This faith and finance podcast is underwritten in part by Christian Healthcare Ministries. Are you finding it increasingly challenging to find affordable healthcare? Christian Healthcare Ministries is a budget-friendly, biblical, and compassionate healthcare cost-sharing alternative that aligns with your Christian values.
And it's available in all 50 states and around the world. Learn more at chministries.org slash faith buy. For Christian parents, the holiday season often feels like a whirlwind of materialism that leaves you wondering what happened to peace on earth?
Hi, I'm Rob West. In the midst of all the excitement and expectations, we often find ourselves missing the heart of Christmas, which is Jesus. Today we'll share a few suggestions for keeping Christ in the family Christmas. 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. Well, perhaps this has happened to you before when January rolls around, you're spent, both physically and financially. You wonder what happened to the wonder of Christmas and you promise that next year will be different. Well, next year is here and we're going to help you make this a fantastic Christ-centered celebration without any of the financial regrets. As in so many areas of life, parents have opportunities here to set an example.
Here are four ways you can do that. First, you can set a good example with your attitude. If you're frantic and rushed, your kids will be too. Theparentq.org suggests that you do one less thing this year. Choose one event to remove from the calendar and give yourself and your family some margin.
Let peace on earth be the motto in your home too. Second, parents can set a good example in the area of time management. Make family time a priority during the weeks leading up to Christmas. If you focus on shopping, decorating and holiday events, your kids will think those things are most important. So as December 25th approaches, back off a bit on the shopping and activities and leave an evening or two open just for family time. You could gather around the tree and read the Christmas story from the Gospel of Luke, do a Christmas craft together or make cookies. You could even start a new tradition this year.
Traditions make memories that last a lifetime. One of my favorites is the Jesse tree. You can make one with your kids to tell the story of God's redemption in the days leading to Christmas.
Go to faithword.org for daily Bible readings and printable ornaments for the Jesse tree. And here's another suggestion. Put the phones down. Challenge the whole family to put the devices away for a time. Be present with each other without the electronic distractions. Leave the phones at home when you go to church or out to dinner. Drop the devices in the glove box when you go to visit grandma.
It's a small thing, but it can mean a lot. Another way to build Christ-centered Christmas memories with the kids is to pray together. At bedtime, retell the story of each of your children's birth or arrival in the family.
Talk about the amazing story of Jesus' birth in a stable in Bethlehem and pray for other families who are welcoming children in the midst of unusual or difficult circumstances right now. The third way parents can set an example at Christmas is in the area of family finances. I know this is a tough one because there's a lot of pressure to spend money at this time of year, but when you stick to your budget, even during the holidays, your children will see your commitment to financial peace. By the way, it might help to talk to your kids about the family Christmas budget.
They need to understand that cash doesn't grow on Christmas trees. Put your heads together and come up with creative ways to celebrate Jesus inexpensively. Our final suggestion for setting the example for your kids during the Christmas season is probably the most important. Demonstrate generosity toward those less fortunate and invite your kids to participate.
Luke 19-10 reminds us that Jesus came to seek and save the lost. Let your children experience the joy of helping others. Here are a few ways you can give together, starting right now. Make Christmas cookies together and take them to the local police or fire station along with handmade Christmas cards. Leave bagged Christmas snacks and drinks at your doorstep for the delivery people who stop by.
Make a sign to say thank you. Sponsor a child together with Compassion International or World Vision. If you have older kids, make plans to volunteer at a local soup kitchen or ministry during the holiday break. Restore the peace of Christmas along with your family this year. Rest in God's presence.
Take time to remind yourself and the children in your life that there's so much to be thankful for. My prayer is that we'll all look forward to the coming of the Christ child with wonder and anticipation. As the prophet Isaiah foretold, the people who walked in darkness have seen a great light.
Those who live in a land of deep darkness, on them light has shined. All right, your calls are next. The number 800-525-7000. By the way, you can call that 24-7. 800-525-7000. I'm Rob West and this is Faith and Finance, biblical wisdom for your financial journey.
We'll be right back. What's most important to you when it comes to choosing your financial advisor? Someone who's aligned with your biblical values? How about someone who will take the time to explain your options? Certified Kingdom Advisors are professionals who meet high standards in competence and integrity and have been trained to offer biblical financial advice. To find a Certified Kingdom Advisor in your area, visit faithfi.com and click Find a CKA. Welcome back to Faith and Finance.
I'm Rob West. This is the program where the 2,300 verses on money and possessions found in God's word intersect with today's financial decisions and choices. The number to get in on the conversation, 800-525-7000.
That's 800-525-7000. By the way, Jeremy called and couldn't hold and he was wondering about where to get the best rate to buy a new home. Interest rates now, well, they were three years ago at 3%, now over 7.1, even though they ticked down in the last couple of weeks.
It's still important that you find a great mortgage provider to do business with. I'd like one that shares your values, which is why we've partnered with Movement Mortgage. You can learn more at movement.com forward slash faith.
That's movement.com forward slash faith. All right, let's go to the phones. Jeremy, excuse me, Jeff, you've been very patient in Indianapolis. Go ahead, sir. Hi there. I have a good situation. My wife and I inherited over a million dollars. We had close to a million in our retirement net worth with our home value, so like 750 in traditional IRAs or 401ks. We're sitting on this money.
We've let it pretty much reside where it was when we received it, but we've got about 400,000 in cash. We're wondering if we should try to make a move to Roth versus those traditional 401ks. Yeah, so you're talking about trying to convert some portion of the 750,000 in traditional?
Yes. Yeah, that would just add a huge tax liability unless you did it really slowly over time. I would question whether or not there's a benefit. Are you still working at this point or are you retired? Close to retirement.
My wife is fully retired. Okay, so you're still at the peak of your earning? Pretty much, yeah.
Yeah, okay. So I don't think you get a whole lot of benefit. I mean, your income is going to drop when you retire, and you'll have largely passive income coming in, interest income and dividends and capital gains. But your taxable income will drop significantly.
And so I think converting this and adding a huge amount to your adjusted gross income to pay that you'll pay income taxes on right now at the peak of your earning potential, I just think is counterproductive, especially when your tax marginal tax rates likely to fall in retirement, and you could pull it out and pay a lower tax rate at that point through the traditional IRA or 401k. Now, you could say, well, the Tax Cuts and Jobs Act is expiring in 2025, President Trump's tax cuts, and you're right, they are set to expire. There is still a question as to what administration will be in place when that happens and where are rates headed from here? Probably not lower.
I think at the very least they stay flat. They likely are headed higher, again, depending upon what, you know, who is in government. So but I think just given where you're at right now, still working, I don't like the idea of you, you know, having a huge amount added to your taxable income, which could very easily be pushed up that portion of it into a higher tax bracket.
So I kind of like the idea of you having, you know, the after tax bucket to pull from and the pre-tax, and then you can decide which one to pull from based on what's going on in the tax code and your income. I think the key is, I mean, it sounds like you guys have a million dollars in a taxable account. Is that just sitting in a savings account or is that still invested in the equities that you received in the inheritance or what? Yes, it is. It's mostly banking, which is frightful.
We were, we had two of the banks that failed. So that was a considerable loss. Oh, wow. Yeah. So kind of a scary situation to let it just remain where it is. But that's what we've selected to do. Yeah.
Well, I mean, obviously, you're sitting on a huge portfolio here. Are you making all the decisions yourself? No, no. Okay. So you have an advisor account? Yeah. Yeah. Okay.
Yeah. I mean, I think bottom line is I would have some really wise trusted counsel that's making the investment decisions for you. I'd make sure you're not highly concentrated in any one company or a couple of companies or even one sector.
As you said, you know, when you do that, you can have big losses like you had with these regional banks where the depositors were protected, the investors were not, of course. So make sure you're properly diversified. And, you know, given the significance of this portfolio in total, no reason to take unnecessary risk beyond what you feel the need to. I mean, this is ultimately a tool to accomplish God's purposes, whether that's giving. And I'd look at asset based giving, you know, as appropriate, especially where you have capital gains along the way. And you could make gifts to donor advised funds that allow you to do giving where you don't ever, you know, realize the capital gains on the sale if you have some profits along the way. So that's going to be a really effective strategy.
Our friends at ncfgiving.com can help you National Christian Foundation. But I think the big idea here is to get this into a portfolio that works for you all and fits with God's plan for this next season of life, which means don't take unnecessary risk. Maybe you're using CDs for part of it, you know, high quality government bonds for part of it. And yes, stocks, I think makes sense. Whether you're in their 60s or 70s, you still want probably, you know, as much as 3040, maybe even more than that percent in in stocks to overcome the effects of inflation. So you've got something to give away or pass on to the next steward. But I think at the end of the day, Jeff, I'd probably not at this point be a big fan of you converting it to a Roth.
You just don't have the time to realize the benefits. And I think you're in a higher tax bracket today than you will be down the road. Okay, thank you. All right. We appreciate your call to Florida. Hi, Marie. Go ahead. Hi, thank you for taking my call, and thank you for your ministry. We listen to you every chance we get.
Well, thank you. My question is, I'm retired and I am taking RMD. I am 10 years older than my husband.
I have always been self-managed in my account. And so for the past couple of years, I've been pulling some money out every single month. I was wondering, is it time for me to get a financial advisor because of tax complications, tax questions, where to take the money from first? Now, let me just say this, that my husband is younger than I am. He's 10 years younger than I am. He wants me to spend or take as much money as I can, because he says, just say you spend all your money, just say it was all gone. Well, then my retirement will come into effect. And he said, you should spend your money. You made it, you saved it, but spend your money, enjoy yourself, do what you want to do. So I'm thinking, well, it's an idea.
I never really thought of it like that. But am I ready for a tax advisor? And should I just take the money? Am I ready for a tax advisor? And should I just go ahead and take as much money as I can stand?
Yeah. Well, I think there's a lot there. I mean, it's always good to get wise counsel, whether it's for taxes or investments, which I know you said you've been managing yourself, but also somebody who's just objective, who could engage you and your husband in a process of thinking through why has God entrusted us with this money? What is the purpose of it? One of the purposes, because money is a gift from God, it's a blessing. He created it is to enjoy it. So I'm not opposed to that, but I also don't think he's given it to you just to spend frivolously. Now I'm not saying you're indicating you would, but it's worth thinking about and even praying about God, why have you entrusted this to us? What is the appropriate lifestyle you call me to? How much should I enjoy? And how much should I give away through a qualified charitable distribution?
You can meet that RMD and send it to ministry or charity and not ever pay taxes on it. So I like you getting an advisor here. Thanks for your call today. Well, we need to take a break. This is faith and finance.
We'll be back after this. We're grateful for support from movement mortgage who provides residential home loans in all 50 States guided by a mission to love and value people and a goal to redefine the mortgage process movement seeks to help others achieve their financial goals. You can find out more at movement.com slash faith movement mortgage LLC supports equal housing opportunity and MLS number 39179.
For licensing information, please visit NMLS consumer access.org. We're grateful for support from Eventide investments on the faith and finance program. Eventide approach to values-based investing is grounded in the belief that humankind was created in the image of God with intrinsic dignity, value, and worth. Eventide calls this investing that makes the world rejoice. More information is available at eventideinvestments.com. That's eventideinvestments.com. Welcome back to faith and finance.
I'm Rob West. The number to call is 800-525-7000. Now, before we get to your calls, I want you to know that Faithfi is here to help guide you with practical biblical wisdom and tools. From now through December 31st, we're offering the new book entitled Leverage Using Temporal Wealth for Eternal Gain with a Gift of Any Amount. Give that gift right now by going to faithfi.com. That's faithfi.com. To St. Charles.
Hi, Roberta, go ahead. Yes, I was wondering if it's possible to protect any inheritance you want to give your children from the nursing home? Yeah, so the only way to preserve, you're talking about your home in particular?
Yeah. Yeah, so the only way to do that would be to give it to your children and then not go into a nursing home for at least five years, which is the Medicaid look-back period. They won't take your house while you're still alive, but in most cases they will come after your assets once you pass away.
Now, there is a downside to that, and that is if you make this outright gift of your property to your kids now and you were to get past that five years, but then ultimately they sell it, then they have your basis for capital gains purposes, which means they could pay a lot more in taxes than if they inherited the property through your will or a trust or a transfer on death deed, because at that point they'd get the stepped up basis to the current market value as of the date of death as opposed to inheriting your cost basis, which is what determines capital gains. So you just have to consider all of that. And then also at the end of the day, I think you just have to establish your own conviction around this just in terms of whether or not that's appropriate for you to gift this to them, even though you're not intending for them to use it, only to be able to preserve that inheritance.
I'm not weighing in one way or the other on that. I think you just need to think and pray through that, whether that's what you want to do. But that would be the primary strategy you would need to look at. At the end of the day, though, I would probably get some legal counsel on this, whether it's an elder care attorney or an estate planning attorney can help you look at your whole estate, Roberta, just to make sure you're well planned and that you're preparing for that season of life where folks can need that type of assistance.
I would also recommend if you're between ages 55 and 65, that you consider long-term care insurance, which can be another way to offset that risk that you might have during this season. I hope that helps you. We appreciate your call today. Thanks for being on the program.
To Illinois. Hi, Gary. Thanks for your call.
How can we help? I'm 72. My wife's 69. I retired in May this year. We're kind of behind with things in our finances in the sense that we bought a house later in life. We still owe $75,000 on our mortgage, which will be at the current rate, a 15-year mortgage, and it'll expire in eight years from now. Given that I'm retired, I'm just wondering about the wisdom because I've heard you talk about it it's not a good idea when you're at this stage of life that you don't need insurance, so they get that. Since we've still got a $75,000 mortgage, if I died six months from now, my wife would still have $72,000 or $73,000 to owe or to pay on the mortgage. I'd like to minimize that risk to her, so I'm wondering about the wisdom of still carrying insurance for the next 10 years. Yeah, and when you pass away, if she still has the mortgage, what changes would take place in her income? Well, she's pretty close to where she's about a year away from retirement. Right, but I guess the question is, does anything change at your passing such that if she still had a mortgage, she would have a loss of income that would make it more difficult for her to pay the mortgage?
Yes. Okay, yeah, well the most cost-effective way to take care of that would in fact be through just a straight-term policy, not mortgage protection insurance where it drops over time because that tends to be more expensive, but just a straight-term policy for 10 years just to get you through the payoff of the mortgage. Maybe you split the difference and instead of paying off the whole thing, maybe you take care of half of it, something like that. Thanks for your call, Gary. Let's go to Akron, Ohio. Kelsey, you're next on the program.
Go ahead. I am getting married in December and my wedding is being paid for by my parents and my fiance owns a house. So with my current savings, I have over a hundred thousand dollars just in savings because I was planning on eventually getting a house, but I've been very blessed with getting a house and also getting my wedding paid for. I do contribute to retirement.
I have a traditional IRA and a Roth and I'm tithing and I'm just not sure where to go next with this money that I've been blessed with. Yeah, well that's a great problem to have. Well, first of all, congratulations on your upcoming wedding and I'm delighted to hear that mom and dad say, listen, we've got this covered and your future husband has a home. Does he have a mortgage on that house?
Yes, he does. A couple of things here as you're preparing for marriage, I mean, you all need to do a lot of talking and hopefully you're doing some premarital counseling, but as a part of that, or in addition to that, I would say, let's spend some time talking about money and how money was handled growing up for the two of you and was there an abundance or a surplus of money? Was money tight and how has that shaped how you handle money and view money? Also, how has God wired each of you?
Part of that has to do with your upbringing. Part of it is just God's, you know, handiwork and creating you and your personality and your temperaments and I think as you all talk about things like what lifestyle are we going to live? How much is enough both for accumulation and how much we spend on a monthly basis?
How much do we want to give? And how does that fit into our overall plan? I mean, really, these are values, questions and conversations that are informed ultimately by your faith and position in Christ and recognizing that God is our true abundance, not the things of this world.
And then, you know, where path does God have you on? And as you all bring your finances together, because to become one in marriage, including this area of finance, how do you all want to handle the money that God has entrusted to you as a married couple one flesh? And what are those priorities and goals driven by your values? And I think that will allow you to begin to craft some, you know, things that you're looking to do, including, you know, do we want to ultimately be debt free and pay off this mortgage? How much is enough to be saving for the future? I mean, you know, are you putting enough away for the long term for retirement? And if not, maybe you need to, you know, add a little bit more to that. Are there any other savings goals that you have? Do you want to do some more giving right now even beyond the tithe? Is God leading you all together, you know, once you're married to do some significant giving and maybe there's some projects or issues that are passions that you want to be able to support? So I think those are the kinds of questions you need to be asking. And that starts now, before you all get married as you think and pray through all this.
So hopefully that gives you some things to think about. Kelsey, stay on the line. I want to send you a copy of Howard Dayton's Money and Marriage God's Way for you all to read.
Well, that does it for us today. I'm Rob West. Thanks to our amazing production team and to you for listening. I hope you'll join us again next time, right here on Faith and Finance. Faith and Finance is provided by Faith By and listeners like you.
