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. Um Corey Tin Boom once said: If the devil can't make you sin, he'll make you busy. Hi, I'm Rob West. When life moves fast, it's easy to make financial decisions on the fly and lose sight of the habits that build long-term faithfulness. But God calls us not to hurried living, but wise stewardship.
Today, we'll talk about how to stay financially faithful, even in a full and demanding season of life. And then it's on to your calls at 800-525-7000. That's 800-525-7,000. This is Faith and Finance: biblical wisdom for your financial decisions. Life can feel like a constant sprint.
There are deadlines to meet, kids to shuffle, meals to make, emails to answer, errands to run, and responsibilities that never seem to end. For many people, the issue isn't laziness, it's overload. And in seasons like that, financial faithfulness often gets neglected, not because we don't care, but because we're exhausted. We stop paying attention, we spend reactively instead of prayerfully, we put off conversations we need to have, we ignore creeping lifestyle inflation, we delay generosity until things settle down, and before long, the pace of life begins to shape our financial decisions more than the wisdom of God does. That's why busyness can be more spiritually dangerous than it first appears.
Because busyness doesn't always oppose faithfulness with rebellion.
Sometimes it opposes faithfulness with distraction. Jesus warned us about this in Luke 8 when he described the seed that falls among the thorns. He said it gets choked by the cares and riches and pleasures of life. In other words, the daily grind, the normal everyday cares of life, can grow so thick that they choke out what truly matters. We can spend hours worrying, scrolling, comparing, impulse buying, chasing the next opportunity, or reacting to every headline while neglecting the simple habits that build faithful stewardship, planning, giving, saving, communicating, and trusting God.
Jesus highlights a similar tension in Luke ten. Martha is working hard, serving diligently, doing good things. But Mary is sitting at his feet, listening. Jesus gently says, Martha, Martha, you are anxious and troubled about many things, but one thing is necessary. Martha wasn't doing something sinful.
She was doing something useful. But even useful things can become disordered things when they crowd out what matters most. And that applies to stewardship, too. It's possible to work hard, earn income, pay bills, and stay active, yet slowly lose sight of the heart of stewardship, trusting God, aligning our resources with His priorities, and handling money with wisdom and intentionality. You see, stewardship is never just about transactions, it's about worship.
Every dollar we earn, spend, save, or give becomes an opportunity to express what we believe about God. Do we trust Him? Do we believe He is our provider? Do we see money as ours to control or His to manage? That's why financial faithfulness requires more than good intentions.
It requires margin. Not just margin in your bank account, but margin in your soul. Dallas Willard once said, hurry is the great enemy of spiritual life in our day. That certainly has implications for our finances as well. Hurry can lead to impulse spending, neglected planning, avoidable debt, forgotten generosity, and anxiety driven decisions.
So what does it look like to be financially faithful in a busy season? First, slow down long enough to notice. Proverbs 27, 23 reminds us to know well the condition of our flocks and give attention to our herds. In an agrarian society, a person's wealth was tied up in their flocks. To know the condition meant slowing down enough to actually count them, care for them, and manage them.
Today, your flock is your bank account and your budget. Awareness is often the first step toward wisdom. Second, prioritize what matters most. If generosity, saving, debt reduction, or wise planning matter to you, don't leave them to chance. Put them on a calendar, automate what you can, schedule the budget meeting, make the decision to give in advance.
What gets scheduled often gets done. Third, simplify where possible.
Sometimes the problem isn't only a busy calendar, it's an overcomplicated life. Too many commitments, too many subscriptions, too many obligations. Simplicity can be an act of stewardship. Fourth, remember that small faithfulness matters. You may not have time today for a complete financial overhaul, but you may have time to review one statement, cancel one unnecessary expense, or pray over one decision.
Remember, small acts of faithfulness done consistently can reshape your future. And finally, keep the goal in view. The goal isn't perfect financial performance, it's faithful stewardship. We'll be right back. 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. 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. Great to have you with us today on Faith and Finance. We've got a few lines open. You can call right now with your financial questions: 800-525-7000.
Let's go ahead and dive in. We're going to begin today in Oregon. Betty, how can I help you? My question is, is there a formula that one can use to determine does it make sense? They continue to do the conversions.
I was in Ross conversions. I'm 71 and a half. I've been using QCDs to make my charitable contributions. But I'm just wondering, does it make sense to continue to do that or to do some more conversions? And after I'm required to do the receive the RMDs, Can I do conversions at that point?
I mean, is this the optimal time to do it if I were to do any additional conversions? Yeah, great. Good questions here, Betty. I like the way you're thinking. First of all, I love that you're doing the QCD, the qualified charitable distribution.
That's a great move. That's going to reduce taxable required minimum distribution income and satisfy the RMD without raising your adjusted gross income.
So the QCDs and the Roth conversions can work together, not against each other necessarily, but the QCDs help with, of course, charitable dollars, not the full tax issue. I mean, in terms of a back of the napkin formula, if you will, it's really. You know, the tax rate now versus the tax rate later, especially with required minimums.
So you're a good candidate if you have large traditional IRA balances and RMDs are going to push you into a higher bracket, or they already are, and you have room in your current bracket. See, we want to take a fill the bracket approach.
So each year, what we typically do is we look at your current taxable income, we identify the top of your current tax bracket, and we convert just enough to fill that bracket, but not spill into the next one. And that is going to, you know, hopefully put you in a position where you don't trigger higher Medicare premiums. You don't pay anything in that next higher bracket, but you are systematically moving it from the bucket that requires the required minimums over to the bucket that does not. And that is an annual process that I would typically encourage you to work on with your CPA to determine what is the right amount each year. And I love that you're using the QCDs to satisfy your charitable intent.
I think the Roth conversions on top of that can be an effective strategy to complement it, if that makes sense.
Okay, okay, and so that would be just with my CPA versus the you don't know of any I guess, computer program out there where you one can plug in the numbers and say, okay, this makes sense. Because I've done two of them, I've done two conversions. And um I thought, well, I I don't know. Um Okay. Yeah, there is finance more sophisticated financial planning software.
For instance, you know, if you're a Soundmind Investing newsletter subscriber, which a lot of our listeners use because they provide mutual fund recommendations and ETF recommendations, and they want to kind of do it themselves, but they want some counsel. And so that's where the Soundmind Investing newsletter can be helpful. With that subscription comes, you know, access to some pretty sophisticated financial planning software that normally would be used by an advisor, but they make it available to consumers. And you could do that kind of planning, but it gets somewhat complicated. It's kind of like you can do your taxes, but you got to have confidence in using the tools.
And I think the same would apply here.
So unless you want to dive in and kind of learn how to navigate that, and I'm not discouraging him, just saying it, you know, it may quickly become more complicated than you signed up for. I think the better approach. is just to say, you know, I'm going to work with my CPA. Annually, to just help me run that calculation and determine: given my QCDs, given my balances, given my required minimums every year, given how much I have left in the current tax bracket to quote fill it up, what is that kind of Sweet spot for this year, you know, in terms of additional amounts that I should convert. And that should be a fairly simple calculation.
Okay, all right, I'll just I'll just do that then, okay. Thank you. Thank you. We're on the same wavelength regarding that, so I'm thankful. For that, good.
I'm delighted to hear that.
Well, absolutely, Betty. Call anytime if I can assist you further. Lord bless you. Illinois is where Leslie's located. Leslie, how can I help?
Hi. Um, my husband and I are setting up a trust. My husband doesn't know anything about my health.
So I'd like to put another relative. as my medical power of attorney. Is that okay? When I say, is that okay? He wouldn't supersede that person, would he?
if it's written up as as as these other people would be? My medical powers of attorney. Yeah.
So you already know who you want that to be, the person that would be your medical power of attorney? I asked a cousin, and I have a son. And I have those too. And I asked a cousin if she was willing, and she said yes right away. Yeah.
Yeah.
I mean, the bottom line is, and I'm not an attorney, so ultimately you're going to need to talk to an attorney about this, who the person who will draft this. But yes, you can absolutely name someone other than your husband as your medical POA. The law allows you to choose any competent adult you trust, and that can be a family member, a friend, certainly a cousin. And that person would then make healthcare decisions if you can't speak for yourself. And that authority is separate from any trust or the financial side of things.
And so, you know, your wishes are going to take precedence.
So the person named in your medical power of attorney will make the decisions, not your husband, even if he's co-trustee or beneficiary. And to make that clear, the attorney could include language that says the medical power of attorney has final authority over healthcare matters. Um and and that's part of the benefit of you know having that in place. Oh, well thank you. Yeah, I know it's unusual and odd.
You've probably never heard of such a thing, but it's you'd be surprised. I've heard of a lot of things, Leslie. But basically, that attorney is going to draft that for you. They'll probably do like a HIPAA release so that this person can access medical information. I would, at the same time, and the attorney will probably mention this, but I would do a living will so you can make end-of-life decisions.
And then the attorney will help you review all the documents and how they all work together so there's no confusion. But yeah, that's what you need to do as your next step. I just got some paperwork called the five wishes. Do you think that's a good thing? I'm not familiar with that.
Give me a little more context. It it's it's five wishes, I guess. I haven't really studied it, but the things that you would want ultimately if if you're no longer able to ways that you want your family or friends to treat you if you're no longer able to make decisions.
Okay. Yeah, it probably is a very good tool. I don't know the details on it, but anything that is an advanced directive or a living will type document that covers the primary areas of healthcare. and your personal preferences if you become unable to act for yourself is a good thing. And so, you know, I would probably take that with you when you meet with the attorney and they can make sure that you have what you need to cover all of end of life decisions and medical directives.
Okay. I can do that. You're welcome. Very much. Thank you, Leslie.
Lord bless you. Thanks for being on today. We appreciate you as well. Back with much more after this. Stay with us.
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 Forside Funds Services LLC.
Investing involves risks, including possible loss of principal. 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, helping you manage God's money God's way. That's what we do here each day. Not because we have all the answers, but we look to God's word to help inform the decisions we make about money, starting with the understanding that we're stewards, God owns it, money is a tool to accomplish God's purposes.
Let's head back to the phones. Houston, Texas, Mohammed, go ahead. Yes. My question is, I am sixty seven years old. I'm getting a social security check and a medical benefit.
Now my wife is in Obamacare, and she is Working as a part-time teacher, if she applies for this early retirement, 60 years, and get the social security check. Will my check be reduced? Good question.
So here's kind of a simple way to think about it.
So she will not get her full Social Security benefit. The 62 is the earliest someone can start Social Security, and that results in a permanent reduction. Because for most people today, full retirement age is not until about 67.
So if she starts at 62, her benefit's probably going to be about 30% lower than if she waits till full retirement age.
Now, does that in any way affect your benefit as her husband? No. Her decision to start early does not reduce your Social Security benefit. Each person's benefit is based on their own record. Does that make sense?
That makes sense.
Now if she is on Obamacare, does she has to forcefully take the Medicare like we have to at age sixty five? Or we get penalized. Yes, absolutely.
So at 65, she is, unless she's covered by an employer plan, a qualifying employer, then she is going to need to go ahead and take Medicare at that point, or she will have some penalties if she delays. After 65, but you can continue Obamacare now until 65 to get full benefit and also apply for the Medicare benefit, the health benefit. That's right. Yeah, when you turn 65, you should transition from Obamacare to Medicare because the Obamacare subsidies usually stop once you're eligible for Medicare.
So if you stay on the ACA plan instead of enrolling in Medicare, then you're going to lose the premium subsidy and you're going to have late enrollment penalties later. That I understood. I'm on it.
So the only question here is because Since she has that, she doesn't want to go and apply. She was just trying to get. cash check, not the not the medical part.
So at this point, she's confused and myself confused. You clarified, thank you very much, that individual benefit will, uh, paycheck will not be. But now the question is If she applies for the A Medicare check, she has to apply for Medic Medicare. health too, or she can defer that until sixty five. No, she would need to go ahead and apply for that.
So, are you wondering which parts of Medicare she has to take? Yes. Okay. First of all, there's four parts. You've got the Part A, hospital, the Part B, the medical insurance, the D, the prescription drug, and then the C is the Medicare Advantage.
She needs to enroll in A and B at 65. Those are going to be the important ones for her to go ahead and take at that point so she doesn't have any penalties down the road. I hope that helps cover it. I know this can get complicated in a hurry. We appreciate your call today.
To Colorado, Candy, how can I help? Hi, yes. We've been blessed to have two homes in different states. And within the next three to four years, we're thinking about selling one of them, not sure which one. But you had mentioned the capital gain exemption when you sell a house.
where you don't have to pay taxes on the capital gains. And I was wondering, you said two of the last five years Do they have to be consecutive? They do not. No, and this is a common area of confusion. It does not have to be consecutive.
So it's a total of 24 months within the last 60. prior to the sale.
So, you have to have owned the home for at least two years, lived in it as your primary residence for at least two years. But those two years can be any 24 months in the five-year window before the sale. They don't have to be back-to-back, but you can only do this every two years.
So, if you do it once and you meet the requirement of two out of the last five, not consecutive, then you wouldn't be able to do it again for another two years.
Okay. Sounds great.
So we could flip-flop. states where we reside in then, correct? You you could, yes, as long as you establish yeah, you're you're living there as your primary residence and it has to be uh for twenty-four months out of five years. Wonderful. Thank you so much for clarifying that and for your program.
Well, thank you very much. I appreciate it. Let's go to Canton, Ohio. We'll finish up with Nancy. Go ahead.
Hi, my husband and I have five rental properties, and I'm 70, and he's 72. And eventually, probably when he's about 78, we wanted to dispose of our properties. We do have three children. I didn't know if it's best to do it in one year or what you would suggest financially so that we don't have to. Yeah, timing matters a lot here, Nancy, not just for taxes, but for Medicare.
Because if you sold all, let's say, Extreme, you sold all five rentals in one year, that would massively increase your income and drive up your Medicare premiums two years later. If you spread it out, which is typically the way you'd want to do it, you know, that's going to help to not have that big income spike. Because when you sell properties, you'd recognize the capital gains, any depreciation recapture, any net rental income. And if you were to do that in a single year, your income could jump six figures. Even if the properties aren't big, and then that's reported to Medicare.
And the Medicare premiums are based on income from two years earlier. That's what's called Irma. And so that would trigger higher Medicare Part B and Part D for one full year, possibly thousands of dollars in extra costs.
So spreading it out over several years would help to keep your income lower, hopefully, stay below the IRMA thresholds, reduce your capital gains, and then spread out any depreciation recapture as well.
So, what could you do?
Well, you could stagger the sales. You could do 1031 exchanges if you're gonna reinvest in other properties. The other thing to consider is if you wanna do any giving out of any of these properties, you could give all or a portion of any of these properties to a donor advised fund before you sell. And then you don't have any capital gains on that portion. Because it's sold inside the donor advised fund, eliminating the capital gains, and then it just funds your account that you can then direct to your favorite ministries or your church.
Does that make sense? Yeah, thank you very much. You're welcome, 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 Standridge, Pat Montague, Devin Patrick, and all the team members here at Faith Fi. We'll see you tomorrow.
Faith in Finance is provided by FaithFi and listeners like you.
