Rethinking Retirement

We continue to see the collateral damage caused by all the packaging.

Thanks for watching. Well let's begin with the financial side of things, Rich. It eases the strain on your retirement assets in three ways. First, delaying retirement means you'll have fewer years when you need to make withdrawals for living expenses. Second, for most retirees at least, you'll have more peak earnings years. The easiest time to maximize your contributions to a 401k is when you're at the top of your pay scale and that's going to maximize the benefit there. And third, those added working years give your nest egg more time to grow through compound earnings. Although, as always, you'll want to keep a smaller portion of your portfolio in the market as you get closer to retirement.

Ok, well all of that makes perfect sense. In a nutshell, more working years mean more money. So what's another financial benefit of delayed retirement? Yeah, you may be able to delay withdrawals from your 401k. The CARES Act suspended the required minimum distributions this year for 2020 for both 401ks and IRAs due to, of course, the coronavirus.

But that was just a one-year reprieve. Normally, you have to start taking those RMDs when you reach the age of 70 and a half or 72 now, depending upon when you were born. But there's a sometimes overlooked provision for 401ks and unfortunately this doesn't apply to IRAs.

It's called the still working exception. You see, if you contribute to work past those ages and you meet certain other requirements, you can delay taking RMDs until you retire, regardless of your age. Now, it only works for your current 401k, not older ones perhaps you left with the company when you separated. Delaying RMDs, though, has two benefits, actually. It keeps more money growing in your 401k, but also it delays having to pay taxes on your withdrawals until, quite likely, you're in a lower tax bracket once you have retired. So, there's definitely some silver in the silver lining, so to speak. Yeah, okay.

What else have you got? Well, if you have to delay retirement, your Social Security check will almost certainly be larger and that happens in two ways. First, every year past full retirement age, which is now either 66 or 67, depending upon your age, your check will increase by 8% up to age 70, so there's that. But then also, your Social Security benefit is based on your highest 35 earning years. Assuming you're earning now more than you did when you entered the workforce, which would be true for most people, then each higher earning year replaces a lower earning year, which increases the overall amount of your check.

Gotcha. Well, that's a fairly exhaustive list of financial benefits to delayed retirement. What about some less tangible benefits?

Yeah, sure. In one respect, it may actually be easier on your routine. You see, if one spouse retires and the other doesn't, you can find yourself perhaps out of sync. Who's supposed to do what?

Do all the household responsibilities fall on the retired spouse? That sort of thing. Yeah, I could see that causing a bit of friction. Okay, we got time for a couple more here.

What else? Well, you get to maintain your social network for a longer time. You can lose touch with work friends after you retire. Plus, there are psychological benefits to interacting with other people. It keeps you on your toes and it stimulates your brain when you continue to work.

I need all the help I can get with that. All right, I think we're just about out of time. Anything to wrap this up? Yeah, well, I think, you know, as we think about doing work that glorifies God, we always want to work as unto the Lord. And so, no matter what season we're in, retired, working, the question is, Lord, what would you have me to do? You've given us a lot to think about. Thank you, sir. And we'll be back with your calls.

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That's christiancreditcounselors.org or call 800-557-1985. For those of you who like to dabble your toes in social media, we have got a few presences, if that's a word, online. We've got a Facebook page at Money Wise Media. We're also on Slack and, excuse me, we're not on Slack, we're also on Facebook and on Twitter and on Instagram and probably every other social media.

Rob and I are on Slack right now but that's totally, totally separate from that. I did want to mention though, we often post a Facebook question of the day that ties into our opening topic and today's question was, how have your retirement plans changed? Mike has chimed in, he said, I'm considering working a year or two longer in part because Social Security benefits are calculated on 35 years of work history.

You were just talking about that and Mike says, it's definitely a factor worth considering. And Rob, we probably can't really wrap up that topic without talking about the biblical perspective of retirement and the Bible doesn't talk about 401ks, it doesn't talk about 65 being the magic age. What does it have to say about retirement? Well actually, Rich, there's only one place in the Bible you'll even find the idea of retirement and it refers only to the Levitical priests in Numbers 18 25.

It reads, and from the age of 50 years they shall withdraw from the duty of the service and serve no more. You know, I think that was a very specific context and what we can clearly take away is that because we saw that we were to be workers and that occurred before the fall, we just look at the Garden of Eden to see that we were to be productive and to take God's creation and improve it and that we should think about the call that God has on our life realizing that we're working to an audience of one to glorify him only and that calling doesn't have an expiration date. And so we should expect to continue to work for his glory even after perhaps we reposition our lives away from paid work and think about what God has for us in a unique season perhaps when we can't work or when we have the ability because of assets we've accumulated to go do something else that the Lord might be leading us to. So it's always about how am I serving the Lord, how have you called me Lord, and it's not about pursuing this life of leisure although there's nothing wrong with rest, that's God-ordained as well, but it's entirely different than I just want to accumulate as much as I can as quick as I can so I can have the good life quote-unquote.

I don't think that's a biblical perspective. Right, Howard Dayton years ago introduced me to the topic of your workplace being your pulpit and that that's you know what what you do vocationally is actually an extension of what your life ministry is so I know a lot of people when they retire perhaps they don't go and punch a clock anymore but they may take those same skills and use it to mentor other people in business or just to find new ways of ministering outside of the office but still taking the skills God's given them and yeah I think that's exactly right my friend Mitch Anthony who we've had here on the broadcast before says it's about retiring not from something but to something right and I think about what am I retiring to it's what does God have for me in this next season that I'm transitioning to not just retiring from something which leaves kind of my next assignment open-ended and so I think that's a constant dialogue we need to have with the Lord and if we're married with our spouse so we can experience his best in that season so my do-it-yourself guide to dummies book I may not be able to use quite as extensively as I thought I had if I'm still doing what God's called me to do that's exactly right we'll find out our number eight hundred five two five seven thousand again one eight hundred five two five seven thousand we'd love to talk to you today and we'll start by heading to Minneapolis Minnesota John welcome to money wise live how can we be of service sir hello sir question for you regarding my my inheritance so to speak my brother passed away in February he he set up his bank account so that everything went to myself and my wife his possessions were pretty meager and so we've you know we've taken ownership of those and we've got him in a storage unit but before he died he had set up a a legal thing with trying to get money from Social Security Administration for a disability that he had and after his death they awarded him forty thousand dollars you know a considerable amount of money and I I you know tried to get that and they sent me a form saying that I needed to you know they wouldn't just do it because I was his brother they needed me to be an executor I I guess I'm wondering I'm wondering if there's any other way around that with the SSA or if you know how do I go about becoming an executor it's it's I've looked into it a little bit and it's really not very clear to me yeah yeah well let me just talk generally about how this would work John I'm not an attorney but I'll just tell you kind of how this unfolds the first thing you would typically do is to put your brother's estate into probate so that you can be named the legal representative or executor as you reference so to do that you would file a request or a petition for probate in the county where your brother lived at the time of his death there's many other steps to getting the estate through probate but one of them will be to have yourself named as that legal representative and that's really important because as the SSA told you they will make payment to a deceased beneficiary but there's a pecking order and it would first go to a surviving spouse doesn't sound like there is one then children then parents finally to the legal representative of the deceased person's estate and it sounds like in that case that would be you once you've been declared the legal representative of the estate you'd have to fill out a social security form that you'd find on their website and if you have any questions about how to do that I would make an appointment at your local SSA office they should be able to talk you through the process of claiming the funds but all of these steps are going to be put in motion by you being named the legal representative as a part of the probate process it sounds like that was never initiated is that right it was not just because of the cost of probate and that existed it wasn't necessary at the time this is the only reason why yeah so it sounds like in this case you know because this is the steps that the Social Security Administration goes through it is going to be necessary in order for this payment to be made to you as a legal representative which would only be established through the probate process so I think that's the decision you're gonna have to make as to whether you want to proceed with that given these new circumstances revolving around this check but so sorry to hear about your brother's passing my friend we appreciate you checking in and I think hopefully you can decide whether these steps are in order John we do appreciate the call thank you sir let's see if we can squeeze one more in before the break to Cape Coral Florida Michael we've got just a couple of minutes how can we help you sir thank you gentlemen I'll be brief second chapter of life my wife and I are both 55 three daughters six grandchildren married our homes are paid for we are in a position now that we don't know where to go next I've read Robert Buford late past halftime a book we do a lot for ministry but we don't know what to do with the additional money that we get every single year with maxed out our 401ks but being we have no debt we just don't know where to go from here that's my question we owe nobody anything yeah it's a great place to be Michael because you know when we follow biblical principles of managing God's money that he's entrusted to us it actually becomes quite simple because if you think about it there's only five things you can do with money there's money we give there's the money we owe for debt and taxes there's the money we live on and then there's the money that we're saving or growing and and we can start to eliminate those five as we check off the boxes you know once you're completely out of debt that's one of the five that's gone you know at some point you you paid all the tax you need to pay and that's gone you might decide you're not going to increase your lifestyle anymore that's eliminated and ultimately what you'll find is you have two categories left the grow and the give so there's the money you could continue to accumulate but I think we all need to be establishing a financial finish line there's nothing in the Bible that I believe affirms this idea that we should just mindlessly accumulate wealth in fact we see just the opposite in the parable of the rich fool you know who continued to build bigger barns and he said you fool your life will be demanded of you and so clearly that shouldn't be our aim just to accumulate more and more which means that frankly at that point once we've established that financial finish line I think it's incumbent upon us to give that we should be thinking about how we can be not a bucket so that God's resources end with us but a pipeline into God's activity the question is how should you do that how do you give wisely in a way that maximizes each dollar not only giving out of cash but of assets and then where should you be giving and what parts of the world locally or internationally and to what causes that align with your passions in God's heart and I think that's perhaps the thing you need to begin exploring I'd like to recommend something to you and we've talked about this a few times on the program we probably should talk about it more often there's an organization that you may or may not be familiar with out of Orlando Florida called generous giving and it's a phenomenal organization and they have a basically a 24-hour experience called a journey of generosity and in the midst of kovat these jogs if as they call them which is short for journey of generosity these jogs have been moved to an online venue where you can participate in really exploring the heart of God you and your spouse in a small group of other Bible believing givers to not only really hear from God in this generosity journey but to also clarify how much he would have you to give and where and I think this jog might be something that would just really be a blessing to you so I want you to head Mike if you will to generous giving calm and look into a journey of generosity I think that would be a great next step for you and I'd love to hear from you after if you decide to proceed what the Lord may share with you during that experience Michael thanks so much for your call and being with us today on money wise live our number eight hundred five two five seven thousand we've got a few lines open so call now eight hundred five two five seven thousand and we'll be right back do you know if you have enough enough money enough house do you know how much is enough if not Ron blue can help with his book master your money a step-by-step plan for experiencing financial contentment learn how to save invest and give wisely how to create a long-term financial plan and how to get out of debt you'll find it all in master your money by Ron blue available when you click the store button at money wise live org for the word of God is quick and powerful and sharper than any two-edged sword here's Beth Moore with a quick word but I can remember when when she would do something to Amanda and Amanda would come in and she would say just exactly this way me show Melissa hit me and she's glad she did she always added that part always always because to Amanda it was just the motive the heart was so it was not just that she didn't just hit me she's glad she did everything was she's glad she did mattered to Amanda he saved you and he's glad he did he called you and he's glad he did he said his affection upon you and he's glad he did in fact if you never get that through your head and I never get that through my head we've stopped taking our tours into the ditch because I'm telling you our magnet back to the pit of sin is our own unbelief that we have really been made different and are completely loved by God that will you take that one to the spiritual bank it will never change we do not believe what he says about us we do not believe what he says out of his own heart we do not believe that we're different people than we were so we're gonna act out of what we really do believe well however you're living however I've lived in my life I've been acting out of my belief system but we can talk a big talk but we're living what we really do believe he's not sorry it's not sorry you've been listening to a quick word with Beth Moore the study of Galatians is now available as an online experience sign up today at Beth Moore dot org or join Beth in January 2021 for the release of the printed workbook edition again that's Beth Moore dot org glad you could join us for a 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 money wise live.org so glad to have you with us today on money wise live I'm rich Roswell filling in today for Steve Moore who we trust will be back tomorrow Rob West our host today and we're taking your calls at 800-525-7000 800-525-7000 or you can convey your question via electronic means the address is questions at money wise.org and got a question or two lined up that we'll try to get to a little later on in the program but we go back to the phones Rob a lot of people talking about retirement today Mike is calling from Ringgold Georgia and Mike I understand you're trying to weigh the do I retire now or later question yes that's right now thank you for taking my call sure what's going on yes I was wondering now I've heard that from your program that you received more of a benefit if you wait to your 67 to retire instead of going ahead and retiring at 62 but I was wondering how long would it take you to catch up with yourself let's say you did retire at 67 how long would it take you to catch up with yourself had you retired at 62 years old yeah so you're gonna take about a 25% reduction on average Mike when you take early Social Security at 62 versus waiting until full retirement age and then every year beyond full retirement age either 66 or 67 you'll get 8% a year in the form of a higher check up to age 70 at which point you might as well take it because you're not going to continue to increase that check and at that point it's obviously a math equation based on how long you live the thing that you have going for you at least statistically speaking is that you know the last time I looked at this the CDC put a report out that said I think this was back in 2016 I haven't seen the newest data but people are living longer just because of improvements in medical sciences but once you reach age 65 your life expectancy as a male goes up to 83 and your life expectancy as a female goes up to 85 and so obviously you've got time on your side at 67 it's an average of about 11 years based on the last time our team looked at that in terms of where the break-even point is so it's obviously a question of okay I could have had you know the money sooner and started accruing it and socking it away or living on it or do whatever you want give it or you could wait get that higher check for the rest of your life and that's going to come down to does the Lord Terry and you know what is your health and you know there's obviously so many factors there what is your current health and what about your you know your family health and and so forth that might give you a picture into whether longevity is on your side but I think you know you have to obviously be able to live long enough in this case an average of 11 years to be able to enjoy that higher check the benefit though is if you live beyond that then you obviously have more money to be able to work with there are added benefits though of delaying which we've talked about earlier in the program and that is a if you don't need the money and you continue to work you perhaps are replacing earlier earning years as you were starting out in your working career which could also improve or increase the the check that's paid out because it's based on your 35 highest earning years it also gives you an opportunity to you know continue in perhaps what God has called you to so I think you know there's a math side of this a purely financial side and then there's the non-financial side and you've got to look at all of those factors for yourself and decide what makes the most sense I'm just curious Rob if you do retire early whether it's 62 or 65 or whatever and you start off with that lower amount is there ever a point at which Social Security ramps those payments back up to your full retirement benefit or do you stay low for the duration yeah it wouldn't automatically reset to what you would have received at full retirement age but you do continue as you continue to work to replace those earlier earnings years which means you may see in addition to a cost of living adjustment you may see increases as the amount is recalculated each year very good you're listening to MoneyWise Live your host is Rob West I'm Rich Rozzle sitting in for Steve Moore today and we'll be back with more including more of your questions right around the corner so do stay with us MoneyWiseLive.org if you'd like to find out more about the program or hear past episodes we'll be right back how should we as Christians think about investing what if we could invest our money in a way that aligns with what we believe at 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 a 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 available at invest eventide.com Christian Healthcare Ministries enables believers to show love for one another by sharing each other's health costs through CHM's voluntary health cost sharing programs members uplift each other spiritually and financially CHM is an eligible option under the Affordable Care Act and a Better Business Bureau accredited charity interested learn more by calling 800-791-6225 or online at chministries.org hi my name is Ryan Anderson a children and family ministry major at the Moody Bible Institute the Moody radio verse of the week is found in 2nd Corinthians 4 7 through 9 but we have this treasure in jars of clay to show that this all surpassing power is from God and not from us we are hard-pressed on every side but not crushed perplexed but not in despair persecuted but not abandoned struck down but not destroyed that's 2nd Corinthians 4 7 through 9 the Moody radio verse of the week things are always happening at Moody radio God is at work and listeners all around the world our monthly online newsletter uplift has changed in order to bring you more listener stories more program updates and more listening resources be among the first to know about Moody radio's ongoing outreach check out the all-new free e-newsletter uplift subscribe right now go to my moody radio dot o-r-g my moody radio dot org do you know if you have enough enough money enough house do you know how much is enough if not Ron blue can help with his book master your money a step-by-step plan for experiencing financial contentment learn how to save invest and give wisely how to create a long-term financial plan and how to get out of debt you'll find it all in master your money by Ron blue available when you click the store button at money wise live org with SRN news I'm John Scott at her confirmation hearings Supreme Court nominee Amy Coney Barrett has declared that Americans deserve an independent Supreme Court that interprets the Constitution and laws as they are written barring a dramatic development Republicans appear to have the votes to confirm her the mother of Arizona senator John McCain Roberta McCain has died she was 108 a spokesperson for her daughter-in-law Cindy McCain says Roberta died today a cause of death not immediately released the Hall of Fame second baseman Joe Morgan has died a family spokesman says he died at his home Sunday in Danville California Morgan suffering from a nerve condition a form of polyneuropathy he had a Hall of Fame career with the Cincinnati Reds he was 77 stocks finishing higher the Dow gained 250 points the Nasdaq was up 296 this is SRN news welcome to money wise live finding God's plan for your financial life I'm rich Rosalind for Steve Moore today our host as always is Rob West and we're taking your calls at eight hundred five two five seven thousand and we do still have a few lines open so call now eight hundred five two five seven thousand and back to the phones to Omaha Nebraska we say hi to Samantha hi how are you hey Samantha we're doing fine what's going on how can we help so I have just recently started investing in a Roth IRA and in the stock market and it's I don't have a lot of money but I'm I need to get going on my retirement so anyway to learn as I go so I have I initially invested three thousand in a Roth IRA and I did that with index funds and I didn't completely understand what I could do within the Roth RA so I also opened up a regular brokerage account for individual stocks which I put two thousand in now I'm realizing that I could have just done all of that within my Roth IRA tax-free and I'm wondering if I should sell off my brokerage account and reinvested in my Roth IRA even though doing so I might have to pay more for the stocks I'm already invested in yeah yeah okay well I appreciate that background Samantha let's back up just a little bit tell me about your work situation do you are you self-employed or you w2 employee no no I am I work full-time as a server at a restaurant and I'm also going to school to finish my degree and I'm doing this very late in life I'm 50 okay and do you have access to our 401k at work they I do have they just started making a 401k available at work they do not match at all okay there I'm letting having them take two percent and that's it because they're not offering me anything in addition to that okay very good and how much do you have on a monthly basis extra that you could put toward retirement well I've been putting in about 400 a month since I opened this up okay that's great and that goes directly into the Roth it's going directly into the Roth and I'm just doing it as because as a server sometimes your income goes up and down so I'm just doing it for every every pay period I've been putting 200 in okay and that's on top of what they're pulling out of your check for the 401k is that right correct okay yeah that's a great start I mean I think the key is keep in mind with the Roth you're putting in after-tax dollars but the money is going to grow tax-free so you're not getting the deduction in the year that you put it in so let's say you put in $4,800 400 times 12 I realize you may not have done it every month this year but let's say you did then that 48 would would still be money you'd pay tax on for 2020 income taxes but that $4,800 is now going to grow between now and right now in retirement let's say the next 15 or 20 years and whatever you add to it is going to be invested that money is growing and there's no tax due on any of the gains when you take it out in retirement as long as you leave it in there at least five years and as long as you're over 59 and a half when you start pulling it out then you're you're never gonna pay any tax on any of the the gains that's the real benefit of the Roth you'll be able to put in 7,000 this year you get an extra thousand over the age of 50 and so the question is can you fully fund it and I like the idea of prioritizing the Roth over the 401k because of the tax treatment especially since there's no matching in the 401k so I think the key for you because you are starting a little bit later is to really focus on making sure your financial foundation is in place I want you to be out of credit card debt I really would love for you to have three months of an emergency fund in place giving regularly but assuming those pieces are in place then I think you know prioritizing long-term savings in retirement starting with the Roth and then if you get to the place where you have the ability to do more than 7,000 back to the 401k I think would be a great option you certainly could look at that brokerage account there's no reason to you know have that money in a taxable account if it's long-term money and so you know I think I'd probably go ahead and sell out of those if you're not going to be able to fully fund the Roth this year with just your regular contributions pay any tax due and then put it into the Roth and I actually prefer with the amount of money we're talking about here Samantha prefer you using mutual funds or ETFs rather than trying to pick individual stocks what you'll find with individual stocks at this level is you're gonna be too highly concentrated in one particular company as opposed to a fund or an ETF which gives you broad diversification and you're gonna have to do a lot of research as to what are those companies because we don't want to just pick the companies that we frequent when that may or may not be a good long-term investment play so let me do this I'd like to send you a copy of Austin priors sound mind investing handbook I think that'll be a real help to you and visit with our friends at soundmindinvesting.org for some great biblical counsel on investing but I think if you move in this direction of really limiting your lifestyle and being systematic and funding these accounts starting with the Roth and then the 401k when you get to retirement you'll have a lot to show for it. Samantha we're gonna put you on hold let's talk to Amy off the air she'll get some information and we'll get that right out to you thanks so much for your call today time for one more before our next break Leo is in Spokane Washington Leo how can we help you today yeah thank you for taking my call well we've saved up some money for a newer car about 30 grand and we were wondering you know should we invest that in the market as it is today with and get a loan with interest rates so low at this point hmm yeah tell me about the rest of your financial life Leo do you guys have any debt to speak of no okay do you own a home yes is it free and clear do you have a mortgage on it frankly okay very good and you have some savings outside of this thirty thousand like an emergency fund yes okay and what about long-term savings so retirement assets that you might use to supplement Social Security are you do you feel like you're on track with those yes very well okay very good you know I like the idea of you still paying cash for this car I think you obviously have plenty saved up in the market it sounds like you're on track based on where you should be at least that's you know what you're saying you're completely debt-free which is phenomenal you have an emergency fund in place and you've done the hard work of putting this money aside so you could buy a car and not have have to pay any interest on it and you know I think that guaranteed return plus the ability to remain free and clear in terms of your encumbrances is a great thing so you know if it were me I think I'd go ahead and use this money for the purpose in which it was intended which is to buy the car for cash and not take on any debt which also then frees you up with what you would have been paying in terms of a monthly payment if you want to systematically add to your investment accounts you know at the level you would have been making a car payment for that so you know I think you could go either way clearly you've demonstrated an incredible ability to manage God's money well and faithfully that's great if you said you know what we're fine taking on this small debt we'd like to put this money to work there's nothing wrong with that I just think given everything I've heard and how you all positioned yourself it's probably not any need to take on any debt at this point let's remain debt-free and then fund additional long-term savings out of margin or other assets Leo I think you're Rob's new favorite person he had this little twinkle in his eye when he was answering your question that free that's fabulous thanks so much for calling today we'll be back with a few more calls in just a moment our email address once again questions at money wise.org back in a moment God cares a great deal more about our money than most of us imagine in fact Jesus says more about our use of money and possessions and about anything else including both heaven and hell in managing God's money author Randy Alcorn 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 click the store button at money wise live.org hi I'm Gary McGuire I'm here to help you understand how urgent and how fun it is to share your faith at every opportunity through the eyes of a layman if you're wondering why we have so many godless politicians today politicians are a mirror image of the people who elect them and those of us who are electing them are mostly godless and that's because most Christians don't vote God forgive us we're living in the freest country in the world of God's birth to spread the gospel and Christians are allowing to be turned into a godless country by refusing to vote for Christians voting is more than a right it's an obligation and God will hold us accountable for protecting the country that provides most of the resources and manpower to evangelize the world that's why Satan is waging his all-out attack on America doing everything he can to destroy all respect for our country and our godly founders who put their lives on the line to make us free god bless America there is nothing more exciting than knowing God is using you to move people closer to him join us at ignite America calm changing the world one grandchild at a time here's Ken Canfield for grandkids matter I hear regularly from well-meaning godly grandparents who say well we'd like to get more time with our grandkids but it just isn't happening and I know there could be all kinds of reasons for them but friends if we don't become more intentional more proactive more engaged grandparents will be missing out first we'll miss a lot of joy and satisfaction of leaving a legacy that impacts future generations will also deprive our grandchildren of the very best benefits we bring through a close relationship and third I believe we risk falling out of sync with God's plan his heart is for grandparents to be engaged and have a positive influence enjoy your grandkids keep on connecting hearts and uniting generations would you like your life to be infused with joy would you like to interject an eternal dimension into even the most ordinary day author Randy Alcorn says you can when you discover the treasure principle in a concise power pack style this newly revised and updated book offers a six-step plan to finding the immediate pleasure and eternal rewards of the treasure principle and once you discover it life will never look the same the treasure principle is available when you click the store button at money wise live org if you've missed a past edition of money wise live and would like to hear it again or perhaps you missed the first part of this one and you'd like to hear it again don't forget you can find all of our programs on our website at money wise live org by the way while you're there you can also download the latest issue of the money wise e-magazine it features content to help you continue the journey to financial freedom using God's Word and that's what this program is all about this issues theme by the way is money wise decision-making you can listen to this quarter's podcast with Ron blue and also read exclusive articles from Ron from Howard Dayton from art Rainer and many others on ways to make biblically wise decisions for everyday living you just go to our website money wise live org forward slash sign up and you can be a regular recipient of the money wise e-magazine Rob you know I give our email address and then I forget to go to email so let me grab one real quick Linda wrote in and said when you cancel a credit card should you notify them I guess she means the card company or just cut it up yeah that's a great question and you you do want to notify them basically here's the steps you want to pay off any balance first redeem any rewards you might have accumulated so you may have some cash back or something like that don't miss that call them let them know they do typically recommend you go ahead and send something in writing a cancellation letter a lot of people skip that step but if you want to be somebody who dots the I's and crosses the T's I would do that then check your credit report and make sure it was actually canceled and then finally destroy your old card but I think going ahead and doing that with this added layer of protection to have that documented is never a bad idea and those would be the steps rich very good and by the way we do at times tell people to cut up their credit cards and that's not necessarily the same as canceling it it's just stop using the thing so well that's exactly right yeah it's the account is going to remain open unless you tell them otherwise exactly well let's get back to our phones Barbara is calling from Chattanooga Tennessee Barbara welcome to money wise live what's going on with you hey Barbara I think you we might be losing you there once you try to get to where you have a better signal maybe take a step or two to the right or left and that's there you go I think you're sending me now yes yes ma'am you hear me now okay okay so I I owe 120 on my house and I've not had the mortgage that long it's been less than three years but I thought about refinancing just because I plan on paying more down towards the principal and my company and I asked if I could refinance because I just heard the interest rates would be lower and they're so my interest rate is four point three seven five and they could only get it down to one four I mean sorry more than two four but they'll be getting rid of my PMI which would be eight eighty five dollars a month so I was thinking in my my insurance and my taxes are escrowed so my payment would be um right now it's 886 a month and my payment would be down to seven eighty eight a month but they would get rid of my PMI and that would help me pay more towards the principal that's what I plan to do but I just wanted to see what your thoughts were yeah how much do you have in the way of equity do you know meaning what is this home versus the hundred and twenty that you owe so the home on zillow is worth 140 and if I go through the insurance I mean not through the it's 140 on zillow and then just going through puny maps at the company I was in their price for 150 okay all right you know I think is this an FHA loan do you know FHA mortgage yeah so you'd have to refinance to get rid of that PMI I think the key is you know if you're going to refinance there's a couple of factors we want to look at number one do you have pretty good credit do you know your credit score yeah I mean it's it's good okay excellent but it's good it's like that it's in the um it's in the lower 700 okay because you wouldn't necessarily want to refinance just with the existing lender I'd want to go out and shop that around and make sure you get the very best rate you can is this a 30-year mortgage that you have currently it is all right and how many how long are into this are you when did you get it not long um I bought it in 2018 in May okay so I think the key would be um you know we want to get rid of the PMI if we can and assuming you have the 20 equity now you'd be able to do that the second thing is how low can you get the rate that's where I'd want you to really shop around because with a 30-year mortgage if you have good credit you should be able to get a rate around 2.7 or 2.8 percent right now which would be a pretty significant savings and so normally we'd want to see you'd get at least a point in savings and you should easily be able to do that but I wouldn't just automatically take the rate offered to you by the current lender you're going to want to go out on the open market and get the very best rate that you can you're also going to want to compare the closing costs I don't want you to pay any discount points to get that rate down you should be offered that APR you know just without any you know discount points involved you will probably have to pay an origination or some closing costs and you'll want to make sure those are in line shouldn't be more than two percent of the loan so on a hundred and twenty thousand dollar loan you know if you pay a point two percent that'd be around twenty four hundred dollars the key is that if you get that reduction in interest rate of at least a point and you're planning to stay in this home for at least five years hopefully more then you'll make that up in interest over time the saved interest will offset the the closing costs so I like this idea because we can get rid of the PMI which does you no good we can lower the interest rate by more than a point if you go out and shop it and if you're planning to stay put for a while you know this overall will be a great benefit to you and it's not like we're really adding to the term because this is a very you know you you got this mortgage so recently so I think those are your next steps in order to shop this mortgage Barbara I'd go to bankrate.com as a starting place to begin looking for various lenders and if you have any questions along the way let us know Barbara thanks so much for your call we appreciate it today next to Minneapolis Minnesota Donna you're next on MoneyWiseLive what's going on? I have about four hundred thousand in an IRA and when I was with my financial advisor last time he brought up the idea of putting some of it in an annuity and I remember you guys saying something about not liking them and I'm just wondering if you think I should do it. I see you know I'm not a big fan of annuities basically you know I think there are better ways for most people to invest without the complexity without limiting your flexibility and without the cost and here's what I mean by that when you put the money into an insurance contract which is what an annuity is you are getting some perhaps guarantees by the insurance company which removes the risk and that's really the most significant benefit to an annuitant is that you put the money into this insurance product and they either give you a stated guaranteed fixed rate of return or they are giving you a variable rate but perhaps with a floor meaning you can't lose money below a certain level even if the market is down and then you get some percentage of the upside when the market is up and then there's a whole you know slew of various types of annuities kind of in between those two and that's where some of the complexity comes in they're very difficult to understand how they're calculated and how they work and then the limited flexibility comes with the fees and the commissions that are paid out to the salesperson which limits your ability to get your money back out and so for most people what I find Donna is that if you've got money in an IRA you don't need the tax advantage that comes with an annuity because you've already got the tax advantage built in this money is growing tax deferred inside the IRA so then it's just a matter of putting it in the very best highest quality investments possible to get the most advantageous long-term growth in a way that's consistent with your goals objectives and age and risk tolerance but you're allowing the market to work for you now is there downside risk with that sure depending on what investments you choose you can lose your money but that's why you'd either hire somebody to manage this for you or you would pick you know very broadly diversified perhaps index funds where you're just going to capture the broad moves of the market which historically speaking as long as you have at least a 10-year time horizon you're going to do well on average more than eight percent a year over the last hundred years now in any given year it could be down 30 but that's why you would only invest with a 10-year time horizon so you can weather those storms and keep in mind a bear market which is this decline of 20 percent or more from the recent high typically only lasts 18 months to the max three years this year we had one that recovered in just a matter of months and so that's why we kind of play the long game there if you will so you know that's the reason that i don't love annuities now if you said to me rob i just i'm risk averse i want to have a guarantee i want to know that i'm transferring this risk away from myself in the stock market to an insurance company and i'm willing to give up access to my funds you know in exchange for that and i'm willing to give up a little bit of the upside in exchange for that then an annuity can make some sense it's just not my preferred option for those reasons so i've thrown a lot at you donna tell me your thoughts well um i was uh worried about what i lost in this ira over this whole covid thing but then it gained back and maybe that's the reason why my financial advisor suggested the annuity because i like to be safe but yeah i don't have to touch this money for another seven years so um i should just leave it alone yeah how much money is inside the ira if you don't mind me asking about four hundred thousand okay yeah so that's significant money which would also i'm not saying this person's recommending this for uh inappropriate reasons but that would also generate a huge commission if you put a four hundred thousand dollars into an annuity so i think you know the key is do you have the right advisor is going to do what's best for you for the long term and i think as long as it's managed properly inside an ira i just don't think there's a need for an annuity and in fact it would give you a lot more flexibility if you stay outside of an annuity and if you want to consider some other advisors i'd probably look for one that has the certified kingdom advisor designation i know there's a bunch of them in minneapolis you can find them when you go to our website moneywiselive.org rob a lot of people get scared when they see ups and downs in the market but they forget if they're not having to pull the money out right now then it's not necessarily a loss so that's exactly right very good rob thank you so much sir many thanks also to our top notch team today amy dan aaron and jim money wise live is a partnership between moody radio and money wise media we'll see you tomorrow