Pros and Cons of Using a Credit Union

Do you use a credit union, or have you never considered using one?

Maybe you will after listening the next few minutes. Hi, I'm Rob West. Credit union members know the advantages they have, and 120 million of them nationwide can't be wrong. Aaron Cade joins us today with the pros and cons of credit unions.

And spoiler alert, there aren't many cons. Then it's on to your calls and questions at 800-525-7000. That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Well, our friend Aaron Cade joins us again today. He's particularly knowledgeable about today's topic because Aaron's the chief marketing officer at Christian Community Credit Union, an underwriter of this program. Aaron, great to have you back with us. Thank you, Rob.

It's great to be with you again in your audience. So Aaron, it's a question we get now and then. Are credit unions a good place to do my banking?

And we always say yes, but I'd love to hear what you have to say. And specifically, what are some of the pros of joining the typical credit union? Well, a big benefit of joining a credit union is that credit unions are member-owned cooperatives. They exist to serve members as opposed to banks, which exist to maximize profits for shareholders. We tend to be governed by a volunteer board, which is selected from among the member base. That board has voting rights on credit union policies, procedures, and major financial decisions. And those decisions are reflective of what members want and need. Typically, they have a common bond that unite all members.

Sometimes it's a specific geography, a select employee group, or a common affiliation. Yeah, that's a helpful overview. Now, of course, one of the natural follow on questions we get is, are they as safe as banks?

What do you think, Aaron? They absolutely are. Many credit unions are federally insured by the NCUA, which covers up to $250,000 per member. Christian Community Credit Union is privately insured by American Share Insurance. And the big difference there is that every member account is insured up to $250,000.

So that's a big difference. And no account holder has ever lost a dime with ASI. So we're every bit as safe as a bank, if not more so. Yeah, and that's a really important distinction because a single credit union member could have multiple accounts, each insured up to $250,000. Now, what about yields, Aaron? Can credit unions really compete with banks?

Absolutely. Because profits that credit unions make go back to members in the form of better rates and lower fees. So higher yields on deposits, on savings products, CDs, and savings accounts, lower rates on loans, and lower fees overall.

Yeah, very good. And what about branches, Aaron? Yeah, many credit unions are part of the co-op shared branch network, Christian Community Credit Union is. And that gives you access to over 5,600 shared branches across the country.

So there's likely one in your neighborhood. And now also access to 30,000 surcharge free ATMs. And that's a broader coverage than all of the big banks have. Yeah, now that's a great overview of credit unions in general. What about the distinctives of Christian Community Credit Union? Yeah, so our common bond is Christianity. So our members are unified in our faith, and our devotion and obedience to Jesus Christ is our Lord and Savior.

So we're unapologetically team, we invest into biblical causes, and the decisions we make and the things we do are driven by scripture. So the credit union is led by devoted Christians, and the deposits members in trust with the credit union enable us to provide affordable financing for churches, ministries, and Christians all over the US. This is great information to know about CCCU in particular, but we promised pros and cons. So what do you have for the cons?

Well, there's really only one con I can think of if you want to call it that. Membership eligibility is required to join a credit union. With Christian Community Credit Union, the one membership eligibility requirement is that you be Christian. You have to agree to our statement of faith in your membership application.

But that's it. If you're a Christ follower in the United States, and you agree to our statement of faith, you're in as a member. That's really helpful. And Aaron, you mentioned that part of the deposits provide affordable lending to churches, Christian ministries, and Christians across the US. But you're also sharing some of those profits, if you will, with ministries doing the work in the name of Jesus, right? Absolutely. We give to Christian charities, to missions, to ministries every year.

In fact, we support ministries that help protect vulnerable children, combat human trafficking, and provide disaster relief around the world. That's incredible. Aaron, we are out of time. We're out of time, unfortunately, but we always enjoy our time with you. Thanks for stopping by, my friend. Thank you very much, Rob.

It was great to be with you. Folks, I hope you learned something about credit unions. And if you'd like to learn more about Christian Community Credit Union, go to joinchristiancommunity.com.

That's joinchristiancommunity.com. All right, your calls are next at 800-525-7000. We'll be right back after this. The opinions offered during this program represent the personal or professional opinions of the participants given for informational purposes only.

Any information provided is not intended to replace advice from a financial, medical, legal, or other professional who understands your specific situation. Glad to have you with us today on Faith and Finance Live. I'm Rob West. It's time to take your calls and questions today on anything financial. The number to call to get in on the conversation is 800-525-7000.

That's 800-525-7000. We'd love to hear from you today. We've got lines open. Calls are coming quickly, though, so if you have a question today, I'd love for you to get in on the conversation right now. We'll get to you as quick as we can. Let's dive in.

We'll begin in Savannah today. Hi, Pete. Go ahead. Hey, Rob. How are you? I'm doing well. Thanks for your call.

Thanks so much for taking it. Go ahead with your question. My question is, in the Christian context—not in secular is not involved in the question—but in a Christian context, are permanent endowments biblical?

Yeah, and so what would be the context here? Are you thinking like a Christian university? Well, from any nonprofit—Christian university, Christian college, any NGO—that has a permanent endowment, and my understanding of the permanent endowment is that the corpus or the original gift can never be touched, so it has no sunset provision.

Yeah, yeah, yeah, absolutely. I mean, it can be—it's held into perpetuity, meaning the income—only the income from the funds can be used, and it's typically a result of a grant or a gift, and it's meant to provide long-term income. You know, I think the only challenge with them is related to mission drift, and so if the organization drifts away from its original purpose—and I think a lot of the Ivy League schools would be an example of this that were founded on Christian theology and are a far cry from that today—and they'd be unrecognizable to their founders, and yet the permanent endowments are going to continue into perpetuity, the organization that has a completely different mission. And so I think that's the challenge, is how do you guarantee the mission? And you know, a lot of foundations I know solve this by just making sure that the board of directors stays committed to the mission. I'm thinking of a family foundation in particular where the funds are there in the foundation, they're invested, they're to be used for the advancement of the Gospel, and they re-read the charter of the mission of the Christian foundation before every board meeting, just because they want to remind themselves, what is our purpose?

Why was this money placed here by the steward, and what is the purpose for which we're carrying it out? So I think it can be a really good thing, and in some cases a Christian college would be a great example. I know some wonderful Christian universities that are still locked into their original mission and biblical worldview, but they won't hire until they have a certain amount of money in an endowment for a specific position, because they want to make sure that it's funded into the future before they make that hire. Now again, the challenge can be as if there's not the guardrails to keep them focused on the mission, but as long as they are, it can be, I think, a helpful way to make sure that the income is there to fund a particular position.

But that's not easy to do, and so you've got to have an organization that's absolutely committed to it, and so I think then the alternative is to not do that and to just trust that the funds are going to continue to be there, and if the mission shifts over time, well those donors may go away, and that kind of keeps you honest, so to speak. So I think I'm not against it. I wouldn't say it's not biblical, but I would just say you need to absolutely keep the guardrails in place to make sure the mission drift doesn't occur.

Does that make sense? It does, and so that's the second tier question. Really, my first tier question, Robert, if you have time, would be, you know, and I love yesterday's show with Randy Alcorn, because he's sort of the guru for me on so much of this, is, you know, if I believe what I believe in that Jesus is coming back, and that if these funds are going to be hay and stubble at the end, and so there is no reward for it, so it's a bigger—my question is, maybe better—is, is it good stewardship to put it in a jar in the ground? Well, that's a great question, and I see what you're getting at now, and you're right, Randy has a lot to say about this.

He even kind of raises the question—I've heard Ron Blue say this over the years—kind of tongue-in-cheek, but maybe not. You know, I'm not sure we get credit for money we give away at death, because at that point we're gone, and it's got to go somewhere. But I think the idea is, what does it look like to live in such a way that we can continue to give more and more, even during our lifetime, and to your point, making sure that we're getting it into circulation, into God's economy, and not having it just sitting somewhere, whether that's a permanent endowment or even a donor-advised fund. You know, we can use donor-advised funds as a wonderful tool to, you know, avoid taxes like capital gains and so forth, but if that money then just sits in the donor-advised fund and it doesn't get into the kingdom, well, you know, I think to a point that's okay, but in another respect, why is it sitting there? Why aren't we releasing it into circulation for such a time as this?

Because, you know, we don't know the day or the hour, and we want to bring as many people with us to the kingdom as possible. So I think that comes down, Pete, to a conviction matter. I think that's something we all need to be praying about. I'm glad you're raising it, because hopefully by you doing so, it's even challenging some others to be thinking about, maybe I shouldn't make that legacy gift that's going to continue into perpetuity. What if I get it in to make a gift of the same amount that can be deployed for the sake of the Gospel today or tomorrow or next week? And is that a better use of this money as the steward that has been entrusted with these funds by the Lord?

I think that's something we should be praying about and ultimately would be a conviction issue. Well, thanks so much for your help, Rob. It brings more questions, and I know it's short timing, so I'll let you move on. But for me, it continues to go deeper, much deeper, because living here and now, and day to day, and not worried about the future, it's as if I'm storing up treasures on earth, I'm not storing them up in heaven.

I can't have my cake and eat it too. Yes, yeah, that's right. I think you're exactly right. And check out, there's an article on our website, in fact, it was in our Weekly Wisdom email today, and if you haven't signed up for that, you can do it. It's free at faithfi.com. Randy Alcourt actually has an article in today's issue and the title is, Will We Be Rewarded for Leaving Money to Christian Ministries in Our Wills. And it's just a really interesting discussion about this very topic, about giving now versus later. And, you know, if we don't give today, the economy may change, which means we have less to give. Our hearts may change. He says our lives may end before we've even given it. And he has a pretty compelling conversation about this as well in that article. So it's in our Weekly Wisdom. If you haven't checked it out, do that. Again, it's from Randy Alcorn.

Will We Be Rewarded for Leaving Money to Christian Ministries in Our Wills? Hey, Pete, thanks for your call today. God bless you, sir. We're going to take a quick break when we come back. More of your questions.

We've got room for a few more, though. 800-525-7000 is the number to call. Again, that's 800-525-7000. I'm Rob West, and this is Faith and Finance Live. We'll be right back. So glad to have you with us today on Faith and Finance Live. Before the break, Pete was talking about our conversation yesterday with Randy Alcorn. It was a fabulous conversation.

I agree. Randy is probably the book that had the most significant impact on me, other than God's Word, of course, in this area of faith and finance was Randy's classic Money, Possessions, and Eternity. If you haven't read it, I'd highly encourage you to pick it up. Also, a very short read that he's probably most well known for, a small book called The Treasure Principle, another great read. You can get it wherever you buy books. But if you missed our conversation yesterday about materialism and greed and living rich toward God and just how money can compete with our hearts for devotion to the Lord, check it out. You can find it in our app, the Faithfi app, or on our website at faithfi.com.

You can also go to moodyradio.org slash finance. Let's head back to the phones. By the way, we've got room for a few more questions. 800-525-7000 you can call right now.

Out to Seattle. Hi, John. Go ahead.

Hi, Rob. Appreciate the time here. So my question for you, I'm almost 60. I am a retired fireman and we are building our final house that will probably live in for the rest of our lives. We've been building it cash out of pocket and we need about $175,000 to finish construction. And I ended up very recently borrowing that money from an IRA that I have. Uh, and my intent was because I don't want, you know, I don't want to be down with payments. Um, I was just going to pull it out, pay taxes on it and be done with it. My accountant recommended that I borrow the money from one of my rental properties, you know, for tax reasons and then, you know, pay back my IRA so that I have that, you know, for future needs. And I'm just, I'm struggling with that. I, uh, uh, I don't want the payments, uh, of borrowing money from a rental house is completely paid off. Um, and I, I don't know what would be the best route to go. Should I just pull the money from my IRA, pay taxes on it, be done with it? Is it, does it make more sense financially to borrow the money, you know, from a rental house, pay back my IRA essentially to myself, put that money back.

But then I'm, you know, I'm stuck with a monthly payment for a while. So that's my question for you. Yeah. Very good.

It's a great question, John. And just to be clear, and it sounds like you know this, but there aren't, there is no borrowing from a, from an IRA. So you took a distribution and you're just going to get it back in, in that 60 day window, which is permissible by the IRS, but there, there, there are no loans, correct? Right. That's correct. Yeah. Okay. Yeah. Just want to make sure you were clear on that.

Yeah. I would tend to come down on the side of this with your CPA, uh, just because I think, you know, there's some real benefits to you getting that money in there. I understand you don't like to pay the interest and now you're going to have a payment.

Uh, I also understand this is not an ideal time with regard to interest rates, not to mention it's not your primary residence, which I wouldn't encourage you to do, but given the fact that it's going to be a loan on a rental property, it's going to be even higher than the conventional rates for a primary residence. And yet, I think the fact that you're likely going to push a, at least a portion of this 175,000 up into a higher tax bracket because you're taking it all at once instead of spreading it out, number one. And number two, the fact that that money is no longer in there to continue to grow for the future. You know, I, I think, um, despite the fact that interest rates are not ideal, I kind of liked the idea of, of you getting it back in there. I mean, another approach would be kind of a middle of the road where you work with your CPA to say, you know, um, what would it look like for us to spread this out over three years? So maybe you put back two thirds of it and, um, you know, you, you know, you put, uh, you take that out, you know, in the next tax year and then the one following, or if you want to get in under the tax cuts and jobs act expiring, you do it at least over two years, 24 and 25. Um, just because we don't know if that ends up sunsetting, then tax rates are going up. And so you'd rather pay today's tax rates than, you know, future tax rates because they're definitely not going lower.

I wouldn't imagine. And there's a good case for them going up because if nothing is done, they're going to sunset at the end of 2025. So that may have be another middle of the road option. Uh, let me ask you, I mean, other than the real estate assets, do you have, what are the total investable assets you have in retirement accounts?

Uh, Oh boy. I, I, let me think about that a minute. We, I have about 130,000 in passive annual income between two rental properties and two Delaware statutory trust. Now that does not include my wife. I just walked away from corporate America about a year and a half ago. Uh, she's 57 and she's got about 600,000 I think in a 401k. Okay. So we, you know, I think I once figured out our net assets, you know, excluding our house, you know, maybe 1.6, 1.7 million excluding our primary residence. Yeah.

Okay. And you got obviously good rental income coming in. That's going to continue to be thrown off. So what do you think about that at the very least spreading it out over two tax years? Because of what I said about tax rates potentially and likely going up, uh, but, but recognizing that, you know, hopefully we could get a portion of this down in a lower bracket by spreading it over two years, which means you'd pay back half of that this year and then, you know, have half of it in the, in the following.

No, I actually liked that idea. Um, you know, I'm trying to balance out, uh, you know, paying a lot to the IRS or, uh, you know, paying it in interest to the bank. So I kind of liked the idea of splitting it up a little bit and talking with my account about, you know, making sure I come under, come under whatever the next tax level is to make sure we stay underneath that. So, um, yeah, I mean, another kind of a third option would be to say, all right, we're going to split the difference in terms of I'm going to take half of it from the IRA. So that'd be 87 five and we're going to do that over two years. So that's 43,750 this year, 43,750 next year. And then we're going to get a loan for 87 five. So now we're going to end up with interest on half of it. The other half is still in the IRA continuing to grow for the next maybe 20 or 30 years, depending on how long the Lord has you here, which could be, you know, three, four decades.

Um, and so you get the benefit of that, but then half of it, you're enjoying these lower tax rates, which there's no guarantee of that down the road. So I think you've got plenty of options here to think about, but, uh, hopefully that's given you some things to consider. We appreciate you being on the program today, John mid Lord bless you. Uh, we'll take a quick break and back with our next segment, more calls just around the corner. Stay with us. So glad to have you with us today on faith and finance live here on moody radio.

I'm Rob West. We're taking your calls and questions today. 800-525-7000 that's 800-525-7000 before we head back to the phones. Uh, let me just mention, uh, we're about six weeks away from the end of our fiscal year here at faith fi and perhaps you listen to this program regularly. Maybe the Lord has used it in your life and you've been impacted by these principles from God's word and you'd like to support our work. We'd certainly invite you to do that. And especially now over these next six weeks, this is an important time for us to hear from our listeners as we head toward our listener funding goal. And, uh, we started with a goal April the first, uh, for the last 90 days, uh, of, uh, the fiscal year leading up to June 30th with a goal of 175,000, uh, needing to be received.

And the good news is you all have responded. We are so grateful for the giving that has taken place. Uh, at this point, we've already seen nearly a hundred thousand of that come in, which is an enormous blessing, but we still have a little ways to go.

Uh, with 97,000 in the door out of 175,000, we're still looking for about 78,000 more over the next six weeks. And so if you could make a one-time gift or you'd like to become a FaithFi partner with a monthly gift of $35 or more, we'd certainly be grateful. Just head to faithfi.com and click give or go directly to faithfi.com slash give. Either way, we'll take you right into our giving page where you can give online over the phone or find the address to mail a gift as well.

Thanks in advance. All right, let's head back to the phones, uh, to Fort worth. Hi Nancy. Go right ahead.

Hi, thank you so much for taking my call. I have a question regarding paying off my mortgage. I recently purchased a home. Uh, so it's a one year old home, new construction.

And, um, the one year anniversary is coming up in the next 30 days. They'll be in here to do an inspection on things that need to be repaired. And so I'm thinking I'm in good stand, a good standing as far as, um, not having a cushion for, uh, things that may break down.

This is my mindset. So here's the money that I'm looking at as far as my question. Should I pay off my mortgage completely?

I currently owe 26,000 on the mortgage and my savings is 30,000 and that would include my emergency fund. Okay. Yeah.

No other debt. No. Okay.

Excellent. And what are your total monthly bills, Nancy? Um, when you put everything in, including those things, you know, that don't happen every month, but maybe you're having to build up a little bit and pay them quarterly. Do you have a good sense of what those total monthly expenses are?

Yes. So, um, roughly it doesn't need to be precise. I'll say about 2200 a month.

Okay. So let's round up and think, you know, maybe you're missing a few things in there or something or things that don't happen every month. So three months would be $7,500. And as you said, you, you don't have any housing related expenses because you're a new construction and at the one year anniversary, they're going to come in and anything that's not working, right, they're going to, you know, fix it up anyway.

But obviously there are other unexpected by definition and emergency fund is for those things we can't anticipate and they come from any number of directions that could be medical or any number of other things. Um, but if we had three months worth, that'd be $7,500. Now, if you, if you paid this mortgage off, you'd be down to 4,000, which is only, uh, you know, we're talking two months.

Well, not quite. So a little over a month. Um, what would you save every month? Uh, what is your mortgage payment? Not the taxes and insurance portion, but just the principle and interest.

Do you know? Well, here's the thing. So when I bought the home, the appraisal on the, um, home, so I purchased a home at two, I'll say two six zero. I'll round it off to six to 60 K. Um, I, I put the 200 down on the home and had a loan for a 60 K. So I've paid off up to the 26 K. And, um, when I had my appraisal for taxes this year, there was no, um, asset here. So when they did the appraisal was land only and my, um, escrow account was too much for, um, what I needed to cover the, the principal and everything that goes into my mortgage payment. So they sent me the escrow money and I put it right back on my principal because my goal was that by the end of the year, when they come, they've already done the appraisal on the home for the next tax year, which will be in January.

And I'm at about three to 40 on your appraisal. Okay. And what was it initially? Was it half that or less?

It was a, well, initially it was just what the, uh, the land numbers, the land was quite, uh, it was a lot less. It was only coming in at 10,000. Okay. All right. So it's going to go up dramatically and you haven't experienced that yet. Now, let me just clarify, are they still escrowing for property taxes in your mortgage payment or did you say you're handling that yourself now?

They're still escrowing, but it's based on numbers that are changing, but it's a lot lower. Yeah. Yeah. Okay. I'm sorry.

Initially it was five 50 a month for the escrow, but then they sliced it and escrow went to about, uh, maybe 150. Okay. Do you have any sense of what that bill is going to be?

Have you talked to any neighbors or anything? We're all in the same boat. Yeah. Okay. There's probably, their boat is probably a lot bigger than mine as far as what they're going to have to pay because I put so much down on my home, but, um, okay. Well, I think for that reason, I might wait and do this until after you find out what that bill is going to be. I would imagine you're going to get that pretty soon, right?

For the appraisal value? No, the new property tax amount that you're going to owe this full. Okay. So they're not going to do anything with numbers until December. Oh, okay.

So it'll be for the following year's taxes. Yep. Yeah. Okay.

All right. Well, I mean, that could be $3,000. I think the key is, or more, um, I think the key is if you go with my, the plan, what is the mortgage payment only? Just the principal and interest right now? Yes. And that's principal and interest only, correct? No escrows. Right.

Okay. So you'd have $308 a month that you could put into savings. And so you'd start off with a month and a half. And then, uh, you know, six months later, uh, you said your bills were $2,500. Um, and so we'd have $300.

So it'd take you eight months to get another's month worth of expenses. Uh, let's do this. Um, I've got to take a quick break. We'll finish up on the other side of this break. Um, I have one more question and then we'll get you an answer. I don't want to rush this.

So thanks for all that background information. Nancy will finish up on the other side of the break and then Ellen, John Rusty coming your way as well. This is faith and finance live. We'll be right back. Great to have you with us today on faith and finance live.

I'm Rob West. We're taking your calls and questions before the break. We were talking to Nancy in Fort worth. She bought a new construction home about a year ago. It's still under warranty.

In fact, at the one year anniversary next month, they're going to come out and see if anything's not working right and fix it. Wouldn't that be great? Uh, she's got, uh, let's see about, um, $7,500, uh, in her savings account. No. Uh, what did you say? You have, you have 40, uh, 30,000, correct? Nancy and your savings today. Yeah. Yeah.

Got it. So she's got 30,000 in savings. She's got a mortgage of about 26,000 remaining on her home. So she's wondering about paying that off, which would leave 4,000. Now we want her to have an emergency fund of at least $7,500, uh, because that would be three months of expenses. She spends about 2,500 a month, she believes. And so that would drop her down to only a little over a month, a month's worth of expenses. So not ideal, but she's in a brand new home and she would be saving that mortgage payment of about three Oh eight per month. Um, the challenge is it's going to take you at three Oh eight per month, Nancy, uh, to get up to my goal of 7,500 for your emergency savings.

It's going to take you nearly a year to do that at three Oh eight a month. So here's my last question for you with your mortgage payment today. Are you able, do you have any surplus at the end of the month? Anything leftover or are you kind of spending right up to the edge? Well, I have been, I'm not at the edge. I have been working part time.

And so that part time ended, uh, yesterday. And, um, that's my concern. If I dropped down to just my retirement money that's coming in and that's, uh, 1536 monthly. Yeah. And that's not going to be enough.

So, so what's your, what's my retirement benefits. I see. Okay.

So actually if you can, if you just continued on this plan, you'd start having to pull out of savings just to balance the budget with you not working. Is that right? I believe so. Yeah. But if you got rid of the mortgage, you think you could make it work.

You just wouldn't really have much leftover. Right. Okay. Yeah.

I mean, I think you're right on the edge here. I mean, I don't love this plan, but I, I can't think of a better option because you are in a brand new home. You still will have 4,000, which is less than I'd like, but it's something and you're going to be adding through, um, well, uh, no, you're not going to be adding 300 a month. So you're going to do this just to balance the budget, which means a 4,000 is all you would have. Um, and then what happens if when you get that new property tax assessment, your property taxes, you know, go up to $3,000 a year or more and some, what if you had to pull a two or 3,000 out of that 4,000 and now you're, you know, you're down to just barely breaking even.

And at that point, if something unexpected comes, now you're putting it on the credit cards or I'm going to take out another loan. So what about continuing to work part time? Is that an option?

It is. Okay. I think that's my best option. If I think I'd wait until you get another job part time and continue to make the mortgage payment like you are, get that other job. And then if you get the job we could take and, and paid pay off the mortgage, save the 300 a month. But I think right now I'm concerned about you, you know, depleting all of your savings, not having, if you don't get another job, not having, um, you know, very much left and knowing that this big property tax bill is coming, I just wouldn't feel great about that. I mean, if you had confidence you could find something, you could go ahead and pay off the mortgage to balance the budget, but I wouldn't wait, uh, to get that new part time job because I think you need some more cushion to build that savings back up, uh, to where I'd feel good that you're not kind of just running too lean.

Does that make sense? And the only thing was there's this low payment that I have that I'm responsible for now. And I've been putting an extra 1000 on my principal every month. So, um, I'm thinking now if I paid that off the 1000 would go into my savings. Okay. Yeah.

That's new information. So you're, you're paying a thousand more every month, uh, on your mortgage, which means you're going to have, I mean, so help me with that. If your mortgage goes away and you don't have the three Oh eight payment, you are still gonna, and, uh, and you stopped, uh, so you'd have 1300 a month. You're telling me extra. Uh, that's the way it was before my income changed on yesterday.

So, but that's what I have been paying. Initially the mortgage payment was eight 66 with, uh, the original, uh, loan and numbers. Okay. So I just kept it like that.

Even though the escrow analysis reduced my mortgage, instead of paying less or what they assessed it at, I put more on it. I started. All right. It makes sense.

So here's what I would say. We got to get that part time job back. So you need to go find some more work. We're just too lean of you eliminating that income.

You just don't have enough cushion. So I'm okay with you paying off the house, but only if you go get that other part time job. Okay.

Cause we need to build that savings back up and without you having any other income other than your social security, it's just too lean and something's going to come out of left field and you're not going to have the resources for it. I hope that helps you Nancy. Thanks for being on the program today.

Let's go to Pennsylvania. Hi Ellen. Go ahead.

Hi. Um, my brother and I were talking, um, he's 66 and plans to work till he's 70 and wants to be able to save in some kind of fund to, um, like after he's gone to help his adult autistic son, he's in like a group home, like a dorm building. Yes.

So he's, yeah. So the best way to do that, I mean, there's something called an able account, a B L E, which is very easy to set up very low cost. The problem is, uh, you know, you're going to run into the, uh, the limits, uh, on that pretty quickly. And if it needs to last him the rest of his life, uh, you know, you may not be able to put enough in there. And so that then involves something a little more complicated and costly, but will serve him well, which is a special needs trust. And you'd want to go to an attorney who specializes in this area.

Uh, you know, the, your brother, uh, would set it up, um, or the two of you you'd fund it with either cash or assets or investments or whatever it is. The individual with the special needs, um, would be his, his adult son would be named as the beneficiary. And then one of the key features is that it's structured in a way that preserves the beneficiaries eligibility for means tested government benefits. So it keeps the trust assets separate from his son's own assets. It limits the control and you know, his control over the trust, but it doesn't count as a resource for the purposes of determining eligibility for benefits like Medicaid and SSI. So it's a complicated process.

It's going to be, you know, it's going to probably cost a few thousand dollars, but it'll set him up so that when you and your brother are gone, his son will have the assets he needs once it's funded and it'll work well with the government assistance that will be available. Does that make sense? Great. Yep.

So we were wanting, yeah, so it's called a special needs trust and you're going to want to connect with an estate attorney to get that drawn up. Thank you for calling Ellen. We appreciate it. Uh, to Indy Indianapolis. John, go ahead.

Uh, yes, Rob. Appreciate the ability to call in here. Um, my wife and I have been paying for longterm care insurance for about 15 years now. We're in our mid to late seventies. There has been a class action suit against the longterm care company, uh, informing us that their, the company's rating now is C plus plus with the note that that means that they're marginally able to pay for future. Um, and so they're forecasting that we, even though we've had some pretty significant increases in these longterm care payments in the last decade, um, they're forecasting more to come. So they've offered some options. Um, at this particular point in time, I don't know what the overall state of the industry is, but it's concerning enough that, um, we're wondering if we should not, not canceling the account, but, um, they offer some reduced options.

And, um, uh, I guess the question is what kinds of things should we be thinking about to make a decision about what would you do? Yeah. Wow.

That's a tough one because I don't like that C plus plus rating at all. There's been a lot of consolidation in the industry and we're left with a much smaller group of longterm care insurers that are really committed to this space and have the financial health to do it. There have been a lot of increases across the board in these premiums, in some cases, dramatic increases. And that's just in line with what's going on in healthcare. The cost of healthcare is, you know, up dramatically in these policies that are funding that or having to go up with it. Um, and so it's, it's affected, uh, you know, what's going on just in the longterm care insurance space.

Uh, but there are some clear leaders in this space. And so I think the question is, do you have the option to move over to one of those policies or is it going to be too, too cost prohibitive for you just based on your age to try to start that process over? Um, if you were to cancel the policy or let it lapse, I'm assuming there's nothing that would come back to you.

Is that right? Well, they actually, two of the options are to make no more payments at all. And, uh, but to reduce the, um, almost, um, half million benefit at this point by about 20% of that. Um, but then, uh, locked in for that total amount, not have to pay anything more, uh, that obviously assumes that the company remains solvent needing to tap it. Um, so, uh, that's where that's at. I mean, we have, um, a pension that, that is, is, is very strong so that if we were in longterm care, so we'd be able to handle that. So I don't have to rely on an IRA or anything like that for it.

Okay. So yeah, I mean, that may be your best option. I'm hesitant to say that that's definitively the right option just cause I don't, I mean, I don't know what the company is.

I don't know what the options are, but I don't like the C plus plus C plus plus rating on top of these dramatic premium increases. So I wouldn't continue just at a surface level. I wouldn't continue to throw more and more money at it. I think I'd probably be more inclined to stop paying and just ride it out with a greatly reduced benefit.

But I think before I made that decision, I mean, you've got a lot invested here. Uh, I'd probably get an independent agent who specializes in longterm care to look at this with you, help you make a good choice. If you don't have one, uh, I'd reach out to a certified kingdom advisor there in Indianapolis on our website at faithfi.com. Click find a professional. Any of them could refer you to an insurance agent who's independent. There's a longterm care insurance specialist. I do that before I made the final decision. Sorry about this, John. No, this is tough. Thanks for your call. They did finance lives of partnership between Mooney radio and faith by rusty stand the line and we'll be, see you tomorrow. Bye bye.