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Taking Interest in I Bonds

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
March 24, 2021 8:03 am

Taking Interest in I Bonds

MoneyWise / Rob West and Steve Moore

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March 24, 2021 8:03 am

You might not be familiar with I Bonds and the way they function as savings vehicles. You may also be surprised to learn that unlike your savings account at your local or online bank, these bonds are currently yielding quite a bit more interest. On the next MoneyWise Live, hosts Rob West and Steve Moore share some information on this savings strategy. Then they’ll take your calls and answer various financial questions. Taking an interest in I Bonds on the next MoneyWise Live at 4pm Eastern/3pm Central on Moody Radio.  

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This is Doug Hastings, VP of Moody radio and were thankful for support from our listeners, and businesses like United faith mortgage mortgage commercials are rarely exciting.

So to make it slightly more interesting. Here my nieces to do it for me. Interest rates continue to drop like my sister's baby teeth, uncle Larry had still not scared.

It was rates are boring. Talk historically low and now this year is even more boring. Talk historically lower than the previous point talk historically low sounds boring for so many listeners who just wanted to deal at refinancing right now could see the amount of light rates have gotten that some borrowers could patiently save hundreds monthly and tens and tens of thousands over the life of the loan and if you didn't put 20% down before somebody ends up having to pay PMI gave uncle Brian I sent we are United faith mortgage United faith mortgage is a DBA of United mortgage Corp. 25 Millville Park Rd., Millville, NY license mortgage backer for licensing information, go to an MLS consumer access.org corporate MLS number 1330. Equal housing lender not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota and Utah watch cable TV for a while and you're bound to see a program about buried treasure in the Sierra Mountains are often some Caribbean island, but you ever wonder whether searchers hardly ever find anything well even better question might be what Earth is buried treasure have to do with government funds and your savings account today. Think of advisors.

Pres. Rob West answers those questions and more. Now we are accorded to please hold your calls until next time we have some great questions already more taking an interest in wait to see you tie these loose threads together, bonds, savings accounts, buried treasure all about money, I guess. Well they are, but there's more to it than that. First, let's go back to your original idea that treasure hunters on TV never actually find any treasure. Yeah, well, just like they never find Bigfoot either same idea, but there's a different principle at work with buried treasure. It's something called the efficient markets theory in the stock market. It means that the value of the stock always reaches its perfect selling price, barring any outside factors now applying it to buried treasure works like this.

The bigger the treasure the more likely someone else has already found okay well that makes total sense. I guess probably explains why they never find it on TV shows. But what does it have to do really with government bonds in my savings account right well that might be a case where the efficient markets theory isn't working. A lot of folks are passing up some buried treasure in the form of government bonds right now about the best you'll get with your savings or emergency fund in an online bank is around .5% one half of 1% of brick-and-mortar banks are paying far less but get this right now. Series savings bonds are currently offering 1.68%. That's more than three times the online bank rate and it would pay you up hundred and $18 a year for a $10,000 emergency fund. Well that lots of buried treasure there. But why turn down almost $120 a year. If you don't have to exactly now changing channels from treasure hunting to financial programs you might see experts debating which ETF or exchange traded fund is best based on a single basis point. That's .01%, you'd have to have $1 million invested in that fund to earn the extra $108 you get with a $10,000 bond okay so what exactly are I bonds and how do they work now what I bought is just another type of US savings bond and it's guaranteed to keep up with inflation. As with other bonds you get a fixed rate set for the life of the bond and right now it's around 00.

Well that doesn't sound like much buried treasure really well. Here's the buried treasure part. If you own and I bond you will get semi annual rate adjustments. In other words, two per year. And right now that rate change is .84% double that because you get two of them and your annual interest rate is just under 1.7%. There sure buried treasure. Of course I bonds are backed by the full faith and credit of the US government also interest on I bonds is free from state taxes and possibly federal taxes.

If you cash in the bond in the same year you pay for college expenses. Depending upon your income okay but what I think you must be a catch somewhere. Well, because of course you're smarter than the average bear steeple. That's the nicest thing you've ever said okay I agree we've gone from buried treasure to Yogi bear.

So what are the downsides to owning I bonds while they do come of the few restrictions that you have to hang onto them for at least 12 months before you can cash them and that means you shouldn't put all of your emergency savings into I bonds in a single year.

Also, you're only allowed to purchase 10,000 worth of I bonds in a single year. Of course it be 20,000 for a married couple, but you can add 5000 to that by designating that it be taken from your federal tax refund. By the way that be about the only reason I want you to get a refund that large. Otherwise, it's an interest free loan to the government. One other limitation.

You can only buy them online.

A treasury direct.gov no brokers or banks, and I would make sure you only put a portion of your emergency fund in I bonds.

Given that you can't touch it for at least 12 information about thanks very much for listening to moneywise from West. Today's broadcast is recorded so we won't be taking any calls but we have some calls lined up in some great way to find usable at the very. This is moneywise live on Steve Moore listening to moneywise but we're not lives so if you hear that phone number. Please don't stick around. Lots of good information is 11 reminds us, and without faith it is impossible to please him. He who comes to God must believe that he is and that he is a rewarder of those who seek him. Nice to have you with us today moneywise live. Maria is in Ocala, Florida, and maria, we know you been on hold for a while so we appreciate your patience and what your question in my call.

I'm currently 61 year and I'll be 62 in March have to weigh in November of last year and he had a traditional Ira with approximately $45,000 left in it. He'd been using it over the years and now I don't know what to do. I was told to see about converting it to a Roth taken the money out and doing something differently but I know it's going to be experienced tax consequence money.

I'm not currently lowlight but I did get a very minuscule pension from the state of Florida and I inherited my husband Social Security survivor is okay. Maria, first of all, I'm so sorry to hear about your husband's passing. My understanding correctly that you have not touched this IRA since his passing.

It's just been sitting there there. I haven't eaten anything to the bank and I don't know what day okay alright so your what you're living on right now is the spousal Social Security benefits plus the retirement pension is that right, correct it.

Is that enough to cover your expenses. Maria each month I mean very frugally, yet okay I was just letting it into the cause of the worst tax problem that I was told.

For the next year or two. I have my husband and widow.

I get extra exemption on the Ira I mean IRS taxes. Okay well with the traditional IRA that's inherited from a spouse, you generally have three choices and I would check with your CPA to make sure you doing this properly, but you can typically treat it as your own IRA by designating yourself as the account owner, you just need to provide the necessary paperwork and death certificate and so forth. You can roll it over to another traditional IRA. If you have one. Doesn't sound like you do, or another qualified plan, or you can treat yourself as the beneficiary. Rather than treating it as your own, but the bottom line is if you don't need this money mineral is it's nice to have, and you may need it at some point down the road.

Maybe there's a major medical expense or some unforeseen event.

But the good news is you're living modestly Lords provided income to meet your bills you haven't touched this so I just let it continue to grow, but I would transfer it over into your name as the account owner and go through the process of that and then you're going to have to decide how do I want to invest it. Assuming you're not withdrawing it. I don't see any reason to withdraw it, especially in full because all of that money would be added to your taxable income and you'd pay a lot of tax on that.

So I would.

I would really just keep it invested their and if if possible and if necessary think about changing the way it's invested in and who's managing that for you.

Do you have somebody that's a trusted investment advisor or somebody that you know who's helped you with financial planning and other matters in that area.

I never thought about it.

Okay well I don't have anyone I was concerned. Can it become a Roth Ira so it will be a better text that you might be too late. It's not you could convert it to a Roth. The problem is you have to pay all the tax on it and I just wouldn't move. What you have to do that you have a huge tax bill. If you converted you. Basically you'd add 45,000 your taxable income for the year and here's the thing you be paying the taxes right now in your current tax bracket, which perhaps is as low as they'll ever be.

If we think taxes or rates are going up down the road. You're not working so obviously it's not like you're gonna lose you're going to be in a lower bracket down the road. Because of that, but you really get the most benefit from a Roth.

Maria, when you have a long time for the money to compound and grow where as in this case I don't see enough benefit for you paying this large tax bill just to get it into the Roth. I'd rather you transferred to your name and then make sure it's being invested properly and to do that I contact a certified kingdom advisor there in Ocala. Just go to moneywise.org and click on find a CK and I think that'll at least get you going in the right direction. They can help you navigate getting the bank to change the owner to your name and then the perhaps take a look at the investments if you want to do some reading on this from somewhere that that provides a godly perspective visit with our friends@soundmindinvesting.org and again I hope that's helpful. And so sorry about your husband's passing.

Maria God bless you, thank you so very much and if you looking for some other places to find out more about God's word when a read when it when it pertains to your money, your investments, your retirement, you'll find lots of things to read lots of free resources and our store is well if you'd like to purchase some of the books you hear is giveaway to many of our listeners. You'll find all of that and more.

When you visit moneywise.org it's also where you can make a donation if you so inclined to just click the donate tab at the top of the page moneywise.org and thanks in advance for your generosity will remain in Ocala, Florida hi Sue, how can we help you today I would like to know what I okay Sue but I think the first question is just to make sure this is money that should be invested in the main thing related to that is how long do you anticipate before you need this money either to begin drawing income from it or where you might need to take some out for a specific reason. What would he think about, but would you anticipate that the majority of this money would not need for let's say 10 years now. You don't think you need it within 10 years. Is that correct okay okay very good and is this money in retirement account or is it in what's called a taxable account, which is just like a checking or savings account. Something like that at all. I actually but this is an in an IRA or some other type of retirement account is okay okay yeah very good well what what I know is that this is a large sum of money $70,000 is a significant amount of money. So here's what I would do. I would hire somebody to help you invest this I would find somebody who shares your values. Somebody who understands that you come from a biblical worldview. Somebody who understands and has great competency in managing money like this, and it's not can be managed according to what they think should happen is to be managed according to how they might look at an investment strategy that fits with what you need to happen. Meaning what is your age and what is the likelihood you'll need some of this money. How long before you would need to draw some out how much risk do you want to take and really ask you a lot of questions.

Get to know you and what God called you to, and then help you build an investment strategy that is gonna be reflective of all the things you've been talking about and then walk with you along the way as you have questions and help you understand what's being done that would be an investment professional and I'd recommend a certified kingdom advisor that just means that they've gone through great training to apply God's word to their professional advice. It means that they have great competency in character and integrity as well as a lot of years and in serving in this area.

You can find that person, Sue.

If you use a computer. Just go to moneywise.org and just scroll down a little bit and you'll see something and says find a CK that stands for certified kingdom advisor look for one there in Ocala that you can visit with. In fact, I'd look for a couple of them find the one that's the best fit for you. Make an appointment and I think that will get you going in the right direction soon. Thank you very much and God bless down to Miami time. Yet we know you've been holding but unfortunately were running out of time, but you have a good word for us about our friend Larry Burket will been doing my early 28/30 years now and die. We might have been and I are totally debt, including college, my daughter graduated with her pH side of that's incredible. So God is really honored your faithfulness to follow his principles of managing his money and you're now reaping the benefit in seeing the fruit of that so excited. What a powerful testimony and you know what's on your you've been an encouragement. I know many others who are listening today to say I want to be able to tell that same story years down the road and so thank you for being obedient to share that with our listeners to a PhD with no college that absolutely incredible. We appreciate that Tonya and we appreciate the memory of our good friend Larry Burket. I had the honor of working with them for over 20 years. Just a wonderful great guy and of course a flare with Larry were hurting. Here he would tell you they just try to plagiarize God's word as much and as often as possible. That's our focus.

God's word when it comes to your money and finances. We have to pause for a break for moneywise. Life after this today.

This is moneywise live your best to help understand and establish God's plan for your life and your money.

Please remember that today's program is prerecorded, so I don't call next Seward, Alaska hey Mark what's going on in your life, sir big fan of the show with them whenever I can. I have a question. Yeah, I have a question for you today regarding my father's will. My father is retired and 70 years old and up. My mother passed away several years ago. Up until this point he had the well-written that my brother and I will split 50% of everything you have. He has about $180,000 in cash young hundred thousand dollars.

All and has a few other assets potent so forth. On a recent vacation. He news to me that he's thinking about changing his will to going to 20% for myself.

My brother and then my brother has a daughter 28 years old who has two small children in each of those mentioned would all get 20%. I have the power of attorney on his will, because out of the group about trust me to lump all through with his wishes, leaving a Christ follower as well as him. My brother is not, and neither is my my niece. But for purposes of he asked me what I thought what my reaction was and if if I had any input with that and I really didn't know what to tell him other than I could doubt old mentally it's yours.

Yours to do as you choose and what you ask of me, I will you follow through to the best of my ability so my question for you today is from a biblical perspective. How can we find some enlightenment on this scenario and there an answer that I can give my father from from a biblical perspective. Yeah well I certainly appreciate that and we do see the inheritance in the Bible. It's pretty clear.

Proverbs 1322 comes to mind a goodly good man leaves an inheritance to his children's children, and so that model is certainly there. I think each of us as stewards have to decide how does God want us to manage his money and that's not something somebody else can tell us a child or a parent or anybody else.

I think each of us once where an adult we need to be able to stand before the Lord and really through prayer. Decide how the Lord wants us to handle his money and when it comes to that final decision of wealth transfer which, remember, is the last stewardship decision will make.

We need to be asking it about that as well and that not only includes inheritance but there's only two other places you can leave money the government hope you don't want to do that if we don't have to in the form of taxes and then charity or ministry how we want to put the money into circulation and in God's economy and we've got to decide how we want to balance those and then what is the plan that allows us to live that out and that can change over time we should be revisiting that periodically so I think the best thing you can do. Mark is first of all, encourage your dad. Assuming he's a believer to really be thoughtful and and pray through that decision and just give him the ability to know this dad, this is your decision. You're the steward of these funds. Whatever is ultimately passed on to someone else they will become the steward, but not until then, and so asked the Lord to give you wisdom here, I think.

Secondly, what you could do would be to give them a book the very best book on this topic is a book by my good friend Ron Bloom was a mentor of mine, and it's called splitting heirs HEI RS splitting errors, you can get it on Amazon. It really talks about, not the technical side of wealth transfer, but the principles and always looking at each of the principles from a biblical perspective, and I think that might be an encouragement to him as he thinks about how he wants to pass on this money to whomever he wants to pass it on to the end of the day it's his decision.

I would just affirm that in him and tell him you'll be praying for him as he makes that as well and then you've done the last thing which is to say, ultimately I'm going to do what I need to do to honor your wishes.

And that's exactly what you should be saying. So I think that's the direction I would go encourage them to pray, affirm his decision-making process and then perhaps given the gift of this book splitting errors. In fact, if you hold all of the line. Mark will get your information will send you free copies are nifty Mark. You sound like a godly guy and it sounds like your father made a wise choice in making you a power or giving you power of attorney. We wish you the best with this. Thank you very very much with that deposit will be right back with more this is moneywise live today telling others about how to appreciate that. And let's go to our phones now Madison, Wisconsin. Alan, thank you very much for contacting us. Or what's in your mind last week and heard a woman call in with question about how to help her teenage kid where question on how to handle their finances and looked concerned that maybe it's too late and there was anything bad habits that have set in and I'm the father of several small children from the oldest of eight down newborn and wondering what things I can start thinking about in teaching and a practical they're doing now so that we get ahead of the curve and don't get into that habit from the beginning. Well I can tell your good dad Alan because you're thinking about the right things and you want to the Lord as you raise these children do it in a way that honors him and that clearly are doing that and I think starting early is the right idea.

As we begin to make money fun, make it visual and I make it in a way that's relatable and age-appropriate. So for very very young children.

I would just start with the simple bank or jars that allows them to see money separated for saving giving and spending and it's fun if they can even have a clear jar of some kind where they can see the money grow and you know what you're trying to teach. There is that there's uses of money and that with everything that comes in from whatever purpose.

That is when talk about allowances in the second. Let's say it's birthday money or Christmas or however little ones earn money that they immediately begin to allocated among save give and spend and with saving.

I would even encourage them to print out a picture of you help them do this. Of what they're saving for. So it's right there at the top of the jar and they know what they're working toward, and they can begin to learn the idea of delayed gratification of putting money away. We also want to get them involved in giving early so that just becomes a part of their habit as they grow older. And then of course with the spending that would be on things that you would deem for them to spend their money on at their discretion, but it would be more in the short term I think as they get older, we can also teach them the value of of work and working with excellence and doing a good job so there would probably be another is my house chores that everybody has to do this just part of being in our family and you're expected to do them and you don't get paid for it, but perhaps there are other jobs that you determine in advance where they do get to 1/4 and age-appropriate amount of money and they are paying based on how they did with that job and some of those things could allow them to earn some extra money again then allocate that among the gifts they've spent so I think that's really important. It's also important just a model.

This you know as we talk to people adults about managing God's money, I will just tell you that probably the most powerful force in how you handle money as an adult is really how your parents modeled handling money as kids and it shouldn't be any surprise that's probably that way with most things, but it's certainly that way with money what money was like growing up has a profound impact on how and how you handle it in your later years and a lot of that has to do it was a spending plan modeled you did you talk to the kids about the fact that there are limited resources and as they get older actually involve them in some of the decisions in an appropriate way saying things like, there's limited resources we have a certain amount set aside for eating out so we can give and so we can save and all those things. So let's decide this together. We want to eat out twice and get something less expensive this week or do we want to eat out just once. Maybe we take tonight and stay in because we want to be able to do something after church.

You know those kind things will those conversations will begin to reinforce this idea that money is limited and needs to have a plan and then finally not owning it all is critical and they need to understand that and that's by way of you talking about it. So tell me what your thoughts are and that is that helpful yeah have been taken out of your pocket, you will really do Alan so you have to take anymore notes Howard Dayton is written a wonderful book for children ages 5 to 7 called the ABCs of managing money handling money and if you'll stay online will get your contact info and we will see to it that the Howard sends you a complementary copy alright buddy.

We appreciate that, for thanks very much Rob I think is also important. I don't have to tell you, teaching children about money is like teaching them anything else. It's a process. Just because you say something once or twice or 20 or 30 times. It's a process that takes a while to get it and children are different. One may get that one may not get it so well. It's a process. Well it is a process and I can_again this idea of modeling enough you know if we are living without a budget living free of frivolously it's causing all kind of strain and stress in our lives because were not heeding the Council Scripture. Our children are taking note of that and I don't say that to you feel bad about yourself, but I think as you purpose yourself moving forward. To do this. God's way understand the benefits of that are not just for you but for your kids as well, not ready, let's continue on that, see West Memphis, Arkansas hey I have a Bible question for some it's my question. I will say that I'm a huge fan of the show. I'm 19 now been listening since I was 16 and one other question, they have definitely been answered, and now completely and fully by what what is the best way to provide from your your family from a biblical standpoint.

Well, I am delighted to hear that you're 19 years old you're thinking about God's word in your thinking about how it applies to your life and that is the right way to go because this is really the textbook that should guide every facet of our lives. What a lot of people fail to realize saying that you're picking up on is that God's word speaks authoritatively to this area of money like it does every other area of our lives and so we need to understand these principles, we need to dig deeply into them and then we need to think about how to apply them as a relates to provision the author Ron blue said this, he said, as I look in Scripture. In particular, first Timothy as it relates to my lifestyle. I see three things that were charged with doing number one is that were to provide.

That's to your question were to live with contentment and were to enjoy what we have. Well, the provision comes from first Timothy 58 where it says anyone who does not provide for their relatives and especially their old their own household has denied the faith and is worse than an unbeliever, and certainly none of us would want to be called that.

So what does that mean how do we provide will the good news is, God doesn't just leave us to our own devices to figure that out.

He gives us principles in his word that help us to understand what that looks like starting with God owns it all. Recognizing the importance of giving because that's going to cause us to hold money loosely to break the power of money over the lives we should have a spending plan. The Bible talks about that. The ant stores up during one season. So he has food in another season that's the idea of saving that we should count the cost and so we should have a spending plan that governs how much is coming in and going out that we should be thinking about putting money aside for the longer term. All of these things are how we provide because we follow God's principles. Here's what I want you to do. Hang on the line. Hey Morgan to get your name and number were to send you Howard Dayton's book your money account that's gonna pack every one of these principles I just described very question. Hayden thanks very much for calling 800-525-7000. This is a reminder that today's program is a broadcast number. Please send us an email. Questions, moneywise.org moneywise live just one of the 2300+ verses in the Bible, but you money and possessions you ask and do not receive because you ask with wrong motives, so that you may spend it on your pleasures. James 43 go from James to Jack Schererville, Indiana hi Jack, what's on your mind today for Rob West absolutely money that I need to set aside for my grandkids just got a new grandson right before Christmas and wondering if it's best to go with like a 429 or some other investment that he can tap into whether he goes to school or not.

Yeah, yeah. Good question Jackie, did you say you are thinking in terms of college or how important is it for you to have this money available for other noncollege related expenses.

Well I'm thinking for college, but who knows what's going to happen 18 years down the road. Everything else yeah well I think that's really the first decision I really like the 529 for saving for college specifically because it's going to grow like a Roth IRA and you got a lot of time on your side because he was just recently born. So if you do this if your systematic investor over long period of time and this money grows and in the investments inside the 529 and that it's used for qualified educational expenses including up to a certain limit K to 12 private school, but also college related expenses, room and board and books and fees, and other things at college. Not to mention tuition then you get all that growth, tax-free, and depending on your state, you have to check there in Indiana. You may end up getting estate tax deduction for the contributions so that's what I like about it. Now what that doesn't allow it to be used for his other things that make more know if he doesn't need the funds for college.

Keep in mind, it could always be transferred to another. 529 account for the benefit of another person, including yourself.

If you're decided you want to further your education or another grandchild that might come and have need for it, or in the event he gets a college scholarship or grant award. You can take the money out on a pro rata basis equivalent to the scholarship so that would give you the ability to get some of those funds back to be redirected, so I think you got a couple of options. One is you could say you know I'm skinny go all in on college and just expect that at some point he's gonna want to go to school and need some help and this is gonna be the best tax-advantaged environment for me to grow these funds so I'm going to do that or I'd like to split it into him to take half of what I want to contribute each month or each year, but in the 529, half somewhere else now.

For that somewhere else I wouldn't put it in a custodial account like a you TMA or UGMA just because that becomes his money at the age of majority in your state and use it for whatever he wants, and you may want to have a little bit more control. Depending on where he's at and how God has wired him in the decisions he's making in all of that at the time and so that would give you reason I think to keep it in an account in your name separate earmarked for him, but invested. Nevertheless, and then you could give it to him at your discretion and time of your choosing. So that would be the probably the two directions I would go if you want to entertain the 529. I'd look@savingforcollege.com you can run a little calculator there to determine the best 529 for you based on your state and the performance of both 529's in your state and outside alright thanks are okay Jack, thanks for college or thanks for very much right Chicago, Illinois. Michelle I know you've been holding patiently for a while.

Thank you for that and what your student loan question how long and wondering what your thoughts are regarding refinancing with a private lender versus the government loan because they offer so many options like an contraband and deferment and then to M, but the interest rate haven't tested out yet don't want to look into how much the entrance rated for like it might save me money if I transferred to wondering if I yeah Michelle, you identified the main issues here.

The first issue is if you move out of the federal program and that's what you'd be doing by refinancing with a private loan and there are many of them and some of them very competitive in terms of fees and interest rates.

But as soon as you move out of that environment you are giving up the flexibility that comes with the federal loan program.

The protections for not only loan forgiveness.

If you're a student happens to qualify for that but also the flexible repayment options. The income-based repayment options, deferment or forbearance other options that you have in the federal loan program.

Now why would you give that up.

Well, the only reason you would is because you feel like it's there's enough reason to move out of that because your to save some money on the interest rate and that's obviously where you need to start to say, can I in fact save money because you need to save a good bet in order for you to justify walking away from some of those flexible options. Yeah, I think it's a it's a risk that you would have to go into knowing the risk that you're assuming by giving those up and just decide how certain do I feel like the future is for your student or if you're the one repaying it. Your financial well-being and whether or not you know you want to just preserve those options, but you may find Michelle when you go out and look for those private refinancing options. There's just not a lot of savings there.

You may find that the federal rates are such that you know there's not going to be much that you realize on a monthly basis, so I probably start there.

Just so you know what you're comparing and visit with Sophia in a number of the others that are the most competitive. You can go to bank rate.com to compare them and once you have an idea what the interest rate would be. I think you'll know pretty quick. Whether or not it makes sense.

Okay Michelle, thanks for calling to bless you. Thanks Michelle. I appreciate that already run it's been a while since we've done an email so this take one of those of this is from well see who he is, says dear Rob, I was divorced before I married a wonderful Christian lady after our wedding, I learned that her credit was ruined by helping her adult kids who then defaulted on the loans she cosigned my credit is excellent. Would we be better off if we kept separate accounts yeah well I think the big idea here is that whenever we are married to become one that includes our finances and so especially when we been were marrying later in life, or perhaps in like in this case a second marriage. We need to have full disclosure we need to talk about. Perhaps what's happened in the past, good bad or indifferent, but then we need to move forward together. Now, what would be the practical impact of you all having joint accounts really nothing your credit history is yours. Hers is hers. Hers will not spill over the years. Apart from you having accounts that you share together in those not being paid on a timely basis so I'm assuming this wouldn't happen, but the only potential risk is you have a joint credit card.

She allows a child to use it and you don't have the money to pay the bill that would be about, you know, the only problem I could foresee in there would be obviously much deeper issues there that you would have to tackle but you know it just the fact that she has some poor credit and you all have some shared accounts, there is no ramification of that it's not going in any way spill over to yours. Apart from the genuine and real credit history that you have together for those particular accounts only, not any accounts that have been previously okay and if you have a question for Rob you'd like to ask by email rather than actually appearing on the program. The address is questions@moneywise.org keep it just to a couple of lines questions@moneywise.o Archie Indianapolis hi Connie, how can we help you with your RMD while I don't really even when I think now I Guess, and fellow island. During where to put that money down. One option we talk about Connie quite a bit here in the program just because so many of our listeners are looking for ways to be generous is something called a qualified charitable distribution of you free familiar with that term. Okay, that essentially what happens is the IRS will allow you to make a was called a qualified charitable distribution which is a gift directly from your IRA to a crisp draw to a ministry or not-for-profit charity and that will also satisfy your RMD. So imagine this. Imagine you're already doing some giving to your local church and you replace that giving that you're currently doing out of cash with money you've Artie paid tax on you, you no longer make that and you make the gift directly from your IRA in the same amount. Why would you do that well.

Hey, it's gonna satisfy the RMD to the extent you make a qualified charitable distribution, at least to the amount that you need to take out for that year and second, there's no tax that's realized. So instead of you selling some money or selling some stocks taking the cash out and adding it to your taxable income for the year. There is no tax when you do the qualify Journal distribution. It's a nontaxable event in the the ministry or charity receives the full value of the distribution and nobody pays the any tax you don't and they don't. Does that sound like something might be of interest to our charity thinker exactly you got it. That's great. And then you could keep giving what you're getting out of cash. Or you could replace it. It's up to you but yeah I think that would be a great option. So here's what you do call your IRA custodian. Tell them you're interested in doing a qualified charitable distribution they'll give you the paperwork. Let your church or charity know that this is coming. Work with your CPA to figure out how much you need to take out for any given year, and then when you thought the paperwork, the money will be sent over and you'll satisfy your RMD and make a wonderful have to charity that you love to get frequent flyer flyer miles with that know whatever toaster maybe a toast because earlier you were talking about online thanks that's exactly what I was thinking about when do I get my toaster home Lambrecht were out of time. Thankfully he's Rob West, I'm Steve Moore you are you and were glad you're tuned in today moneywise and I was a partnership between Moody radio and moneywise media so much for listening appreciate your prayers. Join us again next time


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