Preparing for the Inevitable

This faith and finance podcast is underwritten in part by Soundmind Investing. For more than 30 years, do it yourself investors have relied on SMI for proven strategies and trustworthy guidance. SMI helps people build wealth so they can provide for their families, prepare for the future and give generously. Learn more at soundmindinvesting.org. Good stewardship requires that we prepare ourselves financially for the time when the Lord calls us home.

Single or married, you need to be ready. Hi, I'm Rob West. Death is a fact of life, so to speak, and today we'll talk about how to prepare for it. Then we'll take your calls at 800-525-7000.

That's 800-525-7000. This is faith and finance, biblical wisdom for your financial journey. Proverbs 13 16 says, In everything the prudent acts with knowledge. So whether you're a newlywed, single, or celebrating your 50th year of marriage, it's important to plan for the future. As hard as it is to think about your own death or that of your spouse, it's something you have to do. After all, death isn't a matter of if, but when. There are many financial decisions that have to be made following a death, and most of them will be much easier if you and your spouse, if you're married, have updated wills. I can't emphasize this enough.

This is task number one. Legal powers of attorney and healthcare directives are also critical. You'll need an estate attorney to draw these up.

It's an expense, but don't put it off. The goal of estate planning is to assure that your wishes are met after you die, both personally and legally. Your loved ones will appreciate knowing exactly what you want at a time when it can be hard to make decisions. I also recommend that you prepare instructions for your memorial service or funeral, if possible.

Sounds gloomy, but it's actually a very loving way to help your family and friends begin the grieving process. As you're getting your will put together, you'll also need to make two important lists. The first is a list of all your financial accounts. This includes bank accounts, investments, credit cards, mortgages, retirement, outstanding loans and pensions.

It's important to keep this list updated. The second list is everyone who will need to be contacted in the event of your death or that of your spouse, along with phone numbers and addresses. This includes family members and friends, financial institutions, pension and life insurance companies, social security, the IRS and credit bureaus.

You might also include contact information for your college alumni association and other organizations you're involved with. While you're organizing your financial papers and contact list, you should update the beneficiary designations on all your bank, investment and life insurance accounts. By the way, make sure someone you trust knows where all your important documents are located.

If you're married, your spouse needs to know how to get hold of this information. With the help of an estate attorney, arrange for major assets like vehicles and your home to be jointly owned or transferred on death. This will help you avoid probate on these assets and secures them for survivors use if you're married.

Each state has different rules for property and probate, which is why having professional help is so important. Now, let me speak to those of you who are married for a moment. First, let me stress how important it is that both spouses understand the family finances. Too often, one spouse will handle all of the money matters, and if that spouse passes away first, the survivor is completely in the dark. Next, if you use credit cards, it's important that each spouse has one in their own name.

That's because when a card holder dies, the issuer must be notified. At that point, the card will be closed and the surviving spouse can no longer use that card, even if he or she is listed as an authorized user. The third point for married couples to consider ahead of time is what the surviving spouse's income will be. For most people, losing a spouse means losing some or all of your income, which may require significant lifestyle changes. Consider this ahead of time and plan accordingly. If you're retired and on Social Security, know what your benefit will be if your spouse dies.

If you both get Social Security checks, the survivor gets to take the larger monthly payment. Have the documents accessible so you can start the Social Security survivor benefit process immediately when one spouse dies. You know, it's worth emphasizing again the importance of communication in these financial matters. It's so critical to talk about the future with your spouse and, if appropriate, with your children or other family members. That way, everyone knows what to expect. Now, I know this is difficult, but consider the alternative. Not communicating now can lead the surviving spouse in a vulnerable position, making a difficult time even more stressful.

Another reason for clear, honest communication is so that you and your spouse are on the same page about things like charitable giving, guardianship of minor children, and disposal of assets. You and I can't know when the Lord will call us home, but we do know where home is. Philippians 3-20 reminds us that our citizenship is in heaven, and from it, we will await a Savior, the Lord Jesus Christ. We'll be back in just a moment.

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This institution is not federally insured. Welcome back to Faith and Finance. I'm Rob West. We've got a couple of lines open today for your calls and questions on anything financial. Anthony's standing by to take your calls today at 800-525-7000. We'll try to get you on the air as quick as we can. 800-525-7000. You can call right now. Let's go to Wheaton, Illinois. Hi, Lucy.

How can I help? Hi. I'm 76 years old and I don't have drive insurance. And I'd like to know if you could recommend me a drive insurance, insurance that is affordable because I'm an SSI.

Okay. Well, Lucy, I appreciate that call and thanks for that background. You know, if you're on supplemental security income benefits for a disability, it's going to make it more difficult to get life insurance in addition to your age being 76. I think the better question is, at least as a starting point, is do you really need life insurance? So the purpose for life insurance is to care for dependents if the family breadwinner should die prematurely. Do you have anybody depending upon your income that would be in a hardship situation if you were to pass away? Actually, you know, I'm helping my daughter because I live with her, but just to help out.

She doesn't support me or anything. But if I die, funeral expenses, you know, that's what I'm worried about. Sure, sure.

All right. Do you have anything set aside that you could use for funeral expenses? I'm trying to say something, but I don't know.

I know you say about $10,000 for funeral nowadays. Yeah. And how much do you have in your savings right now? I'm just starting. Okay. Not much. All right.

Yeah. So, you know, you could potentially, you know, look for a, you know, a small policy that would kind of be a guaranteed acceptance. You know, you can get life insurance with no medical exam. There's also insurance over even 80 years old with no medical exam. And, you know, you could do it specifically to cover the cost of a burial.

You know, I would have your daughter help you just, you know, look around in terms of some options for that. It'd be a very small policy because here's the thing. I mean, this is going to be an expensive policy if you try to get a substantial amount of death benefit at your age and health status. But if it's something modest just to cover the burial expenses, perhaps, you know, you could look at a $25,000 final expense in burial policy or something like that that would basically just cover, you know, these expenses payable to your daughter.

And, you know, that's really the next step for you. So, you could use one of the online life insurance tools that would help you find this. You know, there's several websites that would help you find the very best company for your age and health status for this type of policy. So, one is a website called NerdWallet and I'm looking at what they say based on their independent reviews are the five best burial insurance companies as of this month. And so, you could go to nerdwallet.com and just search for best burial insurance companies. U.S. News and World Report puts out the same thing. So, there are some great options.

Forbes would be another one. So, I would do some research online, you know, for this and have your daughter help you as well and see if you could find something that is small enough that it would fit your budget but also give you the peace of mind to know that those final expenses are covered. And the goal would be that if you could continue to save, perhaps, you know, down the road, you could drop this policy as it gets more expensive and then just rely on your savings. Does that make sense?

Well, it makes a lot of sense, yes. Okay, very good. Ask your daughter if she'd help you with that.

Tell her she could take a look at Forbes, NerdWallet, and U.S. News and World Report and find who are some companies you should get quoted for burial insurance. And, Lucy, I hope that helps you. May the Lord bless you and thanks for calling today. Let's stay in Illinois and talk to Paul. Go ahead, sir. Okay, Rob, thanks for taking my call. I appreciate the financial wisdom that you give us each and every day.

Our situation is that we've been married over 50 years and the Lord's blessed our marriage. We started budgeting in the mid-1980s using the home budget book we got at the drug store. I don't know if you remember those things. They had a blue cover. Oh, wow.

It was amazing. And we kept that up and it easily converted into an Excel because it's a grid setup, days of going across the columns and then items going down the rows. And I've maintained that since the 1990s.

It fits like an old shoe. I just love working with it. My wife does know how to read the reports for budget actual invariants both year-to-date and months-to-date. But it was pointed out the other day, and I've kind of known this all along, my wife is not really much into the spreadsheets like I am. In other words, if I was to pass away from the scene, she'd be high, wide, and dry as far as running our budget system.

Do you hear me? Do you have other couples on that situation? Oh, yeah. And that's typically the way it is, is that the Lord puts a spender together with a saver.

And we just typically are opposite so often with regard to how we process information. I know Ron Blue, one of my mentors, the popular finance author from a biblical viewpoint, he said he would sit down with his – one of his clients was a well-known pastor. You'd know the name. He was his advisor. They'd meet once a year for dinner. And he'd go over all the spreadsheets with his wife because she wanted all the detail. And then at some point, he and the husband would excuse themselves during the meal. On the way to the restroom, he'd say, how are we doing? Ron would say, you're doing fine.

And that was all he wanted to know. So there's different personality types, Paul, and we've got to find something that works for both of you. What do you feel like knowing her personality would best fit for her? Well, I mean, maybe you could make some suggestions as to, you know, some really low-profile budget systems that, you know, for the non-numbered person could get along with. Is she comfortable with technology?

For instance, do you think a real simple smartphone app would work, or are you looking for more of a tactile paper and pen approach? Well, you know, my problem is we've tried every dollar and mint and some of those apps. But what I find is that, you know, we take out $300 a month in cash right at the beginning of the month. And incorporating cash transactions in your budget, you actually have to do it manually because a lot of these systems, you know, you had your credit card tied into it, you had your debit card tied into it. And I get that, it makes it simple. But when you add in cash, that's another dynamic.

So that's just a little description. All right, let's do this. I'd like to do an experiment, Paul, if you're on board with it, and I'm going to cover the cost for it. I want to give you six months on the FaithFi app.

It's our budgeting system built on Larry Burkett's envelope system, but in a simple format. But I'm also going to connect you with a certified Christian financial counselor who's really skilled in the FaithFi app to meet with you and your wife, get you set up on it, see if we can make it work for you. And as long as you agree to come on a couple of months down the road, if it works out and tell us about it, we'll cover the cost of the certified Christian financial counselor and the subscription to the FaithFi app. Would you be open to that?

Well, that's very generous to you, Rob. I appreciate that. Let's do it.

Sounds good. Stay on the line. We'll get your information. We'll be right back after this.

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That's eventideinvestments.com. Welcome back to Faith and Finance. I'm Rob West. All right, let's head back to the phones. We'll round out the broadcast today. We've got a bit more time. We'll get to hopefully a couple more questions at a minimum.

To Miami, Florida. Hi, Eddie. Go ahead, sir.

Hi, thank you for taking my call. So over the years, I've had about three retirement accounts. One is a Roth IRA and two for three bees.

I have about $100,000 between the three of them. And but I wanted to get better investment options. And I can do that by rolling them all into a Roth IRA. I know that there would be a tax penalty, but since it's kind of a relatively low amount, maybe I can just go ahead and do that. And, you know, compared to the possible gains of having a better investment option in the having all the accounts in the one Roth IRA. So I wanted to get your opinion on that.

Yeah. So what do you have in the 401k and 403 B's if you were to put it all together? How much do you have?

About $100,000. All right. And what is your age, Eddie? 50. 60 years old. All right.

And you're planning to continue to work for some time? Yeah. No, I'm sorry. 50. 50.

Oh, 50. My apologies. And so you're planning to continue to work for the foreseeable future, right? Correct. All right. So are you actively saving in 401ks? Right. With my current employer, I have a retirement account, yes. Okay.

But the 100,000 is all from previous employers? Correct. Okay.

Very good. You certainly can. So essentially what you would do is you'd roll those old 401k or 403 B's out to a traditional IRA, and then you could convert a portion of that into a Roth IRA. You'd of course have to have the money to pay the tax when you do it, but you could do that. And then from that point forward, it's now growing tax free for the next 15 or 20 years. And that's just until retirement. And then obviously if you don't need the money, it's going to continue to grow even though maybe you get a little bit more conservative.

You're right. You'd have complete control over the investments outside of those 401ks, which would be a good thing. Um, so the only question is, does it make sense to pay the tax now or later? I would say we're probably in the lowest taxed environment we will likely have. If anything, taxes in the future are heading higher.

So that would make the case why this is a good idea. There is a great study that was done by some researchers that looked at this idea of, of given the opportunity to have pre-tax money in the traditional versus the Roth, the after tax, tax free growth. What is the best mix? And based on their analysis of thousands of scenarios using actual people, what they came up with is a rule of thumb that said, okay, if you have the opportunity to do both, uh, you should probably look at taking 50 or taking your age, adding 20 to it. So in your case, 50 plus 20 and the, uh, you know, the total of that is how much you'd want in traditional and then the balance in the tax free growth, the Roth. So in your case, what that would mean is, okay, let's say we roll a hundred thousand out. You could take, uh, you know, leave 70% of it right there, take 30% of it and roll it out to the Roth, pay taxes on that 30 and now you've got both buckets growing and then you could decide in retirement where you wanted to pull from based on what made the most sense from a tax standpoint. That would be one option.

Now if you wanted to, you could convert the whole thing as long as you have the money to pay the tax. But I just throw that out as an idea. Does that make sense? Yeah. Great. That's great insight. Appreciate it.

Okay. Um, there's a great article on this, which is what references that study. If you'd like to read up on it, uh, if you just search Roth or traditional IRA, it'll probably come up.

Sound mind investing, uh, is where you'd want to go soundmindinvesting.org or I think we have it on our website at faithfi.com. You may want to give that a read before you make the final decision. Very insightful. And Eddie, thanks for your call today. Uh, let's finish up in Moline. Hi Zeke. Go ahead.

Hey Rob. Thanks for taking my call. Um, I had a question. So we've switched tax people and the one we have now is asking for a physical copy of our social security. So I was wondering if it's safe to give it to him because the other person that we had didn't ask for it. Yeah. Uh, is he asking for a photocopy of the card or the actual card from the social security administration? He's asking for a photocopy. Okay.

Yeah. I mean, it's understandable that a tax preparer might want to verify your social security number, especially if he doesn't know you. Um, so I don't think that would be out of school at all that they're asking you for a copy of that.

I might, you know, want to know how they're going to secure that and the same would apply with the, the, uh, you know, copies of your tax return itself, which is going to have your social security on it as well. But this is probably just for verification purposes. Okay. Yeah. Thanks Rob. All right. Zeke.

Yeah. Appreciate your call today. God bless you.

Uh, let's go to Aurora, Illinois. Hi Mary. You'll be our final caller. Go ahead. Hi.

Good afternoon. Thank you for taking my call. The reason I'm calling is to let you know what an important service you give. I hope you can understand me. I'm not speaking as clearly as I used to.

You sound just fine. Oh, thank you. I remember years ago you made a comment or said something to the effect that even if you may charge a million dollars, you have to pay it back. I mean, that's what you owe. It wasn't that amount, but if you charged it, you owed it. So when I was planning to move, I knew I couldn't pay off my credit card to the credit union. So I called them and told them I wanted to do something with it anyway. Long story short, the gal in the collections department spoke to her boss and the facility I was living at, they took all your money and never again. Anyway, they said something about it would affect if I paid that loan and it would affect my public aid. And I thought, I don't care. I owe that money. Anyway, they said, well, what anyway? They said in effect, what do you care about your credit for?

It's not like you're going to buy a car or a house. And her boss got so mad, he gave me, he didn't give me a solo amount, which would have negatively affected my credit. He arranged for me to make payments, but it was mainly because of what I heard on your show.

Wow. Well, Mary, what an encouragement. I'll tell you, you took responsibility. You had made a commitment. You wanted to honor that and obviously God blessed you in the midst of that.

I think he was blessing your faithfulness there. But really appreciate you sharing that, of course, grateful for your kind remarks and your encouragement, but delighted about the message that you just shared with our listeners because I'm confident there's somebody out there that needed to hear that today. So Mary, thank you for being on the program today and for sharing that.

Away from what? You can't walk away from what you, oh, I mean, that's right. It's only because of what I heard on your program and I wanted you to know that. Well, thank you. That's a wonderful place for us to finish today, Mary. It's a biblical truth and you reminded it of us today and we appreciate you being on the program. I'm so delighted you got on.

May the Lord bless you, Mary. Call back anytime. Well folks, that's going to do it for us. On behalf of my team, Robert Sutherland, Tahira, Dan and Gabby T, I'm Rob West. We hope you come back and join us tomorrow. We'll do it all over again. In the meantime, may God bless you. Bye-bye. Join finances provided by Faithfi and listeners like you.