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Avoiding the Most Common Retirement-Planning Mistakes

Faith And Finance / Rob West
The Truth Network Radio
June 20, 2024 5:41 pm

Avoiding the Most Common Retirement-Planning Mistakes

Faith And Finance / Rob West

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June 20, 2024 5:41 pm

It’s said that we learn the most from mistakes, not success. But is that something you want to experience with your retirement savings? On today's Faith & Finance Live, Mark Biller joins host Rob West to share his insights and help you avoid some of the most common retirement-planning mistakes. Then Rob will take your calls and financial questions. 

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It's said that when we learn from mistakes, not success, but do you want to experience that with your retirement savings?

Hi, I'm Rob West. There's no question that saving and investing for retirement is something you want to get right the first time. Mark Biller joins us today to help you avoid some of the most common retirement planning mistakes. And we'll take your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Well, Mark Biller is executive editor at Soundmind Investing.

He and his team are devoted to helping you apply biblical principles to your investing so you can get retirement right the first time. Mark, great to have you back with us. Hey, Rob.

Good to be back with you. Hey, let me mention, folks, before we dive in with Mark today, Mark will be with us for a good portion of the broadcast today. And at least during the time he's with us, we'd like to take your questions on investing related topics and specifically retirement planning related topics. If you'd like to talk with Mark, give us a call at 800-525-7000. Again, that's 800-525-7000. All right, Mark, we said that when it comes to retirement, we don't want to have to learn from our mistakes, but we absolutely can learn from other people's mistakes, right? Oh, absolutely.

It's a lot less painful that way. And to that end, Rob, two years ago, an investment firm called Metixas surveyed 2700 financial professionals all across the world. They were asking about the most prevalent mistakes that they had observed regarding retirement planning. So this was basically a greatest hit of errors and oversights that financial planners see over and over again. We detailed several of those from that survey in an article that we called Avoiding the Most Common Retirement Planning Mistakes, which listeners can check out at soundmindinvesting.org. Yeah, and a big point there is, and you said this, this isn't necessarily just retirees reflecting on their mistakes.

This is advisors, so they're seeing this over and over again. So this is a pretty good list. All right, well, we'll begin to take some calls here in just a moment on investing in retirement.

But first, let's move through some of these. What was on the top of the list in terms of retirement mistakes? Yeah, well, somewhat surprising to me, the most common retirement planning mistake was underestimating the impact of inflation. And the reason I say that was surprising to me is because if you think back over the last few decades, really up until just about the last three years or so, the last three decades was mostly a relatively low inflation environment. And yet, in spite of that, underestimating inflation was still a big problem for people in their retirement planning. And I think what it comes down to, Rob, is that in the same way that people don't appreciate the positive power of compounding in the long-term growth of an investment portfolio, they also fail to grasp the destructive impact of inflation's compounding over time. So even with a relatively tame rate of inflation, that compound effect over many years destroys a lot of purchasing power. So an example of that would be if we had inflation of 3% per year, a lifestyle that costs $75,000 a year today to support would require $135,000 20 years from now. There's a big difference between $75,000 and $135,000 in terms of how much income a retirement portfolio has to produce.

Yeah, that's really helpful. And we've had a pretty stark lesson in how destructive inflation can be over the last few years in particular. All right, Mark, what's next on the list? So the next one was investing too conservatively. And that one really goes hand in hand with the inflation-related problem we just talked about. So to meet the challenge posed by that ongoing inflation, retirees have got to keep their portfolios growing at least to match that rate of inflation. And that's where we can get into a little trouble with fixed income instruments like CDs, savings accounts, bonds. Those all have a place within a retiree's overall financial picture.

But those types of instruments aren't likely to keep pace and definitely not outpace inflation. And that's why investing too conservatively can actually be a risk for people. And it's why you and I are always talking about on these programs how retirees need to be careful about scaling down their stock exposure too quickly. Yeah, really important.

That's why we are even allocating more and more these days as people are living longer. All right, back with your questions and more retirement mistakes with Mark Biller just around the corner. 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. Well it's great to have you with us today on Faith and Finance Live. I'm Rob West.

With me today, my friend Mark Biller. He's executive editor at Sound Mind Investing. Mark and his team wrote a great article that we're talking about today.

You'll find it at soundmindinvesting.org. That article is titled The Most Common Retirement Planning Mistakes. And it's taken from a survey that was done of 2,700 financial advisors about what they saw as the most prevalent mistakes made by retirees or prospective retirees in their retirement planning. Before the break, Mark shared number one, underestimating the impact of inflation and number two, which was investing too conservatively. And Mark, that leads to the next retirement mistake.

Go ahead and share that with us. Yeah, so the next one, Rob, was overestimating our investment income. So on the one hand, we tend to underestimate the impact of inflation and reinvest maybe too conservatively because of that. On the other hand, there's a tendency to overestimate how much we're going to get from our portfolios income wise. One of the things that we always tell our folks is as you do retirement planning, you want to be optimistic regarding how long you're likely to live. But it's really better to be conservative about the projected returns that you're going to earn because that builds in a little bit of a margin of safety. And so directly related to that, what we see is that withdrawing too much money too soon from retirement accounts can really create big problems later for people, especially if they end up being in the group that does live to a ripe old age, they or their spouse. So the general rule of thumb and in the financial planning world has been for a long time that you don't want to withdraw more than about 4% annually from your retirement portfolio.

That'll keep you those accounts from being drawn down too quickly. But it is important to recognize that that 4% rule is just a rough rule of thumb. It's not always optimal for every individual. And so you really want to try as much as possible to drill down to your own personal safe withdrawal rate. That's going to depend on things like what other sources of income you have, the size of your portfolio. And one that can trip people up is the sequence of returns that they get and the big pitfall there is a big downturn in the markets right after a person retires.

That can really make it difficult to stretch a portfolio over a full retirement. Yeah, that's really helpful. Again, you can find this and more at soundmindinvesting.org. All right, we've got some more to share on this topic, but we do want to mix in your questions today, specifically while Mark is with us on investing-related topics and retirement planning. So we'd love to hear from you at 800-525-7000. Again, that's 800-525-7000.

Let's go to Florida and welcome Ray to the broadcast. Go ahead, sir. Hey, good evening.

Hey, longtime listener back when Larry Burkett was here. Oh, that's great. Got it. Yes. Love your ministry.

Thank you. My question is, my company offers an annuity. It used to have a retirement and I fall into the place where I didn't get the retirement, but I have an annuity. By the time I retire, I'll be a little over $100,000. I was wondering if I should take it as an annuity, you know, X amount every month or perhaps just withdraw the whole thing. If I withdraw it all and invest myself, I have to pay like 20%.

I couldn't believe that. Well, they're just going to withhold what they would expect you to have to pay or somewhere close to it to the government in terms of the taxes that would be due on that distribution. But Mark, this is obviously an age-old question, lump sum or annuity.

How do you help folks make that decision? Yeah, it's funny you say that, Rob, because we have an article on our website that people can find that is titled lump sum versus annuity because this is a common one. And really what it comes down to, Ray, a big part of what it comes down to is the implied rate of return of the annuity. And the terms of the annuity are very important.

So what you need to do is try to find out what that internal rate of return is. And then you can make a comparison between what that annuity is essentially paying you, the rate, versus what you think a reasonable alternative portfolio that you would invest yourself or have an advisor help you with is going to pay. And so because the terms of one annuity versus another can vary quite a bit, it's hard to give kind of general advice on that. But if you dig into that and you find that the annuity is only paying 5% essentially as an internal rate of return, then you'd probably look at that and go, well, I might take my chances investing that money on my own. Whereas if the terms of your particular annuity are quite generous and maybe it's paying 7% or 8%, you might think, you know, by the time I invest that in a relatively conservative way, that rate of return doesn't look too bad. So unfortunately, there is some digging that you have to do to try to determine what that internal rate of return is.

But that's really what it's going to come down to. And if you'd like a little more kind of hands-on with some numbers and illustrations, like I said on our website, we have a lump sum versus annuity article that you can use the search box on the Sound Mind Investing website to find that, and that might help walk you through it a little bit. Rob, any other specific pointers on that? Well, that's great advice, Mark. I would just echo that and say, you know, if you do want somebody to take the time to help you work through this in person, it's an important enough decision that I'd probably pay an advisor for their time to help you make that calculation if you need it.

And you could go to faithfi.com and click find a professional and connect Ray with a CKA in your area. The only other thing I would add in addition to what Mark said is, you know, a lot of times folks will look at whether or not they have enough guaranteed income from other sources and whether this would be kind of over and above that. And if that's the case, they've done their budget and they know where their income is coming from and it's enough without this to cover it, they might say, well, I'm more inclined to take the lump sum, but if they know there's a gap there and they'd have more peace of mind with that guaranteed check that would come in and really fill that gap, so to speak, and they wouldn't have to think about market performance or anything like that, as long as that internal rate of return is not out of whack, they might say, all right, I'm going to go ahead and take the check because at least I know that my bills are paid. So hopefully those are some thoughts, Ray, that you can just think and pray on as you guys make this decision. And again, that article lump sum versus annuity at soundmindinvesting.org.

Just search for it there. We appreciate your call. We've got more great questions coming up related to investing and retirement. While Mark Biller's here today, we do have room for a few more, 800-525-7000.

Again, that's 800-525-7000. Mark and I have been talking about common retirement planning mistakes. These coming from a massive survey of financial professionals among those underestimating inflation and its impact, investing to conservatively overestimating investment income and underestimating your lifespan.

People are living longer these days. We'll have one more to add to that list just around the corner and of course, more of your questions. This is Faith and Finance Live. I'm Rob West. He's Mark Biller and we'll be right back. Great to have you with us today on Faith and Finance Live.

I'm Rob West. With me, Mark Biller, Executive Editor at Soundmind Investing. We're talking today about their brand new article out called The Most Common Retirement Planning Mistakes taken from a massive survey of financial advisors on the most common financial mistakes or retirement planning mistakes specifically they've witnessed in their working lives.

And we're sharing those with you today. We're also taking your questions today on investing and retirement planning topics. Mark, before we head back to the phones, let's share that final retirement planning mistake that you observed. Yeah, so that's underestimating your lifespan and that happens, I think, because we hear so often these average life expectancies and in the US that's about 76 years.

So that kind of gets locked in our brain. But we shared in a different recent article that a man who reaches age 65 and good health has a greater than 60 percent chance of living to age 85. And a 65 year old woman in good health who makes it to age 65 has a better than 50-50 chance of living all the way into her 90s. So because of that, we tell our folks that if you make it to age 65 and good health, you need to plan on at least two decades of retirement. And that definitely influences how people manage their money if they know they need to make it last that long. There's no way to know exactly what the returns are going to be like over those couple decades or even what the rate of inflation will be like. But at a minimum, you need to plan for an appropriately long timeframe.

And if you're not doing that and considering that very possible chance that you could outlive your money, then you're asking for trouble. Yeah, that makes a lot of sense and something of course to factor in. All right, we do have one more of those mistakes. We'll get to that in a moment. But let's head back to the phones. By the way, we have a few lines open.

800-525-7000. Let's go to Ohio. Hi, Troy, how can we help you?

Hi, Rob. I just wanted to say I've been listening to you for a long time. A lot of good biblical wisdom, and it's helped a lot of people, including me. I really appreciate that. Thank you. That's very kind of you, Troy.

Thank you for saying that. My question is, I'm 60. I'm going to be going out here in about three years to retire.

I heard you say something about plus 35. How do they calculate off of your highest year earning for Social Security, or how do they do that? Yeah, so it's based on your FICA taxes. And so as that FICA is going in every year on your tax return, they're pulling that information. And that is, of course, the portion that goes towards Social Security. And so those highest 35 years that you paid FICA taxes are going to pull into calculating that formula that will ultimately determine what your Social Security retirement benefit is. Now, that never stops being evaluated. So even if you work past full retirement age, if you happen to earn more than and therefore pay more FICA taxes on your highest 35 that are currently in place, they would swap one out and it would readjust your benefit.

But that's the way it's derived based on your tax return. Well, thank you. That clarifies a lot. That helps a lot. I really appreciate it. Thank you very much. Absolutely, sir.

Thanks for being on the program and for your kind remarks about it. Let's go to what will stay in Ohio. Stephen, go ahead. Yes, sir.

I had a question. I've recently retired here in the past year or so. And I'm looking for how do you decide who is reputable out there that I can I got a couple 401ks that I would like to roll over into something else, something more secure. There's a company here in Ohio. It's called Mortosh Financial. And I really don't know that much about them.

I've heard about them for the last five years or so. I'm just wondering, how do you go about picking somebody that's reputable? There's so many scams out there.

Very good. Well, what I would say is I like the fact you're thinking about picking someone because you spend your whole working life putting money away in your retirement plan, in your case, your 401k. And so, you know, not putting that on autopilot, but getting some wise counsel to manage it, I think is key.

I've got two suggestions for you. One is related to our guest today, and that is a trusted resource would be, of course, soundmindinvesting.org. Not only do they have the newsletter option, but they have the private wealth option as well. You can learn more at soundmindinvesting.org. But we recommend the Certified Kingdom Advisor Designation, CKA.

It's the only industry designation, Steven, for those men and women who've met high standards and experience and character and competence. They've been trained to bring a biblical perspective. They've done a regulatory review and pastor and client references. So you could search for, I would say, two to three CKAs there in your area, perhaps interview them and find the one that's the best fit. And you can just head to faithfi.com.

That's faithfi.com. Click find a CKA right there at the top of the page and you could find that list to begin interviewing. But Mark, any other thoughts just on how you might go about evaluating someone to work with in terms of investment management? No, I think I think you've hit it right on the head, Rob. And I really like the idea of talking to at least a couple different options because you just, you know, people are people. And so sometimes you're going to click with one advisor more than another.

It doesn't mean that one isn't good. It's just you're going into a relationship that's a really important one. You know, you're entrusting, like you said, your whole life savings, basically, all these years of building this. And you're kind of handing over the keys to somebody. So you do want it to be someone you feel comfortable with, that you click with, ideally, a little bit. And, you know, so there is a little bit of that subjective factor, even after you've checked all the very important objective boxes. Don't skip those. You got to have those as the first screen. But then beyond that, talking to two or three gives you a little bit of a feel for what it's going to be like to work with them over time.

Yeah, that's great advice. Stephen, we do have a list of questions that you can use as a part of that interview process. So when you head to faithfi.com and click find a professional and then you'll select investments.

And when you get to that list on that results page of the CK listing, there'll be a PDF that you can download there with some questions to use during the interview. Thanks for your call today, sir. Back with Mark Biller after this break, we're taking your questions on investing and retirement planning at 800-525-7000 plus one more of those mistakes.

Stay with us. Great to have you with us today on Faith and Finance Live. I'm Rob West. Mark Biller's here today. Mark is the executive editor at soundmindinvesting.org, a frequent guest and contributor. We're taking your questions specifically on this portion of the broadcast on investing related topics and retirement planning. Mark's been sharing from a new article that they've written at soundmindinvesting.org called the most common retirement planning mistakes.

You can check it out there. It's based on a survey of 2700 financial advisors on the most common retirement planning mistakes they had witnessed. And Mark, you shared four of them.

Share that last one with us. Yeah, it's for getting to account for health care costs. And people tend to do that because here in the US, Medicare generally covers a lot of our health expenses once you turn 65 and above, but it doesn't cover everything.

And so generally speaking, Medicare is going to cover routine medical costs and short term hospital stays. And if you want to cover other expenses with insurance, you need to purchase a Medigap supplemental plan or a Medicare Advantage plan. Even with those, a person is still likely to face some out of pocket expenses for copays and things that those plans don't cover, like dental care. Now, the other big health related wildcard in retirement planning is, of course, the potential cost of extended care. And long term care insurance, unfortunately, has just grown so prohibitively expensive for most people that it really isn't a great option for a lot of folks. Thankfully, there are some other options that are more affordable short term care policies that focus on shorter term stays. And those can actually be a good option because statistically a lot of stays in nursing homes and things like that do tend to be shorter.

They're not necessarily permanent. The last point that we kind of bring up, Rob, along these lines in the article is our love of health savings accounts. If you are eligible for a health savings account, we strongly recommend funding that and trying to build up that balance. Just some great benefits with a health savings account. Even if you don't have access to an HSA account, though, we also say, you know, one of the best ways to prepare for later life health and health costs is to take good care of yourself today. That's where all the familiar advice about diet, exercise, sleep, managing your stress, all those controllable factors can really pay off down the line.

Yeah, that's really helpful. And then, Mark, to revisit long term care insurance, you know, it's becoming more and more cost prohibitive, but that's in direct proportion of the rising costs of health care. So how should folks think about that?

Yeah, it is. And, you know, I still think, Rob, that it's worth going through the exercise of pricing out what that coverage would cost, especially if you have any family history, you know, of dementia or Alzheimer's, anything like that, it's still worth pricing those policies. We're just coming at it from the standpoint that more and more people go and look at that and they find, yeah, that just really doesn't fit my financial situation. And that's where, you know, thankfully, the industry has adjusted to those higher costs as well. And instead of only offering these, you know, really long term policies that cover you forever, if you need it, they have pivoted. And that's a good thing because that matches the more common need of 18 month, six month, three year type stay with a policy that isn't going to completely break the bank. You know, I think there are statistics that show that a pretty decent percentage of those nursing home type stays are three years and less. So that is a reasonable option for people to consider. Yeah, no question about that.

Well, that's really helpful. All right, let's head back to the phones. Let's go to York, PA. Hi, Deborah. Go ahead.

Um, your program today is exactly what I need to listen to. I'm 70 years old, retired, still working though, part time. My husband's retired.

He also does odd jobs and he's still working. We do not need to get into our investments because our social security and our, the work that we do is supplementing everything we need right now. But, um, my, um, my husband was concerned about getting, uh, he doesn't like the stock market, wanted something a little more secure. So our financial advisors suggested annuities and they would be, um, for six years, you would have to keep that money in for six years. He did say that there was a 12% cap and a 20% protection or buffer. And, um, so, um, I don't know about annuities that much, but I'm, I would like some, a little, some advice on that. Yeah, very good. Uh, you know, annuities, there's so many varieties of them and you've got to read the fine print.

So we wouldn't be able to comment on the specifics, but Mark, just hearing Deborah, what thoughts would you have to share? Yeah. Um, I definitely understand the, uh, the reticence to just invest in the stock market with, you know, more or less unlimited downside and annuities do kind of scratch that, that itch of giving you some upside while protecting somewhat to the downside. Um, and that's an attractive combination.

There's no question about it. The sticking point with annuities is today and has always been, what is the level of expense that you're paying in order to get those benefits? And traditionally annuities have been an expensive way to get that type of protection. Um, so that's not to say that the annuities are, are always a bad deal. You just really need to look carefully at all of the costs.

Sometimes those are a little tricky to decipher. So you really need to be careful to look at all of the costs and the surrender costs and all those types of things. If you need to get the money out early. Um, one thing, Deborah, that is pretty new to the investment industry is there, there is a new class of ETF. Those are exchange traded funds. They're like mutual funds that trade just like stocks. And this new class of ETF is specifically designed to replicate some of the advantages of these annuities, but without the downside of tying up your money, um, with surrender charges and the expenses are much lower. Um, we don't really have time to go into those in detail, but for listeners who are interested in that type of an option, um, there, there are two main companies that I'm aware of that, um, that issue. Those one I believe is Invesco and they're called buffer ETFs.

If you just do an internet search of buffer ETFs, um, you can look and see some of these options that they have different timeframes, they have different caps and buffer combinations so you can protect a little or a lot. Um, so those are some, some really intriguing options. We have started using those some at SMI. Um, and in some of our very conservative portfolios, we'll use that for stock exposure because we can really cut that downside risk.

Yeah, that's really good. You can always connect with a certified kingdom advisor as well. They're in York PA. Just go to our website, deborahfaithfi.com click find a professional at the top of the page. That's faith fi faith fi.com.

Just click find a professional. And as we said earlier that you'd want to interview two or three, but this might be that season where engaging with an advisor to manage this for you. It makes a lot of sense. Thanks for your call. I'm back with our final segment with Mark Biller right around the corner.

Stay with us. Great to have you with us today on faith and finance live here in our final segment today, we're taking your calls and questions for Mark Biller on anything investing related and specifically on retirement planning questions. We've been talking about an article that the team at SMI has recently put together. You can check it out at soundmindinvesting.org. It's titled the most common retirement planning mistakes. This is from a survey of 2,700 financial advisors.

What did they find? Well, underestimating the impact of inflation, uh, investing too conservatively overestimating investment income, underestimating your lifespan, people are living longer, and then finally forgetting to account for the rising cost of healthcare. Those are key points for you to consider in your retirement planning. Let's head back to the phones.

We'll go to Indianapolis, Indiana. Hi, Jerry, how can we help you? Hello, I've been listening ever since Larry Burkett have learned a huge amount, but I'm in a little different situation now and wanted to get your take on what I'm thinking I should do with, uh, what I, to me is a significant amount of cash that I have, um, roughly 135,000 in the bank. I have about 72,000 in that two investment accounts and I have 50 K in a CD that matures in September. Uh, what should I do or should, how much should I take of the cash that I have on hand to try and make it work for me better than sitting in, uh, an account?

I am retired in good health, been retired about 12 years and have completely debt free. Hmm. Wow. Yeah. Great question. Uh, Mark, your thoughts?

Yeah. You know, Jerry, the, the starting point for any question like this is always really to compare your expenses and your need for income with, uh, the cash and resources that you've got available to invest. So, you know, if you're, if you're meeting all of those cashflow needs, then you can afford to be fairly conservative. Um, and one of the nice things about, uh, the higher interest rates of the last couple of years is that for the first time in about 15 years, we're actually getting paid, uh, pretty decent return to have, uh, money and good savings accounts.

Now you have to be careful there. You don't want to leave it necessarily at your local bank, which may or may not be paying a good rate of return, but you can earn, you know, in the 5% range of with, with very safe cash type investments right now or savings products right now. And that's not always a terrible option, especially if, um, you can afford to take that, that low amount of risk. Of course, the next steps out on the risk ladder are typically to move out into slightly longer term bonds. Um, it is a little bit of a weird environment right now though, where, um, you know, with the inverted yield curve, those short term, uh, instruments like CDs and short term bonds are actually earning as much or more as moving out into slightly longer and riskier bonds. So that isn't necessarily paying the way it usually does to take that additional risk. Um, so, um, you know, all of that to say, um, a lot of it does kind of depend on the, the cashflow situation and your expenses. Do you, do you feel a need to earn a higher rate of return than you've been getting? Maybe a place to start is what have you been earning on those CDs and cash investments?

Do you know? The cash, the CD is right at 5% for eight months. Uh, that's one of my concerns. The one investment account was inherited and I'm not getting hardly three or 4% out of it. There's stocks and bonds.

It was that way when I got it. It cost me nothing to, uh, keep it going. There's no expenses. But I may pull out maybe $1,000 a year in cash and that's all.

So I'm not impressed with the way it's, um, in growing. It does, they do take some of the dividends and reinvest them. But I'm living, uh, well within my income and typically put $1,000 a month or more into the savings from my income. So that's not a big concern at all. Um, and I have great insurance. Um, it doesn't cost me a lot of money.

I'm blessed on many levels with that, um, a whole situation of good healthcare and, um, live within my income. So that's why I wanted to try and see if I should do something different with the cash to be a good steward over it. Um, and I've learned from the last couple of days about changing to a certified kingdom advisor that maybe would look at faith based investments and see if he could meet, you know, three, four or 5%, um, after expenses. Hmm. Yeah.

Go ahead. I, I definitely think they would probably be able to do that given that as you just noted, you know, you can earn 5% basically keeping that in, in super safe cash and CD type investments. Um, you know, right now again, that 5% is, um, a little bit higher than the rate of inflation, which is kind of our first goal is to make sure our purchasing power isn't being eroded there. So that's not a terrible option, but I do like the idea of talking to somebody about the overall picture, especially if you're not pleased with the performance of the investment accounts.

Um, there may be some simple changes that they can make to, uh, to boost the performance there. Um, Rob, what are your thoughts? Yeah, no, I think you're right on. So I would just heed that council and Jerry, if you need to find a CKA there in Indy, you can find some great ones at faithfi.com. Thanks for your call, sir. And for your kind remarks about the program, uh, let's finish up in Missouri today. Hi John, go ahead.

Well, I've got just a couple of simple questions for you. I've got a mortgage left on a house that's 13 years and I could pay it off. Uh, now I'm retired. I'm 71 and retired. I could pay it off now or should it be better if I leave the money in the air for emergency purposes?

If I paid it off, I have enough steel emergency. Okay. And what is the interest rate on that mortgage right now?

6.1, one, two, five. Okay. Yeah. So Mark, I mean, in this season of life, obviously paying off the mortgage, as long as he doesn't deplete his emergency reserves is equal to a guaranteed 6.1%. And that's a pretty good return, right?

It absolutely is. It's better than you would get in savings. So I would rather pay off the mortgage and get that slightly better return. Like you're saying, um, you know, if you've, if you felt uncomfortable, maybe bringing that, that, uh, savings level down that much to do that, you could even look at getting like a home equity line of credit on the paid huff house, which gives you access to that as if you had that cash still sitting in savings, but you're getting the better return of paying down that six plus percent debt, um, while you're probably getting five or less in a savings account. So that I like that idea, Rob, a lot.

Yeah, I do too. And I think the other idea, John, is to take what you were sending in the form of that, uh, monthly payment, you'll still have the taxes and insurance, but the principal and interest, and don't let that get gobbled up in lifestyle spending. Just start socking that away every month. And in no time, you'll be back up where you were, but, uh, you'll save all that interest. So, um, hopefully that helps you, but we like your plan.

I think you're on the right track. Thanks for calling, sir. Uh, it struck me, Mark, when, uh, our previous caller mentioned the late Larry Burkett and it's amazing. Not a week that goes by that somebody doesn't mention Larry. You know, Larry had a big, uh, role in encouraging Austin prior in the beginning of sound mind investing, didn't he?

Absolutely. It was instrumental to SMI ever getting off the ground. He was very supportive, uh, allowing Austin to come on the radio and kind of share what he was doing. And, um, many, many, many of our, um, our clients from the early days came from Larry and the radio.

So it's, it's really gratifying to hear from people, you know, even now that, that were, were listeners when, when Larry was doing this many years ago. Yeah, there's no doubt about it. All right, Mark, tie a bow on this, uh, retirement planning topic that we started with today as we come full circle. Yeah, I think, uh, the bottom line, Rob, is we live in a very unpredictable world. Of course, we all know that, um, no retirement plan is going to work out exactly the way we plan and think, but that planning exercise, doing that diligently in advance and taking advantage of the different resources that are available to you as a planner can go a long way towards securing your financial future. It's not a one time thing you do at once and you never have to look at it again.

You do need to keep up with your plan, but boy does it pay big dividends down the road. No doubt about it. Well, Mark, so appreciate, uh, you stopping by today. Folks, if you want to pick up this, uh, article, you can check it out. soundmindinvesting.org.

It's called the most common retirement planning mistakes. Uh, SMI has been a long time, uh, supporter, partner, underwriter of ours here at, uh, faith and finance going all the way back to Larry Burkett. So Mark, uh, just grateful for you and, and Matt and Joseph, and of course, Austin and your long time support of this program. Thanks, Rob. We appreciate you too.

And the work you're doing every day, helping people with, uh, right where, where they're at, where the rubber hits the road. Very good. All right, Mark, we'll talk to you again real soon. May God bless you, buddy.

Thanks. Well, folks, grateful to have you along with us today. Let me take just a moment before we round out the broadcast here today. We're just 10 days away from the end of June.

Why is that significant? Well, first of all, it's amazing to think that the year is halfway over, but secondly, it's the end of our fiscal year here at faith and finance, which just simply means this is a really important time for us to hear from you. We've had so much incredible listener support. And so we're incredibly grateful to those who have already supported our work, but we would just invite you to be a supporter. If you've found some benefit in this program, maybe you've been able to apply what you've heard.

You've been encouraged by it. If you could make a gift before June the 30th, big or small a hundred dollars or a thousand dollars or anything in between, we'd be grateful. We're $15,000 into a $50,000 match. That just simply means every dollar is doubled for the next 35,000 to help us reach our goals in the next 10 days.

You can make that gift online or over the phone. Just go to faithfi.com and click give that's faithfi.com and click give and thanks in advance. Big thanks to my team today, Amy, Tahira, Lynn, and Jim.

Faith and Finance Live is a partnership between Moody Radio and Faithfi. May the Lord bless you and come back and join us tomorrow. We'll see you then. Bye-bye.
Whisper: medium.en / 2024-06-20 18:17:30 / 2024-06-20 18:33:18 / 16

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