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The Connection of Love & Money: IRA’s

Finishing Well / Hans Scheil
The Truth Network Radio
January 12, 2019 8:30 am

The Connection of Love & Money: IRA’s

Finishing Well / Hans Scheil

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January 12, 2019 8:30 am

We have been doing Finishing Well for a year! Thanks for joining us on this journey!


This week, Hans and Robby discuss IRA’s. The original idea behind money is that it is supposed to serve as a servant, for your family and for the kingdom; is your money doing this?


We can show love through our money. Just like in Matthew 25:18, God will reward those who bring back more and chastise those who dig a hole in the ground and hide their money.


IRAs were not created to accumulate money and leave it all to your children. They were created to replace the pension, which allows the postponement of  taxes. There are rules and laws limiting how long you can postpone though, which comes in the form of RMDs, or required minimum distributions. There is only one way to get money out of an IRA (which is not a Roth) and not pay taxes: a QCD.


QCDs, or Qualified Charitable Distributions, are a direct transfer of IRA money to a charity, such as a Church, which satisfy RMD requirements and are tax-free. There is a max of $100,000 per year per person, but this strategy can be used with much less money.


Hans then tells a story about a client he met 5 years ago when he was turning 65. The client, John, came to Hans for a Medicare supplement, but Hans immediately began helping him plan for his required minimum distributions, which start at 70 ½. At this time, Hans set him up with an annuity funded by IRA money. He put in $170,000, and now it is worth about $213,000. While this might not seem like a great return, during these 5 years, John was guaranteed that he would never lose money.  He also has guaranteed payments for life. Now, his wife and him are taking annuity payments and donating $5,000/year. This money satisfies his RMD but he does not have to take taxes out.


This annuity also has the added benefit of long term care coverage. If John or his wife needed this care, their yearly payment would double for up to 5 years to cover the cost of this care.


This can be a complicated process, do not try this at home. If everything is not in line in regards to the IRS, there could be consequences, including extra taxes.

Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on for free!


You can contact Hans and Cardinal by emailing or calling 919-535-8261. Learn more at


Finishing Well
Hans Scheil
If Not For God
Mike Zwick
If Not For God
Mike Zwick
Finishing Well
Hans Scheil
Rob West and Steve Moore
Finishing Well
Hans Scheil

Welcome to finishing well brought to you by certified financial planner belongs child best-selling author and financial planner helping families finish well over 40 years of finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started with finishing well today on finishing well, sort of a new year, Hans know where were celebrating anniversaries sorts right. This is our full year that we've been we've been doing the show. So I think it's kinda cool, the today show is very intriguing to me and in looking at the word money from the Hebrew standpoint of the word money. If you look inside it. It's it's almost the same word a silver with Hebrew and so what does that mean you know if you dig down into the root of that word, and look at the letters that actually make up the word. And as I've been studying that I can see that the originally idea behind money is. It's a servant and and it takes great humility and service you know in order to understand that word. And do we think of our money as a servant and there's a great connection to love and money and I love you've ever made this connection, but when you love your wife. You have a tendency to give her jewelry and that jury tends to be silver which again this has to do with money and so how do we love through the use of money when we look at it as not only a servant but as tremendous potential.

Think about it how Jesus talked about it in the servant of the talent that these guys all had a certain amount of money they were given the one that got all the flak buried hologram in the ground and when I think of these distributions on IRAs. I can't help but see, it's a similar thing. How you love your family here.

How are you gonna you know love the kingdom of God. If you're just taken the minimum distribution so you just people. The IRAs were not created to just accumulate money and then try to keep it all in their and then leave it to your children and the IRAs were created really, and replacement of the pension so they were created were you would have a defined contribution plan, you would get the benefit of the investment earnings you could avoid or postpone taxes for the two you draw money out that there's rules and laws in there that if you postpone it to longer you get to age 70. Now you gotta take this minimum amount if that's all you ever take out your IRA even if you don't know whether you needed or not you can earn money on it. Most years and so you can have a big pot of money at the end of your life that is going to go to your heirs in there and have a big tax problem right and and and more than that it was never used. To love well either your self, your wife or or your children because they ended up with the tax benefit, not what you thought was justice a statement realize that there can have to deal with the tax deal with that. So especially as the tax laws of change. This year there some questions that we have seen, right at the end of the year that would clearly indicate that people do not understanding you will yes assist so so let's talk. And really, the shows can be about today is to CDs which is a qualified charitable distribution and many of you that listen regularly have heard us talk about these over and over again and where this is so important and it's so important for the kingdom.

Yes, what to CD is is a qualified charitable distribution so it is really the only way you're going to get money out of an IRA providing is not a Roth is the only way to take money out of an IRA that you never pay taxes.

Now that's worth repeating it in less you talk about a Roth IRA. A traditional IRA. The only way you're gonna get money out of those now days with the new tax laws is through a QCD but it's been that way all along is the monies gotta come out of their at some point I either before or after you die.

Somebody's going to have to pay taxes. So any distribution in the exception is going to be when the money is donated to a charity goes directly to the charity and could be the church. It could be missions or could be any charitable charity that qualifies as a charitable deduction, a 501(c)(3), yet essentially insert it's going to. The money has to come directly from the IRA and go directly to the charitable organization and when that happens it never shows up on your tax return because we don't pay taxes, they say, why would I want to give my IRA money away.

I need that for me to live with you needed for you to live, then take it that I'm a tell you a lot of seniors.

This is why they have trouble with minimum distribution same get angry about this and I don't need the money to live. And yet the government is making me take this money out and pay taxes on. This is not fair of me. I hear that a lot or some version of that and this is something that's been around for about 10 years and you have to be 70 1/2 or older. Right in order to qualify to do this if you're younger than that. You can't do it. QCD this year. You have to wait till your 70 1/2 that if you or your spouse is there, you can give up to $100,000 of your IRA to a charity to the church commissions to whomever you choose.

Jazz is labor the shameless plug where you go $100,000 maximum in a year per person per if you have a couple in the husband and wife may both of IRAs, most of you are can be given away hundred thousand dollars a year, but that's the And it counts as a minimum distribution. So let's make this a little more real than we talking about an example. Later where this gentleman is been a client for five years is going to begin drawing out of his IRA. $15,000 a year which he doesn't need these can be paying about 5 to 6 grand in income taxes on that 15 variances can be left with nine grand that he doesn't really need date and he on the other hand, is donating to his church out of his other money or his income in his wife or donating about $5000 a year and they're not getting released.

They want this year get a tax deduction for this because of the new tax law and the $24,000 standard deduction's is a lot of people that used itemized that I could be itemizing anymore and so therefore they're not can be really getting a tax deduction for all their tithing and giving money that their Pena right so you don't get the deduction.

However, if you took it as a QCD and and took in converted your charitable giving out of your IRA to the church, then you're not paying income tax on that money coming out of the IRA. Yeah and what what I'm advising my client John to do this 15 grand were going to talk about it a little bit in the second half of the show at Raquel's passion and but what I'm going to advise him to do. At the very least, is to take 10 grand that he pays taxes on and then he'll probably have 3030 500 bucks and taxes will net about 6500 bucks for himself and to take five grand.

Of the 15 grand distribution just donated directly to who is already donating okay and so that's going to lower his tax bill keep his giving the same and these can be a happy camper. Plus reaches a minimum distribution that is the how would have to have done anyway so we didn't want to pause for a minute and mentioned that you're listening to the finishing well, a certified financial planner Hans which is brought you we always want to point out by cardinal don't forget the guide and they got up at cardinal, then and if you go to cardinal there you can find the seven worries that right Hans and they can get this book of the chapter on IRAs absolutely free, thereby go Encarta look on the seven worries tab and go to IRAs and their you can download a PDF of the entire chapter of the book or the workbook exactly the end, you know, women, and is it cardinal only do a blog post about the article that really gave us the idea for the show talking about you CDs again for mid slot and it slot is in my book. I make a lot of reference to basically dedicate the whole chapter because most of what I've written in the cardinal guide is come from what I've learned in the ad slot program and he wrote this article about urine Q CDs animal do a blog post about it on cardinal talk about a little bit here and what it really was.

He was just hit by so many questions during December of people like what is this how much can I do what can I do in my thinking is number one is. Let's not put off minimum distributions until December so you can take your minimum distribution or your distribution is larger than the minimum you can do that anytime during the year you're over 70 1/2 I can like January and a lot of people my reasons, I like January is now I know I got it done.

I've met the rules and I'm done.

You put it off till December.

Sometimes it can be a crunch time to actually get the money out of the financial institution so I like January. I also like that that money is available to either you or you know your charity of working to do this you can do these things in January and so she wrote this whole article that just outlines some of the rules and regulations and answered questions about how much you can deduct when you can deduct it, which you can deduct it from and I think that's all fine and good but the thing I got out of this is let let's go ahead and get on the 2019 required minimum distribution list.

Go ahead and get on that now and the beginning of the year yeah and you can see by the Florida questions.

Having read the article that wow all of a sudden, with the difference in the tax law you know people are looking for in a new answers with the situation and so here we are well we are got a whole show on love and money. How can you love well with the potential of your IRA. All that silver and gold that you been storing up over the years.

When we come back got a story, and how that may work how it may work for you in your life on financial planner Hans Schild you don't forget cardinal guide. Hans and I would love to take our show on the road to your church, Sunday school, Christian or civic group.

Here's a chance for you to advance the kingdom through financial resources and leveraging Hans expertise and qualified charitable contributions veterans aid and attendance IRA Social Security care and long-term care. Just go to cardinal and contact Tom to schedule a live recording of finishing well at your church Christian or civic group contact Tom cardinal that's cardinal welcome back to finishing well 2019, etc. today's show on the connection between love and money what God intended originally for money and its potential in and not only that, but you know how you love your family well through money and in why was Jesus so hard on the guy who buried it. You know in the ground, which you know when I think about these menaced minimum distributions and we been talk about that on IRAs today and Q CDs and constantly left her hero, you were describing exactly what that connection. Yeah. So a Q CD is a qualified charitable distribution in what amounts to is as if you're over 70 1/2 or your spouse's that you can give any amount that in your IRA up to $100,000 to the church or to missions or to any other deductible clause that you find appropriate up to hundred thousand dollars in the year so you can effectively take your required minimum distribution RMD and you can give it away and benefit the kingdom. Okay, so people say well that's a whole lot like why would I want to give it away. I need that to live off of. Well, if you need it so bad to live off of. You wouldn't put off till age 70 start taken these required minimum distributions son.

I can tell you what to do with your money under Skinner make you aware of a way that you can give money to the church and really lower your tax bill at the same time. So that's what they are and we wanted to talk specifically about a client that I just work with this. Just coming into this so this is a gentleman John that I met five years ago. He was turning 65. We meet so many of our clients when they're buying a Medicare supplement insurance policy from us when they're turning 65 in then immediately we start planning for age 70 with their IRA and their income and many people start making distributions right at 65 because I'm a big believer in starting to draw down your balance of your IRA as soon as you can. Once you're retired, saving later tax problems, but in any case, this gentleman John he just reached age 70. This was five years ago just reaching age 70 seasons turn 70 1/2 this year he's gotta make a required minimum distribution and he can do it this year as a Q CD because he is over 70 1/2 during at some point during the year so anyhow that's a bunch of gobbledygook. What he did is he purchased an annuity from me five years ago and I recommended this particular annuity because it looked to me like it would give them the largest income starting at age 70 and that income would continue for the rest of his life and it was very it was fun to sit down with him this week working on the forward I know at others.

Lots of folks out there who have listed our show all year and would as soon as you were the use the word annuity. They all went well.

What the world eat at Esther and so much as the ignorant person in the group air and annuity. While I I'd I learned just the last show that Social Security, in itself, sort of an annuity, but can you describe for list. Is it just him and maybe for the first time when the world is an annuity annuity is generally from an insurance company where you take a hunk of money you deposit with the insurance company pay a premium and you have an account with that money sits in the account and it grows until you start taking what keeps going after that, but it grows for the life of the policy and then at some point in the future, or sometimes immediately.

In this case it was at some point in the future you start taking an income and then alike so security put money in all your life and then at age 65 3/4 or whatever age you finally get it. All of a sudden this starts providing an income and net income is guaranteed for life. It doesn't matter how long you live. You're going to keep pitching in this guy's case guarantee is for both he and his wife for their life by content so carrying on. I just want to make sure everybody is on the same page and it's also an IRA so this is an IRA anew, so an annuity is an acceptable and acceptable acceptable receptacle so that annuity you can open an annuity account, annuity IRA, but IRA money. That's exactly what we did five years so that hundred and $70,000 grew to wear today.

It's $213,000 value that's in the area of cash money, you say well it's not that great of return over five years and it's not so for the fact that this thing had a guarantee from year to year to year that he could never lose money on, and so when you start comparing it in that sense it was between four and 5% return on his basic money now.

It also has another set of values that's calculating this far in excess of the 213,000 and those values are not cash that you can go dry out simply a number that we used to calculate the guaranteed income for life and so he just decided to exercise that in the guaranteed income for him, for he and his wife $15,000 and some change per year is guaranteed to come from the insurance. One of them lives to 100 or hundred and 10, at 15 grand is going to be coming in every single year to the second one of the guys and there's a huge advantage to refund me long-term care yet. So if either one of them needs long-term care can only use this benefit one's the 15 grand will double for that year. Go to 30. And it'll stay at 30 grand for up to five years. So in other words, if you needed long-term care that you got some additional money coming in to pay for that and then if the person passes away, then the other one still alive. It'll just go back down to the 15 grand and then the 15 grandma keep coming in for the rest of the survivors like allowing another question yeah I think that's the effect of the staffed public so if it's an IRA and it's also an annuity he's getting this income.

He put money in that wasn't tax Tyson was this a Roth known iron out. This was in fact this is a traditional Ira traditional Isley puts his non-taxed income into this annuity when he gets this income out is that tax yes okay yeah it's taxable.

It also meets because it's a lifetime income he's met his required minimum distribution as this is his only IRA. That's another advantage for taking the income now is by turning that on and having it paid over his wife's in his lifetime to the survivor as well.

That meets all required minimum distribution. So he just had very bad eyes and I wonder if you see, I had asked you not based on we talk to social about two CDs can he take that income right that this would be taxable and do a Q CD with that money coming out of the annuity he can do that year by year. It is choice and he can even do a partial one so we can we can have them receive half of it which is taxable to him and half of it go to his church. He could take five Brandon given to his church keep 10 grand for him so he was a tither and he was tithing say $8000 a year, and his goodness $15,000 a year income that essentially he can take that a grand is a Q CD and now is taxable income goes down to seven is taxable income from the IRA goes down to seven while yeah me it's it's it's it it really is anybody that's over 70 that has IRA money needs to shift their charitable giving from their regular checking account in their regular funds over to this Q CD system pretty much universal and given out that absolute advice so I don't really want anybody acting on that but I'm doing it for a point you definitely take a look at this.

Of those, if you're over 70 1/2. Your parents are over 70 1/2 still have money in an IRA there facing required minimum distributions and their giving to the church for their tithing on a regular basis or even if there'd been giving his mother charity like the Jesus labor love or are may be the number harvest food bank or anyplace like that that your given money to those are all 501(c)(3)'s and they will qualify now word of caution were back to the excellent memo that we were article that we were talking about this all needs. You need to doubt your eyes and pressure tease with the IRS and 1099.

Needs to be filled out certain way. Money has to go directly from the IRA to the charity so don't be trying this at home were you just read step guide anybody that wants to talk to me about it. I'll be glad your personal giving my phone number.

I promise I will try to sell you anything. Be glad to help people out, especially if you're given the money to some benefit. The kingdom I and in their gets back to the original thing were talking about that here. Since this wonderful potential for the kingdom and so many different ways that that God's provided to me and we talked about it on many shows different nominal resources that have been amassed in this country for the kingdom have all kinds of potential. But if we leave them sit in the ground on I mean in a working to be called to account for how we did with that money closure. Let's also add with the annuity that he has and has this 15 grand guaranteed for life.

Now if if his wife later in life. Let's say he passes first. His wife lives a long life and she really needs that money you know when he's going when she's gone and she's 80, 8590 she's got a guarantee that even if that annuity ran out of money that insurance company is to be paying her that 15 grand for the rest of our clients and believe me out at the stage of my life understand what long-term care is an know he would. It's what a wonderful thing to know his wife. If all the sudden she broke her hip in no there she goes. She doesn't have to know the compass go to someplace that you know you know what I'm saying absolutely and we have people that have poor health that can't qualify for regular long-term care insurance and actually track their money into these type of annuities because they're not asking anybody any health questions on the front so we can have some people is very poor health. Get these in there getting them for a little bit different reasons but they're all mixed together so that's a wonderful thing site you've increased mine over a year and skip increase my vocabulary I did a couple of of understanding Q CD. It is an RMD and annuities. I hate the show was over. We got one coming up next week so site stating same time same station again finishing well, a certified financial planner Hans Schild and is brought to you by Cardinal guide. Don't forget the God Cardinal We hope you enjoyed finishing well brought you by Cardinal visit Cardinal do for free downloads of the show or previous shows on topics such as Social Security, Medicare and IRAs, long-term care and life insurance, investments and taxes as well as constant best-selling book, the complete Cardinal guide to planning for and living in retirement and the workbook once again for dozens of free resources past shows what you get. Hans book go to Cardinal do if you have a question, comment or suggestion for future shows. Click on the finishing well radio show on the website and send us a word.

Once again that's Cardinal Cardinal

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