The Bible on Troubled Times

The stock market's up, the stock market's down. The economy's up, then it's down.

Jobs are created and jobs are lost. Can you imagine having to go through troubled times without God's Word? You know, Jesus never promised us a rose garden in this life, so what comfort does God's Word offer for difficult times that we might apply to our finances? Host Rob West explores that first today. Now, we are pre-recorded, so please hold your calls until next time, but we have some great questions already lined up. I'm Steve Moore, The Bible on Troubled Times, next on MoneyWise Live. Well, Rob, we should wish our listeners a happy Labor Day before we start.

It hasn't been a happy year as far as jobs are concerned with the coronavirus pandemic, but at least we can do that. And I think very few people go through life without experiencing some sort of financial difficulty from time to time. We might even say that the more money you have, the more trouble you can get into. Would you agree?

I certainly would, Steve. Just look at the Hollywood celebrities, professional athletes and even lottery winners who end up in bankruptcy court. You know, there's an old joke about a guy who knew that money can't buy happiness, but he'd still like to give it a try.

So the amount of money we have really doesn't matter. We still have to be prepared for financial troubles now and then. What verses can help us prepare spiritually? Well, Steve, let's start in the Old Testament.

We certainly know that the Israelites were no strangers to trouble as God led them out of Egypt and into Canaan, which they were to conquer. We can take comfort in many Old Testament verses that reveal God's faithfulness to do exactly what he says. I'll take us to Deuteronomy 31 verse 8. It is the Lord who goes before you. He will be with you. He will not leave you or forsake you.

Do not fear or be dismayed. When we pray and ask God to be a part of our finances, asking for his guidance as we weather our financial storms, we can find peace and contentment. When we commit to following his financial principles, I believe he'll lead us out of the wilderness.

Remember, it's his money in the first place, not ours. We're simply managers, stewards, called to manage his resources according to his will. God has promised to provide for all of our needs and he is always faithful.

Amen to that. But of course, a key there is understanding the difference between a need and a want, and that's certainly another reason to pray for God's guidance. Where else can we find comfort in troubled times? Well, staying in the Old Testament, let's go to Psalm 94, 19, which reads, When my anxious thoughts multiply within me, your consolations delight my soul. You see, the psalmist lived in a time when the righteous were persecuted in Israel, but God provided comfort and consolation to the faithful.

So how does one living in troubled times obtain those things? Well, I would just say through prayer and the study of God's word. Instead of worrying about things you can't control, spend time on your knees and in God's word to find comfort.

You see, he knows what you're going through and is absolutely in control of all things. That's right, and that alone is a comforting thought. Okay, can we move to the New Testament? Sure, let's look at the Beatitudes. In Matthew 5-4, Jesus says, Blessed are those who mourn, for they shall be comforted. This verse isn't simply about grieving the loss of a loved one. It applies to all who are broken in spirit and cry out to God. It's about humbling ourselves before God, admitting our wrongs and committing to do things his way.

In our finances and in all areas of life. And when we do that, God says we will find comfort and contentment. And how much better would it be if we reached out to God in prayer first, and not to let anxiety overwhelm us when the event happens?

A lot better. As the Apostle Paul writes in Philippians 4-6, Be anxious for nothing, but in everything by prayer and supplication, with thanksgiving let your requests be made known to God. And just a few verses later, My God will supply all your needs according to his riches in glory in Christ Jesus. You know, we tend to think that our problems are our problems, unique to us, but it's amazing how many verses in the Bible talk about trusting God to care for his people in troubled times.

Well, it really is. You know, many times we tend to worry about things that haven't happened yet, and often even won't happen. Jesus addresses that too in Matthew 6-34. He says, Don't worry about tomorrow, for tomorrow will care for itself. Each day is enough trouble of its own. The message there is do what you can today, and don't worry about the things you can't control that might not even happen tomorrow.

Great news from the Bible itself today on Labor Day. He's Rob West. I'm Steve Moore. Now, we are pre-recorded. Don't call in, but please do stick around. Lots of great information and questions coming up. This is MoneyWise Live.

Right direction on the same track. Never Enough, three keys to financial contentment. Available when you click the store button at moneywiselive.org. If you're investing for retirement or any other goal, you may be wondering if it's possible to enjoy both profit and peace of mind no matter what's happening in the market. Sound Mind Investing has a short video webinar on that topic at soundmindinvesting.org. SMI has helped tens of thousands of Christians learn to be wise and faithful stewards in the area of investing.

Profit and peace of mind no matter what's happening in the market at soundmindinvesting.org. Do you remember that old ad from the 1970s for Clayton's? It's the drink you have when you're not having a drink.

Hi, I'm Bernie Dymett. Clayton's has become part of our language. A Clayton's drink looks as though it's alcoholic, but really it isn't. Clayton's anything is something that looks real, but isn't. Question, is it possible to have a Clayton's person? You know, a person who's not really a person. A baby in its mother's womb, is that a Clayton's person?

Or maybe the street people we walk around on the footpath, they're almost always smelly. Are they Clayton's people? Or maybe those workers in the factories across Asia who make the toys our kids play with and the clothes we wear, all for a few cents an hour. Are they Clayton's people? Jesus said, I've come to bring good news to the poor and to set the captives free. I wonder when he looks around whether he sees any Clayton's people on this earth.

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Or call 800-557-1985. Hey, welcome back to MoneyWise Live. This is Rob West.

I'm Steve Moore. Today's program is prerecorded. We won't be taking any of your live calls, but wait, don't push that button.

We have lots of great information coming up, biblical, practical, and I think you'll find it helpful as well. Hey, thanks so much for hanging out with us today. Let's go right back to our phones.

Hudson, Ohio. Hello, Ellie. What's on your mind today? How can we help you? Hi, thank you so much for taking my call.

Sure. I'm listening in and I think somebody asked a question similar to mine, which was is this a good time to convert a regular IRA to a Roth IRA and pay less taxes on it. In the tax situation that I'm in, I'm married, I do not work, my husband does, and he is very upset with me at the idea that we would file our taxes separately. But I'm thinking that if we did that and if I took this conversion income and rolled it over from a regular to a Roth and pay the taxes on that, I would be in a lower tax bracket than he is, and then we would each take our deduction separately. Does that sound like that would be a better idea than just filing jointly?

You know, Ellie, you'd have to run the numbers on that, and that would be more complex than we'd be able to do quickly here on back of the envelope. But do you have a tax preparer that you all work with? No, he just does the TurboTax. Okay. And he said he's going to run it separately both ways. Okay. And so far he's coming out, you know, with just doing it jointly.

Yeah. Yeah, I suspect you may find that that's better in this case. Now, the benefit to moving to a Roth in terms of the conversion would be that you would no longer have the required minimum distribution, which has been pushed out to age 72 if you weren't age 70 and a half by the start of this year, and also the money would grow tax-free. And so if you're not planning to use this money, you'd be able to take it out in retirement down the road and not pay any tax on it at that time. The challenge is that arguably you're in a higher tax bracket now. I realize this is assuming you file jointly. You're in a higher tax bracket now because he's working, whereas, you know, if you were to keep this in the traditional IRA and pull it out in retirement when neither of you are working, as long as we don't have considerably higher tax rates at that time, you would be paying less in the way of taxes because you don't have any more earned income, or if you do, it's much lower than it is now while your husband's at the peak of his working life.

So it really just comes down to does this idea that you have a filing separately allow you to make the conversion and not pay as much more tax or perhaps not any more tax? I'm not sure that would be the case. I'm just speculating you'd have to run the numbers to see. But given that you're in retirement, you don't have – like, for instance, if this was 20 years ago and you're trying to decide whether to put money in a Roth to have tax-free growth, you know, that's where the Roth can really shine. But when we're doing it later in life, especially when we're nearing retirement and we're at the peak of our earning years and considering the fact that required minimum distributions have now been pushed out a couple of years later, I just don't see the benefit for somebody in your position to do that.

I'd probably – and this is probably what you'll find when you do the math – I'd probably just stay the course on the traditional IRA. Run the numbers and see, but I think that's where you're going to end up coming out. Does that make sense to you, Ellie?

Yeah, that does. I just thought with the drop in the stock market and the value of my accounts being so much less, I'd be paying a lot less tax than I might be, you know, hopefully, than 10 years from now when I'm going to be worth a lot more. I see what you're saying.

Sure. So you'd hold on to the same investments, pay less tax and then let the account appreciate. So you can run the numbers on that as well just to say where are we today, what level, where do we expect to be once this recovers five years down the road and then you could factor in the tax savings on that as well because essentially you'd be realizing the value of this at a discount, so to speak, because the market sold off versus paying the tax on it at full value later, assuming and historically speaking it will, assuming the market comes back. So I like the way you're thinking that is an added consideration here.

So you'd run the numbers both on you all filing separately, but then also factor in the savings, so to speak, that you would have on paying the tax now on stocks that are quote-unquote on sale. And I think you could look at the numbers you and your husband think and pray about it and then make a decision. Ellie, thank you very much. God bless. All right, let's take another call.

Millersburg, Ohio. Kevin, we appreciate your patience, my friend, and what's your question today for Rob? My question is I'm a teacher in a public school system and we recently got emails saying that we have the option of purchasing a 403B or a Roth IRA, and I was just wondering the advantages or disadvantages to either of those and if I should pursue, I guess, investing into one of those. Yeah, that's a great question, Kevin. The Roth IRA wouldn't have any matching. Does the 403B have some matching associated with it? I don't think so. I didn't read too in-depth into the emails that they have sent. Okay, very good. I guess I'm really basic at this.

Sure, yeah, no problem. What we would generally say in terms of retirement contributions is, first, make sure you don't have any credit card debt. Make sure you have three to six months expenses saved up in an emergency fund. But then it'd be great to, unless you have any other pressing priorities, it'd be great to start saving on a systematic basis for retirement.

The earlier the better. That's where compounding is most effective. In terms of the account to choose, I like the idea, especially when you're young, of if you have matching available, start there. A lot of times they'll match up to 3% or 5% or 6% of your pay on a pre-tax basis going into a 403B or 401K. Well, that's free money. You put in 3% and they match it with another 3%. That's 100% immediate return on your money.

You're not going to get that anywhere else. If that's the case, by all means, start there and fully max out the matching portion of your contributions. Then, as a young person, I like the idea of you pivoting over to the Roth or if there's no matching to start with because that's going to allow you to put in more money toward retirement in the sense that the Roth is already taxed. So you will have already paid the tax on the Roth and that money will go in and then grow tax-free between now and retirement. For this year, you can put in $6,000 if you're under the age of 50 and you and your wife could each have a Roth IRA. Now, if you fully fund that between the two of you, $12,000 for the year and you want to be able to do more, then you'd go back over to the 403B because that's going to have a much higher contribution limit on an annual basis.

But I really do like that Roth assuming there's no matching because the tax-free growth is really going to benefit you over time because when you get ready to take all those gains out in retirement, you'll pay zero tax on any of that, which is what makes the Roth so powerful. Okay. Sounds good. Thank you. Okay. Thank you for calling, Kevin. God bless you. Thanks, Kevin. Thank you. God bless. All righty.

Quickly to Miami. John, we have just a couple of minutes. Let's see if we can squeeze it in, all right? Oh, thanks, Rob. How are you doing today? Very well, John.

Thanks for calling. Good. And listen, you guys have been wonderful, man. The last quarter, you guys have been with me through it all.

I hope you guys back in January and February invited you to the Super Bowl and all. Yes, sir. I'm right in the middle of closing, right in the middle of closing and this thing has been really crazy for me and I found out that my credit scores were where I wanted them and so that kind of increased my mortgage payment now.

But since this is going on with the market, how would that affect? Does that help me or does it doesn't do anything for me in this closing atmosphere here? But I guess I just got documents today. Go ahead. Well, John, so if I understand correct, you have not closed on this home yet?

No, I'm right in the middle. I just got my loan papers from the bank. I see.

Okay. Yeah, so what you're going to want to look at is whether or not you have a float down option in the paperwork. Oftentimes, they will give you a one-time what's called float down option, which is basically within a period before the mortgage. You can take advantage of a lower mortgage interest rate in a period like we're in right now where rates are moving down. And keep in mind, they don't run exactly parallel with the fed funds rate. So just because the interest rates were lower to half a point or a point like they were over the weekend doesn't mean mortgage rates are automatically going to drop by that same amount.

In fact, they won't. Now, the general trend on mortgage rates is down with the fed funds rate, just not as much. But no doubt, they are lower. So the question you would want to call and ask the mortgage company is, do I have a float down option within this mortgage? If you do, you should be able to take advantage of that lower interest rate.

They may make you pay a fee for it, hopefully not. Or the other option, which is a bit more drastic, is you cancel it and you switch lenders. But you've got to factor in that that's another hard inquiry on your credit report. That's probably going to pull your credit score down even a bit more. And that may work against you because now you're actually perhaps in a lower range of scores that's going to result in a higher rate. So you may not have that option.

My first call would be to your current mortgage company just to ask if they can float that rate down with the market. And, John, we're going to have to run here. We are pretty much out of time for this segment, but we're glad that you got through and we're glad to hear that things are moving in the right direction for you.

Thanks very, very much. You're listening to MoneyWise Live. Your host is Rob West.

I'm Steve Moore. Again, we're going to pause for a brief break and then we'll come back. Stick around.

Don't go away. We ought not to believe in something of a savior or a messiah that does absolutely nothing any of it says. Does that make sense to you? I don't think that gullibility is the order of the day. That we would just believe that Christ Jesus is Lord although he does not do one thing he says he will do.

I don't think that we were not called to a theology of gullibility when in my own personal walk Christ has done this, this, this, this, this, this. When I know good and well he is God and he has shown himself faithful to me. When there have been undeniable things he's done, I know he is Lord.

And then something happens over here that doesn't figure into that. Don't be offended. Know what you know. You have the fact in your faith. You have seen him as Lord. You know he is faithful. You know that he is.

So when something happens in your life, when something happens in my life that doesn't line up with that, then that's where I have misunderstanding. But I will believe with all my heart, my God is faithful. Let me tell you something, if we are going to base our faith on what God does instead of who he is, we are in for the roller coaster of our lives. We have got to base our faith in that I know who he is.

I don't know what he's doing, but I know who he is. You've been listening to Beth Moore with today's quick word. Join Beth for the online teaching experience releasing September 15th at BethMoore.org.

See you next time for another quick word with Beth Moore. The financial wealth you leave behind could be the best thing that ever happened to your loved ones or the worst. In Splitting Heirs, giving your money and things to your children without ruining their lives, Ron Blue explains why it's important to make these decisions now instead of forcing your heirs to do it later. Splitting Heirs will foster a real appreciation for the precious resources that God has entrusted to you.

And it's available when you click the store button at MoneyWiseLive.org. And we're talking money, talking finances, and talking the Bible today on MoneyWiseLive with Rob West. I'm Steve Moore. Let's go back to our alliance Akron, Ohio. Hello, Adam. Thanks for holding my friend.

How can we help you? Yes. In fact, you listen a lot and what he has talked about between whole life and term life. And I was wondering if me and my wife, if it was wise to cancel our whole life with the penalty and surrender and create a term life instead.

We just, yeah, that's the question. Well, Adam, you know, generally speaking, I do like term better. I'd rather you have pure insurance. It's less expensive and you can get the amount of coverage that you need, which that's the whole point behind the life insurance is to make sure you have the death benefit. So your family's provided for in the event an income earner is, you know, goes home to be with the Lord. And that money is not available for a spouse that's depending upon it or a dependent child. It's also to cover any added expenses, take care of debt, you know, perhaps a college education that might be just a few years away, things like that.

And I want to make sure you have enough coverage. So buying the pure insurance or the term insurance is the most cost effective way to do that. Now, whole life takes that and bundles with it a savings vehicle. But with that becomes comes some illiquidity because you have these surrender charges. And so you don't have access to your capital. Number two, there's often some pretty steep commissions and expenses that are going to put a drag on all of this. And so that's why I'd rather you buy the pure insurance and then save outside of it.

But you've already got it. So the question is, does it make sense for you to collapse this policy? Pull the cash value out while first, because you never want to cancel the death benefit before you have something else in place to replace it.

And so you would go and put the term policy in place and then cancel the whole life, take the cash value out. I guess that is a consideration. But given that you mentioned a surrender penalty, I guess my first question would be, have you evaluated how quickly that might go away? And if you were to wait just a little bit longer, you know, does that make some sense so that that surrender value is at least less than it is today? Or perhaps nonexistent?

Not everybody looked into that too much. I just know right now my wife has at least like we could still take out the surrender values like I think like three or four thousand dollars out of like I think the accumulated value is like maybe twelve thousand. However, my surrender value is zero right now and the accumulated value is like five thousand nine hundred. Yeah, that seems like you're giving up a lot, which is, again, one of the reasons why I don't love insurance. Do you have enough death benefit? What does this pay out as a death benefit? My death benefits like three hundred ninety thousand and my wife's is like, I think, four hundred and forty thousand. OK. And does she have most of the income coming into the household? She has a little more. I'm a teacher, so I have retirement to S.T.R.S. in Ohio and she's a nurse. She has also a good retirement.

Yeah. Well, one way to think about this is typically, you know, just as a starting point, you would want to think about having ten to twelve times your income annually in the form of a death benefit. And then you might add to that any debt you want to be able to pay off. And if you have kids going to college with a major expense, you could add that to it. That would give you a kind of a ballpark without some additional planning on how much death benefit you need.

So you may find, Adam, that you're a bit underinsured, perhaps both of you or at least you are. But given the surrender charges you're talking about in terms of the accumulated value versus the cash value, that's a pretty significant amount. So I think what I would want you to do, number one, is get a bit more information as to how quickly that death benefit steps.

Excuse me. The surrender charge steps down so that that hopefully in the next couple of years will go away. And then I think it would be helpful for you guys to visit with a certified kingdom adviser there in Akron just to look at your whole financial situation, evaluate these policies, help you figure out how much life insurance you really need. Look at any other planning considerations, including your investments, and even do a retirement calculation to determine are you on track ahead or behind just so you have that information. It'll cost you a little something, but I think it'll be well worth it. So short answer to the whole life is I wouldn't do anything until you get a bit more information and you'd always want to make sure you put the new term policy in place first before you cancel it.

You wouldn't want to be in a situation where you have no insurance and then you find out you have a pre-existing condition. And then secondly, I'd recommend you get some financial advice in the form of a financial plan. And to find a certified kingdom adviser there in Akron, just go to MoneyWiseLive.org and click on Find a CKA. Adam, God bless you and your wife. Thanks for your call today.

We'll be back with more right after this. your financial goals while remaining true to your Christian values and commitments. We call this investing that makes the world rejoice. More is available at InvestEvenTide.com.

That's InvestEvenTide.com. Christian health care ministries enables believers to meet their health care costs affordably, biblically and compassionately. It's not insurance, but a voluntary cost sharing ministry based on the biblical example of Christians sharing each other's needs.

And members aren't fined under the law for not having health insurance. Christian health care ministries might be your health cost solution. Call 800-791-6225 or visit chministries.org. Hi, my name is Ryan, a communications major at the Moody Bible Institute. The Moody Radio Verse of the Week is found in Second Chronicles 714. If my people who are called by my name will humble themselves and pray and seek my face and turn from their wicked ways, then I will hear from heaven and I will forgive their sin and heal their land.

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With SRN News, I'm John Scott. President Trump says he's expecting a strong rebound in the third quarter of 2020, with a good economic report coming out just in time for the November election. He spoke at a Labor Day news conference to talk up the economy's recovery.

The president claims Democrat Joe Biden's policies would destroy the economy. Wildfires have burned more than 2 million acres in California this year, setting a new state record. Temperatures have also been soaring in the state. Los Angeles recording 111 degrees on Sunday. A British judge has rejected a request by lawyers for WikiLeaks founder Julian Assange to delay his extradition hearing until next year to give his lawyers more time to respond to U.S. allegations that he conspired with hackers to obtain classified information.

The U.S. has indicted Assange on 18 espionage and computer misuse charges. This is SRA News. It's really great to have you with us today on MoneyWiseLive. Psalm 37 21 reminds us, the wicked borrow and do not repay, but the righteous give generously. And if we can help you today to be righteous and to be forthright and to be wise with your money and your possessions, that's why we're here. Let's go right back to our phones.

Nashville, Tennessee. Hi, Gary. How can we help you, sir? Gentlemen, greetings to you.

I turn to you for some direction. I have a dear, sweet mama who's dealing with some cancer issues right now. And her home has a balance on its mortgage of about, I think, 58, 59 thousand dollars. And I'm curious, can I do a purchase of her home to relieve that burden from her and not have to worry about gift taxing or that sort of stuff?

Yeah. Are you planning to buy the home at fair market value or just for the basically the value of the outstanding mortgage? You know, I was thinking the outstanding mortgage. And that's why I've called you, because someone said that you have to pay whatever that value market value would be.

Yeah, yeah. Essentially, you do. If you were to sell it to a non-family member at below fair market value, the IRS considers that an arm's length transaction usually would let it slide. But when a family member does it to another family member, it's a non-arm's length transaction and it does cause red flags to pop up at the IRS with a gift tax not far behind. It doesn't mean you can't give a family member a good deal. But if your mom were to sell that home to you by, you know, and it would be by, let's say, less than 25 percent or more than 25 percent of below fair market value, then that would be allocated to or considered a gift. Does that make sense? Then I would. Yeah, it does. Well, then would I then be obligated to a tax for the difference?

No. Well, you'd need to work with your tax preparer just to see what the implications are of that. I suspect that would go against your lifetime exemption or hers because it's her property and she's the one making the gift to you, in a sense, because she's selling it to you well below fair market. And, you know, based at the current levels, that wouldn't be an issue. The question is just does that at some point get changed in the future and would that create a gift tax situation down the road?

That's entirely possible. So I think you just need to visit with a tax professional, really understand the implications of this from a tax standpoint. And then if you're comfortable with that and decide to go ahead with it, then I would have a real estate attorney draw up the docs for you to make sure that it's done properly and it's recorded and all those types of things. But make sure you look into both of those before you make a decision to proceed. Thank you so much. All right. Appreciate it. Thank you, Gary. Thanks, Gary. God bless.

But let's see. Hi, Illinois. Hello, Frank.

What's your question for Rob West today? Hi, I'm 55 years old and I'm a caregiver and I don't work full time like I could work for a client and all of a sudden they pass away and I'm out of work for a year straight, sometimes six months straight. So right now I'm actually working. Before I started this caregiving job, I lost my job in retail. I was selling jewelry for many, many years, but I don't have a 401k.

Never did. Never thought about, oh, you know, the future, saving money and all that stuff, doing it on my own. And I little by little try to put some money aside every time I could. I like skimp and save every penny I can.

And I never go out to eat. I never do anything that I even spend hardly any money on. I have about fifty, maybe fifty five thousand dollars of cash that I don't even have in the bank, which is not a good idea, but I don't know what to do with it at my age. Like what would how do I even do anything with stock? Like what would I invest in or should I?

I don't know what to do. Sure. Makes sense, Frank. I think the key is we want to try to normalize as much as you can on a variable income, the cash flow that you have coming in. And during those seasons where you are working and you have some steady paychecks coming that you're putting some surplus aside in savings such that when you are not providing those services and you don't have any income, then we've got money available and you'd want to have more reserves than someone who's on a paycheck or a salary where they can count on that every month. So I think that's the first step for you is to determine what does it take to fund your lifestyle, all of your expenses and even the nonrecurring expenses and the things you need to be saving for because they come once a year. And, you know, being able to take a vacation every now and then and, you know, what you need to put away to maintain the car, all of those things.

What does that mean? What do you need for 12 months? And then look at, you know, based on historical trends and how many months a year you find yourself typically working, you know, being able to set aside that amount and set a goal for that so that you can pay yourself a consistent income so you're not, you know, seeing these wild fluctuations. Then once you determine, OK, you know, I know what I need for the year and I've got a plan that helps me get there. And for instance, you know, I've already been able to put away a few extra months this year.

And so I'm on track with what I know today. And you can adjust it if you have to then decide, OK, what's actually available to invest for the longer term. But that would be beyond kind of this cash flow reserve that you have and the emergency savings of probably three to six months expenses that you need as well. Until you have those in place, you know, I wouldn't be putting money away with a 10 year time horizon because you may find that right at the time you're starting to invest for a year or two in. Now all of a sudden you're having to sell your investments to pull the cash back out because you're needing to fund your lifestyle.

And that's what I want to avoid with that portion that truly, though, can be earmarked, Frank, for the long term. If you're, you know, being paid as an independent contractor, you're considered self-employed, you're probably going to want to look first to the Roth IRA. And then beyond that, I would look to the SEP IRA. The Roth at fifty five is going to allow you to put in seven thousand this year. And then the SEP, you'll be able to put in a lot more than that. I would look at opening those at either a Schwab or a Fidelity where you can have very low expenses. They can get you set up with an ETF portfolio that matches your risk tolerance, investment time horizon, goals and objectives. And it'll use very low cost, but very broad based indexed investment options that will just capture the performance of the market over the long haul. And this is a great time to become a systematic investor because we're at a period where the market is down. But, you know, again, I wouldn't go into that until you do a bit more work to figure out what do I need in terms of the annual amount to put aside to normalize some of my monthly cash flow.

And I need to build up that emergency fund in a liquid savings. Does that all make sense to you? Yes. Thank you. All right. Again, for the those the Roth or the SEP, the SEP IRA, I'd probably look at the Schwab intelligent portfolios or you can look at Fidelity or Vanguard. Frank, we're glad that you called today and we trust that will work for you going forward.

Thanks so much. And Rob, you know, I've had people tell me before, I just want to know what to do with my investment money. I don't really want to get onto a budget, which I know you guys recommend.

Is that a prerequisite? Do I have to be on a budget in order to begin investing? Well, you really do, because, you know, at that point, if you're not, how do we control the flow of money in and out? And we don't know how much we need or have available to be putting toward investments until we really quantify what we need to fund our lifestyle. Yeah, OK. You're listening to Money Wise Live, except we're not. We're prerecorded today, so don't try to call in. But don't go away.

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And on that day, the choice we make today will have consequences. Managing God's money is available when you click the store button at moneywiselive.org. You're listening to Money Wise Live, and we're certainly glad that you are. This is a call-in program. Wouldn't be much of a call-in program without you there. Now, today's broadcast is pre-recorded, so please don't try to call right now. But earlier, we set up some calls in advance. So let's continue. Let's go back to our phones. Irma and Laura, we are coming in your direction, so don't go anywhere.

But first, Lawrence, Indiana. And Paula, what's on your mind? Hey, thank you so much for your fantastic, great ministry. I am nearing retirement about 18 months from now. And I work with a faith-based healthcare ministry, and they offer – I've been there 35 years, so a nice, you know, the monthly pension. However, the decision I need to make ahead of time is – well, not that – do I want to take a monthly payout from them for the rest of my life, or do I want to take out – I think right now it would be about $137,000, but you're guaranteed about – I think it would be around $3,100 a month for the rest of my life, or the lump sum to invest on my own.

Yes. And I'm leaning a little bit more towards taking the monthly payment, because it's within my lifestyle, and the other factor is if you take it out right away, the whole amount, you have to wait six months to work with them, even as we're waiting for time, which I would like to do, as long as I'm able to. And otherwise, you could be back to them after your first pension payment in 30 days. Okay.

You broke up there right at the end. So you said, give me the six-month provision you were talking about? If you take out your lump sum and decide to go invest it on your own, you cannot rehire with them in any capacity for six months waiting for you.

If you take the monthly pension option, you get your first pension payment in 30 days, and at that point you're eligible to restart. Yes. Yes. Very good.

Okay. Well, this is obviously a choice that you need to give a lot of careful consideration and prayer to, and it really comes down to your life expectancy, which the real question we can ask there is just based on our health and longevity in the family, things like that, that would be one consideration. And then your retirement income, does this monthly check in fact cover what you would need to cover your lifestyle moving forward and essential expenses? And if so, having that peace of mind moving forward would be something that a lot of people like to have access to. So you're not ultimately responsible for making sure that this lasts throughout the rest of your life.

You would know that at least that portion is covered. Now, the lump sum, the benefit there is, gives you more control over your money obviously, allowing you the flexibility of spending it or investing in how you see fit. And as long as you can in fact make it last through the rest of your life, you'd have access to the principal in the event that you needed access to a larger sum of money, maybe a major medical event, or you needed some long-term care for a period of time, something like that. So I think those are really the considerations you need to look at. But assuming you expect longevity from a health standpoint, and Paula, you really see this as something that would really help you have some confidence that you would be able to fund your lifestyle throughout the rest of your life, and whatever the Lord has for you moving forward, then that can be quite attractive.

The only other consideration there is, if a pension administrator were to go bankrupt, which is obviously for most companies very low risk, not something you often would think about, but it's a possibility, the pension payments could stop, although there is pension benefit guarantee company insurance that would cover most situations, so that would be the only other consideration. But given that, give me your thoughts on which way you're leaning and whether you have any questions on what I've shared. Well, I'm glad you brought up about the long-term care, because I do not have that, and the income situation, it would cover about 75%.

I believe when you add your Social Security, and then I have a little over, not quite, $400,000 in the, you know what I call it, the long-term savings investments. So, I feel, seriously, I feel inclined to stay with it, because the Lord led me to this position, and he's been faithful along that takes me from a spiritual standpoint, if it sounds financial either way, and the health and all of that should be okay. Yeah. So you say you're leaning toward taking the monthly payout of the pension? Yes.

Yeah, yeah. You know, that's, again, comes down to those considerations, and it sounds like you have thought through this. One thing that might be helpful, because this is a pretty significant decision, is for you to take some time and visit with a financial planning professional who could really take a look at both of these options, take a look at what the lump sum payout would be, and what a reasonable expectation would be in terms of the income that you could generate from that without touching the principal, which from a wealth transfer standpoint would give you something to pass on to your heirs if that's appropriate, versus taking this monthly pension that obviously would not pass on beyond your life, and just consider really the imputed kind of interest rate there that you would have to achieve to accomplish the same thing, although you'd have to consider the fact that you are assuming that risk.

And if you're investing in the market to do that, then you'd have to be comfortable with assuming the risk that comes with that. So I think at the end of the day, it sounds like you're leaning toward the monthly payout, and if it does the things you're looking for and gives you that added peace of mind, that's real, and that's something that needs to be factored in here beyond just the numbers of it. But I'd probably take some time to visit with somebody who can really help you run these calculations and look at both of these decisions in light of your overall financial plan more than we would be able to do just here quickly on the radio today. So if you want to move in that direction, I'd recommend you go to our website, moneywiselive.org, click on Find a CKA, a Certified Kingdom Advisor there in Indiana, and just spend a couple of hours with somebody who can really help you look at this from both perspectives.

This will also be an advisor who shares your values, so they can factor in that as well. Paula, I pray God will give you wisdom and direction as you seek him in this regard. Thank you very much for calling in today.

Let's quickly move to Grand Rapids and Irma. We know you've been holding. I understand you want to get rid of some credit cards, huh?

Or maybe. I do. I do. All right.

Go right ahead. Okay, I am retired, 74 years old. I work on the Title V program, and I have five credit cards. I know that I would keep one and you maybe two, but I don't want it to hinder my credit score. But I did hear something about you can lock your credit or something like that. And I do have a card that I can pay off probably next month. So I don't know what I should do or how I should go about.

Sure. Irma, are you carrying beyond this one that you'll pay off next month? Do you carry any other balances or do you pay them off in full? One credit card and it's probably the balance is under $20.

Okay, very good. So the biggest issue that happens when you close a card that will affect you negatively is something called credit utilization, which just basically means when you reduce the available credit, which is what's going to happen when you close the accounts because that money is no longer available to you, then if you're carrying a balance, the balance you're carrying is a higher percentage of the total credit you have access to. And if it gets above 30 percent, that really could impact you negatively.

That's not going to be a factor here because you're not carrying a balance. So if you take three of them off the table, you're not any higher percentage because you have no balances. The other issue is just the longevity of the accounts that you have, the average length of the accounts. But most of the credit scoring models now still factor in the age or the history of the account even though the account is closed. So what I would do is just close two every six months. So I'd probably close two now and then wait six months and do the third one. Other than that, I wouldn't have any concern over your credit.

If you saw a minor drop in your credit score, it would bounce back within a couple of months. Irma, we wish you the best. Thanks very much. Laura, we know you've been holding. We're almost out of time.

Give it to us quickly if you can. Well, my husband and I are working on paying off our mortgage. And we'd like to do that within the next 10 years before we retire. We have enough surplus that we could make a considerable monthly payment. And I don't know whether it's to our advantage to just keep putting that money back and then pay it a couple times a year like we have been. Or if it's better for us to set an extra amount each month and just make that payment as though it's part of the mortgage.

Yeah. Laura, I love this idea. And as long as you have your emergency fund in place, you're on track with your other savings goals, I think starting to really focus on reducing that mortgage is a great idea. If you have the money to do it, you build it into your plan, there's no reason to wait. You have no benefit of sending a larger amount twice a year versus sending as much as you can with your regularly scheduled payment. Because as soon as you pay toward principal, as long as they're applying it that way, and you'll want to check with your mortgage servicer to make sure you send it in such a way that they're applying it immediately. But as long as they are, that's money that you're not paying interest on for the life of the loan. And the quicker you reduce that principal, the quicker you're reducing the overall amount of interest that you're paying. So I would go ahead and send it monthly.

And I would just make sure you contact your servicer to find out how they want you to do it, so it can be applied to the principal of the mortgage. Yes, Rob. But over the years, how many people have we spoken to who regretted paying off their mortgage early? Let me count them. Zero. And that's the correct answer.

And with that, we're pretty much out of time. Thanks, Rob. Hey, thanks so much again for being with us today. Hope you found something helpful and useful.

If so, please do us a big favor and tell a friend. We're with you each day at this time, Monday through Friday with MoneyWise Live. Our phone number is 800-525-7000. Our website is MoneyWiseLive.org.

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