fully?
I plan to be a full-time mom and daughter. Yeah. Oh, I know that can be a challenging, but what a blessing that is. What is your age? If you don't mind me asking early fifties. Okay, cool.
Yeah. I mean, so I would say you still, I mean, you've got a long time horizon. We want this money to grow. I mean, typically in your fifties, we would say probably at a 60, 40 portfolio, 60 stocks, 40 bonds. You could get more conservative or more aggressive from there, but that's a good benchmark.
And that would be for the portion, the 60 that's in stocks, probably half of that in the C fund, the other half in the S and the I, and then for the 40 in bonds, that would be the F fund. You could also connect with a certified kingdom advisor at faithfi.com if you wanted somebody to manage it, but I'd say stay the course, get a little more conservative and congratulations on your early retirement. Well, that's going to do it for us today. I hope you found something helpful and encouraging today, but above all else, I hope you were encouraged to go back to God's word. You know, in our role in managing God's money, we always need to be reminded that God owns it all. We're stewards and money is a tool to accomplish God's purposes. So as stewards, we have to understand the heart of the master. We find that in scripture. A big thanks to my team today, Taylor, Devin, and Pat, and we'll see you next time right here on Faith and Finance. Faith and Finance is provided by Faithfi and listeners like you.
