An angel of the Lord appeared to Joseph in the financial lens. It's a show about money, after all. And please hold your calls, because we're pre-recorded today, as you might suspect.
I'm Steve Moore. Joseph and Mary, rich or poor. Next, right here on Money Wise Live. Just one. Maybe several, actually. But I think the one you're implying is, how could Joseph and Mary, a young couple just starting out in life, pay for their escape to Egypt? The other day, we had economist Jerry Boyer on to talk about the economics of Herod and the corrupt temple class in Jerusalem. You know, Jerry always challenges us not to ignore what may appear to be minor details, because every word in Scripture is important, or it wouldn't be there. But at the same time, we don't want to add details that aren't in the text. And this sometimes happens when people try to determine the financial status of Joseph and Mary.
Aye, for instance. Well, for instance, some claim that the young couple may have had considerable means to travel from Nazareth to Bethlehem in the first place, a distance of about 90 miles. And some say that Mary surely must have ridden a horse or a donkey to make such an arduous trip, especially while pregnant.
But that's just opinion. Matthew says nothing about the trip, and the account in Luke makes no mention of Mary riding an animal. The Roman Emperor Caesar Augustus had demanded a census be taken for tax purposes, and in Luke 2 we read, And everyone was on his way to register for the census, each to his own city. Joseph also went from Nazareth to the city of David, which is called Bethlehem, because he was of the house of David, in order to register along with Mary, who was engaged to him and was with child. So there's really nothing to indicate here that Joseph and Mary were wealthy, but what about the evidence that they were poor? Well, the first hint of that comes later in Luke 2, verses 22 and 24, which read, They brought him, Jesus, up to Jerusalem, to present him to the Lord, and to offer a sacrifice according to what was said in the law of the Lord, a pair of turtledoves, or two young pigeons. Now, that tells us that Joseph and Mary had little money, because a lamb was the customary offering, turtledoves or pigeons were an offering of the poor.
But that really begs the question, how did they afford that later trip to Egypt, and then two years of exile? Yeah, to answer that, we turn to Matthew's Gospel. Two years after Jesus' birth, the family was still in Bethlehem, where the Magi found them. In Matthew 2, 10, and 11, we read, When they saw the star, they rejoiced exceedingly with great joy.
After coming into the house, they saw the child with Mary his mother, and they fell to the ground and worshipped him. Then, opening their treasures, they presented to him gifts of gold, frankincense, and myrrh. Now, here again, some people believe this made Joseph and Mary exceedingly wealthy, because those gifts must have been of great value.
But? But, Scripture doesn't say how much they were worth. But they certainly came in handy right at that moment, because that's when Herod ordered the murder of all boys, age two and under, around Bethlehem. In Luke 2, 13, and 14, we read, An angel of the Lord appeared to Joseph in a dream, and said, Get up, take the child and his mother, and flee to Egypt, and remain there until I tell you, for Herod is going to search for the child to destroy him.
And, of course, Joseph took his family to Egypt, and they stayed there for two years, until Herod had died, and it was safe to return to Israel. Ah, I see, and they may not have been able to stay away that long without the gifts from the Magi, I see. Exactly. All right, thanks, Rob. Hey, and speaking of gifts, you have some exciting news for our listeners, right?
Well, I absolutely do, Steve. MoneyWise Live is listener supported, and we need your help to keep God's financial principles on the air. So, between now and December 31st, a generous donor, listen to this, has committed to matching any contribution you make to the ministry. So, please prayerfully consider making a gift today. Just go to MoneyWiseLive.org and click the donate button, and I promise you'll feel twice as glad that you did. Amen. MoneyWiseLive.org, click that donate button, and thanks in advance. Now, we're pre-recorded, so please hold your calls, but we have some great ones already lined up.
Stick around. Merry Christmas, and this is MoneyWise Live. Do you know if you have enough? Enough money? Enough house?
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Let's go back to our phones. Coral Springs, Florida, Gregory, good to have you with us today. We appreciate your patience. What's in your mind? Hi, thank you guys for taking my call.
Y'all are great. I've been learning a lot. I'm 60 years old.
I'm a teacher. I'm a widow since 2001. I'm a little behind the ball, but I have three children. They're grown and God is really blessed.
Kept us, allowed us to have our home and et cetera and so forth. And my question to you is, I have a 403b invested in a number of different annuities, tax sheltered annuities. And for one of them, I have been advised by my counselor to go ahead and pay off a equity line that's at about twenty five thousand. My mortgage, it's at five point zero five.
I believe it's been variable. It's been going up. I could borrow that amount of money from one of my four or three annuities at two percent. I'm going to be working maybe. Maybe I'm going to try to hang in there for another five years. And I wanted your advice on if I should take my part of my 403b and pay off that twenty five thousand dollar equity line. Yeah, I'm not a big fan of borrowing from retirement accounts really for any purpose, especially paying down debt. I'd love for you to be debt free when you reach retirement. Do you know, based on your current trajectory on what you're paying to this each month, and I'm assuming you're living on a spending plan. And this payment fits within that and your current on it. If that's the case, do you know when you expect this to get paid off in full based on your current payment schedule? At the rate I'm going now, it's going to be pretty much continual.
I can't can't throw thousands of dollars at it. And my my my saying is that it matures into believe it's no more draw date on a like two years now. I won't be able to draw on it and I'll just be paying on it.
Right. And I'll be paying that higher rate. OK, so what is the rate now and what will it be? Right now, it's five point zero five and where it will go, I do not know.
OK. And you said it's twenty five thousand. So it's a home equity line and we're still in the open period where you can draw from it. I can draw from it now, but in two years it's no draw. OK. And what about the equity you have in your home? How much do you have beyond your current mortgage and this equity line? The equity in my home, I've got a good, good amount. I owe like one thirty with this twenty five. It's another like one fifty in my home is valued at close to four hundred.
OK, good. Well, you know, one thing you could do here would be to convert this to a home equity line of credit, which would be a fixed rate. And you should you know, rates right now are running right at five percent. If you have good credit, you obviously have a lot of equity in your home. So I think that would be one option where you could pay this with a home equity line of not a line of credit. A home equity loan is what I should have said. You have a line of credit.
You want a home equity loan, which is going to have that fixed rate. And, you know, I'd love to see you perhaps even get that assuming the payment works within your budget. Get that at a 10 year payback. You could go 20 years. They'll even let you go 30. I wouldn't do that. But that way you've you've locked in this fixed rate at five percent. You build it in your budget. You're planning to work for another 10 years. Is that what you said? No, probably a five.
I'm I'm 60. I'm going to try to hang in for five. OK, so the goal would be to perhaps limit it to a 10 year line of credit on the payback. Try to accelerate that with an extra payment a year if you can and and get that paid off that way.
Oftentimes these home equity loans right now will have no fees whatsoever as long as you keep them for at least three years. If you were to pay it off before that, you may have to pay the upfront costs that they incurred to give you the the line or excuse me, the loan. But the key will be you'll you'll move to this fixed rate in this current environment.
Then you'll allow your four or three B to continue to grow, which is what it's there for anyway. And you'll have the full amount working for you between now and retirement. So you have that available to supplement any other income sources, because keep in mind, if you take this loan, even though you're just paying interest to yourself, number one, it's not working for you anymore because it's not in the account. And if you were to separate from your employer, it's all taxable to you.
And we certainly don't want you to have all of this taxable in one year, which could be pretty costly. So that would be my preferred approach. And you could look at discover home equity loans or any number of other options there.
You could check out bankrate.com to see who has the best terms right now. But I think that would be my preferred option before paying it off with a loan from the four or three B. Gregory, thanks so much for checking in with us today. We appreciate that. Let's move quickly to Chicago, Illinois. And Kathy, how can we help you? Oh, hi.
Thank you for taking my call. Well, I got an inheritance that was pretty large a couple of years ago. But my problem is that my husband is not a Christian and he's totally against paying for anything for the church. And I have in any way got to a point where he refused to pay for anything like camp or anything like that. And because it's a large amount, I kind of feel like I'm sneaking any time I send any money. But I believe that the tithe is God's. And so I'm kind of stuck on there because, I mean, at one point he I mean, it used to be our money. And then all of a sudden he was forbidding me to get things.
So then, you know, legally, this could be just mine because it was my inheritance. But I don't think that that's what God would want me to do, because it could injure my marriage. And so but I don't want to hurt my relationship with God either. And so I'm kind of in a quandary as to how to handle it. I do have, you know, like I give to Compassion International. I mean, those kind of things are all right with him. But I mean, I just it'll end up like taking me like 10 years to pay the tithe back if I just do, you know, these charities a little at a time.
So I don't really know what to do. Yeah. Well, Kathy, a couple of thoughts here. Number one, I appreciate your desire to be found faithful in giving.
And you obviously take that very seriously. And we should as believers, we should be generous givers. I think, though, what's even more important, perhaps even to the Lord. This is just my thought here is your husband coming to Christ and the Holy Spirit grabbing a hold of his heart and revealing his need for a savior and coming to a saving knowledge of Jesus Christ as his personal Lord and Savior. I know that's got to be your desire.
I'm sure you've prayed to that end for many, many hundreds of hours. And, you know, we can read a bit about this in First Peter three in verse one. It says, wives, in the same way, submit yourselves to your own husbands so that if any of them do not believe the word, they may be won over without words by the behavior of their wives when they see the purity and reverence of your lives. And I think, you know, First Peter three one is a great example of how we can honor the Lord by submitting to our husband in a way that allows him to see you living a life of faithfulness and of holiness and of devotion to the Lord.
And not perfect by any means, still a sinner saved by grace, but pursuing the things of the Lord. And that perhaps through your example, the Lord might do a work and draw him and your husband unto himself. That is the Lord.
And so I think that's perhaps preeminent here. Not you trying to certainly sneak behind his back to do your giving. Remember, it's all the Lord's.
He doesn't need our money. He wants our hearts. He knows full well your desire to be found faithful in the area of giving. But I think perhaps as you honor your husband in this process and use that as a testimony to the Lord, your willingness to submit, let's just ask the Lord to use that in his life to do something miraculous. And I would, as it relates to the giving specifically, approach your husband and say, I'm not going to go around you in this.
I'm going to honor you. I want us to do this together. You know, my heart's desire is to be a giver. And so I'd like to talk about what we can do together to allocate a portion of our resources, be it the inheritance or otherwise, that we can do some giving with. And perhaps you take a period of time where you say to your husband, let's take six months and do X, either a percentage of your income or a dollar amount.
And then at the end of the six months, let's get back together and talk about how that went and see what the Lord does as your faithful and giving with him bought into that with some amount and see what how the Lord might use that. But I wouldn't look at this, Kathy, as a bill that you owe to the Lord that you need to make good on. Remember, God doesn't want us to give out a compulsion.
This is not about legalism. This is about holding his resources loosely and honoring him in all that we do. And I think by you honoring your husband's wishes and not trying to go around him, you're honoring the Lord at the same time. So I would be encouraged.
I wouldn't feel guilty. And I'd approach your husband with this, make it clear that you're going to work together, but see if you can come up with the amount that he's on board with. And I think if you do it God's way, Kathy, and some of Rob's recommendations, all of his recommendations, I believe are godly ones that God's going to bless this in his timing. We're going to ask all of our listeners to pray for Kathy and her husband. This is MoneyWise Live. It's every decision you make so you can feel confident you're getting it right.
Request your copy with any gift to MoneyWise of $25 or more at MoneyWiseLive.org. If the heavy burden of debt is robbing you of freedom and peace of mind, Christian Credit Counselors can help. You can have an addictive relationship that you cannot even, I mean, you can almost feel like, and I'm talking just in conceptual terms here, that you're just almost under the spell of a relationship. You know, I know what it's like to be in a relationship that for some reason you cannot think straight in. No, we're just going to sit there and then one day we're just going to think straight. All the while we're sitting, we're still drinking its wine, but we're going to get it straight soon. Has anybody noticed that it is not until we would make a willful decision, in case God may be right, to push back from the wine of our intoxication, and I'm not talking about literal wine, I'm talking about whatever your wine is. Whatever the thing is that's got us so intoxicated and got us thinking so weird, got us in such a dysfunctional state, it is not until we push back from the thing that we take the time to begin to wake up. It is like being, there are activities, behaviors, and relationships that are so toxic and so dangerous that it is like coming out from under a drug when you get away from it.
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Back to our phones, up to one of my favorite cities, Rochester, New York. Hello, Dee, what's on your mind? Hi.
Hi. Yes, I was wondering, my husband and I are wondering about the advantages or disadvantages of paying off our mortgage in a lump sum. We have a contract, a mortgage contract that has a no penalty prepayment.
Sure. And we have about $159,000 in savings and we calculated that after we pay off everything, including the house, we would still have about $59,000 in savings. My husband and I are older, he's 74, I'm 67, but he's still full-time employed, getting his full salary plus a veteran pension.
He's 100% disabled and we're both on Social Security. So, we were just thinking that we would like to own our home, green clear. Yes, well, it's a great question, Dee, and I appreciate the background. Is the $153,000 in a retirement account or is that just in a taxable savings account? It was part of our pension that our company gave out to the employees, so it's actually in our credit union, it's just in a savings account.
Okay, very good. So, Dee, tell me, do you have any additional retirement savings besides the $159,000? No. Okay, and you said that your husband has, of course, this pension money, he also has a Social Security coming in, as well as some additional guaranteed income. Are you all able to meet your obligations right now with the income that you have?
Yes, we are, yep. Okay, and what if you stopped working? Have you done the budget, the retirement budget that does not include any current wages but just the income that will continue on like the retirement from the military as well as the Social Security, that type of income? Yeah, we figured the salary, the VA pension, and our both Social Security's income that we could live on that quite well, I think, yeah.
Okay, very good. And what do you think you spend on a given month right now, just rough numbers? What do we spend? Yeah, I mean, do you have a budget, and if so, what's the total of that in terms of expenses on a monthly basis? $2,000, $3,000, $4,000, what do you think? Boy, I would say, I don't know, maybe $3,000.
Okay, alright. So, here's the good news, I think, is number one, you've got these guaranteed income sources that are going to last the rest of your lives. You want to understand what you would be entitled to if the Lord calls your husband home before you and make sure that you understand what that is. You're living on this budget right now. I assume you have a very detailed look at how much is there. And if you paid off the home, you would be in a situation where you have less expense because now you don't have the mortgage payment. And you would still have $60,000, which is more than a year's worth of expenses. So, I think you're in a good position here. I would actually say, let's proceed with paying off the house and the other debts. You still have a year in the bank, you've got all this guaranteed income, and now we just lowered your lifestyle and your monthly expenses.
So, you certainly could seek some additional wise counsel, but I like the idea, especially since I feel like the Lord has placed it on your heart, I like the idea of you all being debt-free and just pursuing paying that off even now. So, thank you so much for calling. We appreciate that. Yeah, thank you very much, Dee. And are you comfortable with the numbers that Dee gave to you, Rob? Absolutely. Yeah, okay. You know, at this time of year, lots of people are thinking about giving and being generous.
And with that set up, anything come to mind, sir? Well, I'll tell you, Steve, it is the time of year where we think about needing to shore up our budget here at MoneyWise Media, as well as thinking about next year. So, if you would pray about possibly joining with us, partnering with us, and giving to this ministry, we'd be grateful. You can do it quick and easy at MoneyWiseLive.org, or you can call us at 888-663-4211. Yeah, and when you help us, it enables us to help others find true financial freedom. It's not just about getting out of debt, but it's finding God's plan for your life, which allows you to be even more generous than you are. This is MoneyWise Live. He's Rob West. I'm Steve Moore.
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More information about unwrapping the names of Jesus is available at moodypublishers.org. Many people are experiencing financial challenges such as credit card debt, downsizing, dead-end jobs and depleted savings. In fact, more than half of all divorces are the result of financial pressures at home. But there's hope in Your Money Counts. Biblical financial expert Howard Dayton shows that the Bible is a veritable blueprint for managing your finances and you'll discover the profound impact it has on your relationship with God.
Your Money Counts is available when you click the store button at moneywiselive.org. With SRN News, I'm John Scott. The Federal Aviation Administration had temporarily halted flights out of Nashville International Airport because of telecommunications issues associated with the explosion earlier downtown. Service expected to resume at 3 p.m. local time.
Say that explosion inside a recreational vehicle parked downtown early Christmas morning was deliberate. Three people hurt in the explosion which shattered windows and damaged buildings, the FBI taking lead in the investigation. The fast-track ratification of a post-Brexit trade deal between the U.K. and European Union is underway.
Ambassadors from the bloc's 27 nations have started assessing that accord that takes effect in a week. Alabama teammates Mac Jones and Davani Smith, along with Clemson's Trevor Lawrence and Florida's Kyle Trask, they have been named the finalists for the Heisman Trophy. This is SRN News. Nice to have you along today. It's MoneyWise Live with Rob West.
I'm Steve Moore, except we're not live today. Today's edition of the program is pre-recorded, so don't try to call in. But I hope you will continue listening.
Lots of great financial information coming your way. On this, what I know is your favorite Christian radio station, and you're blessed to have this station in your area. You know, Rob, I lived for a number of years in a part of the country where there was no Christian radio. And I was used to good Christian radio, and to not have any at all was, I really took some getting used to, and I'm glad I'm not there any longer. Well, exactly right, Steve. We don't often realize what we have until we're without it. And so, yeah, whoever is listening to our voices right now on a great Christian radio station, make sure you let them know how much you appreciate them.
Amen, especially this time of year. All right, let's go to Chicago. Nicole, how can we help you? What's your question? Hi, thank you so much for taking my call today.
Happy to. So I just recently changed my exemptions at my job. I have three children. My exemptions were three, and then I recently changed them to two in September. And there's a new W-4 for this year. I haven't changed my exemptions in a mighty long time. So I just want to make sure that I'm doing it the right way, because I have noticed that I have no taxes coming out of my, no federal taxes coming out of my checks.
So maybe I'm doing something wrong? Yeah, could it be that you're below the standard deduction? What is your pay that you're bringing home, roughly?
A paycheck, it's less than $2,000. Yeah, okay. And are you married? No.
Okay. All right, well, you know, it would behoove you to go and check. Did you use the tax withholding estimator on the IRS's website?
I have not, actually. I didn't know that that existed. Yeah, I would start there. You know, the IRS encourages everyone to use the estimator to do a paycheck update or a checkup, if you will, especially if you haven't done it in 2020. But this would be a great way for you just to recheck your withholding. You'll just want to Google IRS tax withholding estimator, and you'll just be able to go through their little calculator there, and it'll tell you exactly what you should be doing and what that should be related to your W-4. And then whatever it is, it is, I think, you know, related to, you know, how many deductions you have, you know, it will tell you exactly what you need to withhold.
So I would go there. I think that will give you some peace of mind to know that you've double checked it. And you can see if it comes out the same way that it did last time you completed this exercise directly on the W-4. And if you have further questions, I'd check with a tax professional just to run this by someone who can give it a once-over.
But I think between these two, you'll get the information you're looking for. Got it. Thank you so much. All right, Nicole. All righty. Thanks for your call. Bye-bye. Rob, we have an email.
We haven't done some emails in a while, so let's do that. This one comes to us from, let's see, yes, from Ben. He says, Dear Rob and Steve, I'll be retiring soon and will be rolling over about $2 million into an IRA. What's the best way to tithe on this amount?
Thanks very much. Well, Ben, I love this question. So obviously you want to honor the Lord here. You want to apply the principle of the tithe, which is based on the increase. The question is, what is your increase?
And so there's a couple of ways to go about this. One approach, again, not trying to be legalistic here, but just really wanting to honor the spirit of your desire to give on this, on the increase. One approach would be to say, what is the total amount of my contributions over the life of this IRA, the money you put in? The difference between the current value and that amount is your gain.
That's your increase. And then you could tithe on that amount over time. You'd probably not be able to do that all at once or you wouldn't want to because you'd put that push higher tax bracket as you took this major sum out. But you could do it systematically over a number of years and then just keep track of that.
Another approach altogether would just be to say all of this is God's blessing and provision. And as you pull money out as income, meaning you're taking withdrawals on this to supplement Social Security and whatever other income you have, as you pull it out, you're just going to see that is increase. And so then you're going to tithe on it just like you would if it were a paycheck. Now, I realize that, you know, potentially you're going to get to a place where you're quote unquote tithing again, because if a portion of what you're taking out is your own contributions that you tithed on, you know, when you earn that money, if you were tithing on the gross amount, then I recognize it's not a perfect science.
But I think one of those two approaches would really been help you accomplish what you're looking for, either determine the total gain and then tithe on that over time or just tithe on it as you take it out as income. And I think, you know, one of those two will really help you do what you're trying to accomplish. Thanks very much. And if you have a question you'd like to ask Rob and you'd like to do it through email instead of actually calling in, you can do that. Just keep it short.
Just keep it brief. The address is questions at MoneyWise.org, questions at MoneyWise.org. And Rob, recently you spoke with a listener, if I'm not mistaken, she was elderly in her mid 70s and right off the top of the question, you mentioned something about risk tolerance. What does that term mean and how is it different for a 50 year old than it might be for a 70 year old?
Yeah. Well, it's a great question, Steve. And basically what we're talking about when we talk about risk tolerance is, you know, that's the degree of variability in investment returns that you're willing to withstand in your financial planning. So the risk is how much gain am I looking for? And in exchange for that potential return on the upside, how much downside am I willing to allow? And we all need to think through that. You know, if you're fully invested in stocks, I feel like you need to be willing to see a 35% reduction.
So you could just ask yourself that question. If I'm fully invested in stocks, meaning I've got at least 10 years time horizon until retirement, probably even more than that, and I were to open up my statement one quarter, meaning it's been three months since I looked at it, and it were down 35%, would I be OK letting that come back over time? Because if it was down that much in one quarter, which is what happened earlier this year with those folks who were fully invested when coronavirus first hit, you know, they would have to be willing to see that and not react emotionally, not say I'm going to sell out and go to cash, which would be the absolute wrong move to make when the market is down that much. And that's what we mean by risk tolerance.
And if the answer is no, there's nothing wrong with that. You just need to recognize you have a smaller risk tolerance and you probably don't need to be fully invested in stocks. You need to offset that with a portion that is in more stable investments like bonds and CDs and things like that, Steve. So when we talk about risk tolerance, that's what we're talking about. How much variability in your returns are you willing to withstand as you watch your investment portfolio perform over time? And age would just be one component that would be, I would presume, some other components, maybe the amount of debt you're carrying, maybe future expenses like college educations, things like that, right? Yeah. Age and time horizon are really the key because, you know, depending on when you're going to need this money, keep in mind, even somebody who's hitting retirement today who doesn't need the money to supplement their income because they have other income sources may not need that money for 20 years.
And so they have the ability to have a higher risk tolerance in their investment strategy, even in retirement. Thanks, Rob. You're listening to MoneyWise Live. We have to pause for a brief break.
We'll be right back. You probably have a strategy for your finances, your career, even your retirement. But do you have a strategy for your giving?
At the National Christian Foundation, we can help you create a giving strategy to inspire your family, maximize your resources and leave a lasting legacy of faith. To learn how, visit moneywise.org slash ncf. Have you ever taken a wrong turn when it comes to money?
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Your free magazine subscription is waiting for you right now at money wise dot org slash sign up. This is Barry Maguire. I'm a car guy here to help you understand God's purpose for your life through the eyes of a layman in the security of our Christmas homes and the knowledge that we're on our way to heaven. It's hard to imagine the clash of emotions that confront those who don't know the Lord during the holidays. There's the pervasive message of the Christ child mixed with the opportunities for late nights and heavy partying as the fears and apprehensions over what the New Year hold starts pressing in along with the feeling of being out of control. What's it all about?
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That's moody jobs dot org. So glad to have you with us today. It's Money Wise Live with Rob West. I'm Steve Moore. And of course, if you're a regular listener, you realize by now that everything we do and say on this program, even though it's about money, comes from God's word, the Bible.
And if you'd like to really look into what the Bible says about your finances, let me recommend the Financial Stewardship Bible from our good friends at the American Bible Society. You'll find it available to purchase when you visit money wise live dot org. Okay, let's go to Miami, Florida now. Hi, Norma. Thanks for your patience. How can we help you today? Hi, thank you for taking my call.
You guys are a big blessing. I have two questions. My first question is, I have a 401k at work and I'm 59. And they are also offering the raw 401k. So I don't know if I should do that one also or just stay with the regular ones that I have the regular 401k.
Yeah, Norma, you know, it's not a cut and dry decision. There are some considerations here when you're thinking through this. The first would be, you know, can you afford to contribute the maximum allowable amount? Because keep in mind with the Roth, you've got more money going in because the taxes have already been paid versus the IRA with the same, the traditional 401k with the same contribution. It's effectively a smaller amount because you still have to pay the tax bill down the road.
So that's the first consideration. The second is, what's going to happen with your future income potential in retirement? So, you know, for instance, if you think you're going to have, you know, earnings in retirement, then this on top of it with the traditional IRA, you know, could cause you to end up spending more. But for most people, they're going to be in a lower tax bracket in retirement because they're not going to be earning what they're earning right now. Potentially at nearing age 60, you could be at your highest earning potential throughout your entire working life. And so paying the tax now wouldn't really be a benefit to you when you're going to be in a much lower bracket later. So from that standpoint, it'd be better to go into the traditional 401k, get the deduction during your highest earning years, and then take the money out in retirement when arguably you're in a much lower tax bracket. The only unknown there is what are the future tax rates you're going to be? And that's not a simple answer. We just don't know.
So we just have to make some guesses there. The final question is, are you going to be in a position where you don't need the money, and therefore you could really benefit from the ability to allow this money to continue to grow and postponing withdrawals beyond age 72, which would be the case with the Roth. So I think those are really your considerations in terms of can you put the full amount in now in both cases? Number two, what do you expect will be the case with income in retirement and taxes in retirement versus today? And then finally, is this money you're going to need to be pulling out so you're not concerned about the required minimum? Or is this money you might want to let just continue to grow for your heirs?
And if so, then the Roth would be a place to do that because you don't have that minimum distribution requirement once you get to age 70. Do you follow those thoughts? You answered my question.
Thank you so much. I have another question, if you don't mind. I need to do some renovation in my house because I have a problem with the foundation. And I need to know if it's a good idea to take money from the 401k. I need to take like $20,000 or just refinance the house at 20 years, because the rates are lower. So I don't know if I should take the money from the 401k or just do a refinance. Yeah, I wouldn't take the money from the 401k.
I would be looking at one of two options. If you did refinance it, I like the idea that you're actually reducing the term. The question would be, does it make sense to refinance the whole mortgage? And the only reason you'd want to do that is you can save at least a point in the interest rate.
You're not going to extend the term, which you've already said you're not. And you're going to be in the home for at least five to seven years. Do you think you could save a full point on the interest rate?
I think so. Okay, so then you might be better off cutting the term down by two years, getting the reduction in interest and rolling the cost into this cash out refinance, where you'd get the money for the foundation at the same time. The only other option would be looking at a home equity loan, not a line of credit, but a loan for the amount you need specifically for the foundation.
But again, if you can save money in the refi and you've got the equity, that'd probably be the direction I would go, not the 401k by any means. Norma, thank you very much. To Skokie, Illinois next.
Excuse me, that was Skokie, Illinois. And Bonnie, how can we help you? Oh, thank you for taking my call. Yeah, I learned so much from listening to your program.
But I have a question today that I've never heard it brought up on the show before. It has to do with an inheritance I will be getting from my uncle's estate. But in order to get some of this inheritance, I have to sign a paper. It's called an approval and refunding bond. Are you familiar with that at all? Generally, I'll just go ahead and say we're not attorneys, but I understand.
Yeah, the concept behind it. So is your question, is this something you should sign in order to get your inheritance? Well, that and would there be any repercussions legally, if I do sign it, and they want to get the money back, and I don't have it to give back?
Yeah, well, you know, I don't think that would be an issue here. I mean, again, I would seek legal counsel here. But this basically protects the executor of an estate. So prior to you receiving a distribution from an estate, the executor will often require you to sign this release and refunding bond, which once you do that, you essentially waive your right to a formal accounting from the executor of the state. And then any future interest in the estate unless it's shown the bond was procured by fraud or some other impropriety.
If you don't sign it, you can still get the inheritance from the estate, you would just likely have to wait until the probate court releases the funds, which could take several months. So this is essentially a way for you to get the funds a little bit quicker. But you're giving up your your recourse here, you know, printing formal accounting and a final settling of the estate. But in terms of, you know, anything beyond that, I mean, I'm just talking generally about what this document is for.
I would seek some legal counsel, perhaps talk to your own attorney, you could get a referral from your church or even an attorney that's handling this particular state if there is one. But that's essentially what it is. I wouldn't be terribly concerned about it. It's a fairly common process. Kind of boilerplate stuff, Rob, primarily to protect the executor. Is that what you're saying?
That's exactly the most part. All right, Bonnie, thank you for your kind comments about the program. And we trust that information will help you. We wish you the best. Thanks.
And I think we have time for Jackie calling from Northbrook, Illinois. And how can we help you? Hi. Yes, my husband has the opportunity to trade currency for the crypto currency. Yeah. And I just I haven't been able to hear any of your thoughts on that.
And what kind of what you guys think of? Jackie, is this something is he a professional trader or is this something he would do as a hobby? It's a hobby.
Yeah. You know, I'm not a fan of this. It's extremely risky. The Bible says in Proverbs 21 5, the plan of the diligent, plans of the diligent lead surely to abundance. But everyone who is hasty and I would put this in the hasty category because it's just because of the volatility and the risk.
Who would everyone's who is hasty comes only to poverty. You know, I think the idea here is that crypto currencies trade with way too much volatility. They grossly exceed any other investment class. You know, I think the technology behind these crypto currencies is here to stay in our digital age.
I think we're going to see more and more of this. But, you know, there's been a lot of speculation which has fueled the volatility. And, you know, there's also been quite a bit of fake crypto currency exchanges that have defrauded folks out of their money. You know, and there's just little to no regulation. And so, you know, they want to stay away from the reliance on governments and government manipulation of currencies. The challenge is that it's difficult, if not impossible, for the authorities to recover the funds. I think just purely from an investment standpoint, the volatility just puts it in a different class that I think is beyond just slow and steady or steady plotting, the Bible calls it, that I would apply to typical investing.
And because of that speculation and volatility, for me personally and for my recommendation, I'd say I would stay away from it and look to do your investing in proven, more secure, more sound investment strategies with proper diversification and lower risk. Jackie, we hope that helps you. You and your husband have something to pray about and discuss now, and we wish you the best.
Thanks so much, Rob. Believe it or not, sir, we are out of time, so maybe we should put a bow, a Christmas bow on today's program. You know, obviously we talk about money and finances, but all of that is somewhat futile if it didn't come directly from God's Word and His principles. And what day, other than Christmas Day, to really focus on that, huh?
Well, that's exactly right. This is the day, right, where God became flesh and dwelt among us, Steve, that ultimately He may go to the cross and pay the ultimate sacrifice, taking our place, a substitutionary atonement, if you will, for our sins, and we are forever grateful. But yeah, this is an incredible time to be together, to remember Jesus, and hopefully to enjoy some fun along the way, and that's what we're all about, Steve, as you know, here on MoneyWise Live, really going back to God's Word to say, how do we apply His truth to our life in this area of finances that we all deal with every day? Well, it's been all of that true, of course, but it's also been a difficult year. In fact, there are probably some listeners who aren't with all their family members, and we'll remember you and our thoughts and prayers and trust that Christ will fill that void in your heart and in your family's situation this year. Rob, always a great pleasure to be able to work with you like this, and I trust that the West family will have a wonderful Christmas Day. Well, thank you, and to the Moore family as well, grateful for you, Steve. Thanks so much.
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