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Learn more at chministries.org slash faithbuy. You may be one of those people who makes a list for everything, grocery, school, work, or packing for vacation. But even if lists aren't your thing, there is one list everybody needs.
Hi, I'm Rob West. Nobody wants bad things to happen, but it's smart to be prepared when they do. Today we'll tell you what information to collect in case of an emergency. And 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, accidents and natural disasters are always in the news, but we never really expect them to happen to us, do we? When a freak summer storm knocked out the power around here for many hours, most of us were completely taken by surprise.
You don't appreciate running water and electricity until you don't have them. Well, you may not live in an area that's prone to natural disasters or weird weather, but we still think it's smart to be ready for any kind of emergency, from car accidents to house fires or even the death of a family member. Being ready may be as simple as knowing where your important documents are.
We'll help you with that today. First, let's talk about those personal and financial documents. Keep the originals in a safe deposit box at your local bank or in a fireproof safe at home. Depending on your circumstances, you may need to keep certain documents with you, and you can store copies of other documents on a thumb drive or in the cloud. Family documents you need to keep handy but in a safe place are items that prove your identity and family status, including driver's licenses, birth certificates, social security cards, marriage, divorce and child custody papers, vaccination records, passports, military ID, adoption papers and citizenship papers.
Some of these can be digitized, but you need to have originals or certified copies of any document that verifies your identity. Other documents to locate and keep safe include tax, real estate and insurance documents. For example, you should have copies of the tax returns you filed over the past six or seven years.
Gather any real estate titles, including information about original cost, proof of improvements and depreciation taken if it's a business property. Make sure you also have access to the registrations and titles for any vehicles you own. You need to keep all insurance policies and contact information for your agents in a safe place as well. Once you have your identity documents together, as well as any tax, property and insurance information, it's time to gather your medical files. Medical information you'll need to have on hand includes medical history and prescription information, as well as medical plans for anyone in the family with a health condition that requires special care such as asthma or food allergies.
Have copies of your health insurance cards and health care provider contact information handy too. Living wills, health care directives and powers of attorney for health care are legal documents you will need in case you or someone in your family becomes incapacitated. Finally, let's look at what documents you'll need in the event of the death of a spouse or family member. Although we don't like to talk about it much, being prepared for your own death or the death of a loved one can make the grieving process much easier for survivors.
So here's some of the information you should have available. Title to a cemetery plot, if applicable, and funeral or burial instructions. A list of benefits expected on retirement or death of a spouse, including pension, military, social security and others. Location of safe deposit boxes, keys and passwords. A recent statement for each bank and investment account along with contact information related to each account. A copy of your wills and the location of the original along with the name and number of the attorney who prepared them.
Contact information for the family attorney, CPA, investment advisor and insurance agents and the names and addresses of family members and any others who might need to be notified. Of course, nobody wants to think about possible emergencies, but being prepared will make a difficult time less stressful for your family. Taking care of these details in advance is also a part of being a good steward of everything God has given you. Let me finish with a word of encouragement from Isaiah 41 10. Fear not, for I am with you.
Be not dismayed, for I am your God. I will strengthen you. I will help you.
I will uphold you with my righteous right hand. I hope this has been helpful and will take the stress out of an already difficult situation. All right, we're ready to take your calls and questions today. The number 800-525-7000.
That's 800-525-7000. I'm Rob West and this is Faith in Finance. Biblical wisdom for your financial journey.
Stay tuned. We know you've learned to be suspicious of those words, but really you can get biblical financial wisdom delivered to your inbox each week absolutely free. Articles, videos, podcasts, and special offers on biblical resources.
Nearly 60,000 people receive our free weekly wisdom email and you can too. Create your free faith buy account by going to faithbuy.com and click sign up to begin receiving weekly wisdom in your inbox. You're listening to Faith in Finance, where we talk about how to handle God's resources. So let me ask, how are you using God's resources? The book Leverage Using Temporal Wealth for Eternal Gain will help you think through giving to God's kingdom now and later.
And you can request your copy of Leverage with your gift of any amount at faithbuy.com. Now on to the calls. Remember the number to call is 800-525-7000. Let's head to Illinois. Lorenda, you'll be next on the program. Go ahead.
Hi Rob. I am in a pickle. I moved back to the Midwest to take care of a friend who had cancer and left everything, but of course your bills and your credit card debt follows you. So I went to credit counseling and they're taking care of that, but I took Social Security at 62 and to supplement my income I'm driving DoorDash so I can stay at the adjusted income of 18,000, which is the limit. But my children wanted me to get another job because DoorDash is real hard on your vehicle and it's kind of tough in the winter. So I got a full-time job. I start on Saturday and I turn 65 next year and I thought that the penalty ended at 65, but then a friend told me no, it stopped at 67. Can you help me?
Okay, yeah. It's 66 if you were born between 1943 and 1954 and then it gradually increases if you were born from 1955 to 1960 until it reaches age 67. So it's somewhere between 66 and 67. But essentially the way that penalty works, if you will, is that you can earn up to the amount that is for this year, which is $21,240. And if you're taking it prior to full retirement age, then for every dollar you earn above the limit, which again this year is 21,240, then they're going to take a dollar for every $2 you earn above that. And then in the year that you turn your full retirement age, they will deduct a dollar from every $3 above a higher limit only for that year where you turn full retirement age and that higher limit is 56,520.
So those are the two numbers. Now keep in mind that reduction, yes, it's going to reduce your benefit by a dollar for every $2 you earn 21,240 or in the year you turn full retirement age one for every $3 above 56,520. That will eventually be paid back to you in the form of a higher check once you reach full retirement age.
They'll determine how much was withheld and then they'll create a schedule to essentially increase your benefit amount so that over time that's fully repaid to you. Does that make sense? Yes, that does make sense and I'm glad I called you because people were telling me different things. Okay, well I hope that clears it up for you. Thanks for calling today, Lorenda, and all the best to you as you care for your family and try to make ends meet. I know it's not easy. God bless you.
To Tampa, Florida. Hi, Julio. Go right ahead. Hi, good afternoon, Mr.
Rob. How are you, sir? I'm doing well, thanks. Good. Listen, I have a couple of small 401ks, you know, maybe totaling roughly $40,000.
I'm looking to get it out of the market. It's the best place to put it. Is it in the U.S. savings bonds where it would, you know, be the most secure to earn a small amount of interest that I'm going to get? So you have money that's coming out of where? A 401k, did you say? Well, yeah, there's two small 401ks. I have one with Chase Bank and one with FRS and, you know, I want to put them with where the money is going to be being used by, you know, not let's say sex traffic or what, whatever.
I don't know what's going on with it. Not to mention, not to mention that I'm 63 years old and I'm going to be retiring in a few years. So yeah, I want to try to put it in not such a volatile market, if you will. Sure. And where is the rest of your retirement assets apart from these two small 401ks? That's it. That's it. That's all I have.
And what do you have in total? You know, maybe it may exceed a little over $40,000, you know, that's an approximate. Yeah, yeah. Well, and let me ask you this, are you going to begin when you retire drawing an income from this or is that just going to continue to grow? That's a good question. I actually haven't thought that through.
Okay. Yeah, so you need to consider that. Just look at what are my expenses going to be in retirement and where is that going to come from? You know, most folks live on 70 to 80% of their pre-retirement income because the house is paid off.
Hopefully the kids are off the payroll. If you have kids, maybe you're not buying as many work clothes or eating out, you know, at lunch. So, you know, your expenses go down. Maybe you drop your life insurance if you had some.
But we've got to figure out where that's going to come from. Is it coming from social security or social security plus an income stream from your retirement account? And you'd probably want to limit that to about 4% a year, which at $40,000, you know, we're talking $1,600 a year.
So, you know, that would ideally only throw off $130, $150 a month, something like that. I would typically advise someone, unless you just have a real conviction otherwise, to keep that invested. You know, so when you reach, let's say, $65, we would often say, you know, you should have probably 40 to 45% still in stocks and, you know, 55% or so in, you know, in bonds, 55 to 60% in bonds, which by the way, the bonds will do well as interest rates come down, which will probably start happening next year as we need to stimulate the economy and hopefully stocks will, you know, perform. And the key is that even though you're retired, if you're in good health and the Lord tarries, you need that money to last decades, you know, for maybe 30 years.
And so that gives you still that long time horizon where you could keep it invested. And to your point about, I don't want to be funding things that are misaligned with my values. Well, you could put that into some high quality faith-based investing mutual funds. You know, maybe you pick up the fund from like Gilead from the Eventide or Guidestone funds, or maybe, you know, One Ascent or Crossmark.
I mean, one of those that are specifically looking at a faith-based strategy to exclude companies that are misaligned with Christian values and embrace companies that are very much aligned with Christian values. So you can read more about those mutual funds on our website, faithfi.com. Now, if you said to me, Rob, I hear what you're saying, I just don't want to take any risk, I want to protect this money. Well, then I would say, let's, you know, put it in some CDs, some certificates of deposit, you're going to get five and a half percent right now for a one to two year CD, lock it up as long as you can. You know, as you get further out, it's actually going to come down the interest rate. But, you know, that would be the direction that I would go. And I would try to keep it in that tax deferred environment as long as you can.
Does that all make sense? So you think the CDs is a better place to put them than the US bonds? Well, you know, they're they're both back in terms of safety, they're both backed by the US government. And so if you wanted to buy individual bonds, you could certainly do that US US bonds, treasuries, you probably want to stay on the shorter end of the duration, though, just because you're going to get paid more.
But in terms of safety, they're the same. I've still got over four years before I can retire. So you know, I can't retire till I'm 67 and a half. Gotcha. Yeah.
Okay. You know, again, I'd probably keep this working for me and some good high quality, balanced mutual funds, bonds and stocks. But if you're looking just to be ultra safe, then you know, the US treasuries or, you know, looking at at CDs, I think either one of those would be great options. But just think about your need to keep this money growing for you so you can outpace inflation because you still love you know, if the Lord has more for you here, you got a long ways to go.
Hey, thanks for your call Julio. We'll be right back on faith and finance. We're grateful for support from Eventide Investments on the faith and finance program. Eventide's 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. Are you looking for a financial professional who aligns with your biblical values? Certified kingdom advisors are trusted financial, legal or accounting professionals who have completed a rigorous certification program to ensure they provide biblically wise financial advice as part of their practice.
You can find a local CKA professional in your area by going to faithbuy.com and clicking find a CKA. Welcome back to faith and finance. I'm Rob West, your host. In just a moment, we'll take your calls and questions on anything financial. We've got some lines open today, and we'd love to hear from you, whatever's on your mind. Here's the number, 800-525-7000. All right, let's head back to the phones to Palm Beach. Hi, Richard.
Go ahead, sir. Back in October, I talked to you about getting a lump sum from a settlement from disability and paid off all my bills that I'm debt-free. Now I got a problem. Me and my wife are going through a divorce, and she's got all our savings wrapped up in mutual funds. And I'm wondering in this divorce, when that gets diversified back to me, what could I do with it that I'm not hit with a heavy tax penalty on income? Yeah. What type of account is that?
And first of all, Richard, I'm so sorry to hear about that. What type of account is this? Is it a retirement account or is it a taxable account? Everything is in mutual funds and pre-tax going into it. So every time she takes the money out, she gets taxed on it. So it's like mutual funds and IRA. I mean, there's five different accounts you put it in.
Yeah. So typically what would happen is once the divorce is settled, they would just divide the assets to split them between the two accounts. How far are you away from this all being settled? It should have been settled back in February. But it hasn't yet?
It hasn't because she thinks all the money is 100% hardest. So we're about ready to go before a judge. And when it gets dabbled, she'll be crying. What you need to wait for there, Richard, is what's called a QDRO, a Qualified Domestic Relations Order. It's a decree or an order for a retirement plan to be transferred a portion of it or a specific amount to a spouse or a former spouse. And that's really going to give the specifics on what goes to whom. And then separate accounts will be created to receive those assets. And then at that point, you just need to decide, do I want to just leave this here and let it grow? And if it's a significant sum, then I would probably hire an advisor to take over management of it. You certainly wouldn't want to create a taxable event unnecessarily. I would rather you keep it right where it is and just let it continue to grow. My accountant says it's above her.
It's above what she knows how to do. Yeah, okay. Well, typically it would be a financial advisor and a wealth manager and investment advisor that would ultimately take over the management of that. So what I would do, Richard, is go ahead and establish a relationship with an advisor now so that once all this is settled and the assets are distributed, then you'd have already got that person in place to immediately evaluate what's there and then help you develop a plan moving forward based on your goals and objectives. So I'd head to our website, faithfi.com.
That's faithfi.com. And then click Find a CKA and interview a few Certified Kingdom Advisors there in Palm Beach. Find the one that's the best fit and then you'll be ready to go once this all goes down. I'm delighted to hear that you were able to get out of debt and we'll get you through this. I know you got a lot on your plate right now, but I think you'll feel a lot better when you have an advisor that you can trust that is ready to help you navigate all of this in the days ahead. Thanks for calling today.
Hi, Diane in Florida. Go right ahead. Hi, I'm 67 and back when I was 60, my plan was always to take my husband's Social Security and then when I turned 70 to go ahead and take my full Social Security. And then as far as I knew, they changed the rule and if you were born 54 or earlier, you could do that. But if you were born after 54, which I was born in 55, you couldn't do that anymore. So I have held off. I'm 67 now. I've held off all this time and not taken anything. I was waiting until 70. Yeah, and you're right to do that. And unfortunately, that is the rule. So if you didn't reach 62 by December 31, 2015, or as you said, if you weren't, if you were born after January 1, 1954, you can no longer claim the spousal benefits and then later switch to benefits based on your own work record.
That was a great thing. When we were talking to somebody earlier about this, we were in fact speaking with somebody who was born before January 1, 1954. But in your case, that would not be an option. Oh, okay. I thought I had messed up there. So I'm hanging in there.
I'm waiting until 70. Yeah. Yeah.
Well, that'll maximize what you're going to get and allow you to get the full benefit that you have coming your way based on your work record. Yep. So you're doing the right thing there, Diane. Thanks for checking with us, though. We appreciate it.
To Illinois. Hi, Pat. Go ahead. Oh, hi, Rob. I'm calling because I'm interested in securing a reverse mortgage for my condo.
And so two questions. Who should I talk to about this? And what are the things that I would need to be aware of? Yeah, so you know, I mean, the benefit here, Pat, is that it allows you to stay in your home and just tap into that equity to meet your expenses. So it can add to your retirement income, maybe pay help you pay off debt, you can, you know, leave your other retirement accounts alone, although I would try to minimize the amount you pull from the reverse mortgage. But for some folks, you know, apart from really significantly downsizing, it's really, you know, the only option now there are high upfront fees, which is why they're not my favorite way to go about this. I mean, you got the origination fees and the inch mortgage insurance premiums, you know, which can be up to 2% of the value of the home. So they're more expensive than other loan types.
origination fees can be six or $7,000. You know, you need to, you know, look at making sure you can keep the property taxes and insurance up because obviously you're responsible for that. And then it's going to leave less equity for your heirs. But obviously, your primary concern is funding your expenses.
So I imagine you're not terribly concerned about that at this point. So I think the thing to look for is somebody who really specializes in this. And you are going to want to shop have them shop it around for you and make sure you are, you know, minimizing those fees and expenses. So compare the various offers that you get, you know, assuming you've already looked at this, and there's not another way to solve for reducing your expenses or increasing your income without, you know, tapping your home equity, then that's what it's there, you know, and it to do and, you know, that can be a viable solution in terms of who to use. I don't have a referral source necessarily for that. So I'd probably, you know, see if there's a loan officer in your church or in your, you know, among your friend group and just see if they can give you a referral somebody that you trust, or that you know trusts can give you a referral to somebody who really specializes in reverse mortgages. That's what you're going to want to make sure you have just so they are well versed in all the ins and outs of these types of policies. They can keep the fees low and get you in the right product. Thanks for being on the program today. Well, folks, that's going to do it for us. I hope you'll make plans to join us again next time for another edition of Faith and Finance. Faith and Finance is provided by Faith Buy and listeners like you.
