This Faith in Finance podcast is underwritten in part by Movement Mortgage. Movement provides residential home loans in all 50 states. Founded in 2008, amidst one of the biggest financial meltdowns in American history, Movement set forth on a mission to create a movement of change in their industry and in communities. Learn more at movement.com/slash faith. Movement Mortgage LLC supports equal housing opportunity, NMLS number 39179.
For licensing information, please visit NMLSconsumerAccess.org. Yeah. Many seniors today are facing real financial strain, some even resorting to borrowing to cover their basic needs. Hi, I'm Rob West. For retirees on a fixed income, a reverse mortgage can be a practical solution to access the equity in their home and bring much-needed stability.
Harlan Akola joins us today with a message of hope for those looking for margin in their retirement years. Then it's on to your calls at 800-525-7,000. That's 800-525-7,000. This is Faith in Finance, biblical wisdom for your financial decisions.
Well, we always appreciate the insight Harlan Akola brings to the conversation. He's a great friend. He's our go-to expert on reverse mortgages at Movement Mortgage, a proud underwriter of this program. And Harlan, it's great to have you back. Great to be here, Rob.
Harlan, we always say that if someone feels called to pay off their home and own it outright, that's a great goal. But for others, especially the listeners that we'll be talking about today, a reverse mortgage can really be a blessing.
So, I want to begin with the real issue at hand. What do we need to understand?
Well, we've noticed that nearly 70% of the seniors that we speak with are carrying credit card debt. And these are people that are retired, living on fixed incomes, often not a big nest egg. And they're relying on credit just to pay basic necessities. These are not people like young people that are overspending and buying foolish things and getting fancy cars and going out for expensive dinners. They're just trying to cover the basics of groceries and prescriptions.
And these people often are embarrassed. They don't want to talk to anyone about it. They're often asset rich and they have a lot of equity in their home. But here they're paying 25, 30, 35 percent interest on these credit card debts that they're never going to get out of. Wow.
Yeah. And that really is changing. I know more and more are bringing a mortgage into the retirement years, and they really are cash strapped. What keeps more seniors, Harlan, in your view, from considering a reverse mortgage as a source of relief?
Well, there's just a lot of misunderstanding. Most people just think they're going to lose the house, and they don't understand that the right reverse mortgage is carefully regulated by Federal Housing Administration. It's going to protect the homeowner and their heirs. And it's a situation that they're embarrassed, and they have heard that it's a really bad thing to do. And one person even told me, I thought it was a sin to get a reverse mortgage.
Wow. Well, hopefully today's program will help shed some light and dispel some of those myths. Let's start, Harlan, with who is a good candidate for this solution?
Well, really, anybody who's over the age of 62 should take a look at if there is some borrowing where it is. They have at least 50, 60% equity in their home. They could be somebody that qualifies. A very typical situation is somebody that's still making a mortgage payment. Maybe it's a small balance, but it's a relatively big payment yet of $400,050, $600, $1,000, $1,500.
In fact, I was just talking to a widow the other day in Florida. Her insurance. Costs went up. She lived in an $820,000 home, only owed $100,000. But between cost of living and her food and normal expenses and the big insurance increase, she was going backwards and putting her basic bills on credit cards, which is dangerous because it just takes away from the income stream.
And she had very little there. But once she did the reverse mortgage, she still had plenty of equity left to even pass on to her heirs. Yeah, and that's a big idea. The other key is you and your spouse can stay in this for the rest of your life. You're not forced to sell if one of you passes away.
And not only can you get an income stream, Harlan, from the equity in your home through a home equity conversion mortgage, you could opt for a line of credit. And that's even more common, isn't it?
Well, it is. It's probably the most common because the only thing that is certain that happens is there's peaks and valleys in our cash flow needs. A water heater goes out, a car needs repair, something that's just simply unscheduled besides your normal expenses. And what it really comes back to is that we always go to Proverbs 24, verse 3, that by wisdom a house is built and by understanding it's established, that we are just using our equity in our home. as a stewardship situation.
And it doesn't make sense to live in a paid-off home, barely making it and then paying 30% interest on some credit card debt. It's just not a wise stewardship thing. And while we know that this isn't something for everyone, there's so many people that avoid it that just don't understand it that we can be of help to.
Well, we're so grateful for your partnership, folks. Harlan and his team at Movement lead with education, and they're so grateful to be able to help seniors actually find solutions in this fourth quarter of life. Harlan, we're grateful for your time, my friend. My pleasure. Thanks for having me today.
Folks, if you want to learn more, go to movement.com/slash faith. That's movement.com/slash faith to connect with Harlan or his team. We'll be right back. We're grateful for support from Movement Mortgage, who provides residential home loans in all 50 states. Guided by a mission to love and value people and a goal to redefine the mortgage process, Movement seeks to help others achieve their financial goals.
You can find out more at movement.com slash faith. Movement Mortgage LLC supports Equal Housing Opportunity, NMLS, number 39179. For licensing information, please visit NMLSconsumerAccess.org. We are grateful for support from Timothy Plan. Since 1994, Timothy Plan has shared good news with investors and advisors by offering faith-honoring mutual funds and exchange-traded funds.
More information is at TimothyPlan.com. The investment objectives, risks, charges, and expenses are contained in the prospectus and summary prospectus available at TimothyPlan.com. Mutual funds distributed by Timothy Partners Limited and ETFs distributed by Foreside Funds Services LLC. Investing involves risks, including possible loss of principal. Thanks for joining us today on Faith and Finance.
I'm Rob West. Looking forward to taking your calls and questions today. The calls have started coming in, but we've still got room for you at the moment.
So, if you have a financial question, something going on in your life, you'd like some wise counsel, perhaps we can help you with that. We'll make sure we look to God's word for principles that we can apply to the very specific things you're wrestling with in your financial life today, whether it's getting out of debt, saving for the future, giving generously, no matter what it is. Call right now, 800-525-7,000. Again, that number is 800-525-7000. We will head to those phone calls here in just a moment.
So, this is a great time to call. In the news today, according to a new AARP survey, 74% of Americans say they're informed about Social Security, but many misunderstand key facts. Nearly 96% agree. It's an important program, yet only 36% are confident it will be there for them in the future. That's down from 43% in 2020, and 78% worry it won't provide enough to live on in retirement.
One of the biggest misconceptions: well, it's that Social Security will run out in 2034. That while the program's trust fund reserves are projected to be depleted by then, Social Security will not disappear. And here's why. Even without the trust fund, ongoing payroll taxes are estimated to cover about 81% of scheduled benefits. Again, that's if it's allowed to go to zero.
Still, 47% of Americans wrongly believe their benefits would be cut by half or more once the trust fund runs out. In reality, a 19% reduction is expected unless Congress acts.
Now, let's talk about that for a moment. In terms of Congress acting, you know, this is a very divisive issue, and no one is going to want to run politically knowing that under their watch, Social Security will be cut in any way.
So we fully expect Congress will intervene. What levers do they have to pull?
Well, we'll likely see either the full retirement age be pushed out further. We may see an increase in FICA taxes. It might be a combination of the two. Nevertheless, even if it did run dry, again, only about 19% of benefits would be cut. Another area of confusion is when to claim benefits.
You, of course, can start at age 62, but at a permanent discount. Waiting until your full retirement age, about 66 or 67, somewhere in between there, that gives you 100% of your benefits. And delaying to 70 could actually boost your payments by 8% per year. Yet, 41% didn't know the earliest claim. Age and 66% didn't know how to maximize their benefits.
By the way, if you are to wait to age 70 and get that roughly 25% boost on your full retirement age check, it'll take you about 12 years on average to get paid back for what you gave up between full retirement age and age 70, because remember, you weren't collecting during those years. But when you get beyond 12 years, now you've made up 100% of what you gave up and you're enjoying that 25% higher check for the rest of your life. If you have longevity on your side, you're relatively healthy and you don't need the money right away, it's not a bad idea. With more than 70 million Americans depending on Social Security, and that number is expected to grow to 82 million by 2035, well, it's vital to understand how the program works and what the future truly holds. Let me just finish by saying for believers, this is an opportunity to trust God's provision rather than panic.
About the future.
Social Security is a tool, but our ultimate treasure and security rests in the Lord.
So as we plan wisely, we do so with faith and not fear. But hopefully that's dispelled some perhaps rumors you were considering in your own life. All right, let's dive into your questions today. The lines are filling up, but we still have room at the moment: 800-525-7,000. We're going to go to Groveland, Florida.
Andrew, how can I help? Thanks for this separate McCall. And um I wouldn't ask your opinion on should I try to reverse mortgage, but situation is I didn't play in good, a couple of bad breaks. for retirement so I still work full time of seven to one. I got a long time on my mortgage, and I don't know how much longer I'm going to be able to work.
So if I could get rid of the mortgage payment, Uh maybe able to get by if I have to quit work. Yes, sir.
Well, I certainly understand that. Let me ask you: what kind of equity do you have in the home right now? What is it worth and what do you owe on it? I'm not sure when I bought it. I bought it at two twenty.
And I bought it in red during the COVID when everything was cheap.
Now I think it's around three thirds of the value.
Okay. And what is the balance on that mortgage that you're paying on? Oh, I only been paying it's a thirty-year mortgage. I only been paying on it about six years.
Okay. But how much did you borrow originally? Uh two twin.
Okay, so you had 100% financing when you bought it? Yes.
Okay. Yeah, that's going to be the challenge. The problem is you've got to have around 50% equity in the house to be able to get a home equity conversion mortgage, which means, you know, if in fact your home is worth $330,000 and they'd need to confirm that, you know, then a 50% equity would mean you would need to have a mortgage that's no more than about $165,000. At that point, yes, they could come in and pay off that mortgage with a reverse mortgage, what's called a home equity conversion mortgage. And you're absolutely correct.
At that point, with a reverse, you would no longer have a payment. That outstanding balance would grow over time with fees and interest, but so does your home value. And then when you pass away or move, the home would be sold to satisfy the loan. The problem, though, that I'm hearing, Andrew, is although it could be a very effective tool for you, it doesn't sound like you have that 50% equity that is required in order to be able to do this. And so, you know, perhaps you don't have a goal of paying it off, but maybe your goal is to get it down to 50% of the value.
And at which point you can do that, now all of a sudden, you know, you could bring in a reverse mortgage, pay it, you know, off with the reverse mortgage and get rid of that mortgage payment. But it sounds like that's going to. Yeah, I kind of thought so.
Okay. Uh do do do you have a number to a good uh company you would recommend? I do, yeah. Are are you comfortable using the internet? Yeah, I could get my grandkids to help me, yeah.
All right. If you just write this down, go to movement.com/slash faith. I'll say that again. It's movement.com slash faith. Our friends at Movement Mortgage, they really have a whole department that specializes in reverse mortgages.
They're all believers. And so I would have confidence that they would counsel you the right way in terms of whether or not this is a good offering for you. I think what you're going to find is it may be a great option for you, just given the situation, but it's just not going to be available for a number of years until you can get to that 50% equity. But go ahead and check with them, and they can walk you through all the details based on your specific situation. Andrew, thanks for your call today.
All the best to you, sir. Call anytime. By the way, if you're looking for advice from a financial professional and you'd like someone who shares your values and who has met high standards and character and competence and ethics, well, we trust the Certified Kingdom Advisor designation, the only Financial services industry designation out there that is around biblically wise financial advice, pastor and client references, annual continuing education, experience, character, and ethics requirements, all having been met. You can find a CK in your area, and I'd interview at least two or three. Just go to faithfi.com, click find a professional.
That's faithfi.com. Hey, back with more in our final segment right around the corner. Stick around. Right now, more people than ever are looking for biblical wisdom to navigate their finances, and you can help meet that need. When you become a FaithFi partner, you're equipping believers to trust God, steward his resources well, and live with kingdom purpose.
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Hey, great to have you with us today on Faith and Finance. Here's our goal each day on this program: to help you live as a wise and faithful steward, help you to see God as your ultimate treasure, help you to understand the counsel of scripture and really a biblical worldview of money and money management, which starts with the idea that God owns it all and God is our provider, and we are stewards, not owners. And therefore, we've been given a high calling of managing the resources that God has entrusted to us. And we want to do that for God's glory, knowing that money is a good gift created by a God that wants us to enjoy it and delight in it, so long as it doesn't become the thing that occupies our devotion. We don't ever want to let it compete with our devotion to God.
But if it's put in its proper place as a tool to accomplish God's purposes, well, it can do wonderful things as we give it away and invest it and enjoy it and use it to provide.
Well, we want to help you do that. Each day, as we help you navigate the very specific questions you have.
So, if there's something you're wrestling with today, go ahead and give us a call. 800-525-7000. You can call right now. Let's go to Miami, Florida. Angela, you'll be next up.
How can I help? Oh, thank you so much for taking my call. I have a dilemma here. I'm not sure how to go about it or how to make the right decision. I recently retired.
I'm not taking Social Security as yet because I have enough to live on, because I here to wait until I'm ten to maximize it. But my plan at work, my four hundred one K infidelity that I had at work, someone recently advised me or told me about this other company called Big Money Retirement Solution. And I talked to someone there, and they're guaranteeing me an annuity that can pay me nine percent Annually. Right now, Fidelity that I have is paying me seven percent. I've never really heard of this company, so I'm trying to see if it's a wise move to get like half of my portfolio from Fidelity and send it to big money.
Would that be a wise move? Because I've never heard of them before.
Well, I haven't either, and the name is tripping me up here a little bit. But what's more concerning to me is what you said after the name, and that is that they're going to offer an annuity with a guaranteed 9% return. You know, that should raise some serious caution because it really, Angela, just doesn't align with typical returns from reputable fixed annuity providers. Even if the annuity company they're talking about is reputable, and that wouldn't be hard to look up to see what is their AM best rating and so forth. But guaranteed annuities are typically in this environment offering somewhere between 4% and 6% for guaranteed rates, depending on the length.
So for a 10-year guaranteed annuity, you might have something like 5.6%, maybe close to 6%, but nothing that would get up near 9%. There's just. 9% guarantees are unrealistic in today's interest rate environment.
So that would be a significant red flag for me on top of the name big money retirement solutions, which just doesn't sound like, I mean, again, I don't know.
So I'd be hesitant to say it's not reputable. But yeah, there's just too many caution flags going up for me on this one. All right. Thank you so much. All right, Angela.
We appreciate your call today. Lord bless you. 800-525-7000 is the number to call. Taking your calls and questions today on anything financial. You know, when it comes to investing, I love the rule of thumb.
If we don't understand it or can't explain it to our mom, we don't invest in it. You know, these days it can be challenging, and there's so many complicated products that are being sold. And, you know, many cases they sound too good to be true, which should be a red flag in and of themselves. And, you know, we're seeing an increase in the complexity as well, just with some of the new wave of investments, notably in the crypto space. You know, a lot of folks are getting caught up in some of the frenzy around cryptocurrency.
And that's why we've said here, you know, first of all, three years ago, we said, let's just stay away from it altogether. It's the wild, wild west. There's far too much volatility. You know, there's an uncertain regulatory investment. Environment.
It's difficult to understand. I would say now we've gotten to the place where blockchain and crypto is not going anywhere. We've got the first pro-crypto president in the Oval Office. We've worked through a lot of the regulatory environment. We've now got institutional investors and exchange traded funds.
But even then, I'd say it's probably limited to Bitcoin and not the others, which makes up about 60% of the crypto space, Bitcoin alone. The rest, the 40% is between all the rest.
So I'd stay in Bitcoin. And even then, I would probably only take a portion of what you might consider as your gold allocation.
So maybe it's a 10% gold allocation and take a portion of that if you're going to do it. But you need to understand it's going to be very volatile. And that's why you would, you know, maybe have 5% at the most in your portfolio and be sure that you are sophisticated enough as an investor with a long time horizon that you can put even that small of a portion of your portfolio. In something that is considered more speculative. But I would again default back to that rule.
If we don't understand it, it sounds good to be true, too good to be true. I would say pass on it or get with somebody who can look at the fine print, who's a trusted counselor or advisor who could evaluate it for you. Hope that helps. All right, we're going to continue to take your calls and questions today. Again, that number to call is 800-525-7,000.
That's 800-525-7,000. Quickly to Chicago. Hi, May. Thanks for holding. Go ahead.
Thank you for having me. I've been told that there's a way to get a free credit report. I understand the government requires it. The government does provide a website that allows you to get that free report. Yes.
Are you comfortable using the internet? No, but my kids are.
Okay, yeah, that'd be great.
So, next time you have a date with the kids and they come over to the house, tell them that you've got a project for them. My mom usually has at least a couple whenever I come to visit, and I'm always happy to do them. You'll want to go to write this down: three words: annual credit report. Annualcreditreport.com. And they will be able to access May all three credit bureau reports for you on that website free of charge.
And they can get them from, and you don't need to write this down, but TransUnion, Experian, and Equifax are the three. They can get all three, and then you can look through them. And what you want to look for is anything you don't recognize, and they can help you do that. But that's where you want to send them, annualcreditreport.com, no cost, okay?
Okay, I heard that y you're supposed to uh request one at a time every three every four months. You could certainly do that. You know, I believe they give them more frequently now, but yeah, I think if you did that, if you got one of them every three months, I think that would be great. Maybe you start by getting all three and then you settle into the one every three months after this, just so you can, you know, find out if there's anything there, and then you kind of do a maintenance mode after that. But I think that would be a good plan.
Hey, Lord bless you, May. Thanks for calling. Hey, we couldn't do this without our team each day.
So grateful for my producer, Devin Patrick, for our call screener, Sandy Dickinson, and helping me with research today, Mr. Jim Henry, plus the entire team here at Faith Phi. I hope you have a great day. Lord willing, we'll be back to do it all over again tomorrow. We hope you'll join us then.
May God bless you. Bye-bye. Faith in Finance is provided by FaithFy and listeners like you.
