This Faith and Finance podcast is underwritten in part by Movement Mortgage. Movement provides residential home loans and reverse mortgage options in all 50 states. Founded in 2008 during a major financial crisis, Movement was created to love, value, and serve people and communities. Learn more at faithfy.com/slash movement. Movement Mortgage LLC supports equal housing opportunity, NMLS number 39179.
For licensing information, visit NMLSconsumerAccess.org. Uh Could a reverse mortgage strengthen your financial plan? It may depend on whether it's part of the plan at all. Hi, I'm Rob West. For many retirees, home equity is their largest asset.
Yet in most financial plans, it's treated as if it doesn't exist. Today, Harlan Akola joins us to explore how bringing it into the plan can change everything. And then it's on to your calls at 800-525-7000. That's 800-525-7000. This is Faith in Finance, biblical wisdom for your financial decisions.
Well, it's always a joy to welcome back Harlan Akola. He leads the reverse mortgage team at Movement Mortgage, a trusted underwriter of this program. Harlan, great to have you back with us. Hey, it's good to be here, Rob. Harlan, let's start with the problem.
Most financial planning software includes home equity, but it often just sits there, unused. Why has this been such a blind spot in your mind?
Well, a couple of reasons, Rob. First of all, most clients' home equity is shown, but it's treated as illiquid and untouchable. And most advisers often aren't trained or equipped to incorporate it into retirement strategically, or they simply have a strong bias against using it.
So one of the largest assets that a client has is, quite frankly, often overlooked. Yeah, no doubt about it. And that's significant, especially with so many retirees feeling unprepared. What opportunity is being overlooked here?
Well, home equity can function as a third bucket alongside income and investments. Multiple researchers and university think tanks have already done the math, and it's best use as a first resort rather than a last resort.
So using it strategically can simply help preserve investment accounts longer. The goal is really just to use all available resources to strengthen any retirement plan. I know you and your team have developed your own software to address this.
So what sets your approach apart?
Well, our software integrates home equity into the broader financial plan, and it supplies data that works with tools that financial advisors use, like eMoney and MoneyGuide Pro. And it just simply gives a clear picture of how a reverse mortgage might affect the overall plan, especially relating to long-term care funding. Yeah, I'm curious, when you run those scenarios, what do you typically see and how do you address concerns about losing the home or leaving nothing behind for your errors?
Well, it simply increases the chances of not running out of money. And for those fortunate to have plenty, it actually improves net worth over time and may even reduce taxable income in retirement.
So, when people pass away, they have less equity in the house but more overall net worth. And so, we show a visual plan from age 62 through 100 so clients and often their children can see how it plays out based on different home appreciation scenarios. Almost everybody's surprised to see that equity often remains at the end, which corrects the misconception that it's all lost. Harlan, when we bring the home equity into the financial plan and see it as one tool in your financial planning tool belt, what does that allow you to do? I know you mentioned perhaps delaying pulling from retirement accounts or perhaps delaying Social Security.
I mean, what are the implications that you usually introduce into the planning process that are often overlooked?
Well, we look at taxes and we look at the timing of when things are taken out of the investment bucket and when people actually start drawing Social Security and even when they decide to retire.
So what it really comes down to is the importance of timing and the best way to use the money that God has entrusted with us and what we have, not only for our own monies, but also for those that we are giving to others as our planning for the future, both for making sure that we have enough money not to be a burden to our children and also that we can be of help in God's kingdom. Yeah. You mentioned stewardship. How should someone think about using home equity in that way? And what would you say to someone who's never considered it?
Well, they should just look at the fact that home is not just a shelter. It's also a significant financial asset, and it's just about managing all the resources that God has entrusted to us, which includes all of the appreciation values in our home, which for many people is substantial.
So wise planning just means considering every tool that's available and not to overlook any of the things that we have been so thankfully blessed with as we look at all of the things that God has entrusted with us. It just simply takes more time to understand how these strategies work. And it's important to seek guidance so we can see the whole picture. That's well said. Harlan, we always appreciate your educational approach.
Thanks for being with us today. Always pleasure ride. Our guest today has been Harlan Akola with Movement Mortgage, a trusted underwriter of this program. Movement Mortgage serves families in all 50 states, offering home loans and reverse mortgage solutions. You can learn more at faithfi.com/slash movement.
That's faithfi.com/slash movement. Your calls are next at 800-525-7000. We'll be right back. Mm-hmm. Imagine having biblical financial wisdom delivered to your inbox every week, helping you integrate your faith and financial decisions for the glory of God.
At faithfi.com, you can join a community of over 70,000 people who are already receiving our weekly wisdom email, filled with articles, videos, podcasts, and exclusive offers on resources that will deepen your understanding of biblical stewardship. Start your journey today by creating your FaithFi account at faithfi.com. Just click sign up. We are grateful for support from Movement Mortgage, who provides residential home loans and reverse mortgage options in all 50 states. Guided by a mission to love and value people, Movement seeks to help individuals and families make informed financial decisions from buying a home to planning for retirement.
More information is available at faithfy.com/slash movement. Movement Mortgage LLC supports equal housing opportunity. NMLS number 39179. For licensing information, visit nmlsconsumeraccess.org. Thanks for joining us today on Faith and Finance.
800-525-7000 is the number to call. We've got some lines open today. Any financial question you want to talk about paying off debt, giving wisely, helping your son or daughter? You know, that can be challenging. When is it helpful?
When does it actually discourage responsible decision-making and financial stewardship? Any of those questions and more. 800-525-7000 call right now. Let's go to New York. Doug, go ahead.
It's always a pleasure. And once again, thank you for your expertise First is, have you ever heard the statement, sell in May and go away? I have, yeah.
Okay, and I got a rule of thumb for stocks. They say to sell at 7% on a big downfall to limit your losses. I was wondering if you had a rule of thumb when it's an ideal time to sell your stock when comfortable gains are achieved. And if I got time, I got one other quick question.
Okay. Yeah. So you manage all of your assets yourself, is that right? Correct. Yeah, yeah, sounds good.
You know, as we think about this, I mean, we start with God's word and we see principles there that you'll be familiar with, Doug. We see that God's Word emphasizes prudence in Proverbs 27, 12, and diversification in Ecclesiastes 11:2, and faithfulness with what God entrusts to us in Luke 16.
So our decision should be guided by purpose and discipline, not fear, greed, or trying to time the market perfectly. And I'm not saying that's what's driving yours, but I'm just saying that's what we need to keep in mind. You know, I would also say that investors consistently underperform the market. You know, long-term studies of investor behavior show that the average investor earns several percentage points less per year than the market itself. And it usually comes down to poor timing decisions, you know, buying after gains or selling after losses.
And so, you know, what we realize is that market gains are often concentrated in a small number of days, which is. Which is why, when we're talking about getting in or out of the market, it's best just to stay invested because often missing just a few of the best days can really crush your returns. And that's often what happens as people get into emotional selling where fear causes them to sell low, greed causes them to hold on too long, those kinds of things. I would also say that in terms of you looking at your portfolio. it's not a bad idea to trim the winners, especially when a stock or an allocation, in this case, if we're talking about precious metals, it becomes too large of a part of your portfolio.
So essentially what you're doing is rebalancing to reduce risk without trying to predict the market. Movements because you know, you and I have no idea where the spot price of gold is going a day, a week, a month, a year from now. But we do need to have a rules-based approach that says, okay, if our target allocation for you for precious metals is 10% based on your age and risk tolerance, and all of a sudden it runs like we've seen over the last couple of years, and now it's 15 or 18 percent.
Well, you're not trying to time it, you're just reducing risk by dialing back your percentage to your intended allocation. And that's a good thing.
So, those are just some general thoughts, but give me any follow-up questions you have. Yes, thank you so much. The follow-up question is on the precious metals. Would you still recommend buying them at this time at these high rates to increase your five percent to ten percent of one's portfolio? Yeah.
Yeah, it's a good question. And I think they play a role not as a primary growth investment, but as a diversifier. They don't produce income. Their long term returns tend to trail stocks. And they do well when inflation fears rise.
Federal Reserve is going to be working hard to get that down, especially under this new chairman, I think, that will be coming in very soon. You know, when trust in currencies weaken, which we've got plenty of that going on, geopolitical issues.
So, you know, I think after a strong run, expectations matter. It's already had big gains. You know, could it pull back? Sure. And we saw it do that in a hurry.
But, you know, if you're trying to get to a target allocation, I think just given what we've seen over the last year, I'd probably do it a little slower than I would, you know, if we were just seeing a normal, you know, trend in stock and gold, which we're not right now.
So I'd probably say maybe you take a little bit longer to get up to that target allocation than you would if we were in a normal market for gold, if that makes sense. Oh, wonderful. Yes. It makes a lot of sense.
Okay. Answer my questions. Thank you so much. Absolutely, Doug. Thanks for your call today.
We appreciate you. Let's go to Maryland. And I think Marshall wants to talk about gold as well. Go ahead. Hey, Robin, thanks for taking my call.
I a good while ago, I heard you guys talking about. E T F for gold, what is the E T F? Yeah, exchange traded fund is basically just a way to invest in a basket of stocks.
However, different from a mutual fund, which is also a basket of investments, of holdings and could be stocks, which you buy based on what's called the net asset value.
So the total of all the investments divided by the number of outstanding shares, you get the net asset value at the end of each day.
So, you know, you can only buy it based on the NAV at the end of the day. With an ETF, it trades like a stock.
So, you know, you can buy it based on every tick. But again, it's the same basket of holdings, but the way you trade it is a little bit different. And then, secondly, often the expenses embedded in them, not always, but often they are lower than mutual funds, which is why there's been so much appeal to these because you can trade it during the day. You can own hundreds or thousands of investments. And there's a lot more liquidity and transparency.
And if it's a little cheaper, you can see why people are pretty interested. Is there anything you would recommend? I don't have a lot of knowledge about it. That's why I was calling you. But there's any particular one you recommend.
There, you know, I don't give specific stock or investment recommendations, so I wouldn't be able to do that, but I could point you to a couple of places. One would be if you're kind of a do-it-yourselfer, which is not a bad thing. Our friends at soundmindinvesting.org would be a great resource. That's soundmindinvesting.org. And the Soundmind Investing newsletter, which comes out in...
print form but also electronically would give you specific mutual fund and ETF recommendations to build a portfolio based on your age and and risk tolerance. A lot of our listeners use SMI to manage their portfolios and they update that every month and you can make changes as you see fit. The other approach would be to delegate that responsibility to an advisor. And if you were interested in doing that, I'd recommend you connect with a certified kingdom advisor there in Maryland and meet with two or three, find the one that's the best fit. And at that point, you'd be turning over management to an advisor.
You know, if you're comfortable with that, and you could go to findaca.com.
So I think either of those could be a great option. Just depends on whether you want to do it yourself or delegate to a professional. Marshall, thanks for your call. We've still got a lot more to go.
Some great questions. I love when folks just want to be faithful. You know, we recognize the Lord has given us so much. He's given us, first of all, salvation when we place our trust in Jesus and surrender our lives to Him, accept the free gift of eternal life, and we're restored to a right relationship with Him. That's our abundance.
And then beyond that, we have the promises of God that He'll never leave us or forsake us and that He'll provide for us. You know, it's not the government, it's not your employer, it's God as our provider. Even the ability to create wealth comes from God Himself. And then we're entrusted with money, financial resources, which are a good gift from God, and we're to use those to serve the Lord, including through our generosity. But the key is to balance all that in light of scripture.
All right, one more break and then back with our final segment. Call right now, 800-525-7000. 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. Uh Faith in Finance is grateful for support from Sound Mind Investing. For more than 30 years, they've offered financial wisdom for living well.
SMI provides step-by-step guidance for do-it-yourself investors, from those just getting started to those getting ready for retirement. More information, including a short video webinar on profit and peace of mind no matter what's happening in the market, is available at soundmindinvesting.org. Hey, great to have you with us today on Faith and Finance. All right, let's head back to the phones. By the way, if you've got a question, we've got room for you.
Any financial topic today, 800-525-7000. Call right now. And let's go to Oklahoma. Hi, Linda. Go ahead.
Yes, my question is about HSAs. And it is for Uh health. Reasons. To pay off your medical bills. And my husband's employer had changed banks with the HSA.
And it was supposed to have ended The prior card, the end of December, and rolled over into the new one January 1st. But we found out that that wasn't the case, and we keep calling, and they keep telling us three more weeks, three more weeks. and all that's in that the account that we have now Is just what we've put in since january first. But we don't know what to do about it. And they keep us with this three weeks.
They sent a woman yesterday. And G said, well they had uh the bank had invested the money and so it put a big hurt on that prior bank. And she said it'll be three more weeks.
So we don't know what to do. And I was going to pay off my At hospital bill, but the money's not there, and I've waited all this time.
So now they want to charge me more So I didn't know what to do about it. Yeah. Well, I hate to hear this, and I know this is really challenging. You know, when this happens, and it does happen often, where an HSA custodian is changed from one custodian to another. You do have these situations.
Normally, they happen on a pretty timely basis. But I would press into this a bit more because waiting quietly is often the worst move. You might want to escalate this to somebody who can give you some real answers here. But I think the primary thing to consider is: let's not focus on the card and let's focus on the access.
So the debit card is a convenience. But you know, that doesn't ultimately control the money.
So I would ask the new custodian or your HR department a direct question, and that is: is my HSA account active, funded, and accessible right now, even without the card? And if the answer is yes, then you should be able to pay out of pocket and you could reimburse yourself later from the HSA, or you could pay a provider online. once the account access is set up. If the answer is no, then I would escalate. I mean, if you don't have access to your money, regardless of whether or not they've gotten you the new debit card, that's a problem, and they need to rectify that immediately.
And I would really be pretty adamant. That you need access right away. Even if you say something like, listen, I understand the card is delayed, but I need immediate online access to my HSA funds. I need you to send me the login credentials or confirmation that the account is live today. And you may need to get HR involved.
Um but what you don't want Is any kind of anybody to cut you a check? The HSA funds need to stay in the HSA. We don't want any kind of payment apart from you reimbursing yourself for any expenses that you can document. Does that make sense? Uh well, to a degree.
So what you're saying though is if since they haven't rolled the money into this new one Uh there is A small amount, but not enough to pay my hospital bill. Um So you think I should? try to force them to put that money into the account. Yeah. Well, you want to find out where the money is today.
And so, if it's still at the old custodian, then you should be able to access that potentially. If it's at the new custodian but inaccessible, I think that's where escalation matters. The other option could be that you open a personal HSA. And then you do a transfer from the old custodian directly into the personal HSA. And as long as it stays in the HSA, you know, then there's no tax consequences or penalties, and you regain control at that point.
And, you know, at any point, you can initiate an HSA to HSA transfer.
So I think you need to get a little more information. Are we a day or hours away from it transferring, or is it going to be a little longer? Thanks for your call. Let's finish in Nebraska. Monica, go ahead.
Hi, I hear your show a lot on the radio here as I'm driving home. I had a question.
So my dad is starting to retire from his job, and he's got equity in his home. I was had a question about the reverse mortgage. He has a significant amount of credit card debt. That because he is retiring, we're going to have trouble paying that. But he has I didn't know if it was a good idea to do the reverse mortgage to pay that.
Yeah. So that he can live. Sure. Yeah, you know, I mean, I think you would need to look into it and just see if he qualifies for a reverse mortgage. It could be a great option.
I mean, does he have at least 50% equity in his home? And he's over 62.
Okay. Yeah. So I mean, he may be a great option for it. Essentially, well, let me ask you: is there a mortgage still? Yeah, there is, yeah.
Okay, got it. And so, you know, essentially what would happen is the reverse mortgage could at the very least pay off the existing mortgage, except now he wouldn't have a mortgage payment unless he wanted to, but he wouldn't automatically.
So that would come out of the budget, which that by itself may allow him to balance it. And then we could focus on getting the credit cards paid off. And then, you know, he'd be out of debt once and for all. And then if he wanted to at any point to start repaying the reverse mortgage, he could. But this, I think, is a planning tool to consider.
I mean, it's one of your biggest assets. I mean, some people have IRAs and 401ks, and you know, we have home equity. And so when we're planning in this season of life, ideally, we'd get out of debt and be completely out of debt and just live on Social Security and some sort of income stream from our investments. But the reality is, two-thirds of retirees are entering retirement with a mortgage, whereas half, it was only half a few years ago.
Now it's two-thirds. A lot of them are ill-prepared with regard to assets to use to fund the. Their living expenses. And so they're just struggling to make ends meet, let alone have any margin to kind of enjoy the season. And that's where a reverse mortgage is an option, not the option.
It's not for everybody. It's not without fees and expenses and interest, but it is an option to consider. And either getting rid of that mortgage or getting rid of the mortgage and getting a monthly check. That he knows as long as he's alive and lives in that home, he doesn't ever have to repay it, and nothing beyond the home will ever be required from his estate or him. You know, it can be a great option.
To check it out and get an illustration, I'd go to movement.com/slash faith. That's movement mortgage, our underwriter. Thanks for your call today, folks. I'm so thankful for you and the opportunity to be able to come alongside you each day and hopefully be an encouragement to you, point you back to God's word, and really point you toward God as your ultimate treasure. You know, the opportunity we have to manage God's money is a big deal.
We'll ultimately give an account for it someday, and so we want to help you live as that wise and faithful steward. We'll gather together tomorrow to do it all over again. In the meantime, big thanks to my team today: Taylor Stanbridge, Pat Montague, Devin Patrick, and all the team members here at Faith5. We'll see you tomorrow. Faith in Finance is provided by Faith By and listeners like you.
