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Worrying About the Financial Future

Faith And Finance / Rob West
The Truth Network Radio
May 30, 2024 5:46 pm

Worrying About the Financial Future

Faith And Finance / Rob West

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May 30, 2024 5:46 pm

The data shows that personal debt is rising, and folks are worried about their financial future. So, what’s the solution? On today's Faith & Finance Live, Neile Simon will join Rob West to talk about the solution to fretting over finances. Then Rob will answer your calls on various financial topics. 

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The data shows that personal debt is rising and folks are worried about their financial future. So what's the solution? Hi, I'm Rob West.

There are some things we can't control like inflation and a slowing economy, but we can do some things, especially when it comes to managing and eliminating debt. Nealey Simon joins us today to talk about the solution to fretting over finances. And then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Nealey Simon is our guest today. She's a certified credit counselor with Christian Credit Counselors, an underwriter of this program.

Now we sometimes refer to them as CCC, not to be confused with CERT CFC, another great program that helps people control their finances. But today we're talking about Christian Credit Counselors, and it's always a treat when Nealey joins us because she has such great ideas for people who need help with debt. So Nealey, it's great to have you back with us. It's great to be here, Rob.

Thank you so much. Absolutely. Nealey, credit card debt, as you know, is at an all time high, and we put that alongside the fact that the gross domestic product is falling. That means our economy is slowing. And just recently we had a disappointing jobs report. It feels like kind of the perfect storm is brewing here.

Would you agree? It really is. And much of the worrying is about debt.

You know, we've all heard of it, and most of us have it. Debt has really become an unavoidable reality for life, and it can be very consuming if you have it. So at Christian Credit Counselors, we just really want to help. We want to come alongside and help you with your financial challenges because they're not meant to be faced alone. And we really just need to start talking about our finances so that we can reduce the stigma around debt, which is so common for us. You know, often people don't want to reach out and get help because there's some shame or guilt associated with the debt. But today we're really going to provide you some solutions of overcoming credit card debt the right way.

Oh, that's great, Neely. I'm looking forward to diving into that. But first, I'd love for you to unpack some of the stats that really give us a view into the fact that folks really are worrying about this area. So in 2024, the Wells Fargo Foundation put out a survey and it talked about what some of the personal finance worries are for most people. And what they found is that roughly six in 10 people feel that the U.S. economy is not really going to benefit them once the improvements start happening. And then more than half agree that the uncertainty in the economy makes achieving their long term financial goals impossible. And then lastly, at least a quarter of Americans are concerned that their money won't last or feel like they'll never have the things they want because of their situation.

I think what's really important is that you have to understand why people are feeling this way. And some of the other statistics are that one in three people don't pay their bills on time, which is up 27 percent from last year. And only two in five Americans have a budget and keep track of their spending. And then nearly 39 percent of people are concerned that the money they have or will save won't last. So I think what's really important to understand here is that we can really lessen the amount of anxiety and worry if we start saving and if we start spending less than we make. Well, that really makes the case, Nealey.

All right. So how do we begin to secure our financial future? So if you do have credit card debt or any type of debt, that's where you really want to start. And if you have credit card debt, it's really important you get connected with a certified credit counseling agency because they can help reduce your payments, creating more disposable income, lowering your interest rates. So you're able to get out of debt faster. And typically it's about 80 percent faster while honoring your debt in full.

That's great. And then we also talked about spending less than you make, creating a savings and then increasing it whenever possible really helps to create some financial peace and stability. And it also will allow you to give generously and find contentment. So at Christian Credit Counselors, we really want to help you get out of the credit card debt by educating you on your options. Keep in mind, our consultation is free and it's confidential. What we want to go over is a comparison estimate outlining all the benefits and the fees, walk you through a budget and provide a plan to get out of debt.

Oh, Nealey, that sounds great. And by the way, this is my preferred way, folks, for you to get out of debt. Just go to Christian credit counselors dot org today.

That's Christian credit counselors dot org. Nealey, thanks for stopping by. Thank you so much. Back with your calls after this.

Eight hundred five two five seven thousand. Stick around. 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. Thanks for joining us today on Faith and Finance Live. I'm Rob West. We're ready to take your calls and questions today. The number to call is eight hundred five two five seven thousand.

Again, that's eight hundred five two five seven thousand. We'd love to hear from you today and whatever you're thinking about in your financial life. All right. Let's dive in. We're going to begin today by going to Pittsburgh and talking to Alan. Go ahead, sir. Yeah. Hi, Rob. Thanks for taking my call.

Sure. And so I'm I'm getting ready to retire here and I have my money in a couple of different places. I have a different retirement and I have my one I'm afraid of is a deferred call. So when I retire my deferred call, I can take it out one whole lump sum or get a monthly payment. However, once I start taking it out, I'm done contributing to it. They can still use it and then it could be in the marketplace. But that can fluctuate up and down. Would I be better off taking it out of there and being in a secure place like what I'm thinking about, like an IRA, like a Roth IRA or something?

Yeah, it's a good question, Alan. You know, I think the key is the investment strategy. What's secondary is the type of account. So right now you're in a deferred comp, which is a deferred tax environment. If you roll it out to a traditional IRA, you would stay in a deferred tax environment, meaning that the taxes don't have an impact on the investments. The investments are free to grow and then you pay the tax on it as you pull it out of the account, whether that's the deferred comp or out of the IRA.

Now, if you moved it from that pre-tax environment to an after-tax environment for tax-free growth, like a Roth IRA, it would require you to do a conversion and then realize the tax when you did it. Now, in terms of the investments, whether it's inside the deferred comp or the IRA, I think the key is to recognize that even once you hit retirement, you have a decades long need potentially if you're in good health for this money to last. And so we probably need to be thinking even at age 65 that you need to be planning for maybe three decades of this money to last until age 95 or beyond. And in order to do that, especially with higher inflation, we need to have a growth component in there. And even though there's risk associated with that, you manage that by getting more and more conservative over time. But I think even at 65, it probably makes sense to have somewhere around 40 percent of it in stocks and maybe 60 percent in bonds. Perhaps there's a smaller allocation to precious metals. But the idea would be that if the market was down, let's say we're in a prolonged recession, you wouldn't touch that stock portion.

You'd let that sit and recover over time. And if you needed to draw an income from this account, you do that largely pulling from the income generated by the fixed income portion, that bond portion of the portfolio. But the idea is that, you know, this would give you the income you need to supplement Social Security as soon as you move it out into a more kind of, quote unquote, safe environment. Yes, you're protecting yourself on the downside.

The problem is you're limiting your upside as well. And so you just need to make sure that that's going to work for you based on how much you need to be pulling out. How much will you be relying, Alan, on an income from these assets in the deferred cop in particular to balance your budget in retirement? Yeah, I'm only taking two thousand dollars a month out of there per month, and then it's going to last, you know, 10 years or more than that. And that's what I was afraid of.

Should I keep it in with the stock market or should I take it out? Because, you know, we're. Oh, I lost you. Are you still with us? Alan, are you with us? All right, I think we've lost you.

Let me just sum this up and say I'm with you there. I think the ideal situation would be that you would only pull a max of four percent a year. Now, you may not be able to do that. You may require more. You mentioned two thousand a month. That's twenty four thousand a year. I didn't catch how much is in this portfolio. But if you're taking more than four percent, especially if you're taking a good bit more than four percent a year, you just need to recognize you're going to be slowly drawing it down and you may deplete it over time, especially if you live a long time.

But I think the idea that you would keep some allocation to equities in this, even in retirement, makes a lot of sense. And I'd probably connect with an advisor to talk through how it should be managed. If you don't have one, Alan, you could head to our Web site, faith by dot com. Just click, find a professional at the top of the page. You can interview a few certified kingdom advisors and find one that would ultimately have you roll this over to a new IRA.

And then he or she could take over the management of it at that point with your goals and objectives in mind. Thanks for being on the program, sir. May the Lord bless you. Let's go to Illinois. Hi, Lorraine.

How can I help? Hi. Thanks for taking my calls. I have a hard lean on my property and I would like to know, can I put it still in a wheel?

Because I know I cannot put it in the trust. Yeah. Yeah. So a home lien is just a lien or a legal right or claim against a property that's used as a collateral to satisfy the loan.

Absolutely. You can leave a lien to property to your kids or whoever you choose in your will. The lien debt will need to be properly addressed through your estate assets or the sale of the property or by your kids paying it off themselves for them to be able to take full ownership, free and clear of the lien at your death. But that doesn't prohibit you from putting it in your will.

It will just need to be satisfied before they could take free and clear full ownership. Does that make sense? Yes, it does. Thank you. All right. Thanks for your call, Lorraine. Call any time. Let's see. We'll head to Medina, Ohio, and welcome Valerie. Go ahead. Hi.

Thanks for taking my call, too. My question is, my husband and I both have separate 401 case from previous employers. Yes. And it's the same company, but his is doing a lot better than mine. But my question was, we delayed putting it into a Roth IRA.

We're 66 now because his seems to be doing pretty good, what little we had in it. Yeah. And we delayed putting it in a Roth IRA, but I just found out that if you put your money in a Roth IRA, you really can't touch it for five years. And we didn't realize that.

So if we needed to use it, if we did make that move, is your understanding that you can't touch it at all or that you can touch it, but you would get some kind of penalty or? Yeah. So any of the gains that you would be taking in, not the original contributions, you can get back the original contributions at any time. But any gains for a Roth IRA, it does have to be in there or the account has to be open for at least five years.

So that is true. Now, is this in a Roth 401k or are these traditional 401ks currently? Currently they're traditional 401ks. We didn't even really understand about Roth's recently. Okay.

Yeah. So when you pull these out of the 401ks, if you decide, if you've separated from employment, you'd want to roll these two traditional IRAs, that doesn't have the same five-year requirement. You could begin taking money out of those traditional IRAs as soon as you want.

Now, it's going to be taxable as it comes out because remember it went into the 401k tax deferred. Let's do this. We'll pick up the call on the other side of this break. We'll be right back. Thanks for joining us today on Faith and Finance Live. All the lines are full, so we'll get to as many calls as we can today.

Let's head right back to the phones. Before the break, we were talking to Valerie in Ohio. She and her husband have a couple of 401ks. His is doing a little better than hers.

They're wondering how to approach that moving forward. Valerie, just clarify for me, have you all already separated from your employers? Are you in retirement or is that coming up? They're from previous employers. My husband is retired and his has been the last 18 years just sitting there growing. And mine for about 10 years. Got it.

And you're still working, it's just that this is an old 401k for you? Yes. Okay, got it. And what is the balance roughly on each of them? His is like 150 and mine's like 50.

Okay, got it. Yeah, and his just grows. They're both with Fidelity, but for some reason, his has way surpassed mine. Well, it probably has different investments. And so you're going to have to look at what are they invested in because at Fidelity, like Schwab or many of the others, there's almost an unlimited number of investment choices. So it's all going to come down to what are the investments that were selected for that particular 401k. And then you have to look at the total growth as a percentage of the portfolio to truly compare apples to apples. And what you may find is that he was just in different investments that have performed better than yours.

If in fact, you know, on a percentage basis, he has performed better. But I think the key for you all moving forward is, okay, what do we do with this now and given that their previous employers, you can roll these out to IRAs. Now, as I mentioned before the break, you'd want to roll them to traditional IRAs.

That's not a taxable event. And there is no five year holding period on the traditional IRA. The five year holding period would kick in is if you decided for either yours or his, or both once they get to the traditional IRAs, do you then want to take another step to convert them to Roth IRAs? In doing that, you'd have to add 100% of whatever you converted to a Roth to your taxable income in that year. So that could involve a pretty big tax bill. And I generally don't recommend, you know, rolling, converting large amounts to Roth once you get to retirement because you're missing one of the primary benefits of the Roth, which is that tax free growth over a long time during your working years. And you would also have in addition to paying the tax for any portion that's converted, you'd have that five year holding period for 100% of the amount that was converted, you know, for that period of time. So I think your next best step would be number one, to get these rolled to an IRA traditional, and then get them reinvested once they get into the IRA.

And because this is a significant sum of money, I mean, 200,000 combined, you probably want to think about hiring an advisor to handle this for you make the investment decisions, but give me your thoughts on all that. Well, that makes sense. I didn't realize there were the two types of IRAs. You know, I've been listening to your show for a while, but it's a little confusing.

And then, you know, for me and him, sure, because we've always just kind of let it roll. And, you know, so but that makes sense. I just, I just didn't realize that there were the two types of IRAs that we can choose from. I don't know why someone would choose a Roth then but Well, yeah, I mean, it's just a big difference in the tax treatment. So the benefit of the Roth is you pay the tax up front, which again, is really powerful if you're doing it early in your working years, because then you get tax free growth instead of tax deferred growth. The other benefit is with the Roth, there is no required minimum distribution. See, with that traditional IRA, you're going to have to start taking it out at age 73, based on the amount of the your life expectancy based on the IRS's tables. And if you don't need the money, you're still going to have to take it out.

That's not the case with the Roth. But I think in your case, your next step is if you don't have an advisor, I'd probably interview a couple of advisors and find the one that's the best fit. You could do that on our website, And then just click on find a professional.

And you know, that advisor would then open the IRAs for you, you'd roll the old 401ks in, you all would spend a good bit of time talking about your goals and your lifestyle and your needs in retirement, your objectives, and then they would build and manage a portfolio of making up of those those IRAs for you moving forward. Okay, sounds good. Thank you very much for your advice. You're very welcome. God bless.

Yeah, God bless you as well. 800-525-7000 is the number to call. Let's see, we'll head to Boynton Beach and welcome Valjean. Go ahead. Thanks for taking my call. Hi, Rob.

Hi there. How can I help you? I have been faced with some challenges living here in Florida. Homeowners insurance has gone up tremendously. It's like an additional $1,000 a month and HOA has gone up about another $150.

So it's up to $500 a month. So we're faced with some serious challenges where we're not able to pay our bills. So we would like to, our kids, two of our older kids have moved out. We just have one of the younger ones living with us. And we would like to downsize.

We're faced with a challenge. The roof needs repairs. We received some estimates, which is around $41,000 to have it repaired. And a friend told us about a company called Wide Green and he said that they would do the repairs for you and then you would pay later. But I'm not too familiar with that company. Got you.

I am not at all. It sounds like a finance company, which says to me, Valjean, that they specialize in working with people that have substandard credit or can't qualify for the higher tier loans. I think the key is before you consider borrowing anything, you need to think about your plan moving forward.

And if you guys really have gotten to a place where you can't afford this property and you need to downsize, then I'd get a realtor in there to help you evaluate the property and figure out what to fix and what not to fix before you sell. Let's talk a bit more off the air. We'll be right back. Hey, great to have you with us today on Faith and Finance Live. I'm Rob West. We're taking your calls and questions today.

In fact, let's head right back to the phones to Louisiana. Here we go. Hi, Jan. Thanks so much for calling. How can I help you? Hello? Hi, how can I help you? Hi, Rob.

Hi, there. Hi, I have three questions. Uh-oh, I think you're over the limit, Jan. I'll allow it today only, but no, I'm just kidding. You go right ahead. How can I help you?

Okay, thank you. I'll send you some Mardi Gras beads or something. No, I'm kidding.

No, no, I'll pray for you, which I always do anyway. Take that. Amen. Okay.

Amen. I'm getting ready to purchase a home to be closer to my son and my new grandchildren. So it'll be in my name, and I was wanting to put my son's name on the home. I was told that I could put his name on the deed at closing, and that would, I guess, if something happens to me, it's going to be in his name. So would I do that, or would I put him as a beneficiary in a trust or a will?

What do you suggest? Yeah. So I'm not an attorney. I mean, it's never a bad idea to talk to an attorney, but I would generally recommend against what you're describing. And the reason is because it's going to require you to make a gift of that property, or 50% of it if you're joint tenants, to him, which isn't a big deal because you can give up to $13 million in your lifetime and not have any kind of gift tax. But the bigger issue is then the portion that you give him because he's on the deed as an equal owner, when you pass away, he inherits your cost basis. So let's say you buy this property and he holds it for a long time and it appreciates significantly in value, and then you pass away. Well, if he inherits this through a will or a trust, the cost basis that determines the capital gains is going to be stepped up to your date of death, the market value as of your date of death. Whereas if he receives it now as a gift, he's going to keep the cost basis from your original purchase price. So that's why you just generally want him to inherit it as opposed to him receiving it as a gift through a quit claim deed. Now, a lot of times folks are just looking for an efficient transfer of the property outside of probate, and I get that. The easiest way to do that is something called transfer on death, but Louisiana doesn't recognize transfer on death.

So what I would look at is talking to an attorney about just putting this in your will or creating that trust that you talked about. Wow. You are so smart. Okay.

Here's my other question. The money that I'm on social security, so the money that I get from social security is not enough to finance a house or however you want to say it. It's the amount, a monthly payment, I don't make enough money. So they want me to draw from my assets, which I have assets I can draw from and I'm also having to put a lot of money down because of that. Okay. But my note is still going to be pretty high and they want me to draw from my fidelity assets, which I have liquid cash in my fidelity account.

Um, what do you think of that? What's the value of the home you're purchasing? $210,000. And what were you going to put down? Um, oh, you mean before they told me how much I put or yeah, yes, I already I already put in a bid for the house. I put $70,000 down. So you put 70 down as a part of the contract deposit? Yes. Okay. Not that 70,000 down on the house just so because my earnings to debt ratio was not where they needed it to be to get the loan.

Yeah. Well that I mean, that does cause me some concern. Just because typically, I think those lending standards are a little more loose than what I would like to see.

So the fact that they're concerned makes me really concerned and just in terms of your ability to pay for this loan, just as a rule of thumb, I'd like for this mortgage payment principal interest taxes and insurance to be no more than 25% of your income. Do you have any idea what percent it represents? No.

I mean, if you want to talk to me off the radio, I'll tell you the figures. Okay. Well, no, I think I mean, I think the key is unfortunately, I can't do that because I've got to head out right as soon as we're done today. But I think that would be my next thing is, you know, you're putting down a massive amount at 70,000. That's great.

So you're talking about a mortgage that would only be 140,000, correct? Exactly. Okay. And how much more are they wanting you to add to it?

That's all that's okay. Oh, they Oh, they want me to withdraw from my Fidelity cash account $1,000 a month, which I have 55,000 in cash in my Fidelity account. Yeah. They wanting you to pull all that out on the front end?

Or they're just wanting you to use that as an income source. Income source. Yeah. Okay. And so you're, what are your, what are your income sources today? Just my Social Security. Yeah. Okay. And how much are you bringing in from Social Security?

Like 2000 a month, something like that? Yeah, 1550. Okay.

Yeah. I mean, I think that's the problem is I'd really, you know, I mean, if we were to apply my rule to this, that would be $387. You know, to I mean, even if we went up as high as 30% of your monthly income, that'd be, you know, a little less than $500 a month. And on $140,000 loan, you're obviously going to have a mortgage that's much bigger than that. So just if you're going up to $1,000 or something, you're just not going to have much room for anything else.

And the problem is, I just don't know if it's sustainable. Because ideally, for your investments, we'd only pull 4% a year. What's your total investable assets today, Jan? Investable assets, you mean my total? Yeah, that's infidelity or whatever brokerage firms you have.

I think about 400,000. Okay. All right. So if we were to start taking and you're not currently drawing anything automatically from that right now, are you just living on social security alone? I'm just living on social security alone, because the house that my first house is paid for. And that's my next question. My first house is paid for this would be a I haven't had a mortgage in I don't know 20 years.

So this would be a new thing for me. All right. Were you planning on selling this house or keeping it the one you're in now?

Okay, good question. I own this house with my ex husband. He wanted to keep it I've lived here since our divorce. And you know, we have an amicable relationship. He wanted his name on to keep his name on the paperwork.

I said fine. So I don't have to sell this house by this other house. But I could rent this house to him. So who owns this property after the divorce? Is this his or yours? Or do you want to jointly jointly? Okay, so you're entitled to 50% of it if you sell it?

Well, yeah, but I'm not going to sell it because I know right away that he would want to live here. I see. Okay. Yeah, you got a lot going on here, Jan. All right, do this. Stay on the line. We'll talk a little bit more off the air and see if we can get you pointed in the right direction.

But you stay right there. We appreciate your call today. Well, folks, quick break here in just a moment. And then we'll be back with our final segment. We've got a lot of questions to tackle.

We'll get to as many as we can. This is faith and finance live. My name is Rob West, biblical wisdom for your financial decisions.

Stick around. Hey, great to have you with us today on faith and finance live. We're so glad you've joined us today. Let's hit right back to the phones here in our final segment. We'll go to Missouri and welcome Sherry. Go right ahead, Sherry.

Hi, thank you, Rob, and God bless you. I recently have had a settlement in my in my mind, I said I was going to put that aside for pre burial for myself. I don't have insurance because I am retired and that insurance went away when my company when I retired from the company. So I'm, I'm, I don't have any children I rent. And I'm trying to figure out what would be the best scenario. Do I want to do a pre burial?

What can I do with that money? That at the end, if I have to go to a nursing home that wouldn't be sucked up in there, and then I would have no burial. Hmm. Yeah.

Okay. Well, I mean, to your point, if you did need to go to a nursing home and you know, you would have to deplete these assets before Medicaid would kick in below $2,000. So, you know, that is something to consider. I mean, normally, what I would say is, I'd rather you hang on to the money, do some pre burial planning, but not necessarily prepay. You know, the only downside to prepaying is, you know, funeral homes do go bankrupt.

Doesn't happen very often, but it certainly could. If you choose to move somewhere else and want to be buried there, the prepaid plan may not transfer. And so, you know, I would generally recommend you keep it in liquid savings and give a friend or an estate lawyer the power of attorney to carry out your wishes, make your wishes clearly known to that person. And you know, putting them in your will doesn't guarantee they'll be carried out because oddly enough funeral wishes in a will are not legally binding in many states. But you could do that pre planning.

So a lot of those decisions were made in advance. And then the money is there in a liquid account that's safe with FDIC insurance. But you'd also have it available to you if you needed it in an emergency. And so that would be the way I would go. But if you're concerned about, you know, going into a home and having the those funds depleted, because you know, you have to drain your assets before Medicaid kicks in, then I guess the other way to ensure that this is done, you know, would be in fact to do the prepayment. Does that make sense?

Yes, yes, I was. The other thing I was thinking about was getting a lawyer and attorney and doing like a trust or something like that, that that would guard that money for that particular Yeah, you really wouldn't be able to do that. And that would be cost prohibitive. You'd have to do an irrevocable trust, which is very costly to create and unnecessary just for this purpose. I mean, it could be, you know, several thousand dollars for you to create the irrevocable trust for the purpose of, you know, protecting $11,000.

That really doesn't work. So I think if that's your primary concern, the prepaid funeral plans are going to be the best option for you. And one of the benefits of that is it does protect against the rising costs by allowing you to lock in, you know, today's prices related to some elements of this and ensure that it is all been paid for and therefore the person that you designate to carry out your burial, you know, would wouldn't have to think about that piece of it. So if that's your primary concern, you know, I would, you know, I would go ahead and do that. And it would be another way that you could spend down assets to qualify for Medicaid. Yeah.

So so this so. Would I would I be able to keep $10,000? Like I said, I don't have children, so I would I would need, you know, my husband or or someone to take care of that.

Yeah. So the Medicaid asset limits depended by the state. So usually it's two thousand dollars or for a couple, either three or four thousand dollars. And then when you get above that number, you know, you would have to spend your assets down to that level or below it before Medicaid would kick in. So there's no way to kind of, quote, protect this in your scenario from not being available. You'd have to spend these assets first. And then when you get down below that level, then Medicaid would kick in. So I think you're thinking right about this.

If this is your primary concern, making sure that's paid for and it's still available, even if you have to rely on Medicaid for nursing home care. Sherry, we appreciate your call today. Thanks for being on the program. Let's go to Cleveland. Hi, Rudy.

How can I help? How are you doing? Great. Thank you. I just called about I want I want some information on the reverse mortgage. OK. Yeah.

Tell me what you're thinking. I own a house. It's my dad's all redone. I took care of my parents the last six years. They were alive. And I inherited the house.

I had to pay my two sisters off. But I got the house and it's. Well, it's in fairly good. It's in pretty good shape. But there's things that happen like I'm worried about the furnace is old and I furnace in the in-laws.

We use a little old and and the roof is not my being redone. And I don't have the money. I only get six eighty three a month on Social Security. Sure. Sure. So I've called about a reverse mortgage. And I the guy they you know, they think these people are kind of salesmen. They kind of give you the one around. And I just want to know the positive and negative is about a reverse mortgage. You know, you see something happen.

I'd be able to. He said he said something on I could get the money and put it in my checking account, replace the furnace or whatever happened. And then, you know, there's an interest charge on it, but I don't have to pay the interest until I die. That's right. Yeah, that's exactly right, Rudy. So essentially, it's a reverse mortgage. What's also called a home equity conversion mortgage, a HECM. But basically, that's right.

You can as long as you're 62 and you have 50 percent or more equity in the home, it's a planning tool to consider. Now, I wouldn't just call anybody off the television. I'd want a trusted source. And I could connect you with somebody that we would trust that could give you more information. But the bottom line is it can be available to you in there in the form of a line of credit where it's just there if you need it. But you don't have to take it. It can be available to you in an income stream, like they take the amount of equity you have and your age and life expectancy, and they'll give you a monthly check for the rest of your life. Or it could just pay off an existing mortgage.

And in any of those three cases, you don't have a mortgage payment, which is the key, because even if it's not boosting your income by giving you a monthly check, by eliminating an existing mortgage, obviously your available income goes up because you're no longer paying the mortgage. And then that's correct. Whatever is outstanding, whether it's there being used as a line of credit or coming out monthly, there is an interest charge that's competitive with today's rates and a fee.

And that would grow over time. The nice thing about the reverse mortgage, which is different than a conventional mortgage, is you're not personally guaranteeing the loan. And so whatever the amount is owed, regardless of how big that amount is over time, even if your home lost value, if you if they if you ended up borrowing more on the reverse mortgage than the home was worth, the government would step in and make up the difference when the when you died. So the only thing that is ever going to be required of you is that the home be the collateral for the loan.

And obviously, if the amount you take out plus the interest in fees is less than the value of the home, then once that's paid after the home is sold, then the rest of it would be available to be passed on to your heirs or charity or something like that. So it can be a very great tool and especially for somebody in your situation. Does that all make sense, though, Rudy? Well, I don't know. There's so much you said so much.

I can't comprehend it all. But, you know, the I'm most concerned about it. I'm seventy nine and I've already got a will to give the house to the church.

Yeah, very good. So let's do this. I'm going to have someone get in touch with you that can kind of go through your situation and explain exactly how this works. And I think the key is it may be a great tool for you. It might not.

But you want to lead with education so you understand fully what it is. But I think at its core, Rudy, I think it could apply to your situation primarily because of your age. You're sitting on a lot of equity. You're cash strapped. And so whether or not it's just available to you as a line of credit, you could pull it when you need it or you get a monthly check. You'll never have a mortgage payment ever again. And you will never owe more for the reverse mortgage than the home will satisfy. So at your death, the home would be sold.

The mortgage is paid off and then whatever's left would go to the church based on what you described. But let's do this. You stay on the line. We'll get your information and get somebody in touch with you.

Thanks for calling quickly to Oklahoma. Keenan, how can I help you? Could you recommend a credit card?

Yeah. What specifically are you looking for? Keenan, something that would give cash back or rewards.

What are your primary goals? No, I just I just want something basically like a car rental or something or a hotel when I'm traveling. That's about it.

Yeah. So I've got a couple of options. One is you could check with our friends at Christian Community Credit Union. They have a card that they call Cards That Give to Missions that's generated six million dollars for missions and ministry projects around the world. So this would be a credit union that shares your values as a Christian and could issue you a credit card that you could use for purposes like you're describing. You just want to go to join Christian community dot com. That's join Christian community dot com. And then you could click on their credit cards there. Again, that one is called Cards That Give to Missions. The other option is you could just go to what's called Nerd Wallet. So it's kind of a silly name, but they are a service that basically just rates and ranks credit cards based on different criteria. But if you're just using it for kind of the one off purchase when you're traveling, I would say going with something that aligns with your values as a believer could be a great choice.

But either of those I think will give you what you want. Keenan, we appreciate your call today. Thanks for being on the program. That's going to do it for us today, folks. Faith and Finance Lives, a partnership between Moody Radio and Faith Vi. Thanks to Tahira, Amy, Jim, Tiara and Lisa. I'm Rob West. We'll see you next time. Bye bye.
Whisper: medium.en / 2024-05-30 18:11:47 / 2024-05-30 18:27:57 / 16

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