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July 14, 2020 8:03 am
Most parents, especially those in their 30s and 40s are faced with a tough decision that often the hard against the newly saved for our children's education or our own retirement. Everyone has limited resources to some extent that often leads parents into a quandary choosing between college or retirement. Today financial planning teacher Rob last entries into that debate calls and questions on any financial topic at 800-525-7000 800-525-7000. I'm Steve Moore get ready for another mission of moneywise line Rob taking on some controversial topics lately and I guess this is no exception.
I know certainly not Steve.
We often hear from parents are struggling with the question of saving for their kids college or investing in a retirement plan but I'd like to say at the outset, it doesn't necessarily have to be a choice between one or the other if you can put something aside for both. That's the best way to go. Okay, so what are some things to consider if parents do have to make a decision between the two, but most parents want their children to be able to go to college if they choose, but most parents also know that it's fairly easy to attend college these days simply by borrowing your way through it and that really poses a dilemma Steve because no parent wants their child burdened with the kind of huge student loan debt that's really becoming the norm now.
Making matters worse is the endless increase in college costs, not accounting for inflation. Median household income is risen hundred 35% in the last 20 years, that sounds good but average tuition at a four-year public colleges risen, are you ready for it. 550%. I'm gasping for breath here. Why have college cost risen so much faster than the family income.
While there probably several reasons but one that many analysts point to is the easy availability of federal loan money and students willingness to borrow it. As a result, the schools have almost no incentive to run efficiently. Basic economics tells you that cost will rise when there is no downward pressure on prices.
It occurs to me that you haven't answered the question yet safer education or retirement. Thank you for pointing that out. Obviously this is something every parent has to answer within their own conscience.
After all, I would hope, much prayer and maybe consultation with a financial advisor would be involved. As I said ideally you want to do both, but if you have to choose the wiser financial decision would be to savor your own retirement first, but that doesn't have to mean 100% of your savings and one and zero and the other you could simply just put a higher percentage in retirement and why choose retirement as the priority yet.
One reason is that retirement is changed over the past few decades. Pensions are now a distant memory for most workers member used to get a gold watch a check for life. Not so any longer. Social Security isn't sufficient to meet one's income needs in retirement and the programs revenue is projected to fall below benefit levels by 2035. Workers must take responsibility for their own retirement needs and we always recommend investing 10 to 15% of income to qualify retirement plan assuming you paid off your credit card and consumer debt and you have that emergency fund place. But then what about settling the kids with student loan debt.
Yeah, parents and students can take steps to minimize college borrowing out first. If you have any money left over after monthly retirement contributions open a 529 education savings plan even 500 are usually 50 or hundred dollars a month will make a difference. By the time your child is ready for college.
Next, consider less expensive community college for the first two years and then transferring to a four-year school to complete a degree program. Also heard the recently that some colleges are going to begin offering an on-campus experience with an online price tag. So there may be some flexibility there for the school you ultimately want to be in class in person. Students can also look for internships and part-time jobs to help defray the cost of education. I certainly took advantage of that on campus as I work to help defray some of my costs and then there's the old tried-and-true scholarships that family should exhaust all of those possibilities. Steve, in my view before borrowing for education. A great place to find more cost-saving ideas is saving for college.com. I love that website that one more thing.
Family should consider especially the student will have to borrow for school and that's choosing a major gives you marketing marketable skills studying in a field and interesting is important for your degree in something that's going to really help pay the bills after school, especially when you have that debt will make paying off those loans a lot are a great information. Many people adopt an attitude toward marriage and finances that it will all work out somehow.
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We were discussing the pros and cons of saving for retirement or saving for your children's college education. One thing you mentioned was the two-year college. At least for the first couple of years and that may be transferring to a four-year college. One thing that helps with that in this is from parents. I've spoken to over the years is talk about that two-year college option way early on when the kids don't really care like 12 or 13 or 14 cans of get it gets embedded into their psyche.
You know about the two-year college approach as opposed to telling them when they're 18 and they had their hearts set on the University of Hawaii all four years, maybe five, you know, again, it's a may be a slightly better approach that makes it a bit more palatable when you think yeah I think that's right in and just clear communication in general. Steve you know I think often times the parents know what they're thinking in terms of how much or how little they're planning to contribute toward their child's education, but they don't communicate that to the kids so sitting down early. Maybe when there even a freshman to say here's the track were on. We have X amount to contribute toward your education.
Anything beyond that is fine if you want to go to an Ivy League school or private out of the state school, but you need to go to the website look for the cost of attendance by the way they'll publish that on that website you are interested in and then start thinking now about how you're going to make up the difference between that and what mom and dad are going to be providing and that might be added incentive to get the right grades that might be added incentive to begin saving now. Maybe through a high school job any number of things to you, but I think communication is in so many things is just so and getting an early start is so vital to both of these decisions when I say both aiming college and retirement. To be really honest, at 14 if my parents would've been talking to me about college. I frankly 14. I just didn't care that was above my head.
I was thinking about lots of things at 14 college wasn't one of them and then will we talk about retirement and getting an early jump on that. Well, again, to be honest at 32 I wasn't getting retirement a whole lot of thought.
It just seemed like it was so far away and it was something old people didn't at 32 I was still feeling younger than I feel today so early starts with both of those well and I think that's where just teaching some of these principles, like the power of compounding both working for you and against you in the form of interest on debt is a powerful idea that if they can begin early and can put away some money or avoid getting into debt just the benefits long-term are huge and so teaching these concepts in a way that's practical and understandable will go a long way. Another thing that's good to do early. As far as an early start is calling in. While we have open lines and we have about four right now, so this would be a great time to place your call 800-525-7000. Let's let's begin.
Rob going out to let see Pembroke Pines, Florida, and Miguel, how can we help you get going actually to Chicago and she loans what I'm seeing on my screen. Sheila wanted to go, yes ma'am, you go right ahead. I'm calling so far good education benefits, which is what I and my two brothers my parents could not afford to pay for our college.
We counsel trying to get scholarships and so that's were geniuses not to get override a job that I didn't particularly care for, but the company had spent education until they paid for my education and I look for a job that I like. I love that you know that is certainly one of the things as you're considering job looking for things that fit your work style like more more companies offering the ability to work remote or benefits including help with paying off student loans. I think is another great idea Sheila.
And obviously that worked very effectively in your situation. We appreciate you pointing that out. Thanks for weighing in Russia. Great always nice to hear from her list is real when it comes to you real issues that all this can usually use a help with practical help and assistance.
Let's go to Orlando Florida now hi Randy, what's on your mind. Good afternoon. I Randy, thanks for calling program because a couple of great know you guys are great at what you do it to my family and friends out, like what you can you show the my whole life is nothing but you do everything for somebody whether I'm dating out whether something financially.
I always want to be my moral compass in my direction and anything like our founding fathers not elected to the Bible for the answer to so anything that you implement so many things in America.
My question what about 1 o'clock retirement retirement a little town in America here to be taken.
Man I can't wait on 62 or 65 and I can just stop working. I could just play golf and I can do whatever I want to do biblical you something that the Bible really talks about where you I really, really endorses that or there's something like if the silent are like no really, we should continue working until we are called home. Yeah boy I love this question. Randy and I appreciate your kind remarks. You will find the word retirement in the Bible or retire, but only in one instance, I get to that in a moment, but this idea. The standard view if you will here in America around retirement that is ceasing all work is a modern concept in or before the 20th century, people generally worked as long as they could and then came Social Security and pensions and retiring at 65 came to be seen as an entitlement and you know it's just not the biblical model.
This idea that we would quit work and sit back in a rocker perhaps is not biblical.
God is our true boss number one and work actually predates the fall, the Lord put Adam to work in the garden of Eden, and nowhere does the Bible say that we can quit being of service to him when we have enough money saved up to live a life of leisure. The one place that it does address this idea of retiring is in numbers and it's a pretty narrow instance it would had to do with the Levitical priests, which was for a very specific person and it in the NASB actually uses the word retire, but the Levites were to retire from Temple service at 50 years of age. God's word doesn't tell us why they were to stop their labors but one thing that we can be pretty sure of is that that passage doesn't apply to so how should we approach this, then, given that context and I think the answer is we should realize that art again our service to the Lord should continue throughout our lives are calling if you will, doesn't have an expiration date, but that doesn't mean Randy that we shouldn't be saving for the future. I think the Bible is very clear we should set aside a portion of what God gives us today for the future so we can provide for ourselves and others because there may well come a time where we're not physically able to work the same load that we are now which is why we need to focus on getting out of debt, keeping a lifestyle at a minimum, and then I would say during that unique season where we have the most experience the most wisdom. The most offering service to the Lord, that we would be saying, Lord, what would you have for me and perhaps by being a diligent saver keeping lifestyle and check. We would then be freed up to be used by the Lord, perhaps in a new way in that season of life, but certainly not just sitting back in the life of leisure. Nothing wrong with enjoying some leisure and rest, and perhaps even taking that an extended season of rest, but then I think getting right back to whatever the Lord's assignment is for you is the way to go so I hope that helps and I think at the end of the day you're right we don't need to take our cues from the culture we need to go back to God's word.
Does that make sense of all thank you so much. I really appreciate that our embassies are thanks ringing I Randy mentioned dating advice were not doing that today our weekly jet will talk about anything.
But not dating. We will, although I got teenagers in homes I'm good for a little all right for dating advice. Here's another 25 7000 Stanford, Arizona hi Melinda, you have a comment for some your program appreciate you taking my call people and not having to pay for college. I only when I was at the community college.
I filled out and we need we need to get you near your ear grant from the federal government. It usually takes three tweaking it before but I actually want to count their department had what you have for me and they have night or each department will easily get into college level and anything you like, then their older and their masters. If they're going into the teaching field taking the break each grant and dedication and service time and you don't get the survey don't put in your paperwork when it will turn into the loan so you want to make sure that you're doing everything in a timely way. There are many got it done early utility company company. They unite yet retirement companies that are private. There are just read. I love that Melinda, you know, my life took full advantage of scholarships back then you go to the library to research them, but they applied for literally hundreds and she'd like you Julie. My wife put herself through school 100% so it can be done. Just got to put some work in and start early. Melinda got bless you.
Thanks so much, do you know if you have enough money of house. Do you know how much is enough.
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Here's the link presents the believer's relationship to God when we are born 1.children. I got in verse 14, the Holy Spirit's control and direction the believer's privilege is in God's family and God's family is led by God's very very confusing gets me down from the start because I believe that I was saved as a child absolutely ends in cycles sampling what we are calling nine people know Jesus Christ is the study of Scripture, today is state's agreement to you more about our money than most of us imagine Jesus says more about our use of money and possessions and about anything else, including both heaven and hell in managing God's money on the Randy Elmore and breaks it all down in a simple, easy to follow format that makes it the perfect reference tool if you're interested in gaining a solid biblical understanding of money, possessions and eternity managing God's money is available when you store moneywise live.org to find God's plan for your financial life may include college and if so how we going to been talking a little bit about that but we'll talk about anything that's on your mind today.
Anything financial in our phone number is 800-525-7000 Grand Rapids, Michigan.
Julie, you have a comment to question about about colleges and scholarships for your characters. You incoming freshman and transfer to four years yeah Julie is a great point and I think you're exactly right in terms of what's available and when they need to accept those scholarships think it really comes down to knowing your child and how they been wired and whether they have the ability to perform academically such that they would be able to qualify for and receive those scholarships. Clearly, if you have a child that's headed in that trajectory where they have good standardized test scores. They kept their GPA up met the other requirements service hours and the like. I think able to take full advantage of the scholarship.
That's their to attend the University of choice that they've selected for a full four years would be the ideal situation.
I think what were talking about is just for those that either don't qualify. Haven't received those scholarships and haven't found another way to save if they're looking for ways to still be able to go to college without taking on a lot at that choosing two-year college or community college and then transferring is certainly one way among many to be able to defray the cost. Apart from having a scholarship available so I think what you're describing would be my first choice, but then when you try to get creative. I think that's where you could consider a community college yeah good point Julie were glad that you made and were glad that you called in today.
Thanks very much of Chris. Rob is always the full ride athletic scholarship and know all about, I would because I've heard about them never said one was at the badminton team water polo chest close to you I had a took a class in college badminton and the deal was that the professor was believe he was in his early 80s and the deal was if you could beat him at any point during the semester you got a hand just to nobody ever be okay will come back and talk some more about that topic someday. Chicago hi Pamela, only have for us today. You all you will talk about market and yes I will wait to Facebook college college absolutely Pamela so my preferred savings vehicles call the 529 college savings plan.
If you go to saving for college.com. You can read about them you want to look at the state of Illinois plan but you want to compare it to other states and you can do that saving for college.com. Think about it like a Roth IRA, but specifically for college savings.
So as you start making systematic contributions you be able to select from the investments inside the plan, and many of them will automatically get more more conservative as your child near the age where they would go off to school call the 529 plan go to saving for college.com Magellan like they were coming your way. Stay with us this is moneywise live, how should we as Christians think about and testing. What if we could invest our money in a way that aligns with what we believe that Eventide we believe it is possible to love God and love our neighbor in the very practice of investing we design investments for performance and better world so you can invest for the future with a sense of wholeness and purpose.
We call this investing that makes the world rejoice. More information is firstname.lastname@example.org Christian healthcare ministries enables believers to meet their healthcare costs affordably, biblically and compassionately is not insurance but a voluntary cost-sharing ministry based on the biblical example of Christians sharing each other's needs and members are defined under the law for not having health Christian healthcare ministries might be your health cost solution call 800-791-6225 or visit CH ministries.org Moody radio verse of the week is found in Revelation and they sang a new song, saying, take the scroll and open for you were slain or blind you ransomed people for God from every tribe and language radio verse of the founder. Once we walk in the wilderness like the one 2170. Would you like your life to be infused with joy. Would you like to interject a kernel dimension into even the most ordinary day on the radio and says you can when you discover the treasure principle and a concise powerpack style is newly revised and updated book offers a six step plan to finding the pleasure and eternal printer print what you discover. Life will never look the same treasure principle is available when you click the store, but moneywise live.org US is carried out the first federal execution in the 17 years putting to death a man who killed an Arkansas family as part of a plot to build a whites only nation 47-year-old Daniel Lewis leave you, Oklahoma, died of the federal prison in Terre Haute, Indiana Wells Fargo losing 2.4 billion in the second quarter, the first quarterly loss for the bank since the real estate crash of 2008, Delta Airlines was 5.7 billion in the second quarter is the coronavirus pandemic crushed air travel California school Valley ski resort is considering changing its name to remove the word squall derogatory term for Native American women, stock market, finishing higher today that I'll pick up 556 points. The NASDAQ gained 97. This is SRN use was not very fast on a daily basis to the member that God owns it all wants us to manage it well. We discussed that quite often here in this program we could all use a little assistance when it comes to managing our money well in our resources. Let's continue to do that with Miguel in Pembroke plot in Pembroke Pines is Florida.
I am a professional radio announcer Miguel so why the program regarding that planet called calling.
I have remembered that they wanted to get into it. I really don't know what works and I'm very calm your thoughts about it, so can you please have something to say about it. Yes I do have something to say here Miguel, the technology behind these crypto currencies is here to stay in our digital and global economy. There is a place for being able to transact business securely and to the point of these crypto currencies anonymously, which is also opens up other less scrupulous opportunities as well for people looking to hide these transactions, but the bottom line is the technology behind it is not going anywhere. I think we will continue to see more and more in the way of digital currency.
Now you asked about it as an investment as opposed to as a way to transact business and that's where I would stay away. It's just way too volatile and really it's speculation.
In my view, it did fit into that type of investment category as opposed to what we see in God's word, which would be more along the lines of steady plodding, not to mention the fact that I like to use the rule of thumb, if I can't explain it. I don't invest in that just keeps me out of things that have no business being in. So I think at the end of the day. Yes, people have made some money investing in these but it's again the volatility in the performance which moves wildly based on geopolitical events and payments by governments that bitcoin is likely to be regulated and just a whole host of underlying factors have led to incredible swings in the price of these crypto currencies and bitcoin in particular. And so for that reason, I would really rather you see, you just invest in a more traditional sense.
We are well diversified improvement companies in a way that fits your goals and objectives and not try to capture short-term quick moves in the market because that's just get ahead you down the road where you can end up losing more than your winning and I think that really is more akin to gambling than it is investing so for those reasons, despite what your family members and friends are saying I'd stay away and let them do their thing. Miguel obviously were not experts. What we really have done her homework and looked into this and it really is of volatile currency ups and downs and wild swings and it doesn't seem to be related to anything in particular so you can get a little scary at times and we wish you the best with that as you work through it though. Thanks. Be sure your pretty 1st Tunl., Hill, GA hi Mike, what's going on in your life, sir. Buddy Mike and Isaac were losing you there so perhaps you could find a different spot unless you driving and then give it a try one more time like I think I think you didn't find that different spot look at let's put like a hold will come back and we'll see if he's in the car. Maybe he could pull over something like that.
Chicago and Joel.
Thanks so much for holding sir what you question for Rob West yet regarding 529. If a child there college career and I will have a little bit of money left in the 59. I understand I cannot sign a different beneficiary that including myself that I want to go back home. However, can I find that the beneficiary who would like to go back or a master screen or can I just simply Not Yeah so If You Just Cash out and They're Not Used To That Withdrawals Are Not Used for Qualified Education Expenses. Joel, It Would Be Subject to Taxes and a 10% Penalty, but If You Want to Transfer to a New Beneficiary and Its Used for Qualified Education Expenses Including Post Degree Education Were You Looking for a Masters That Would Be Absolutely, and Play. The Other Exception to That.
And There Are Few Others You Could Do Some Research If If You Have Another Situation That May Apply, but One of Them in Terms of an Exception Is If Your Child Had Any Kind of Scholarship Dollars You Could Pull Money Out Of the 529 Equivalent to the Scholarship Awards and That That Would Not Then Be Subject to the Taxes and the Penalties and by the Way, Only the Earnings Portion Would Be Subject to the Taxes and the Penalty so I Think You Know If You Can Transfer It to the Other Beneficiary and Used It, Use It for the Graduate Degree or Professional Program That Would Be Great. One Other Thing That the Securities Act Brought into Play That We Had Not Seen Previously Was You Can Put up to Take up to $10,000 at 529 Funds in Used To Pay toward Student Loan Debts That's Brand-New and and Something That You Could Do. I Think the Last Thing Is You Could Set the Money Aside for a Grandchild and It Could Be Used down the Road so I Try to Get Creative and Find a Way to Avoid the Taxes and the Penalty on the Earnings. If You Don't Have a Qualified Education Expense Available to You Today Joel, Thank You Very Much. We Wish You the Very Best with That. Let's Try to Squeeze in Bethany, Calling from Chicago. I Think She Has a Question about College Scholarships and What Is That Question Beth Will Know What Something I Don't Ever Being Able to Have All I Know That My Writing down Well. Great Questions Bethany. Let Me Start with the Scholarships You When You Apply the General Rule Is That You Know Some Deadlines Are As Early As a Year before College Starts. So If They're in High School Now and It Sounds like Yours Are Bit before That, but Any Time in High School You Should Begin Researching the Various Scholarships That You Want to Apply for the Good News Is There Is a Wealth of Resources out There Today. If You Just Go to Amazon and Do a Quick Google Search and Find Some Great Books Very Highly Rated on This, but Generally Speaking, You Would Apply for Scholarships during the Summer between Your Junior and Senior Year.
Again, Some of Them Could Be up to a Full Year before so You Want to Get a Jump on That Which Is Why Probably Want to Start Looking at It Even Earlier, but Certainly Not in the You Know in Junior High or Even Your Freshman Year of High School about What You Do Want to Do Is Start Preparing Though One of the Ways to Repair His As They Do Service Projects.
We Have a Little 3 x 5 Card System Where Every Time One of My Kids Does a Service Project They Write It down. Church Activity Community Activity Drop in the in the 3 x 5 Carrier That'll Get You a Long Way down the Line Will Cover Your Other Question off There Will Be Right Back. Here's a Great Deal More about Our Money Than Most of Us Imagine Jesus Is More about Our Use of Money and Possessions and about Anything Else, Including Both Heaven and Hell in Managing God's Money on the Radio and Breaks It All down in a Simple, Easy to Follow Format That Makes It the Perfect Reference to What You're Interested in Gaining a Solid Biblical Understanding of Money, Possessions and Eternity Managing God's Money Is Available When You Store Moneywise Live.org Hi I'm Very Tired. I'm a Car Guy Here to Help You Understand the Urgency and How Fun It Is a Share Your Faith in Every Opportunity.
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Sometimes I Don't Think It Wrong to Spend a Little Freely to Give a Little or like Retirement Actually Christians Who Are Good People and We've Gone by Homeless People in There like My Hard Earned Money They Could Work like Me in My Head like in the Future, but You Have To Trust That God Appreciate Your Call Today.
You Know, I Think for Each of Us Begins on Her Knees, Because I Am Charged with Being Found Faithful. As a Steward of What God Has Entrusted to Me so I Can't Tell You What Your to Do with God's Money. I Can't Tell Anyone Else That We Hear on This Program. We Point out Principles That We See from God's Word. But at the End of the Day.
I've Got to in My Case I Married. So My Wife and I before the Lord Say Lord, What Would You Have Us to Do and That Includes Lifestyle. Do You Want Us to Leave. How Much Is Enough Not Just How Much Lord Do You Want Back. But How Much Should I Keep Who What Is My Financial Finish Line.
And How Do I Order My Finances in Such a Way That I Live Simply, I'm Saving in a Way That's Appropriate Not Hoarding and I Think the Difference Comes down to a Heart Condition or You Ultimately Trusting in the Lord, Are You Trusting in the Things of This World, but I Think As Long As We Are Ultimately Trusting in the Lord and Saving Is a Good Thing and in a Balanced Way, with God-Given Goals and Priorities, Because Where Taking Seriously This Responsibility to Provide Both Now and in the Future, but That Has To Be Tempered Those Savings Goals with This Clear Admonition in Scripture That Were to Be Givers and We Were Created in the Image of the Ultimate Giver God Himself.
He Gave Us His Son Jesus, Who Died on the Cross to Pay the Penalty for Our Sin That We Might through His Substitutionary Gift on the Cross We Might Be in a Right Standing with the Lord and and Be Reconciled That Will That's the Ultimate Gift the World a More Accurate Reflection of That Were Giving to Others, Not to Mention the Fact That Were Invited into God's Story. We Can Participate in His Activity and We Can Meet the Needs of Those around Us without Imposing, We Hold Everything Loosely so We Say, but We Do It with God-Given Goals.
We Give Generously. We Live Simply and I Think in the Context of All of That with the Right Heart Condition. It Keeps Us Really Focused on the Eternal, Not the Temporal. Remember Were Just Brief Sojourners in This Place. Ultimately, Our Home Is in Heaven. And so That's Why Part of What We Should Be Doing Is Sending It on Ahead. Keeping an Eternal Mindset and Not Getting Too Comfortable with the Things of This World Because This Is Simply a Temporary Dwelling so I Think You're Exactly Right. But I Did at the End of the Day It's It's Incumbent upon Each of Us to Consider What the Lord Has for Us Prayerfully and and Do so That with a Diligent Heart and and with Earnest Prayer. So Appreciate You Pointing That out at Something We Try to Visit with You Regularly and Also Just Mentioned Quickly. Steve, You Know. So Often, Because We Hear from People Asking about Their Retirement Plans Asking about Their Investments, Wanting to Know about College Savings and Inheritance. It Can Sound like Were Only Talking to Those Who Are Incredibly Affluent and Were Not We Have To Recognize That There Is No Connection between Our Spiritual Condition and Are Standing before the Lord in Our Net Worth Right God Has Blessed Some of Us with an Abundance He Is Given to Others a Little and That May Change over Time but Here's Our Church to Be Found Faithful and Live with Contentment Where Ever We Are and Were Not Any More Spiritual Were Not Anymore Anything Because We Have A Few More Zeros at the End of Our Checking Account. The Question Is Are You Being Faithful to the Opportunity You've Been Given with What You Been Entrusted. Are You Being Found Faithful to the Lord.
Nobody Can Tell You the Answer to That except between You and the Father through Prayer and Study of the Scriptures. That's Right, It Sometimes Is Hard to Understand and Find That Balance between Saving and Hoarding the Balance between Prudent Preparation and Having Faith That God Will Provide. And Sometimes It Takes a Takes a Lifetime to Find Balance for Our Lives and Keeping in Mind That God Has a Different Plan for Each of Us a Great Comment and Great Thoughts Robin a Great Comment for from You Today Robert. We Appreciate That You Back to Our Phones, Palm Beach, Florida Lorenzo, What's on Your Heart I Will All You Know I'm Looking at That I Work for the Amount of Dollars and Now Mortgage All so I Will Thinking Be a Good Idea to Leave the Money with the Pension and Get the Monthly Check or to Take the Lump Pay off the Balance of the Mortgage and You Live on That Will Be A Lot Cheaper and Then I'll Be at Little or No to Sin. A Request for Mark Yeah Well You Think about This the Right Way, Lorenzo. I like what you've laid out here because obviously you've done several things. Number one is you are a diligent saver.
I hear that you value this idea of keeping your lifestyle and check in retirement. I hear that you want to be debt free. I hear that you've accumulated quite a bit of savings and you want to be faithful in managing that now. You're right. You have these two choices with this pension plan, you can take a monthly payout for life or you can take the lump sum in your charged with the responsibility of investing it or investing what's left after you pay off the house you can go both ways. I generally like and I'm saying generally because I'm at the end of the summer to recommend you sit with a financial professional to make the ultimate decision.
I generally like the lump sum because long as you're assuming the respondent you're willing to assume the responsibility of managing it or hiring somebody to do that for you. You have the benefit of having control of those funds. If something were to happen to you.
They can be passed on. They can be given away if you need access to the money because you have a major medical event or you need long-term care. Down the road you have the ability to do that. But there are some people that say the monthly payout plus my Social Security will cover my expenses for the rest of my life.
I would rather the peace of mind of knowing that I'm my money is not at the risk of the stock market or a portion of its not at the risk of the stock market. I'd rather just take that check and be done with it and transfer the risk to the pension itself into the company providing it. You know that's ultimately decision you have to make now one of the things an advisor will do is help you compute the empty of the internal rate of return of the equivalent of taking the lump sum versus what they're willing to give you monthly just to see on paper which one makes more sense.
But at the end of the day. I think it's ultimately going to come down to which one gives you the greatest piece of mine. Bottom line is you've done a great job preparing and planning and saving and now you can enjoy that. I will say there's something to this idea that you alluded to Lorenzo around getting that lifestyle down which includes paying off that house. I think that would give you a lot of freedom, a lot of peace of mind as you go to sleep at night knowing your debt free and you can respond wherever the Lord leads in this unique season of life, which frankly I'm really excited for you as you enter, so does that help you though as I I process that out loud with you thought about one I would like this that not the thinking along those lines good. Let's do this then go to our website moneywise live.org there in Palm Beach you'll find a number of certified kingdom advisors if you don't Artie have one an advisor. I'd recommend the CK there in your area interview at least three.
And if you end up taking this lump sum you really need somebody to help you with the planning, but also with the investment management in any of those folks would be able to do that. So thank you for your call today sir. Stay safe there in South Florida and I will bless you and thanks so much Lorenzo. We do appreciate that and Rob were nearing the end of our program today.
Time flies when you're having fun. Speak to us about the moneywise magazine because I know the second edition has just come out yes or has Steve. It's called the moneywise family that's our theme and so were dealing with how to raise money smart kids were dealing with how to communicate between husband and wife. We did a great podcast.
You and I with Chante fell upon the researcher she injected a three year groundbreaking study looking at why couples have such challenges communicating about money.
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Judy, Amy, Clara and Jim Rob last time Steve Moore Drive safely wear your mask and join us again tomorrow