This faith and finance podcast is underwritten in part by Timothy Plan. Good news! Since 1994, Timothy Plan has shared good news with investors and advisors by offering a family of funds that honor your faith. Learn more at timothyplan.com. Your investments can do more than grow your portfolio.
They can also create opportunities for generosity. Hi, I'm Rob West. As the end of the year approaches, you may be thinking about charitable giving, but have you considered giving directly from your investments today? Brian Mumford joins us to explore how generosity can be part of your investment strategy, and then it's on to your calls at eight hundred five two five seven thousand. This is Faith and Finance: Biblical Wisdom for Your Financial Decisions.
Well, it's always a pleasure to welcome my friend Brian Mumbert back to the program. Brian is president and CEO of Timothy Plan, a pioneer in biblically responsible investing, and an underwriter of this program. With nearly two decades of experience at the firm, he now leads its efforts to equip Christians to invest with both financial wisdom and biblical integrity. Brian, great to have you back. Great to be here, Rob.
Thank you. Brian, today we're exploring how to give from our investment gains. But before we get into the details, why should generosity be part of our approach to investing in the first place?
Well, Rob, as you know, Scripture reminds us that God owns everything, and that we're stewards of all He entrusts to us. You know, in First Peter four ten, as each has received a gift, use it to serve one another as good stewards of God's grace. And we know, in faith-based investing, we look to invest as stewards of what God has entrusted us. We should hold what God has given us with an open hand and look for opportunities to use it for kingdom purposes. Yeah, I think that's right.
Timothy Plan has put this into practice. I know you give a portion of your revenue to support ministry. What does that look like? You know, from our early days in 1994, Timothy Plan wanted to honor God not only in the way we invest, but also in the way we support ministries on the other sides of the screens that we do. And so, we've supported organizations such as pregnancy centers, faith-based and family-friendly media, and efforts to develop biblical entrepreneurs.
In fact, just this past week, we sponsored and attended a walk for life and a benefit dinner for two of the largest crisis pregnancy centers in Central Florida. Cool. And as our founder Art Alley always quotes from the Christian industrious R.G. Leterno, who famously gave away ninety percent of his income. Yeah, he said, "I shovel out the money, and God shovels it back, but God has a bigger shovel." I love that, Brian.
Let's turn to the practical side. What are some of the ways investors can use their investments to support the causes and ministries they care about? There's some really neat ways you can do this, Rob. I mean, you can donate appreciated stocks, mutual funds, or ETFs directly to a qualified charity rather than selling them first. That could potentially help avoid some capital gains tax.
And if you're over 70 and a half, you can make a qualified charitable distribution or QCD directly from a traditional IRA to an eligible charity. And this QCD can also count towards your required minimum distribution if you're subject to one. Yeah, what a great way to give from your IRA. A lot of people don't realize that's an option. I'm glad you highlighted that, Brian.
For someone hoping to give before year end, what steps should they take now rather than waiting until December? Rob, you really got to start early, especially if you're transferring appreciated securities rather than simply writing a check. And as with anything this important, you really want to work with a trusted CKA financial advisor to really make this plan work because they understand how this all goes and make sure that the charity can receive this type of asset before you try to give it. I mean, sometimes we're very noble in our intentions, but we do things without checking first, and the Tax benefits are helpful, but we really ought to remember the reason that we're giving this. Yeah, that's right, Brian.
Before we let you go, I know Timothy Plan launched three new ETFs earlier this year. Tell us about those. Yeah, Rob, we launched a pair of free cash flow ETFs, tickers TPFC and TPFG. One focused on value, the other on growth. These ETFs look not only at trailing free cash flow but also forward free cash flow.
Which is typically an indicator of a very high quality company, and then we launched a fixed income ETF, TPFI, our very first actively managed ETF that sits in the core plus fixed income category. And all three of these, of course, incorporate Timothy Plan's biblically responsible, faith based screening methodology. Yeah, folks, our investments may grow in value over time, but their greatest significance is in how we use them to love God. And serve others, and Brian, I appreciate these reminders today. Thanks for having me, Rob.
That's Brian Mumford, President and CEO of Timothy Plan, and underwriter of this program since 1994. Timothy Plan has been a pioneer in faith-based investing, helping Christians align their investment decisions with their biblical convictions. Learn about these ETFs and much more at timothyplan.com. That's timothyplan.com. We'll be right back.
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We're taking your calls and questions today to help you apply biblical wisdom to your financial decisions.
So, if you've got a question, now's the time to call eight hundred five two five seven thousand. That's eight hundred five two five seven thousand. Do you wonder periodically how your faith intersects with your financial decisions? Do you have things on your mind as you give, save, and spend that you're wrestling with? Perhaps.
You're trying to pay off some debt or balance that budget. I realize that's difficult. Maybe you're investing for the future and wanting to know how to navigate this market. Do you wait on the sideline? Is now the time to jump in?
Whatever you're wrestling with today, we'd love to help you think about it, but always in view of God's word. Because there's 2,300 verses in Scripture that deal with money and possessions, and we want to make sure you're applying those principles, the heart of God that we see in His Word, to the money decisions you're making. That's our goal each day to encourage you, to cheer you on, to point you back to God's Word, but also to help you make practical decisions and choices.
So now's the time to call. The lines are filling up.
So if you have a question, call right now: eight hundred five two five seven. Thousand. We'll dive into those here in just a moment, but first, in the news today, a new Federal Reserve survey shows more Americans nearing retirement have money in dedicated retirement accounts, but significant gaps remain. The 2025 survey of consumer finances, released October the ninth, found that nearly 37 percent of all U.S. households headed by someone ages 55 to 64 had no retirement.
Retirement account savings that's down from forty three percent in twenty twenty two, according to previous Congressional Research Survey analysts among households in that age group with retirement savings, the median account balance was two hundred thirty nine thousand dollars. The figures don't include other possible sources of retirement support such as traditional pensions or home equity or even social security. For Christians, these findings are a reminder that preparing for retirement is part of wise stewardship. Not a reason for fear. Whether retirement is decades away or just around the corner, it's never too late to evaluate spending, reduce debt, and save what you can while trusting God as your ultimate provider.
I will say, however, though, that we approach retirement differently as Christ followers. I don't think we should buy into the cultural narrative about working until 65 and ceasing all productive work so we can live a life of leisure. There's nothing wrong with rest or even taking. A season of sabbatical, but we're in lifetime service to our King, and in that fourth quarter of life, I submit, you have the most in wisdom and experience to invest in your community, in the next generation, as you perhaps reengage in a different way. Maybe it's from retirement to rehirement, as you think about that picture of that elder in Scripture at the city gate, dispensing wisdom and engaged in dis.
Course and conversation and engaged in ministry and kingdom work and now maybe with more flexibility financially you're doing that in a brand new way. We were created to be productive to be on mission for God through the whole of our life until He calls us home. We don't need to buy into that cultural narrative that we're done and we have nothing to contribute. When we do, well, our health follows and that starts to decline because that's not the way God wired us. I hope that's an encouragement to you today.
Yes, we need to save; that's good stewardship. But we also need to be thinking about what it looks like in that next season to be open-handed and surrendered to God's purposes. All right, we've got some questions holding. We want to dive into those every line full.
So let's begin in Ohio today, Carolyn. How can I help? I was wondering, Trump implemented overtime tax-free income. How is that dealt with—the employer or when you pay your taxes? Hmm.
Yeah, the employee generally claims the overtime tax deduction when filing their federal income tax, Carolyn, not through their employer.
So, under the new no tax on overtime provision of the One Big Beautiful Bill Act, the employer's responsibility is to report the employee's qualifying overtime compensation on their W two or provide the information needed to calculate it. Then the Employee's responsibility is to claim the deduction when filing their federal income taxes.
Now, with regard to payroll withholding, employers generally continue withholding federal income taxes from overtime pay during the year, unless the employee adjusts their form W four, which means you would likely get that back as a as a you know a refund when you file.
Now the law, keep in mind, doesn't make all overtime completely tax free. It creates a federal income tax deduction for qualifying overtime compensation, and but again, employers have to report the qualifying overtime separately in a separate box of the W two, and then you would ultimately claim that tax break when you file your return.
Okay, thank you very much. All right, thank you, Carolyn. We appreciate your call today. Let's head to Georgia and talk to David. David, how can we help?
This is David from Georgia. I appreciate your radio ministry here. I have a question about tithing, and before God, would it be okay or even right to be taking a portion? Of the ties and designate it for the pastor's income, and let me qualify this by saying, I've been in this church for well over 25 years, and the pastor has no designated income. He doesn't work outside the church; he's full time in the ministry.
And but but there is there is you know there's nothing in the budget or or normally paid out. Basically, he's got up and said, "You know, I take nothing, you know, out of the tithe." He said, "I will not touch the tithe." Well, you know, I kind of feel the same way. You know, I don't want to get into the business of designating, um, you know, this much money for the water bill, this much money for the electric bill, or this that. And yet, I have a real heart for the pastor. I mean, you know.
Easy, like everybody else. That's right. Yes, sir. And and that's very biblical. Yeah.
Let me give you my thoughts on this here, David, because it's a great question. I think first, Scripture clearly teaches that those who devote themselves to gospel ministry are worthy of financial support. First Timothy five seventeen and eighteen speaks of honoring elders who labor in preaching and teaching, and then the Apostle Paul writes in First Corinthians nine that those who proclaim the gospel. Should receive their living from the gospel, so there's certainly a biblical basis for supporting an unpaid pastor financially. I think the question is whether that support should come from what you've designated as your tithe.
Now, let's back up. Under the New Testament, Christians aren't given a specific percentage they're required to give. Instead, we're encouraged to give generously, willingly. Cheerfully, we see all that in Second Corinthians nine seven.
So, my encouragement would be to continue prioritizing your local church and your giving. But if you were moved to support a pastor who serves without compensation, I believe this is just my opinion. I believe that's a worthy expression of biblical generosity. I'd also encourage you to consider whether that gift could be made through the church, which provides accountability and trans. Transparency.
You'd have to have a conversation with them about that. They may or may not be willing to do that as a designated gift. But here is what I would say: ultimately, giving isn't about satisfying a legal requirement. It's about faithfully stewarding God's resources to support His church, care for those who minister, and advance the gospel. Ultimately, that's a decision between you and the Lord, David.
I hope that helps. God bless you. We're going to take a break. Back with more questions after this. Lines are open eight hundred five two five seven thousand.
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For more than thirty 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 the short video webinar on profit and peace of mind, no matter what's happening in the market, is available at SoundMindInvesting dot org. Great to have you with us today on Faith and Finance. We're going to get to as many calls as we can here in our final segment today.
Let's head back to the phones. We're going to go to Pennsylvania next. Jeff, thanks for holding, sir. Go ahead. Hey Rob, thanks for taking my call.
Sure.
So my my wife's parents would like to transfer the title to their house to my wife and I prior to their death, and I didn't know what the tax implications were of that. Yeah, it's a great question. The biggest tax consideration, Jeff, when transferring property from, in this case, in-laws to adult children, is whether the property is gifted, sold, or inherited.
So, for a couple in their mid fifties working full time, you want to be especially careful about transferring property while the parents, your in laws, are still living, because the wrong approach could create a substantial capital gains tax bill later.
So, let's talk about those three options that I mentioned.
So, one would be they gift the property now. There's generally no federal income tax when Receiving the gift, they would just need to report it to the IRS, but it would just chip away at their lifetime gift exclusion, which right now sits north of fifteen million dollars.
So, unless they have a pretty significant estate, they don't need to worry about that.
So, it would not be taxable to you or to them. But, and this is a big issue, you would receive or you would inherit the your in laws' tax basis. This.
So, whenever you sell real property or any asset, really, and it's appreciated, you pay capital gains tax. Currently, either zero, fifteen, or twenty percent, and that just depends on what your total taxable income is, including the gain itself. But when you inherit a property, you receive a stepped-up cost basis, so the cost basis is no longer what your In laws paid for it, in order to determine the profit when it's sold, it becomes the market value of the property at the date of death. Which means that if you turn around and sold it after they passed away, there would be no capital gains. But by them gifting it to you, you would inherit their tax basis, their original cost basis.
Which means if they've owned it for a long time, that may be very low. Which means you could have a large capital gain down the road that if you inherited it rather than receiving it as a gift during their life, you would not have. The other option. Is they sell the property to you, and they may owe capital gains depending on what they sell it to you versus what they paid for it, and then at that point you would establish a new cost basis equal to the purchase price.
So let me stop there and just see what questions you have. All right.
So just to make sure I understand, so there's obviously no inheritance tax. Right. But the capital gains tax would come into play if my wife or my wife and I ever sold the property. That's right, and if they gift it to you, you would inherit their original cost basis to determine the capital gains, which would be the selling price when you ultimately sell it minus your parents' original or her parents' original cost basis minus any improvements they made to the property that would result in the total gain that's now subject to capital gains tax versus you inheriting it down the road at death, and that. Cost basis jumping up to the market value as of the date of death, and then when you sold it, you'd subtract the selling price minus that stepped up cost basis.
So then, the the cost basis would be based on whatever the value was, equal to the value of the property as of the date of death. Which means if you turn around and sold it right away, there is no capital gain.
Now, if you held it because you all wanted it as a second property, or you were going to move into it and it continued to appreciate, you could have a capital gain down the road, but it would be based on that stepped up basis as of the date of death, not the original purchase price.
So that's the major consideration.
Okay. Yeah, all right, and then so then if say one of our descendants inherit the property, it would be based on the time of our death, not. Yeah, that's exactly right. Yeah, so if you kept it in the family as long, based on the current tax law, doesn't mean it couldn't change. But based on the current tax law, any time an inheritance occurs, that basis is adjusted up to the current market value.
But it can't come through a gift; it has to come through inheritance.
Okay, all right.
So, so gifted goes back to the original cost. Inherited goes to whatever the current cost is at the time of the inheritance. You got it. Absolutely right. All right, that's what I needed to know.
Okay, thanks for your call today. By the way, if you did decide to transfer the deed, and you may not, just based on what we talked about, and I would encourage that you'd want to have an estate planning attorney or a CPA review what how the deal is structured to make sure that it makes the most sense and that the transfer happens legally and is recorded under the new owner's name. Thanks for your call today. Let's go to Alabama. Hi, Dale.
Go ahead. Hey Rob, thank you. Love your show. Thank you so much. Thank you.
My brother and I own an escort together, and we own stock in this company. It's a small company. My brother just took retirement at seventy. I'm sixty-five and considering. My question is: We're going to continue working some.
Can we pay ourselves with a dividend as opposed to just income? Yeah, it's a great question, and this comes up a lot with S corps. And the IRS has a clear rule: if you're providing meaningful services to the business, then you generally need to pay yourself a reasonable salary first, and then you can take distributions.
So essentially, the salary, the W two wages, are required if you're actively working in the business. Those are subject to payroll taxes, social security, and Medicare, and they have to be. "Quote reasonable," and you have to be able to defend that based on your role, your duties, and experience, and what someone else would be paid for the same work. And then the distributions, often called dividends, can be taken after paying that reasonable salary. Those are not subject to payroll taxes, which is why they're you know a nice benefit of an S corp.
They still pass through your as the owners. Tax return and are reported on your return, but you're not subject to those payroll taxes, which is a nice perk. But you do have to make sure that it's beyond what would be considered by the IRS to be reasonable compensation as salary. That makes sense. I was curious about that.
And just a quick question: Me at 65, if I take retirement, I know whatever I make goes against what I would get because I'm not a full retirement age 67. Does that money, if they subtract money from my distribution or my what I would get monthly, does that money come back to me at some time down the future? Not necessarily. No, the only reason you would get some sort of credit for it is if you replaced one of your high thirty-five years of earnings because you're making more now than you did with one of those high thirty-five years, and therefore it knocked one of those out and replaced it, and you're going to end up getting more. That's really the only benefit.
I understand it's it's somewhat frustrating that you are continuing to pay into Social Security even while you are collecting it. That's just the way the system works.
So you don't get a direct benefit, but you may be rewarded if you replace a high thirty five. Dale, thanks for your call.
Well, we're so grateful for you being here today. Thanks to Sandy, Jim, and Devin. We'll see you tomorrow. Bye bye. Faith in finance is provided by FaithFi and listeners like you.
