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That's 888-201-5577. One Bible verse that's often misquoted is money is the root of all evil. The actual verse, which is found in First Timothy 6 10 says for the love of money is a root of all kinds of evil.
I am Rob West. Money is a useful tool for reaching personal goals, supporting loved ones and serving those in need. But no matter how necessary it is for daily living, money should not become an object of devotion.
We'll talk about that today and then we'll take your calls at 800-525-7000. This is faith and finance biblical wisdom for your financial journey. Well, some people believe money is what makes life worthwhile. For the worldly mind, money seems to promise security, success, freedom and power.
The Christian worldview holds that only God can meet our deepest needs. So we put our trust and hope in Jesus, not in temporary things. Still, we all need and use money every day. Everyone deals with temptations to worry about money or fight about it or overspend it or even hoard it. That's why the Bible offers so much wisdom for putting money in its proper place. Getting back to our verse in First Timothy 6 10, for the love of money is a root of all kinds of evils.
To find out what evils Paul is talking about, we can look back at verse 9. Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge people into ruin and destruction. So the first problem with loving money is this, wanting to get rich can actually destroy your life. When the longing for wealth consumes your thinking and defines your priorities, it leads to temptations, foolishness and harmful desires.
The end result of these is ruin and destruction. Another danger is that craving money can derail your faith in God. First Timothy 6 10 continues, The Bible also explains that loving money and God at the same time is not possible. In Matthew 6 24 Jesus warned us that No one can serve two masters for he will either hate the one and love the other or he will hold to one and despise the other. You cannot serve both God and money.
Finally, you'll have to admit it. Money is never really enough. Have you ever really wanted something and when you got it, you realized it wasn't as great as you expected? Well, that's just what happens when you try to accumulate money for its own sake. Ecclesiastes 5 10 says, The fact is, only Jesus can satisfy the desires of your heart. Ultimately, loving money opens the door for sins like greed, fear, pride, envy and dishonesty to take hold, leading you away from the Lord. All this can destroy your peace and ruin your witness. Of course, money itself is neutral, neither good nor bad, like possessions or prescription drugs or relationships or food. It's not the thing itself that's evil.
It's what you think about it and what you do with it that can become a problem. Let me read those verses from 1 Timothy again. So what we need now is a way out of temptation. The next verses explain how Christians, by the power of the Holy Spirit, can actually avoid the dangers of loving money.
Listen to this. Money is just one of those things, and as believers in Christ, we're called to flee from foolish desires, stay faithful to God and hold on to our hope of eternal life. If we can help you with that, visit us at faithfi.com. All right, let's take your calls next. The number 800-525-7000.
800-525-7000. This is faith and finance, biblical wisdom for your financial decisions. We'll be right back.
We'll be right back. Every day, Faithfi is working to meet people right where they are. Through our national radio program, app and website, we're helping people put their faith in God and not in money and possessions, and we're encouraging and equipping Christians to have a passionate pursuit for sacrificially living and giving the money entrusted to them. If you believe in and have benefited from Faithfi, would you consider becoming a monthly Faithfi patron? Learn more about the Faithfi patrons membership at faithfi.com and click give. Welcome back to Faith and Finance.
I'm Rob West. It's time to turn the corner and take your calls and questions today. The number 800-525-7000. That's right, we've got lines open. Our team is standing by ready to take your call.
800-525-7000. Let's dive in. We're going to begin in Kentucky today. Hi, Dan.
Go ahead, sir. Hi, Rob. I appreciate you taking my call.
I have spoke with you a couple of times before. I'm a recent retiree, but the issue now with tax planning and so on, I became more aware of the donor advised fund option. And I read your material on your website, but I was wondering if you could expand a little bit more on that particularly. Well, my concern is there are other, are there multiple entities, it seems that would offer the option of opening a DAF. But my concern is not funding through fees and that a company that may support philosophies, hiring practices that I may not want to be party to.
So what would be your recommendations? And I understand NTF is one that you've spoken of before, so I apologize if this is something you've addressed more recently, but could you expand or give me some thoughts, some of your thoughts on the DAF? Yeah, I'd be happy to, Dan. And I'm glad you brought this up, especially this time of year. You know, the donor advised fund is one of my favorite giving tools or vehicles that exist today. You might think of it for those who maybe haven't heard of this before as a charitable checking account. So essentially, you make a gift to your donor advised fund, and then you can make recommendations to grant that money back out.
Now here's the key. You technically are giving up control over that money when you put it into the donor advised fund. And that's how you can get the deduction, because you're turning it over to a donor advised fund sponsor. Now, by nature, the whole purpose of a donor advised fund is that the donor advised fund sponsor does not create strategies on where the money is given. It's intended for them to hold the money, even though they technically own it. They are supposed to wait for, and by virtue of how these are designed, the gifts go out of the donor advised fund only at the request of the contributor, the person who set up the account in the first place. So you'd make recommendations, and then they would pass those on. Now, the key here, and you raise a really good point, it's not only about the maybe internal practices of the company. It's also that they have the ability to stand in the way of what ministries or organizations, charities ultimately receive the funds, because conceivably, and this happens with certain donor advised fund sponsors now, you could say, I wanted to go to XYZ Ministry, and they say, I'm sorry, we can't follow your request or recommendation, because that particular ministry is on a list of hate groups that we won't give to.
And so we're not going to do that. And so that's why I think it's really important that you choose your donor advised fund sponsor to ensure that they're aligned with your values in terms of what they stand for, and that they will ensure that you can always at any point in the future, make recommendations to ministries or charities of your choosing, and including those that align with your Christian values, which is why I would recommend that you look at the National Christian Foundation. The two biggest donor advised fund sponsors in the country are Fidelity Charitable and Schwab Charitable, but for the reasons I mentioned, and not because they have any of these curbs in place right now, but they could be added down the road.
And that's why I think using ncfgiving.com founded by Larry Burkett and Ron Blue and others will ensure that no matter how long the money is in your donor advised fund, you'll always be able to recommend that it be granted out to those charities that are on your heart. Does that make sense? It makes a great deal of sense and you actually hit the nail on a couple nails on the head that I was hoping to take care of. So thank you very much. All right. Yeah, you're very welcome. It's really simple to set up.
I would do it. Begin the website is ncfgiving.com. They call it a giving fund, but it's in a sense a donor advised fund. So if we can help further, don't hesitate to reach out. Thanks for your call today. To Chad Anuga. Hi, Karen, go ahead.
Hi, thank you so much for taking my call. Um, related question actually, um, on RMDs and charitable giving. Um, my mother years ago was late on doing her RMD and she had to pay a penalty of 50%. Yeah. So I would specifically like to know when mine is due.
It's hard to understand from what I read. My birthday is 1-2252. Okay.
Yeah. So your first RMD required minimum distribution, Karen, from a traditional IRA or 401k or other tax deferred retirement account is going to be, uh, April 1st of the year after you turned 73 based on the new, uh, you know, the latest, uh, rule and regulation changes. So they've been pushing it out slowly and, um, just based on your age, uh, that would be April 1st of the year after you turn 73. And then in years following, you'll just need to make sure you take that by December 31st of each year. That April 1st deadline is only for that first year following the date you turn 73. Now I see in my notes here, you're wondering about Roth IRAs. There are no RMD requirements for Roths. This would only be for traditional accounts. Now it's never a bad idea to work with your CPA, especially as you're thinking about taking your first one just to make sure you know the amount you need to take and the date and that, uh, you know, you're in line with what's required of you based on the balance of the account and the IRS tables.
Um, but, but that is the year you need to be targeting at this point. Okay. And how do I find out how much will my, and I did not say that about the Roth, but that's okay. How, how will I find out from my traditional IRA how much I owe? Will they send me something?
Yeah. Uh, so they would have to, uh, the IRA custodian is required to inform you of the amount of your RMD by January 31st each year. And it's basically an amount that's determined by dividing the December 31 balance of the IRA or retirement plan by a life expectancy factor that the IRS publishes, uh, in their publication 590 B on their website. But again, your CPA could help you with that.
Or, uh, you know, you would look for that notification, uh, by December 31st each year from your IRA custodian or retirement account custodian. Okay. I hear that music. Could we possibly come back and talk about charitable giving? I'd be delighted to.
That's a great idea. So you stay right there and, uh, I appreciate you, uh, keying off of the music and knowing that that means I need to take a break. So when we come back, folks, we're going to continue talking to Karen and Chattanooga, and then we'll head to St. Louis after that.
We'll be right back. Are you struggling to fit your faith into your practice as a Christian financial advisor? The Certified Kingdom Advisor designation teaches you a step-by-step process to confidently deliver advice that aligns with Christian values. Discover the skills you need to help your clients make a kingdom impact. Get started today by enrolling in the CKA educational program at kingdomadvisors.com slash get certified.
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Principal loss is possible. Foresight Fund Services LLC. Welcome back to Faith and Finance. I'm Rob West. We're taking your calls and questions. I've got a few lines open. 800-525-7000. That's 800-525-7000.
You can call right now. Just before the break, we were talking to Karen in Chattanooga, Tennessee about required minimum distributions. But Karen, I know you said you had a second question related to charitable giving.
So go right ahead. Can I put that into charitable giving without paying taxes, and how does that work? Yeah, and we didn't hear the first part of what you said, but did you say a qualified charitable distribution? Yes, I believe that's the name of it. Yes, it is. The required minimum distribution to a qualified charitable.
Yeah, very good. So the qualified charitable distribution is the means by which you make a charitable contribution from a qualified account. So think IRA, 401k, which yes, you will have that required minimum distribution on April 1st of the year after you turn 73 and you're only 71 now. Now, the qualified charitable distribution becomes an option at age 70 even though you don't have that RMD until 73. Now, when you make the qualified charitable distribution, essentially you're making a gift from your IRA directly to a charity or ministry or your church, a 501c3 nonprofit.
Your custodian, whoever you get your statements from on your IRA, is the one that will send the money to the charity at your request once you complete the paperwork for the QCD. And when that happens, they get the full benefit of that money because it's not added to your adjusted gross income, which would be taxable as it would be if you were to take it out and the money were to come to you directly instead of the charity. Which is why it's such an effective tool because you get the money to the charity and you don't have to recognize it as income, which you normally would have.
And furthermore, to your point, once you have those RMDs, it also satisfies your required minimum distribution. So what a lot of folks will do is they will say, okay, I was actually going to do some giving out of cash, maybe cash in my checking or savings account to my favorite charity. I'm going to replace that with money in my IRA that I don't need and do the giving out of there, which essentially allows me to give the same amount and not recognize it as income. And then I just leave the money in my checking or savings that I was going to send. Or in other cases, you may use it as an additional giving opportunity.
But in either case, it's a really powerful tool. So Karen, thanks for your call today. Let's go to St. Louis. Hi, Joyce.
How can I help? Hi. Hi, Bob.
Thank you for taking our call. My husband is sitting here with me. My husband and I are both retired and soon to be ages 77 and 75. We're planning in two to three years to enter a retirement community. And we currently have about 90, well actually about 100,000 in our IRA and about 130,000 of equity in our home in a solid neighborhood, thankfully.
Our joint monthly retirement income is about $4,700. Questions are twofold. How should we handle these assets to gain and protect them while ensuring we have enough funds for an entrance fee of $200,000 and a monthly rent of $2,800 into this retirement community?
And when the time comes, can we transfer the current $100,000 in the IRA into this nonprofit church-based retirement community with this entrance fee I mentioned of $200,000 without having to pay the 10% IRA withdrawal fee? Hmm, yeah. Well, a couple of thoughts on that. Number one is, it sounds like that $4,700 a month, even today, is enough to cover your bills, correct? Yes. Okay, yeah, great. And the good news is when you're ready to move into the retirement community, which I think can be a great option, you're going to sell your home at that point, correct? That is correct.
Yeah. So you'd have $130,000 in equity or whatever it grows to between now and then, plus whatever the IRA grows to. Now, this is a little tricky on the entrance fee. You know, I don't think there's going to be a way because even though you said it's a nonprofit, you're obviously getting value from that. So you're not making a charitable contribution, you're buying in to this retirement community. So that's going to be a taxable event.
Now, it's not going to be a penalty. If you're over 59 and a half, you're able to take that money out without any penalty, but it will be added to your taxable income as it comes out of the IRA so that you can then, you know, add it to the equity coming out of the house to make that down payment, or at least buy in in full to that retirement community. So I think the thing for you to do is work with your advisor.
And if you don't have one, you can find a CKA on our website, faithfi.com. Work with your advisor to take a proactive approach to managing the IRA to protect it, but also grow it modestly, given the time horizon you have between now and when you're planning to pull the money out so you can buy in to the retirement community. Hopefully the house continues to grow in value and you're continuing to pay it down. So maybe we're a lot closer to the 200,000 that you need when that time comes. But to the extent some of the IRA needs to be used, that just needs to go in to the planning of how the investment allocation is put together. And then I would also work with your CPA on whatever amount has to come out of the IRA as to the timing on that, because you may want to pull it out, you know, whatever that amount is divided in two and take it out over two tax years, just to lessen the burden on that. The other consideration is, depending on what happens with the election, the Tax Cuts and Jobs Act expires in 2025. So those tax rates are probably going up.
So you're probably going to want to think about maybe pulling a portion of it out prior to the taxes increasing. I hope that helps you, Joyce, and gives you some good information. But I love the direction you guys are headed.
I think that makes a lot of sense. Thanks for your call today. Let's stay in Illinois and talk to Linda.
Go ahead. There's a lady in my church who has not been able to come to church unless she receives a ride because her car broke down and it cannot be repaired. She also has health issues and she brings her granddaughter who's eight years old to church. I have saved $1,000 to purchase a car for her. And I would like to know if you know of any organizations where I can find a good car for a low price. Hmm.
Yeah, it's a great question. You know, I might start Linda at your local church because if this is a church member, perhaps there's somebody in the church that wants to sell a car. The other options are just, you know, where you're going to find a car that, you know, you're going to have to pay a market price for. So you could look at Auto Trader or CarMax or Carvana.
You know, there's also newspaper ads, but you're not going to obviously get those for below market prices, which is why it probably started the local church. We appreciate your call today. Thanks for being on the program. Well, once again, our time went by way too fast, but tune in next time and we'll do it all over again. Before we go, I'd like to thank our incredible production team, Amy, Devin, Jim, Robert, Brandy, Rob, and Ben. Couldn't do it without them. Have a great rest of your day and I'll see you again next time for another edition of Faith and Finance. Faith and Finance is provided by Faith Buy and listeners like you.
