One size fits all may work just fine when you're buying bandanas or beach umbrellas, but it's definitely not true if you're saving for college. You know, it's no secret that we're fans of 529 plans around here, and there are plenty of good reasons for that, but today financial planner and teacher Rob West says there's another option to consider. Then it's your calls on anything financial at 800-525-7000. 800-525-7000. I'm Steve Moore, Coverdell Education Savings Accounts. They're next right here on MoneyWise Live. Well Rob, we almost always advise parents to open a 529 plan to pay for their kids or maybe even their grandchildren's college expenses, but now you're rocking the boat a little bit today.
What's up with that, sir? Well, no doubt Steve, a 529 plan is great. It's a tax-advantaged way to save for college, but it's not the only one. A Coverdell account is similar in many respects, but does have one distinct advantage over the 529 plan that some folks may be interested in.
Well, I'm interested as well, and we'll get to that in just a moment, but first, how are the two plans similar? Yeah, it's a good question. First of all, like 529 plans, Coverdell ESAs they're called, they give families a tax-advantaged way to save not only for college, but also elementary and secondary expenses as well. And that wasn't always the case for 529 plans, was it?
You're exactly right. It was always true for the ESA, the Coverdell, but the Tax Cuts and Jobs Act of 2017 is what allowed 529 plans to also be used for K to 12 education up to $10,000 a year for those expenses. We should also clarify, Steve, the term tax-advantaged. It doesn't mean that your contributions to either an ESA or a 529 are deductible on your federal tax return, although some states will give you a break there. It does mean that your earnings are allowed to grow tax-free in both types of accounts.
So for either plan, you pay no taxes when you make withdrawals for qualified educational expenses, and those are generally defined as tuition and fees, books, and some room and board expenses. Okay, good. All right. Any other similarities? Yes.
When you apply for college aid using the Free Application for Federal Student Aid, what's known as the FAFSA, both ESAs and 529s are counted as family assets. And that's a big deal because it impacts you not quite as much. Okay. Well, the two are so similar. You have to wonder why we really need both. Yeah, that's exactly right.
This is where the differences come in, Steve. First, ESAs have income restrictions and were really designed for low and middle-income families. Your modified adjusted gross income can't exceed 190,000 for married couples filing jointly, 110,000 for single filers. The 529 plans though don't have an income restriction, although individual state 529 plans set their own maximum balance.
There's a huge range there and they tend to start at 235,000 and go up to a half a million dollars. Okay. All right. Some important differences there. I'm still wondering, however, about the advantage that Coverdell ESAs have over 529s. Yeah, and it's in your investment options.
You might look at a 529 plan as similar to a 401k when it comes to investing your contributions. You're limited to the investment options inside the plan. A Coverdell ESA, on the other hand, is more like an IRA.
In fact, they were actually called education IRAs until 2002 when the name was changed. First of all, you can open an ESA at a bank, a credit union, even a brokerage firm, and from there you can invest in almost anything, including individual stocks and bonds, real estate investment trusts, mutual funds, and even ETFs, exchange traded funds. In 529 plans, you can only invest in traditional assets like mutual funds, and again, limited to the options inside the plan. So flexibility and investments is the key advantage for the Coverdell over the 529. Yeah, you can really get your hands up to your elbows and your hands kind of dirty dealing with all that if you want to. Any disadvantages to ESAs?
Yeah, there are two. First, contributions are lower with ESAs. You can only put in $2,000 a year, but that can certainly add up. If you did that starting when your child was born with a 7% return, you'd have almost $73,000 by the time he or she heads off to college. With the 529 plan, you can put in up to $15,000 a year, and the ESA has one other disadvantage. It's an age restriction, which the 529 does not have.
You have to make all of your contributions to an ESA before your child turns 18, and then those contributions and earnings must be used before the child reaches age 30. Okay, we'll come back and chat about this some more. You're listening to MoneyWise Live. 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-packed style, this newly revised and updated book offers a six-step plan to finding the immediate pleasure and eternal rewards of the Treasure Principle.
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More information, including a short video webinar on profit and peace of mind, no matter what's happening in the market, is available at SoundMindInvesting.org. Silence may be golden, but are you silent toward God? The book of Mark gives us this exchange between Jesus and His disciples. And when He was in the house, He asked them, What were you discussing on the way? But they kept silent, for on the way they had argued with one another about who was the greatest. Jesus knew that they'd been having this ridiculous conversation, and after He asked them about it, their silence spoke loudly. It betrayed the sinful, proud attitudes that made them want to be the greatest.
When He asked them, What were you discussing on the way? Jesus was giving the disciples a chance to come clean. He offers you and me the same chance when we sin. Like the disciples, we can keep quiet and try to cover up our sin, or we can be honest and find forgiveness.
Would you spend some time right now thinking about what it means to be honest before God? I'm Nancy Damas-Wagamuth from Revive Our Hearts for OneCry.com. If the heavy burden of debt is robbing you of freedom and peace of mind, Christian credit counselors can help. We're a nationwide nonprofit credit counseling organization that has helped over 300,000 individuals in the last 27 years get out of credit card debt 80 percent faster, while honoring that debt in full. To learn how Christian credit counselors can help you, visit christiancreditcounselors.org. That's christiancreditcounselors.org, or call 800-557-1985. Nice to have you with us today. It's MoneyWise Live. Rob West, your host. I'm Steve Moore for just a couple of minutes talking about ways to save for the education of your children, or perhaps your grandchildren.
I have a couple of those, so I'm interested in this. We're talking about ESAs. We're talking about 529s.
I think we covered most of the high points, Rob. Any general advice for folks who want to save for children or grandchildren's education? Absolutely, Steve, and it really applies to either option we've explored today, either the ESA or the 529, and that is start early and put in as much as you can.
That way you'll get the maximum of compound earnings over the years. The goal is, of course, to borrow as little as possible for education. It's easy to borrow, but it's a lot more difficult to pay back student loans. Now, I will put one exception on that or one caveat, and that is if you have high-interest consumer debt, like credit cards, or you don't have your emergency fund, or you're not systematically saving for retirement, I don't think college savings precedes any of those. But once you're on track with retirement savings, you've got your consumer debt paid off, got that emergency fund in place, living on a balanced budget, now it's time to start thinking about putting money aside for some of those medium-term goals, and I would certainly put college savings in that bucket.
Okay. Rob, will we ever see the day when college costs are reduced in some form or fashion? For decades now, we've been talking about the fact that every year college education costs continue to rise, but how long can that last? Will there ever be a new norm?
Yeah, well, that's exactly right, and I wish I knew the answer to that, Steve. I will say that there are many people that believe that college tuition is a bubble in and of itself just because of the massive college tuition inflation. We've seen the run-up in costs precipitated in large part by the ready access to this student aid that's been available and loans, federal loans, making college accessible, which is a good thing, but unfortunately it comes with a lot of debt and it doesn't create a lot of supply and demand for these schools because the money is available. But there's obviously tons of changes going on with the advent of online learning. COVID has accelerated a lot of that. I think a lot of schools are rethinking their tuition model. We have fewer students that are going to be available just based on population trends and what's going on there. The challenge is so many of these schools have to maintain these big beautiful buildings and they are expensive.
So for the on-campus learners, they have to put out a lot of money just to operate everything and many of them are using the resources coming in from the online students to supplement that, but it's a challenge and I think we're going to see big changes down the road. Okay, good. Hey, here's our phone number, by the way, 800-525-7000. If you have a question or a thought for Rob West, we'd love to hear it. If God has been working in your life through your finances and there's something you'd like to share with our listeners, I like this aspect of the program, Rob, that not only do we just sit and answer questions, but from time to time, we get a chance to really look into the lives of our listeners and hear about how God's been working, particularly in their money and in their finances. So if you have anything you'd like to share with us that might encourage someone else in your position, call right now, 800-525-7000. Rob, I have an email here.
We haven't done an email to start off the program in a while. So this one comes to us from someone who wants to remain anonymous and they say, how do you select the financial advisors you put on your website as kingdom advisors? Do they have any training they need to do through MoneyWise?
That's a great question. Yeah. So in the financial services industry are a number of designations. You might be familiar with CFP, Certified Financial Planner. Certainly you're familiar with CPA, Certified Public Accountant. CFA, Chartered Financial Analyst would be another well-known designation. Well, CKA is one of those designations, but it holds out those men and women who have really purposed themselves to be specialists in biblically wise financial advice.
So we don't actually approve, so to speak, folks. They don't work for MoneyWise. We simply have aligned ourselves with the gold standard for biblically wise financial advice, which happens to be the CKA designation, Certified Kingdom Advisor.
Now let me tell you what's behind that. These are men and women who have met significant experience requirements. So at least 10 years in the business or one of those other big C designations I mentioned. They meet character requirements, statement of faith, code of ethics, pastor reference, client reference. They've gone through a regulatory review and they've gone through a 50-hour certificate course at a university that Kingdom Advisors puts out that trains them to be specialists in biblically wise financial advice, applying the counsel of God's word to the advice that they're giving at a professional level. And you roll all that together and that's the CKA designation.
So when you go to our website moneywiselive.org and you click find a CKA, you're only going to see those men and women in your city that have attained that designation and are active and in good standing. Yeah. And it isn't just a one time thing. If I'm not mistaken, every so often these folks have to be reexamined, if you will. Right. Oh yeah. Every year, just like with any designation, they have to reattest to all of these things, statement of faith, and he changes regulatory wise and reaffirm all of their core beliefs as well. So there is an ongoing recertification process. Yeah.
Quality folks all across the country, men and women. All right. Let's go to our phones again. 800-525-7000.
Anything financial today. Williamsport, Pennsylvania. Hello, Kay. Thanks for calling.
What's on your mind? Hi, thanks for taking my call. Just real quick, I heard that you're familiar with the Williamsport area and with the Little League World Series. Yeah, very good. You're right. I love watching the kids play, but I think the best part is watching the little kids go on their cardboard boxes using that hill as a slide.
Oh yeah, I've seen that. So now do you have kids that have participated in that game? Well, my oldest wasn't old enough at the time, and of course this year they didn't do it. So next year we're really hoping to take part. Oh, that's great.
I love that. Well, Williamsport is obviously a fixture of Little League baseball, and it's been that way for a long, long time. My kids have been baseball players, my boys at least growing up, and we went to Cooperstown, New York, which was a highlight for them in the summer, and they really enjoyed it.
We had a blast as well, but that's really cool. But hey, how can we help you today? So my question is, my husband and I are looking to start saving for our 10-year anniversary trip, which is coming up in two and a half years, and we're wondering what the best avenue is to save aggressively. We're trying to do something nice, but not overly nice.
We're not going across seas, but we still would like to save at least $5,000, and what would be the best avenue to do that? Yeah. And Kay, let me just make sure I understand what you're asking. So when you say save aggressively, are you talking about you want to try to put it into an investment that's going to generate a return, or save aggressively, meaning you're really going to try to be diligent in putting aside as much as you can every month?
What did you mean by that? What's the best place to save in, like a money market account, or a special savings account? What would be the best way to get the most return on our investment? Sure, yeah, it's a great question.
And I like the fact that you're thinking that way. I wouldn't be in favor, and I didn't hear you say this, I wouldn't be in favor though of you putting it into the stock market, or something that has the potential to lose money, because with that time horizon, we just don't want to take a risk like that, because in any given market cycle, you may be in a position where you'd have to sell it at a loss, and that's not something you want to do. So what I would do, Kay, especially in this low interest rate environment, probably doesn't make sense for you to lock it up in a CD. The very best thing for you to do would just be to open an online savings account. It's probably going to be paying around 0.6% right now, so a little more than a half of 1%. But if you go to somewhere like Marcus, or Capital One 360, or Ally Bank, you're going to find a savings account where there's no fees, no cost, you can link it right up to your checking account, and you can set up an automatic transfer every month of whatever you want to put into that vacation fund, or anniversary fund. You're going to get a little bit of interest, as I said, a little bit more than a half of a percent a year, and that's not much, but the key is you want the return of your money, not necessarily the return on your money. Now, a little bit of interest doesn't hurt, and that'll maybe buy dinner one night when this is all said and done on that great trip, but you're not going to lose anything either because this is FDIC insured. So again, I would go to one of those three unless you know of another one.
It'd be an online savings account at an online bank with FDIC insurance, Marcus, Capital One 360, Ally Bank, all of them have great websites, great smart phone apps, and you can link it right up to your checking account. Yeah. Okay, we're glad that you called, and we wish you guys the best. You've got a couple of years to get this trip in place.
We hope it's a great one. Where would you go, Rob, if you had to go on a trip? Well, there's two places Julie and I really want to go. One is we've never been to Hawaii, and we actually air MoneyWise in Hawaii, which would be fun. The other is the Holy Land. We've actually never toured the Holy Land we're dying to go. Well, Marcia and I haven't been to either one of those places either, so maybe we can meet in the middle or something. I like it.
We'll be right back. 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. Hebrews 4-12 says, For the word of God is quick and powerful and sharper than any two-edged sword. Here's Beth Moore with a quick word. If there is anything I've echoed to you over and over again through the years, it is this. What God says to us is that it is all about loving God, and it's all about loving people. And our frustrations so often, we think we would do anything for Christ. We just wish it did not involve people. You understand what I'm saying? But people are the point. Everybody just say people are the point. People are the point. I want you to look with me just a second, just because I want you to just take this in for a moment.
It's not that these numbers are so important. I just want you to kind of get a grasp of it, that in this benediction here at the very end of this letter, the apostle Paul sends greetings to three groups of people, to 26 individuals, two families, and three house churches. This was a man that knew the church.
I want you to have a proper picture of him. There is a scene, if you've ever just pored over the book of Acts, you find out what kind of a man he was and how it says that he met with the leaders in Ephesus that he'd worked with for such a long time. That was one of the places he stayed the longest in his missionary journeys, stayed several years with them. And when he left them, they wept as if they were experiencing a death.
Close, close relationships. He's so strong of tongue that we tend to think he could not possibly have had people that were just crazy about him. That was not true.
They were nuts over him. You've been listening to A Quick Word with Beth Moore. Maybe you're like me, always on the go. The free living proof app is a perfect tool to help you stay connected, encouraged, and in his word with Beth.
Download the free app today. Just search for Beth Moore in the App Store. Thanks for listening to A Quick Word with Beth Moore. Money and life run on the same track. But unfortunately, sometimes it seems like your money is heading in a different direction from your goals. In Never Enough, Three Keys to Financial Contentment, author Ron Blue helps you to break down all your financial options to a basic four and then shows you how to keep it all chugging along in the right direction on the same track.
Never Enough, Three Keys to Financial Contentment, available when you click the store button at MoneyWiseLive.org. Really glad to have you out there today because it's a call-in program. If you weren't there at calling in, we just have to talk amongst ourselves and we do plenty of that before we really get on the air.
So nice to hear from you today. We could just plan our next vacation if you want, Steve. You want to do that? Yeah. I mean, no, no. Let's take calls. You know, Marcia would say, why do you guys do that without us? You know, so we probably have to get the wives together on this as well.
That's true. Yes. Eight hundred, five, two, five. Somehow I know I'm going to be in trouble as soon as the program's over.
Well, it's just another day in the life, right? Hey, I'm trying to give the number here. I'm sorry.
Eight hundred, five, two, five, seven thousand. You can reach us by calling 800-525-7000. Chicago and Lane, you have a testimony of sorts for us, huh? I sure do. I am so grateful. God's been so good to us. My husband and I got saved in our early 20s and he was adamant that we tithe and offer, give offerings. Even when he lost his job, I was in school, he was insistent. So unfortunately, at the age of 50, he became disabled and couldn't work anymore, but I was working. But again, he was insistent on tithing, offering, staying active in our church. And ultimately, I lost my job about five years ago, but then got another job.
And part of my pay at my new job included company stock. Well, I was able to retire. I'm now 60, but I was able to retire a year and a half ago early because God is good. He keeps blessing us financially by us, you know, remaining faithful in the tiny little things. He has, you know, let the showers of blessings financially, you know, come upon us. And I just want to thank him.
And now I'm listening because, you know, the other day you guys were talking about, you know, you know, giving retirement money when, you know, at age 70 for the required minimum distribution. I'm looking into that because it's like, I want to be a good, we want to be good stewards, but I just encourage everyone, when things seem bleak, when you lose your job, when you feel like now, you know, he's disabled, God is good always. And just stick with the stuff, stay faithful in the little stuff, and he will just take care of you like nobody's business. So I just thought I'd give that testimony because I am just thrilled.
Well, Elaine, I'm so glad you did because not only are you really honoring the Lord for what he's done in your life and your husband's life and giving testimony to that, which clearly the Bible says we should be doing, but you're really illustrating how when we apply God's truths to our lives, it puts us in the best position to experience God's best when it comes to his resources that he's entrusted to us. You know, crank it through your calculator. I don't know how it doesn't always make sense that by giving, it'll actually allow our money to go further. And it's not that God is a cosmic vending machine and we give to get or anything like that. It's just that when we recognize that giving breaks the power of money over our lives and it causes us to think with an eternal perspective and it causes us to see money for what it is, a tool. It's a means to an end, not an end in and of itself.
I think we just live differently. And you're a testimony to how God's provision is real when he's faithful. And when we are givers and we reflect his generosity through our giving, things just tend to work out.
And here you are retiring earlier than you thought. And you guys have obviously been through some trials along the way, and yet God has been faithful. And so thank you for sharing that testimony.
What an encouragement. Yeah, thanks. Thanks, Lane, very much. Let's go down to Orlando. And Debbie, you have something for us along those lines, huh?
Yes, I do. Thank you for taking my call. What you just said, it sounds so much like my testimony. I was saved 15 years ago. And our pastor, the first thing he started teaching us was being biblically used in financial wisdom through the Bible. And he had Dave Ramsey course in our church. And I did not know anything about finances at that time.
I was in debt in a terrible way, wasn't making any money, had lived in the world for 50 years, and just was not sound at all. And I took Dave Ramsey's course and learned so much about being responsible with God's money, tithing, giving offerings, giving back to the Lord, trusting him when you don't, like he said. I've been out of a job, I can't tell you how many times, but God always provided, I always had more than enough to get by, and I always tithe no matter what, because, you know, because the Bible says that my pastor now, he says, you're not giving a tithe. That belongs to the Lord. That's what, that belongs to him.
It all belongs to him, but he allows us to keep 90 percent. So I just wanted to give God praise for that and encourage your listeners that, you know, if they're struggling at all, taking a Christian course on biblical financial responsibility, it just changed my whole life. Well, I'm so glad to hear that, Debbie.
What an encouragement. And I'm glad you mentioned Dave. Dave is a good friend of mine and of Steve's. And actually Dave's going to be with us on the program on November the 17th. And so put that on your calendar. We're actually going to talk to him about his own story.
And I can't wait for you to hear some of the heart behind his ministry and his teaching on The Dave Ramsey Show. We're looking forward to that, aren't we Steve? We certainly are. You're listening to MoneyWise Live with Rob West. We'll be right back.
Stick around. Investing is more than just returns. It's an expression of who you are and what you do. Does the way you invest your money reflect your identity as a Christian? At Eventide, we design investments for performance and a better world so you can invest with a confidence to reach 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.
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Interested? Learn more by calling 800-791-6225 or online at chministries.org. Hi there. My name is Anna, a biblical studies major at the Moody Bible Institute. The Moody Radio Verse of the Week on this Pastoral Care Week is found in Hebrews 13 verses seven through eight. Remember your leaders, those who spoke to you the word of God. Consider the outcome of their way of life and imitate their faith.
Jesus Christ is the same yesterday and today and forever. That's Hebrews 13, seven through eight, the Moody Radio Verse of the Week. If you're about to throw in the towel on homeschooling, it's time to leave the second guessing behind and quiet the voices of not good enough. Step courageously into guilt-free homeschooling by reading Homeschool Bravely. In this book, Jamie Erickson teaches you to see homeschooling as a calling. She helps you overthrow the tyranny of impossible expectations and guides you through many of the common bumps in the road. Get your copy of Homeschool Bravely today.
Homeschool Bravely is available now at moodypublishers.com. 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. With SRA News, I'm John Scott. President Trump's reelection campaign says it's postponing a rally tonight in Fayetteville, North Carolina for a few days that's due to Tropical Storm Zeta. Power Outage U.S. says power outages from Zeta now exceed two and a half million.
Stretching from Louisiana to Virginia, Georgia remains the worst overall state for outages with more than 700,000 still without power in the Atlanta area and the northern part of the state. The head of the Wisconsin Republican Party says hackers stole 2.3 million from the party's account that was being used to help re-elect President Trump in that key battleground state. Party Chairman Andrew Hitt says the party noticed suspicious activity on October 22nd and contacted the FBI last Friday. Higher finish on Wall Street that now gained 139 points.
The Nasdaq up 180, the S&P picked up 39. This is SRN News. Good to have you along today. It's MoneyWise Live, finding God's plan for your financial life. If we can help you in that way, call right now. Open lines available 800-525-7000. Back down to Florida a bit, Loxahatchee, Florida. And Dawn, what's your question for Rob?
Hi, thank you for taking my call, Rob. We have Coverdell accounts for our three girls who, two of them are in college already. And I was just wondering when we access those accounts to pay for their tuition, do we make the payment directly to the college from the account or can we pay out of our own checking account and then reimburse ourselves for this fund? Yeah, you can actually, Dawn, reimburse yourself from a Coverdell account after paying qualified expenses from your checking account. You'll fill out a form with the financial institution to get the withdrawal and then your child will receive that form 1099-Q and will need to determine how much, if any, of the withdrawal is included in taxable income. If sufficient qualified education expenses are incurred, then none of the withdrawals are taxable and nothing needs to be reported on that 1040. If some portion, though, is taxable, then it would be reported as other income.
But as long as you're using it for qualified educational expenses, you keep your receipts and cancel checks in case you're audited, then you can actually reimburse yourself after you've paid those expenses. You just want to be able to document that. Okay, thank you very much. Okay, Dawn, thanks for calling. Thanks, Dawn. Itasca, Illinois, Janice, how can we help you?
Hi, thanks for taking my call. I have a question about tithing. So during this time of COVID, we've been attending church online. We do not have a church to call our home church.
We are in between churches. So the money we have set aside to put towards our tithe, would it still be considered tithing or tithe if we use that money to give to people around us who have, for example, experienced a job loss or who are sick and in need of help? Should I be legalistic about tithing and make sure it goes to a church body as opposed to an individual?
Yeah, you know, it's a great question, Janice. And, you know, when we go back to the God's Word and we see this passage and where we would typically talk about that is Malachi 3.10 and bring the whole tithe into the storehouse and we ask the question, okay, well, then what is the storehouse? And basically it would mean the depository or the treasure for the temple or the church in the case of the New Testament church. And, you know, I think that's really a great starting point is to recognize that the local church is God's plan A and that we should be faithful givers to the local church.
And, you know, I think in terms of how you approach that, I would pray through that. You know, for me, I would say the tithe should start with the local church, but that's the beginning of our giving, not the end. And so if we give systematically a tenth, which is what the tithe literally means to the local church, then we would look for opportunity to give beyond that to meet the needs of those around us. But I don't think that's a hard and fast rule.
I mean, clearly when Christ came, he replaced the law of Moses with the law of Christ. And so we're to give proportionately and systematically. And I think that should certainly start with the local church and then we give beyond that. So the question is, where do you come down? What does your church teach? What is your conviction as you study the scriptures? For me, I would start with the tithe going to the church and then give beyond that. But I think you could certainly take that before the Lord and come to a consensus between you and your husband. And this is not about being legalistic.
It's about giving gladly with a cheerful heart out of obedience as an act of worship and seeing God's provision to you, which is it's all his, but returning a portion of it for circulation in his kingdom. So I don't think I can give you a hard and fast answer because I don't think there is one. I think at the end of the day, you all need to make that decision for yourselves. Okay, sounds good. Thank you so much.
Appreciate it. All right, Janice. Absolutely. Yeah. Great question.
And one that comes up all the time and a thoughtful question. People want to be generous and faithful with what God provides, right? Well, that's exactly right. And that's, I think, the heart motivation behind the question, Steve, is we want to honor the Lord. We don't want to inadvertently rob God, as we see discussed in the New Testament about we rob God with tithes and offerings. And so clearly we want to be givers. We want to do it in a way that honors the Lord. And we have limited resources and we want to support the local church, but we also see incredible need around us, including people we love and care for and those on our path and in our community. And so how do we balance that?
And I think that's where we need to really just find ourselves living simply within God's provision so we have margin that allows us not only to support the work of our local churches, but to give beyond that and meet real needs of people that God places in our lives. Thanks, Rob. All right, let's go west a bit. Clarkson, Washington, the state of Washington, and Wayne, what's your question for Rob West? Yeah. Hi, Rob. Yeah, I have a question about some dealings with my 401k.
Okay. You know, I recently did something after talking to my accountant and a few things that I have a financial advisor as well, but I got to thinking about something. You know, I'm a little uneasy about the stock markets going up and down. I've seen losses in my own account.
I'm 70 years old. And so I really don't have a lot of time to lose for, you know, in the stock market situation, even, you know, conservatively. So I thought, you know what, if nothing else, my company that I work for, I'm able to put away 50% of my wages. So I thought, well, you know what, I'm just going to do that for now and put it in preservation account and at least get 15% on what I don't have, that's not taxable. Right. Am I thinking right? Isn't that making 15% on my investment, so to speak? Yes. Although you have to recognize you will pay that tax at some point when you pull the money out and you'll likely be in a similar tax bracket. You could even make the case that depending upon, you know, who's in office and what's going on politically, the taxes could be higher than they are today.
So yes, you're enjoying that essentially deduction and therefore you're not paying those taxes on that money, but it will be realized at some point unless you were to give it away directly out of that account, which you could do through something called like a qualified charitable distribution once that 401k is rolled to an IRA. Do you follow that what I'm saying? Yeah, I do.
Yeah. So I think you're just kind of kicking the can down the road. And the question I would ask is, you know, what are your priority uses right now that line up with your values and your priorities? What is God doing in your life and how much is enough? What is your ultimate retirement savings goal? And if you're on track or you're even ahead of that because you've already accumulated enough or just based on what you had been putting in, you're going to meet those goals, then are there other things you should be doing? Can you purpose yourself to become debt free with a portion of that by realizing it now? Do you want to increase your giving? You know, I think all those things should be on the table as you prayerfully say, Lord, what would you have me to do with your resources? Clearly, though, one of those opportunities, I think, is to sock that money away.
And yes, you won't pay tax on it. But that day will come at some point, apart from just a few exceptions. Wayne, we're glad you called in today. Hope that helps you a little bit. We have to pause here for a brief break. But thanks again for calling in today. When we return, Brenda from Calhoun, Georgia, you're coming up next.
After that, it's Kathleen and Ruby. Here's our phone number 800-525-7000. If you have a question, a comment, call.
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Hi, I'm Barry 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. God is the rock upon which this amazing nation was founded, but the prosperity and protection that God has blessed America with for so many years is in serious jeopardy. If Christians don't vote this election, our freedoms will be shaken as the stabilization of that rock holding God is taken away. God will be removed from far more than our schools and courtrooms. Our First Amendment freedom of gathering together in church has already been taken from us, which could be extended indefinitely.
Even our Freedom of Speech allows us to tell people about Jesus in the open marketplaces under attack. November 3rd is right around the corner. It's the most important election in our nation's history and it's your God-given privilege and responsibility to vote. If you want to continue living in freedom and prosperity, please seek guidance from God's Word and vote accordingly. There is nothing more exciting than knowing God is using you to move people closer to Him.
Join us at igniteamerica.com. Here it appears for a little while and then vanishes. Trouble is, we get so caught up in life that if God hadn't told us differently, we'd think this parade of life as we know it would go on forever. But it won't. And it's not even the best life we'll ever come by. Good things on earth are mere images of better things we will one day know in heaven. So let's not get too satisfied with fine things here.
They are only previews of the coming attractions. Think about that the next time you're out on a gorgeous starry night. We'll be right back. I know you've been holding a bit. Thank you for that. And what do you have for us today? Well, thank you, Rob. I'm a long-time listener to Moody Radio, about 25-plus years. Wow. First-time caller.
Great. So I have a testimony. My parents, now this has been 60 years ago, they taught me money-wise principles and the envelope system long before Larry Burkett came along, I believe. And I thought my dad had invented that when I heard of them. And one of those envelopes was tithing. And on our allowance, any little birthday money or whatever that we got, we had to put in these envelopes.
And so we, you know, maintained good principles and that. And then years later, I went up to Pennsylvania to my grandmother's funeral. And my grandfather had been a pastor of this church and she was the church secretary. And the current pastor brought out a book, an old book out of the archives with church records on it. And we started looking at it and we found in her, my grandmother's writing, a list of all the people and how much time they paid each week.
A dollar forty-six, two dollars and eighty cents. I mean, it just brought me to tears. I thought, those people didn't have anything, but yet they paid their tithes. And God has always been faithful to me and blessed me beyond measure. Things haven't always been smooth, but He's been faithful to me.
Oh, wow, Brand. I'm so glad you called today. After 25 years of listening to Moody Radio, you called today to share that testimony of God's faithfulness and God's people responding to God's truths. And I'm so thankful.
What an encouragement to see evidence of people purposing themselves to follow God's biblical principles. They're always right. They're always relevant.
They're never going to change. And therefore are good. You know, as Jesus said, it's better to give than to receive. And you are evidence of a life well lived, Brenda. And I'm so thankful that you called to give testimony to our Lord today because He is faithful. And it's a joy to be able to hear your voice and to be able to chat with you for a moment. Well, Brenda, thank you so much for that.
That was really a blessing and a bit surprising. I thought all along Larry Burkett invented the envelope system. Now I'm I'm Googling here. It says the earliest envelope system was made of papyrus. Those envelopes were made of papyrus. So I thought Google said Brenda, Brenda's dad, Brenda's dad.
And italics. It says Brenda's dad. I like it. Right. That's great. God bless you. Thank you so much.
We love it. St. Petersburg, Florida. Hello, Kathleen. You have a question for Rob? Yes, please. I'm afraid my ID has been compromised.
And I would like to have the names and the telephone numbers for the credit bureau so that I can have my credit frozen. Yes. Kathleen, tell me a bit about what's going on. Have you been notified that one of the accounts you had was compromised? Or have you actually been informed that you've been the victim of identity theft? What actually has taken place? Yeah, well, okay. I was the victim of identity theft because the IRS reported that somebody had used my social security number.
I don't know what else they used, but they were able to get a fraudulent refund using my identity. Yes, yes. Okay. Yeah.
So clearly, you need to take the next steps. Do you use a computer? Kathleen, are you? Do you go on the internet periodically? No, no, I'm sorry. No, that's okay. The reason is, and for the benefit of perhaps our listening audience, a great website that the US government has put together, the Federal Trade Commission is identitytheft.gov, G-O-V.
But you're absolutely right. I think one of the steps you should take is to freeze your credit at each of the three bureaus. They're Equifax, TransUnion and Experian. And if you hold the line when we're done here today, Kathleen, and give your information to my producer, we will get back in touch with you and I will give you or my team will give you those phone numbers since you don't have access to them online, which for anybody else who is online, that would be the quickest and easiest way to put a credit freeze in place. That's going to prevent anybody from opening a credit line or taking out a credit account in your name using this fraudulent information that has been compromised in the same way they did with the IRS because that will require a PIN number that they will not have.
Obviously, you're going to tackle this with the IRS. I think at the same time, you know, you need to report this to the Federal Trade Commission and we can give you the phone number to do that as well when we talk to you about the credit freezes. I know this is concerning. It can be something that can be very distressing. So I'm sorry that you're going through this.
It is becoming more and more frequent, Kathleen, ultimately, and there are steps you can take. And so I think between contacting the FTC and putting these credit freezes in place, you will be well on your way hopefully to getting beyond this and recovering from it. So thank you for your call today. Give your information to our team and we'll get back in touch with you. We will indeed. Thank you so much, Kathleen. Let's quickly go to Minnesota. And Ruby, what's your situation today?
Hi. My self-employed husband had no income this year due to a work-related accident. And other than a small privately funded disability payment, so we also have to take distributions from a beneficial IRA, which has to be used up within about 30 years. So we're wondering if we should take money from that to create an income so that we could fund a Roth. We do hope to, in future years, have another business income. And then, of course, we would still have to take the mandatory distributions and that would be taxed. This year it wouldn't be because we don't have income.
Yeah. Ruby, I'm not a CPA, so you're going to want to talk to a tax professional about this. But I don't think that would work. In order to fund a Roth, you have to have earned income and a withdrawal from a retirement account is not going to qualify as earned income. So I think the key for you moving forward is really just to look at the various income sources you have and determine what you can use moving forward once you have earned income down the road to be able to continue to fund long-term retirement savings. In the meantime, I think apart from having earned income, I don't think there really is an option for you to be able to fund a retirement account at this point. So I think the key for you will be to live as modestly as you can so you can create as much margin as possible with savings in just a taxable environment and then that savings could be used down the road to supplement whatever retirement assets you have once you or your husband begins working again. So I'm sorry to hear about your situation with regard to the disability and the fact that you don't have income. I don't think though that beneficiary IRA is going to do the trick. So unfortunately, it doesn't sound like you'll be able to make any contributions this year. Ruby, we appreciate the call and pray God will give both you and your husband real wisdom as you move ahead. Thank you very much.
Columbia, Tennessee. Julie, you have some Roths and you're wondering about buying an indexed universal life policy, correct? Is that the question? Correct.
Yes. All right. Rob, what do you think with that little information? Well, tell me a little bit more, Julie, if you don't mind what's going on in your life and what are you contemplating? Well, my husband and I, we've been saving for retirement. He's 47, I'll be 45 and we have, we already have life insurance, really great life insurance policy for both of us. We already have his Roth and he also has some 401k. We have an extra Roth policy that he did from an old job several years ago and just kind of put that in a Roth. And so we're wondering if it'd be smart to put a little bit of that, that Roth into an IUL or what your thoughts were on those. Yeah. And why are you thinking that?
Why not just let those Roths continue to grow and then fund other retirement accounts, perhaps on a tax deferred basis with new contributions? Yeah, that's what we were thinking. We just had someone, I guess maybe trying to sell a policy for an IUL. That's why we were curious. He said that, you know, you have nothing to lose and you capture all the gains and none of the losses.
So that's what we're curious about. That's true. The challenge I think is these policies tend to be expensive. They obviously bundle insurance in with it, which it sounds like you don't need and you're not getting the full value of the upside. So I'd rather you take a long term approach recognizing there will be years or periods where you're going to have some losses, but over time it's the very best place to build wealth with the right strategy and making sure the investments are consistent with your goals and objectives.
Certainly if you want to transfer the risk to an insurance company, an insurance contract can do that. But I think for the average person, I like what you've got. I like Roth IRAs. I like that that's going to grow tax free and when you pull it out, you'll pay no tax. And if you want to get a current deduction, new contributions going into a company sponsored plan or a traditional IRA could supplement that. So you've got all of these tools working for you.
I don't see the need at this point to add an insurance contract or product like you're describing. I think you guys are on the right track and I just stay right at it. And with that, we're going to have to say goodbye, Julie, because we're out of time here. But thanks so much and we hope that helps you as you guys move forward.
Sounds like you're really making a lot of good choices there in advance. Thanks so much. And Rob, always a pleasure, sir. Let's come back tomorrow and do it again. All right.
All right, Steve, I look forward to it. Please don't forget that Money Wise Live is a partnership between Moody Radio and Money Wise Media. If you find the program helpful, perhaps a friend of yours would find it helpful as well. So mention it to them. We're here Monday through Friday at this time. It's Money Wise Live. Our phone number is 800-525-7000.
If you have a brief email for Rob, you can send that along to questions at moneywise.org, questions at moneywise.org. And then finally, my thanks to our technical crew pushing all the buttons, pulling all the levers behind the scenes. You'll never see them, but they do great work.
It's Amy, it's Deb, it's Jim, and it's Gabby T, that T of course for talented. We're blessed to have her. Blessed to have you there as well. Join us again next time.
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