Managing Assets After a Disability

By wisdom, a house is built, and by understanding, it is established. By knowledge, the rooms are filled with all precious and pleasant riches. Proverbs 24.

I am Rob West. Faithful stewardship requires us to make wise financial decisions, manage and grow assets, and protect our families from hardship. Are you ready if you're suddenly disabled or incapacitated? Valerie Hogan joins us with a checklist to prepare you for it. Then it's on to your calls at 800-525-7000. This is Faith and Finance Live, biblical wisdom from your financial journey. Well, we always look forward to having Valerie Hogan on the program because we always learn so much. She's an author, attorney, a certified financial planner, and a member of Kingdom Advisors. Valerie, great to have you back with us.

Rob, great to be on with you again. Now Valerie, I would think that one of the best ways to prepare for a disability or incapacitation would be to have disability insurance. Is that right? It is. I think we need humility to realize we don't know what's coming in the future and then due diligence so that disability insurance protects us from loss of income if we're disabled in the future. And it is available publicly and through private programs.

The cost is going to vary by the strictness to how you qualify for it, by your medical history, length of time the benefits are going to get paid, is this short or long-term disability, and the length of time you have to wait before it kicks in. Yeah. And to some extent, I guess you could say that preparing for a disability is really basic estate planning, right?

It is. And that means you should consider a durable power of attorney for finance or health decisions, a will or a revocable living trust and a living will for when you can't make medical decisions on your own. Yeah, that's great advice. What else, Valerie, should we do to get organized in case we're suddenly incapacitated? Yeah, so to get organized, you definitely want to store your important papers in a place where you know where they are and the legal docs in one secure place. And you want to let someone you trust know that location when they need it and they may need it kind of quickly.

You want to talk to your spouse or family member about your advanced care wishes and permit your doctors and lawyers to speak with your caregiver, which may require a HIPAA release. Okay. Yeah, we talked about organizing important documents. I'd love for you to run through a list of what should be included. Okay, well, this will be quite the list.

So here we go. We're going to need birth, death, marriage certificates. We're going to names of phone numbers of close friends, relatives, doctors, lawyers, and financial advisors. Then for financial information, we're going to need things like our social security card or number sources of income and the IRAs 401ks. We have insurance information like life, long-term care, home, car with policy numbers, maybe agents names and phone numbers, bank account numbers, checking savings, credit union, information on where we hold our investments like stocks, bonds, other property, and that broker's name and phone number. And the list does go on.

Most recent income tax with her return would help. We'd like an up-to-date will or trust with original signature and witnessed, and that differs by state as to what you need, any liabilities you have and to whom you owe, and then maybe the deed or trust for your house and for your car. Then we go on to health.

We're not done yet. Okay. Any current prescriptions, if there's a living will, if there's a durable power of attorney for healthcare and any health information with policy. So for that insurance, the policy number and phone numbers, and then again, those HIPAA releases. That's a great list.

And by the way, all of those things will be in the show notes today, if you miss that. But Valerie, how important is it to have an attorney help you draw up a will or trust and advise you on preparing for a disability or becoming incapacitated versus doing it online yourself? I believe it's worth it to make sure it's done properly and that a licensed attorney that specializes in estate planning in your state is an excellent resource to get wisdom and advice in this area. Yeah. And I would imagine you would say that a godly estate planning attorney can help you think through whether the next steward is not only chosen, but also prepared. Is that right? Definitely.

I mean, one that's going to share your values and worldview is really going to help you walk toward when you usher and graduate into that next stage. No question about it. Well, Valerie, we covered a lot of ground in a short period of time. We'll have to have you back, but thanks for stopping by. Glad to be with you, Rob. Thanks for having me on.

Absolutely. That's Valerie Hogan, attorney, certified financial planner and co-author with her mom, Miriam Neff of Wise Women Managing Money, expert advice on debt, wealth, budgeting and more. Your calls are next, 800-525-7000. I'm Rob West and this is Faith and Finance Live. We'll be right back. 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. I'm so thankful you're with us today on Faith and Finance Live. I'm Rob West, your host and along with my team, we're grateful that you're listening today. Here's our goal to help you be that wise and faithful steward of the resources God has entrusted to you, making wise decisions as you live, give, owe and grow God's money. The number to call today with a few lines open, although the calls are building quickly, is 800-525-7000.

That's 800-525-7000. We'd love to help you think about those decisions in light of biblical wisdom. Now, here's the reality. The Bible has a lot to say on this topic. My friend and former host of this program, Howard Dayton, counted them. That's right. Early in his journey, his faith journey as a part of a men's Bible study, they decided they were going to count the passages on money and possessions in God's Word.

Now, a little funny anecdote to this. Howard was a brand new Christian and so he and the other gentlemen that decided they were going to take this on, that gentleman said to Howard, hey, why don't we split it in half? You take the Old Testament, I'll take the New.

Howard ended up doing a lot more work. Nevertheless, they cut out every passage, stacked them in piles according to topic and 2350 verses later, they had their number. So we know that God's Word has a lot to say about this. And I believe that the reason there's so much there is because money and the things that money can buy and all the issues surrounding our management of God's resources is probably the primary competitor to lordship. If something's going to derail us from placing God in his rightful place in our lives and first position, it's most often going to be money and the things that money can buy. And so we want to look at it through the lens of scripture. We want to approach this from God's perspective and not the world's perspective.

Well, we want to help you do that each day, making practical decisions. But in light of the reality that God created money as a good gift to give and to provide and to even enjoy, but that we're to be careful and not let it grip our hearts. And we can see how it will do that and choke out the word. We see that clearly in the parable of the sower. Remember, Jesus said that what was choking out the word from bearing 30, 60, 100 fold returns was the cares of this world and the deceitfulness of riches.

And so as we look at this through the lens of scripture and guard our hearts holding God's money loosely, well, we can find a way to manage those resources as a tool to accomplish God's purposes. Well, we want to help you do that each day, encouraging you along the way. And so let's talk about what's on your financial mind today when you call 800-525-7000. Let's dive in today. We're going to begin in Tulsa, Oklahoma. Ray, you'll be our first caller, sir.

Go ahead. Oh, good morning or good afternoon. Hi, Ray. Yeah, right.

Yeah. Rob, I've listened to you for a couple of years. And one thing I want to say, I'm convinced that God has shown his favor to us as children by him blessing us with Rob Weston, faith and finance. And I really mean that. Thank you. Well, that means a lot, sir.

I appreciate you saying that. Well, let me tell you my quick story. God blessed me with a Schwab account about seven years ago. And I have done nothing with it.

I just sat there. And I think one big reason is I am a lost ball in high weeds when it comes to investing. So I really could use your help. Okay. Let's dive in.

How can I help? I'm not sure what to do with it. Well, I like the idea of responsible investments. And I've heard you speak to companies.

One was Kingdom Advisors and the other was Sam Mine Investing. And I think the Lord is telling me that I need to do something with and get it out of that secular account and put it in biblically responsible investments. And so that's that's my question.

What what what should I do? Yeah, it's a great question, Ray. And I'm so delighted to hear that you're thinking about it in this way. You know, the exciting thing is we live in a day where you have the ability to align your investments in the secondary market and stocks and bonds, whether it's through mutual funds or individual stocks, you have the ability to align your investments with your values. And that can take on one of three different forms.

It can include and it may be all three. It can include avoiding certain companies that are misaligned with your values. Often many Christians will want to avoid companies directly involved in tobacco or alcohol or pornography or abortion, you know, things like that gambling. That would be one approach is to avoid companies misaligned with your values. The second is to embrace companies that specifically have an end aimed at human flourishing and even advancing the gospel. So they're adding values to value to shareholders through their company's growth. But they're doing it in a way that's responsible, that promotes the human good. And then thirdly, and you could do this alongside those other two is corporate engagement, where as an owner of these companies, you're able to vote proxies and express your values to company leadership, where they may have gotten off track.

And maybe they're promoting a political agenda that doesn't even align with their objective to grow their company, but they've gotten kind of lost along the way and you can call them to account in that regard. And so there are some world class investments now, Ray, that allow you to do this type of investing in a way that, based on the research, doesn't at all sacrifice returns, which is wonderful. And what I would recommend, because as you said, and this is where most people are at, you need wise counsel. You're, you know, you've been, you know, working as God has called and gifted you throughout your life for the last seventy nine years. And you're saying I've been entrusted with a significant amount of money and I want somebody who can invest it on my behalf with my goals and objectives in mind, but do it in a way that's aligned with my deeply held values and priorities as a believer.

So here's where I would go next. I would connect with a certified kingdom advisor. And one of the things we've done recently is we've actually allowed you to search all the certified kingdom advisors in your area, but specify that you only want a C.K.A. that offers faith based investments. Many C.K.A.s, although they've committed to the statement of faith and they've been trained to bring biblically wise advice, they may offer largely or exclusively traditional investments.

But there are many of them that offer faith based investments. And so we can provide you a list there in Tulsa and then you could interview perhaps two or three and find the one that is the best fit for you. Ray, are you comfortable using the Internet to do a search like that? Sure. Yes, I can do that. All right.

Very good. So I'm going to give you a Web site and then I'm going to tell you where to go from here. The Web site is faithfi dot com. That's faith f i dot com. And then right there at the top of the page, Ray, it'll say find a professional. And when you click find a professional, you'll say I want a C.K.A. in the investment area and then it will say, do you want faith based investments or traditional?

You'll choose faith based and then it'll provide you a list of all the C.K.A.s offering faith based investments in Tulsa and then you can contact them and set up appointments. How does that sound? Well, that sounds good. Now, I don't suppose you have a clone working for them, do you? Because I like the way you're thinking.

No, but but I'll tell you, these are men and women that have met high standards and character and competence, and they will share your values as a believer and they will be quite skilled at helping you deploy these assets for the glory of God and as a wise and faithful steward. So I'm confident you'll find somebody that you feel real good about. All right. Rob, I appreciate you enjoy the rest of the day. And you as well, sir. God bless you.

Thanks for your kind remarks about the program. A quick break and back with more after this. Stay with us, folks. Great to have you with us today on Faith and Finance Live. I'm Rob West. We're taking your calls and questions.

All the lines are full. We'll head to those questions here in just a moment. Let me mention, though, as we head toward the end of June, that's the end of our fiscal year here at Faith and Finance Live, which means this is a really important time for us to hear from you with your listener support. As a listener supported ministry, we can only bring you this program and all the other resources that we're working on and the new offerings to equip you as a steward as a result of your generous support. So if you'd consider a gift at this time of year before June the 30th, we'd certainly be grateful.

A gift of any amount, $100, $1,000, perhaps you have a bit more and you can make a $10,000 gift. That would go a long way to helping us serve you as God's people in this area of financial stewardship. Just head to faithfi.com and click Give.

That's faithfi.com and click Give. And thanks in advance. Let's head back to the phones. We've got some great questions coming up.

To Scottsdale, Arizona. Hi, Anna. Go right ahead. Hi. Thank you. Thank you for taking my phone call. Sure. Thank you. God bless you for what you're doing. I was trying to see what to do with some money that I have that the Lord blessed me with. My daughter, Arlene Dashnod, she's in Glenview in Chicago.

She's a listener and she told me about your program. And then the thing is that I do have $500,000 and I also own a condominium, which is rented. And so I have all this money at the same time. I'm renting, I'm paying like $2,500 a month for rent.

So I'm trying to see if I can put all this money together and buy a single home, you know, a small, like two, three bedroom house. And I don't know if, I'm 79 years old. I don't know what is the wise thing to do. That's why I'm just, you know, looking out for you and see if you have any advice for me. Well I appreciate that.

I'm glad you called Anna. Where is the half a million dollars right now? Is it invested in stocks and bonds or is it in a savings account? It's in a savings account. Okay. So it's just sitting there earning interest, correct? Correct.

Okay. And I know you said you're renting the place where you're living and that's $2,500 a month. You also mentioned a condo. Do you own an investment property that you've rented out to someone else or is the condo what you're living in?

No. I have a rental. My condo, medium, I bought it three years ago. It's a bedroom condo. Okay. But I don't like to live in there.

It's kind of small for me and my daughter. Okay. So I'm renting and a fresh floor so I'm paying $2,500 a month for this. So I think that maybe if you just put all this money together if I sold the condominium and buy a home or something of that sort. Sure. Okay. So the condo is rented and do you have a mortgage on it?

Yes. I have a small mortgage. Okay. And how much are you bringing in per month after all the bills are paid related to the condo? Related to the condo, it only leaves like $500. Okay. So after the mortgage is paid and the HOA and all the expenses, you've got about $500 left over. Correct.

Okay. And what's the value of the condo? Right now it's like $415. $415.

Okay. And have you looked around there in Scottsdale, Anna, to see based on the size home that you and your daughter would be comfortable with what you would need to spend? Do you have a rough budget for that? I didn't want to put all the money that I have in a down payment, but I was just thinking of maybe putting, leaving like $250,000 invested, you know. So how much would you be looking to spend for the single family home you'd be buying? What would be your budget for that? Like $700,000.

$700,000. Okay. And so you're talking about selling the condo in order to do this, correct? Correct.

Okay. So if you sold it and let's say, you know, where to get, you said it's worth about $415,000. You know, let's say, you know, after expenses, you know, let's say you end up with $390,000 on top of the half a million you have in savings. So you'd have about $890,000, a little less than $900,000, and you spent $700,000 to buy it free and clear, then you wouldn't have a mortgage, and you'd have about $190,000 left. Is that what you're thinking? If I stole the condo today, I'm going to get like $277,000 equity.

Oh, after the mortgage, $277,000. Yes. Okay.

And so I see. So you would have about $777,000, and then you're saying you wanted to try to keep $100,000. Did you say you want to keep $250,000? Yeah, probably. Yeah. Okay.

All right. And so then basically, you'd have a mortgage, because that would leave you about $525,000. And so you'd need to have about $175,000 mortgage. Is that what you're thinking? I think, according to my figures here, I'm going to end up with a mortgage, maybe $250,000.

Okay. Yeah, I may be off a little bit. You had $500,000, and you were thinking about you would net $277,000 out of the condo. That's $777,000. And then if you tried to retain $250,000 of that, that would leave you $525,000. And you'd be buying a $700,000 home, which would give you a mortgage of about $175,000. But there may be something I'm missing.

But I think within round numbers, that makes sense. Now, do you have enough cash flow? What are your income sources? My income, I have social security. I get like $24,000 a year. And then I get another $39,000, like $40,000. From what?

And my income will be like $65,000 a year. Okay. Got it. All right.

That's really helpful. So let's do this. I've got to take a quick break.

I've got a lot of great background information here. When we come back, I'll give you my thoughts on where we go from here. And then John, Susan, Charlie, coming your way as well. This is Faith and Finance Live. We'll be right back. Hey, great to have you with us today on Faith and Finance Live.

I'm Rob West. Before the break, we were talking to Anna in Scottsdale. Anna is 79 years young. She's got half a million dollars sitting in savings. She owns a condo that's rented out and she's currently renting a place with her daughter. She's spending about $2,500 a month on rent.

And she was looking to see about $2,000 a month, looking to see if she could sell the condo, take a portion of that half a million in savings and put toward buying a single family home with a little more space that perhaps with the same amount of money, she could have something that she enjoys a little more and perhaps even build some equity over time. And I think the only concern I have here, Anna, as I run the numbers, you're wanting to hang on to about $250,000. You calculated that that meant you'd, you know, you'd have a mortgage of about $225,000. And if you did that, you would have a mortgage payment at the current interest rates, including an estimate for property taxes and insurance. And these estimates may or may not be on point, but I'm coming up with about $2,100 a month for that mortgage payment, principal interest taxes and insurance on that $225,000 loan.

And that seems to work right now. It's quite a bit higher than I would normally recommend because with your income being about $5,400 a month, $65,000 a year, I would rather you not be, you know, have more than 25 percent at the most, 35 percent going to your mortgage payment. But that's only $1,900, excuse me, 30 percent would be $1,600 a month.

So it's quite a bit more than that. But you may come back and say, well, I'm already doing that right now with my rent, so I know I can make it work. And that's really the real test is, can you make it fit in the budget? I guess my only concern is, how does this work longer term? Because that's a 30-year mortgage, which means this thing's going to be with us for the rest of your life. And, you know, a good bit of your income right now comes from your small business. So what if you were unable, you know, to continue that at some point in the future? Would you have enough income to continue to pay on this mortgage at that point?

What are your thoughts on that? I have other money. I have another $100,000 because I invested $67,000 here and $27,000 there and $39,000 more. So I still have a little issue. Should I put more money down then?

Yeah, I guess that's what I'm thinking is two things. What if you put a little bit more money toward the purchase and what if you brought down the total spend? So instead of spending $700,000 on a home, what if you guys could find something for 5 or $550,000 and the goal would be for you to buy it with cash and let's keep your expenses as low as possible. And then what I do with what's remaining, whether it's the additional money you've socked away or whatever's left out of the $500,000 in savings, I'd probably set aside somewhere between 6 and 12 months worth of expenses, which for you, you know, that's somewhere between 30 and 60,000 and then give the rest to an advisor to invest for you so that you could grow that a little bit.

Because if the Lord tarries and you're in good health, you might need this money to last for two more decades or more. And I think the way you overcome inflation is by putting it to work for you. So I'd probably do a couple of things. I'd try to spend less on the home purchase.

I'd put more down and try to be mortgage free and then keep in savings, high-yield savings, 6 to 12 months expenses and then put the rest with a certified Kingdom advisor and you could find one in your area at faithfi.com. So that's my best advice. You sound like a wonderful, diligent steward of God's resources, Anna, and I appreciate your call today. If I can help you further, don't hesitate to reach out. Let's go to Chad Anuga. Hi, John.

How can I help? Yes. Rob, I listen to your program quite often and you had a guest on there where she said that we should put money back for disability insurance. And in the past I've heard you say we need to put back money for rent, I mean for car repairs, for this and for that. We need to give the Lord His money, His 10%. With the economy the way it is, with people are spending $1100 more a month because of the current administration, what they're doing to us, how in the world can we do these things?

It's impossible. Credit card debt is in the trillions of dollars now. And so I'd like you to explain to your listeners, how can we do these things that your show suggests that we do?

Yeah. Well, it's a great question, John, and I appreciate you asking. You know, I think the starting point is to recognize that it all belongs to God. And so we've been entrusted, whatever we have as our income and our assets, we are now the stewards of the managers of those resources. And the question is, how do we find God's heart in managing those resources? First of all, with contentment, recognizing God's provision is enough and we need to live within it, not beyond it, even though the world would allow us to do that through debt.

And you appropriately acknowledge that credit card debt is at a record high, $1.1 trillion right now. So the question for each of us is to take a step back and to say, okay, with whatever God has entrusted to me, how do I order my finances in such a way that I can live within that provision? And, you know, it's kind of like that illustration that we've often heard about the jar and the rocks and the sand, and you can't get it all in unless you put the rocks in first, because if you start with the sand, you'll never get the rocks in.

Well, what are the rocks? Well, I would say giving unto the Lord, I think is one of those big rocks. Putting food on the table, you know, keeping a whole roof over our head, gas in the car so we can get to work, the utilities on, you know, those are the essentials. And then beyond that, we start to get in, you know, move from the needs into the wants. And I think we have to right size our living expenses. And we've got to trust the Lord for his provision. We've got to make this an exercise of prayer and trust and faith in the Lord. And we may not be able to do everything. For instance, setting aside money for college is a luxury, even though we'd all love to be able to do it.

We may not be able to. And you're very right in that it's harder now than ever. I was sharing the other day that a basket of groceries just during these last three and a half years is up 21 percent. That same basket of groceries three and a half years ago is 21 percent lower than it is today. So, yes, things are more expensive now. Auto insurance rates and car prices and home. I mean, we're up 47 percent.

And, you know, since pre-pandemic levels on home values, interest rates are up. I get it. It's hard. And so I think that's where we need to have a plan. We need to be willing to right size our expectations. We need to save appropriately. We need to be really thoughtful about what we're spending God's money on. And we need to make an absolute commitment to live within our means, despite the fact that that's difficult to do.

So I think we start with the big rocks and then everything else beyond that is ultimately a matter of prayer. And, you know, I may have to forgo things that I would like to be able to do, but I can't afford. Now, I realize that's easier said than done, but it's what each of us, I think, have been asked to do, you know, by the Lord as he entrusts whatever he does to us. But give me your thoughts on that, John. Well, Rob, what you say is good, you know, but people can't even put food on their table. You know, people are using the credit cards to go in there.

So if all they can do is put gas in their car and buy food, they can't do anything other than that. And I wish you to address that instead of all these other things. OK, well, let's do this. I've got to take a break, but your point is well made.

I hear you. And when we come back, I'll give you a few other thoughts on that and then we'll get to some other calls. John, thank you for calling.

I'll give you the further thoughts right around the corner here. This is Faith and Finance Live. We'll be right back. Great to have you with us today. I'm Faith and Finance Live.

I'm Rob West. Thanks for listening to the program today. Before the break, we were talking to John in Chattanooga.

John correctly pointed out just the challenge that it is to manage God's money and to stay within God's provision in light of what we're facing right now with inflation up across the board and in certain sectors of the economy. We're feeling that more than others. Food up big time. Twenty one percent.

A basket of groceries over the last three and a half years. Home prices up forty seven percent since pre-pandemic levels. And then you've got the high interest rates on top of it bringing down home affordability. You've got tremendous increases in both auto insurance rates as well as homeowners insurance. And, you know, that's just the beginning.

We're seeing other issues in other areas of the economy. And, you know, I think he points out how do you do it all? How do you give to God's to God's kingdom and to your local church and save and put food on the table and gas in the car? Not to mention being able to enjoy what God has entrusted to you along the way.

And I recognize it's challenging. And what I was sharing with John is I think it has to start with an absolute first recognition that everything belongs to God and whatever I have has been entrusted to me by him. Money is a good creation given to us to enjoy and to provide for our families and, yes, to give as well, to give generously. And that calibrates our hearts to the Father. And once we recognize his place as Lord of our lives, including his resources that he's entrusted to us, then we have to live with contentment, which means we live within God's provision. And so we need to have discipline and self-control. And I realize that's challenging.

And so I think the starting place is with those big rocks, as I shared with John before the break, that go in first. I think you've got to start with giving as unto the Lord. And you may not be able to give today at the level you want to, but I would establish a systematic giving level as a first priority, first fruits. And then beyond that, we've got to keep food on the table. And I realize that's challenging. And that may mean we're not eating out, but we're cooking at home and we're going to be judicious about what goes on the table because food prices are expensive. We're going to keep gas in the car and the utilities paid. And, you know, apart from kind of those big three, if you will, everything else is negotiable. And I think that's where having a well-thought-out plan that allows you to prioritize those needs and then ultimately your wants in your budget and then having a system to control that, whether that's the, you know, Larry Burkett's tried and true envelope system, either in a physical envelope version where you literally fund envelopes for your food category and your clothing category and, you know, those types of discretionary items, or you use something like the FaithFi app where you have a digital version of that, that's essential. And, you know, at the end of the day, we've got to make that budget balance because the extent to which we're spending beyond our means using debt is ultimately a recipe for disaster. Is it easy?

Absolutely not. Can it be done? Well, I think if our trust is in the Lord and we have right expectations about what our lifestyle should be, and we trust God for the rest, I think that's all we can do. And so, Jon, I appreciate you asking the question and the spirit in which you asked it, and I hope what I've shared has been an encouragement to you today.

I realize I can't give you a silver bullet on that, but what I can tell you is to trust the Lord, accept His ownership of everything, prioritize your needs, then your wants, put a plan together, and then live within that with a disciplined process. We appreciate your call, sir. Let's go to Lakeland, Florida. Hi, Susan.

How can I help? Hi. Hi, Rob. This is Susan.

God bless. I wanted to assign a power of attorney, but unfortunately, I don't have a family member that I can ask. What do you recommend? Yeah, so if you don't have a trusted family member or friend, Susan, to appoint as your power of attorney, you can hire a professional to serve in that role. Typical options for that would be an elder law attorney or an estate planning attorney that can be appointed as power of attorney for finances and legal matters.

There will be a cost to that, but you might start with the person that drafted your will or other estate-related documents. It could be a financial advisor that's willing to serve in that capacity. There are also care managers with either, you know, nursing homes or a social work background that can serve as a power of attorney for health care directives. And so, you know, this would be a geriatric care manager. But it's not unusual for an elder law attorney to act as both the financial and the health care power of attorney.

And so I would perhaps, if you're looking for someone and you don't have that friend or family member that the Lord has called to your mind to serve in that role, then I would reach out to a certified kingdom advisor in your area on our website at faithfi.com, and then ask for a referral to an estate planning attorney who shares your values as a believer. And then, you know, perhaps you put somebody in that position in more of a corporate role. Does that make sense though? Yes, it sure does. Yes, thank you. Thank you.

Free speech. Thank you. You're welcome, Susan. May the Lord bless you. Let's go to Illinois.

Hi, Charlie. How can I help you, sir? Okay. I used to sell tax shelter annuities and I have some experience. But from time to time, I hear financial guys knocking annuities as not a good investment. And I think annuities are some of the best. I wonder what your, what your guest is going to say about annuities.

Yeah, that's a great question. You know, here's my take on it. They are not my first choice for most people.

Keep in mind, when you're talking on the radio, you're dealing with a wide swath of audience. And, you know, when I talk about just kind of the typical investment and how you save for the future and how you protect yourself in terms of having life insurance to provide for the needs of your family at your passing, annuities are not my first choice. I would rather see people buy term life insurance, get as much as they need at a minimum 10 to 12 times their income during their working years, and then drop that insurance when they get to retirement.

And then at the same time, start as early as possible. And after they give and after they provide for their families, that they have enough left over to put money away in a tax deferred retirement account, like a 401k or IRA or both, and save for a long period of time and let that money grow on a compounded basis. So for the average person, that's my preference. Now, where do annuities come in? Well, they can make sense, in the sense that maybe you started late in putting money aside for retirement and you've maxed out your retirement plans. Well, an annuity is a tax deferred vehicle that you can do additional saving in. Maybe you're looking in a later season of life for a guaranteed return and you want to transfer the risk of those investments away from the market where you're bearing the risk and you want to place that risk on an insurance company in exchange for either a guaranteed rate of return for a fixed annuity or a portion of the upside on a variable annuity with the floor on the downside.

And if that's what gives someone peace of mind, then I'm certainly OK with that. The primary reasons, Charlie, that I don't use them as my default, my go to for the average listener, is that you lose access to the money in part because, as you know, you have surrender charges if you need to get it back. And the largest issue, apart from the tax issues, when you start taking the withdrawal is paying taxes on the earnings. The larger issue is that, you know, when you look at the average annualized performance of the let's say the stock market, the S&P 500 over the last hundred years, primarily where you get the, you know, eight, nine percent annualized returns over a long period of time is because of those years where the market was up dramatically. It offsets the years where it was flat or down. And the problem with annuities, variable annuities, is you're giving up some of that upside potential that's really the key to getting those those better long term annualized returns. Because, remember, the insurance company keeps everything above a certain amount in exchange for giving you that floor on the downside. So for me, especially if you're starting young, I'd rather take the risk on the downside, but get the full upside. And you can't do that with an annuity.

But give me your thoughts on all that. Well, I used to sell both fixed and variable. My clients were schoolteachers who would take money out of their savings and invested in the boat. And every one of my teachers were happy with the annuities. Sure.

Many of them accumulated several thousand dollars. Yeah. And they're safe. You get a good company and you're safe. You don't have to worry about it.

And it's all tax deferred. And to me, you can't beat it. Yeah.

Yeah. Well, listen, I appreciate that. We certainly can have a variety of perspectives here. And again, just to reiterate, I'm not one of those financial guys, if you will, that says there's never a place for an annuity. You'll certainly hear that from some. You won't hear that from me. It's just not my go to.

It's not my default option for the largest majority of people for the reasons that I mentioned. But I appreciate you weighing in today. Thanks for being on the program.

We're going to finish in Macon, Missouri with Darwin. Go ahead. Hello there. My wife and I have a tax, an annuity, excuse me, a trust, a revocable trust. Revocable trust. Yes.

Yes, sir. We have enough property as well as investments. We're going to we are thinking about moving to Illinois to a senior living facility. We wonder if Illinois will have any way that they can get their hands on that money and that property. Hmm.

Yeah. No, unless there was some sort of judgment against you or unless you spend down all of your assets and ultimately go on Medicaid to pay for a nursing home, let's say, and a Medicaid approved facility. And then they try to recover some of that money out of your estate. Now, a revocable trust does not provide protection against creditors like an irrevocable trust does. The only challenge is with an irrevocable trust, you lose control over it. So I like the revocable trust for efficiency and transferring those assets to the next generation. Not going to do a whole lot for you, though, in terms of creditor protection. And yes, the state can recover or the government Medicaid expenses if you end up on Medicaid.

But for the rest of your questions, I'd seek out the counsel of an attorney. Thanks for your call. Faith and Finance lives a partnership between Mooney Radio and Faith. Bye. Thank you to Gabby, Amy, Dan and Taylor. We'll see you tomorrow. Bye.