The 5 D's of a Financial Reset with Sharon Epps

Kingdom Advisors equips Christian financial advisors to bring their faith into their practice with the industry-recognized Certified Kingdom Advisor designation. We bring those advisors together with other industry leaders to form a vibrant network. And through that network, we give them the resources, tools, and encouragement they need to serve clients like you, helping you align your values with your financial decisions and investments.

To learn more, visit KingdomAdvisors.com. Sharon Epps joins us today with some much-needed advice, the five D's of a financial reset. And then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is faith and finance, biblical wisdom for your financial journey. Well, I always love when Sharon Epps stops by.

She's president of Kingdom Advisors, and let me explain what that means. Part of her job is to advise the Christian financial advisors who give you advice. Sharon, great to have you back.

Glad to be back. I think we can all agree that managing our finances can be a challenge sometimes. Financial problems seem overwhelming, and so I'm looking forward to you sharing some thoughts on what we can do about it. Well, whether we're struggling with our finances, they're stable, or we even have a surplus, sometimes we just need a financial reset. Just like our computers need resetting occasionally to clear the cash and run more optimally, our finances can drift or creep out of order. The reset re-centers our minds and helps us focus on the spiritual priorities, and they're really the key to getting back on track. In fact, Romans 8-5 tells us exactly what our spiritual priorities should be. It reads, For those who live according to the flesh set their minds on the things of the flesh, but those who live according to the Spirit set their minds on the things of the Spirit. So we want to live according to the Spirit rather than the flesh, and to do so we need a mindset of surrender to God's ways, including how we handle our money.

That is so well said, Sharon. So let's unpack these five D's of financial reset. Where do we start? The first D is Define.

What does that mean? You should write out a standard of living statement. Define how you should live. What's your why? Your motivation must be deeper than just financial health.

That's too vague. What about the motivation of life and peace? In fact, John 10 says, The thief comes only to steal and kill and destroy. I came that they may have life and have it abundantly. And then 1 Timothy 6 17-19 reads, As for the rich in this present age, charge them not to be haughty, nor set their hopes on the uncertainty of riches, but on God, who richly provides us with everything to enjoy. They are to do good, to be rich in good deeds, to be generous and ready to share. Thus, storing up treasure for themselves is a good foundation for the future, so that they may take hold of that which is truly life.

It's a powerful verse, and that is a great foundation. Alright, the second D of our financial reset. Let's try declutter. Not just your desk area, but the whole house. Spend a weekend going room to room asking, Have I used this in the last year?

Is it still helpful to me? If not, sell it or better, give it away. Decluttering your house goes a long way to decluttering your life.

Now third is delay. Make what you might call an impulse list. Things that you want to buy, put the day's date on them and commit to waiting 30 days before buying an item. You'll probably discover you didn't really need or want the item after all.

I love it. Declutter is my love language, not necessarily delay, as you might imagine. Alright, I see the next D of our financial reset also involves 30 days. Tell us about it.

Yes, it's detect. Create a 30-day record of your spending and review your expenses. Now that's one thing that's gotten easier with technology since we rarely spend cash.

Just take a look at your bank and your credit card statements, all probably online. What would you change? And I have to give a shout out here for the FaithFi app. It combines all of our accounts in one place so Joel and I can use a single source to stay on the same page about our money.

I couldn't agree more. Julie and I use it the same way. Alright, what is the last D in our financial reset, Sharon?

Well, that would be decide. This is where you draw up or overhaul your spending and giving plans. Revamping your budget is a powerful reset experience. Check your priorities and decide where your money will go and be sure you make giving an important part of your plan as well.

Where can you make adjustments so that you can be generous with your church or other ministries that you're passionate about? Oh, this is so good, Sharon. You know, we all need a financial reset from time to time and you've given us some practical steps to do that. By the way, folks, you mentioned the FaithFi app.

It has a powerful feature where with one click of a button, you can reset the system and start over if you haven't been in in a few months. Sharon, thanks for stopping by. Always glad to be here. All right, folks, your calls are next. The number 800-525-7000.

That's 800-525-7000. I'm Rob West and we'll be right back. Stick around. 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. We are grateful for support from Praxis Mutual Funds. Praxis Mutual Funds has seven impact strategies that are designed to create positive real world change. More information is available at Praxismutualfunds.com. The fund's investment objectives, risks, charges and expenses are contained in the prospectus and summary prospectus. This and other information is available at praxismutualfunds.com. Investments involve risk.

Principal loss is possible. Foresight Fund Services LLC. This is Faith in Finance. My name is Rob West. I'm your host and we're thrilled you're along with us today. We want to help you answer the questions you have around financial stewardship today. And we've got two lines open, 800-525-7000. You can call right now. Let's begin today in Texas. Hi, Glenn. Go ahead, sir.

Hi, Rob. Thank you for taking my call. I really appreciate the financial advice, but also appreciate the biblical wisdom you apply to these situations. So thank you very much.

I appreciate that. So my dilemma is this. I've been working with a primary advisor who has been very helpful over the years, but I got a second advisor that came along. The second advisor suggested that I'm going to retire in a couple of years. I would defer my Social Security until 67 and then started at that point.

The other advisor, which I've been working for longer, said, no, what you want to do is take your Social Security right away because you don't want to start reducing your 401 principle, which, you know, if you did it for two years at a $70,000 per year budget, you'd be basically taking away $140,000 of your 401 plan when you could be basically taking that money directly from Social Security instead. Yeah, it does. Yeah. So what is the balance in your 401k, roughly? Over a million. Okay.

So call it 1.1 maybe? Yes, sir. Okay.

And what do you need to pull per year if you don't take Social Security? $70,000. $70,000. Okay.

Yeah. And so what he's saying is you'd take, you know, you'd have to take $140,000 of that, which, you know, normally we would say let's try to limit that to, you know, 4% a year. It sounds like you'd be taking, you know, more like 7% a year, maybe a little less than that, 6.5%, just for two years, though. And then based on the Social Security you'd receive, so two years would get you to full retirement age, is that right? Well, that's getting to 67. So basically it would be a difference of about 500 a month. So what I did is I took the 140 and divided it by 500 a month, came out to like 24 years, right? So I was thinking, well, maybe it is better to take the money to take Social Security now, you know, when I retire versus waiting the two years. Yeah, yeah.

I just wanted to get your thoughts on that. Yeah, no, it's a good question. Yeah, so I think the question is, now, if you get there, you said you get an extra 500 a month, you know, how has that portfolio been doing? Is it, what is it invested in? It's diversified.

Yeah, it's in different accounts. So I'd say it's pretty much overall balanced. So it's pulling in maybe like a, depending upon the year, 6 to 8% a year it's been doing. He's forecasting that it's going to be less, you know, in the next 10 years.

Okay, yeah, very good. Less than 6%, yeah. Okay, and then what would you need to pull out of it once you start collecting Social Security if you do wait and get the full retirement benefit two years from now?

I would probably be maybe 4K a year out of the 401 to get to the, I'm sorry, 4K per month to get to the, you know, the 70, just planning the budget for 70K a year. Okay, got it. Well, you know, here's the reality is, I mean, we're in a, I mean, we don't want to try to predict where the market's going from here.

That's a losing proposition. But what we do know is that the market is very high right now. We know that the economy is slowing.

There is a question as to where the, you know, whether the Fed is going to be able to engineer this soft landing or we're going to slip into a recession. I think, you know, the reality is we know we're going to get that guaranteed increase of 8% a year on the Social Security. And so given that we're just talking about 24 months, I kind of like the idea of locking in that higher check for the rest of your life, even though it does require for you to take a little bit more. I mean, even if you started taking Social Security right now, you would still be pulling something from the 401K.

So it's really just the difference, which is about, it sounds like about half of what you'd be pulling out, you'd be able to, you'd have to take anyway. So we're talking about taking an extra maybe 70K total, 35,000 a year is what I'm guessing. And, you know, in exchange for being able to get that guaranteed increase of 8% and an extra 500 a month for the rest of your life.

And if you're in good health and longevity is on your side, obviously none of us know the day or the hour the Lord is going to call us home. But I think this idea that, you know, with the prospect of a recession, we're, you know, up here at a pretty high watermark, we've got, you know, low taxes right now. And there's uncertainty about, you know, what's going to happen with the election and whether or not the Trump Tax Cuts and Jobs Act will, in fact, expire in the end of 2025 or whether we'll stay here. You know, I think all of that for me says, let's go ahead and hold off on Social Security and take that higher amount, because it's not like, you know, you'd be able to eliminate it completely. You're still going to be pulling a good bit about out every year starting right away, even if you take the Social Security check. So I would probably although I, you know, I could go either way. I mean, you know, because there's there are some unknowns and we're going to have to just kind of make a decision on this. I kind of like the idea of recognizing we've had good growth in the 401k.

Let's go ahead and start pulling from that and let the Social Security continue to grow, not necessarily to age 70, but at least until that full retirement age benefit. Gotcha. Okay. Appreciate that. God bless you, Glenn. All the best to you in this next season of life.

And I'm sure God has a lot in store for you. Eight hundred, five, two, five, seven thousand to Virginia. Hi, Ann. Go ahead. Hi. I recently got a letter from the IRS that I have a retirement fund in another state.

I completely forgot about it. I've lived in several states. I tried to reach out to the employment, the business. They gave me a number to call. They said they don't handle it. They gave me another number to call.

I've called like three or four numbers and I can't locate my account. Should I be concerned about that or since the IRS got the letter, will they just handle that for me? Yeah. The question, I guess the first question is, who's the letter from? Is it coming from the IRS? Yes. They said that it had been filed with them.

Okay. What had been filed with them? A 1099? My employer said that I had a retirement fund. I see. A 1099.

And are they saying taxes are due for gains or something? No. It was like an acknowledgement letter that they had received a 1099 from this employment for a retirement fund of this amount.

Got it. And you're familiar, obviously, with the employer that this would be coming from? Is that right? It's one of your previous employers? Yes.

Yes. And did you reach out to the HR department or the plant administrator from that employee to try to chase it down? I did. And they gave me a number, said it was located in another city. And I called there and they said, no, we don't handle that here. And they gave me another number and I called that number. No, we don't handle retirement funds here.

I can't seem to find out who handles these accounts. Yeah. Yeah.

No, I can understand your frustration there. I would go back to the company that you worked for in that HR department. I mean, they've got undoubtedly I mean, they deal with this every day. And even though this may be a previous plant administrator, everything should have been rolled forward to that new plant administrator. And they should be able to tell you very quickly who to contact that handles their retirement accounts. Now, I mean, there is a national registry of unclaimed retirement benefits. You could do a search for that, but that's going to take you a bit on a somewhat of a wild goose chase. It's unclaimed retirement benefits dot com.

I mean, you could do a quick search there and just see what comes up. But I would really press this with your former employer and say, listen, I've got an old account there. I need to get that rolled out to an IRA and I need you to help me. And the number that you're giving me is the person is telling me they can't help me. So I need you to help me to get to the right person because they should be the one to help you navigate this. You shouldn't be kind of left out there to your own devices. So, again, unclaimed retirement benefits dot com.

But I would really press the issue with your previous employer and you're going to get there. Hang in there. We appreciate your call.

A quick break and back with more after this. Stay with us, folks. They're distributed by four side funds distributors, LLC, which is not an advisory affiliate, a registered investment advisor, nor do they provide investment advice. Are you a financial advisor or CPA seeking to build your practice on biblical wisdom? Not only does the certified kingdom advisor education provide you with deep biblical insights, the CKA designation sets you apart. Each year, almost 50000 people search for a Christian financial advisor. Join our community and share your expertise with clients looking for someone who shares their faith and values.

Find more information at Kingdom Advisors dot com slash get certified. Thanks for joining us today on faith and finance for taking your calls and questions today. Let's head right back to the phones.

Holland, Michigan is where we're headed. Dave, go ahead, sir. Thank you, Rob. Thanks for taking my call. I have a question about reverse mortgages.

All right. My wife and I, I'm 65. My wife is 66. She does not work anymore and has taken her Social Security at 62.

I won't take mine till 67. We just bought a condo four months ago for two hundred eighty thousand. It's probably worth three hundred thousand and we financed 80 plan on staying there forever and wanted a reverse mortgage on the 80 was a smart idea.

Yeah, it could be. I mean, so essentially what that would do is eliminate the monthly payments on that eighty thousand. Are you having trouble making those or could you use that money kind of in your budget or things tight? Yeah, no, it's just we don't have a tremendous amount set aside for retirement, but we should be able to make it on Social Security. And that just wanted to saving the interest of all those payments or what the interest on a reverse mortgage would be.

It's still none of them have an interest in the family when we're done with it. Yeah. Oh, yeah.

Yeah. So the the interest on the reverse mortgage would be similar to the current interest rates now. So right now, around seven percent, there would be an additional fee up front, which is what pays the FHA insurance, which ensures that you would never owe more than the house is worth.

So you're not personally obligating yourself. It's non-recourse debt with a home equity conversion mortgage or a reverse mortgage. But there's a two percent charge on the loan value right up front.

So that would be on eighty thousand. You know, you'd have sixteen hundred for that insurance and then you'd have the closing costs. And then you'd have the interest, which would be similar to the prevailing rate right now. And then that eighty thousand, if you didn't pay it back, which you'd be able to at the reverse mortgage, there's no prepayment penalty. You just don't have to make a payment. The balance plus the fees and the interest would just grow over time.

And then it's your death. Or if you all ever sold the condo, it would be paid back and then whatever remains by way of equity in the condo would be distributed to your heirs. So I think the only reason why you would want to do it is if money was tight.

You know, so, for instance, if at least between now and when your wife starts taking hers, you could let that continue to grow. And then you could, you know, at least eliminate your mortgage payment between now and then. So for the next, let's say, five years or so, you know, you all would no longer have a mortgage payment and that would obviously create more cash flow for you to meet your obligations. And then at that point, when you have her social security, you could start paying some back or you could just, again, just let it ride. And then whatever that balance is at your death would be paid back out of the sale of the home. Does that make sense?

Yeah, it does. So we have to try to calculate what that balance would be at the end. It would never be more than what the condos were.

Exactly. So, I mean, the worst case scenario is there's nothing left because, you know, although I will say, if you're only borrowing $80,000 and you're not going to take any more, I mean, you could not only cover the $80,000, but you could also get an income stream beyond that for the rest of your life. But if all you did was borrow the $80,000 and it's growing at 7% or whatever the rates are going to be because they're variable, so they'll come down as rates come down, your condo is going to continue to appreciate. So there would be some equity there at death that would then, again, be paid out to the kids. But the kids don't want the condo. You know, that may not be a concern.

What may be a bigger concern to you right now is just having a little bit more flexibility in your financial life and eliminating that mortgage payment would certainly do that. Right. And where did I get my insurance sent to me?

Yeah. So two things I can do. One is if you stay on the line, I'll send you a book called Understanding Reverse, which is just a really helpful, easy read on understanding what reverse mortgages are. That'll be our gift to you. And then if you want to talk to somebody, I'd reach out to our friends at Movement Mortgage. They've been a partner of ours. They're trusted, run by godly individuals that are Christ followers. And the person who oversees their reverse mortgage department, Harlan Akla, who joins us regularly on this broadcast, is just a delight to talk to.

And he could answer all of your questions. Just go to movement.com slash faith. That's movement.com slash faith.

And you can put your information in there. Very good. Thank you very much. Stay on the line. You're welcome. We'll get that book right out to you, Dave.

God bless you, sir. Let's head to Texas for our final caller. Vicki, go right ahead.

Yes, Harlan. I had some money that my mother left me after she passed away this last fall. And I'm trying to figure out where's the best way to find the best CD rates so that I can invest some of that money.

Yeah. I would direct you to bankrate.com. Bankrate.com.

And when you get to the homepage, just click on CDs right there on the front page. And what you will see is the list of banks that have the most attractive rates today. So this changes every day. And they also will prioritize those that are five star rated. So they have their own rating system, you know, one to five. And, you know, it's an independent site.

So they're not, you know, getting paid to put these banks on there. And, you know, what you will see is, depending on how long you're looking to go out, you know, for instance, if you're looking for a one year CD today, you know, you'll find that you can get about five percent, a little over five percent with a five star rated bank. If you go a little shorter than that, you can do better than five percent. And if you go longer, like, for instance, if you wanted to go out to maybe two years, then, you know, you'll find something at maybe four point seven five, probably the most attractive rates. It's likely going to be an online bank, Vicki.

But that would be where I would start to begin doing your homework. So is it better to play the game of just short term and then keep re re-upping, you know, six months and then do another six months, that kind of a thing so I can get more interest rate? No, I mean, I'd probably if this is money you don't need for the foreseeable future, I'd probably try to push it out just because, you know, that would be, you know, we think rates are going to start coming down at some point this year and they certainly will next year. And so going ahead and getting the next couple of years, even at four and three quarters, I think is worth it. Because, you know, if you do six months or a year, you're only going to get another quarter of a point.

But you may find that six months from now, you know, you're only finding things in the threes or the low fours. And so I think getting a couple of years at four seven five is probably your best option. And you may be able to find something better even locally.

So you could look at that as well. And that would be on bank rate as well? A local? No, I think you'd probably want to look around maybe at a local credit union or something. Bank rate is just going to have, you know, you won't be able to search locally.

You just look at national options. Right. OK. OK. All right. Well, thank you. I appreciate that. You are very welcome. May the Lord bless you. Thanks for being on the program today.

Well, folks, that's going to do it for us today. Always a joy to talk to you, to hear your stories, to be able to share biblical counsel on managing God's money. Hey, if you haven't checked out our new study, Rich Toward God, it's available on our website, faithfi.com. It's a perfect resource for a small group to unpack this really profound and powerful parable in God's word.

Found in Luke 12 that finishes with this idea of what does it mean to live rich toward God? Hey, let me invite you to be a monthly partner of ours here at FaithFi as a listener supported ministry. We can't do this without you. You can learn more at faithfi.com slash give. That's faithfi.com slash give. Thanks to my team today, Robert Youngblood, Jim Henry, Devin Patrick and the entire team here at FaithFi.

I can't do it without them. We'll see you next time. In the meantime, may the Lord bless you. Bye bye. Faith and Finance is provided by FaithFi and listeners like you.