Smart Move—Donating Stock

This is Doug Hastings, Vice President of Moody Radio, and we're thankful for support from our listeners and businesses like United Faith Mortgage. Heading into spring, I've been spending a lot of time pondering, analyzing, and debating something extremely important to men, and even many women. And that's whether a new driver would improve my golf game.

I would say I'm somewhere between embarrassing and appalling at golf. But man, do I love it. And all my buddies show up with these epic flash, big maverick birther drivers, and I can't help but feel like they've got this massive advantage on me and my persimmons. It's Ryan, and our Faith and Family Mortgage team, we're proud to have a pretty special advantage ourselves, and one that can be a big deal for you. Our team is an arm of a bigger company who is a direct lender, which means our company uses its own money and makes its own decisions within its own walls. There's no middleman, and this advantage often allows us to get you a better rate, saving monthly and lifelong money on a refinance or new home purchase. We're much better at mortgages than I am at golf. We are United Faith Mortgage. 2 Corinthians 9 tells us each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver, and he probably also appreciates a smart giver. Hi, I'm Rob West.

Christians are commanded to be generous towards God's kingdom, and there's no wrong way to do it, but some ways may be better than others. I'll talk about one of those ways today, and then it's on to your calls and questions. 800-525-7000. 800-525-7000. This is MoneyWise Live, where biblical wisdom meets today's financial decisions.

Okay, so I'll end the suspense. I'm talking about donating stocks. We had a caller on the program recently who wanted to donate some of his investments to MoneyWise and asked how to do it, so I thought it would be good to revisit this topic and equip you with the facts so you can take advantage of this kind of giving to your church or favor in ministries. It's sometimes a smarter way to give than simply writing checks because it enables you to be even more generous. By the way, the folks at the National Christian Foundation have a great resource page for doing this, and we'll have a link to it in today's show notes.

So let's start with an overview. Say you've owned stocks or mutual funds for at least a year in a taxable investment portfolio, and they've appreciated in value, as many have. You'll likely be able to pay less in taxes, give more, and improve your personal cash flow, all while simplifying your giving. The way to do it is by donating those stocks before the sale.

That way you reduce or eliminate capital gains taxes. You see, when you open a giving fund with the National Christian Foundation, which we certainly encourage you to do, they'll sell the securities and put the net proceeds into your giving fund. Then you'll be able to recommend grants to your church or a ministry that you're passionate about. When you do that, you're multiplying the impact of your giving because you eliminate capital gains tax on the stock you donate.

That increases your giving capacity. And if you still like the stock you donated, well, you can use your increased cash flow to repurchase it. Let's compare traditional giving to donating stock using a figure of $10,000. With traditional giving, you would start with that $10,000 in cash.

You write checks to your church or other ministries for that amount. That obviously qualifies you for a $10,000 charitable deduction if you itemize. Now, you have to keep track of every tax receipt, and you also continue to pay, at some point, capital gains tax on the sale of stocks in your portfolio. But let's say instead of cash, you donate $10,000 worth of appreciated stock right into your NCF giving fund. Well, NCF sells those stocks tax-free to you and puts the proceeds into your giving fund to be distributed to charities.

Well, you still have the $10,000 in cash you didn't donate, which you can then use to reset the basis in your portfolio. And you can use your tax savings, here's the key, to be even more generous. But there are even more advantages to donating stock through an NCF giving fund. The first one you might call DeductNow Grant Later. You can get a tax deduction this year for the full amount of your donated stock while granting it over several years.

It also simplifies things. You can make one stock gift that easily supports multiple ministries. You also consolidate tax receipt paperwork under one charity, the National Christian Foundation.

And you can do it all online. You just sign into your giving fund on NCF's website from any device to see your fund balance, make gifts, and recommend grants to your favorite charities. So you can see this really takes your giving to a whole new level. It enables you to set your giving goals across multiple years instead of just what you want to give right now. It's also something that you want to discuss with your financial advisor.

That person is managing your portfolio but may not really be aware of your giving goals. By sharing this with them, they can help you select the best stocks or funds to donate. So we hope this encourages you to think a bit outside the box this year with your charitable giving by donating shares of stocks and mutual funds. And the folks at the National Christian Foundation are ready to help you.

Their website, again, ncfgiving.com. It's a great way to be even more generous with your church and favorite ministries. And when you're making your giving decisions, please remember that MoneyWise Media and Moody Radio are entirely listener supported.

Without you, we can't provide folks with information they need to be better stewards of God's resources. So to learn how you can make a stock gift, go to moneywiselive.org slash stock gift. Your calls are next, 800-525-7000. This is MoneyWise Live, where biblical wisdom meets today's financial decisions. Thanks for joining us today on MoneyWise Live. I'm Rob West. So glad you're along with us today.

You have a question about how to apply God's truth in the area of finances to what's going on in your life? Well, we'd love to talk to you today. We have some phone lines open. 800-525-7000.

That's 800-525-7000. Let's start today in Chicagoland, and we're going to begin with Dale. You're first on the program.

How can I help you, sir? Oh, good. Thank you for taking our call. My wife and I are in our 70s, so we're living on a pension, and we have a mortgage with four years left to pay on it, and the balance is about $40,000. We're paying 4.35 percent interest on that. We're thinking of trying to pay it off using some of our savings. The current interest we're getting off of those savings is between three and a quarter and four percent.

Our financial planner says the taxes we would have to pay if we pulled the money out to pay off the mortgage would amount to about 20 percent, and not worth doing that. We have four years left to pay. He had a three-year plan that we could use to try to pay it off, but that's only saving us a year, and we were wondering what your thoughts were on something like that.

Yeah. Dale, as you and your wife talk about the opportunity to be debt-free, let's set the financial side aside for a moment. How important is that to you, just in terms of your own convictions, the desire to be unencumbered? Is that really important, or would you be okay waiting, again, not looking at the financial side to begin with?

We'd like to have it done in regards to our children that would be left if something happened to the two of us. They wouldn't have to deal with that. That would be a factor for us. Just to have it clear would be a factor.

Yes. Well, I think we've got to consider both sides of the equation. We have to look at the dollars and cents, and clearly that's a reality. As a steward of God's resources, we want to make the best decisions we can. Then we need to set alongside that this idea that we want to pursue a life being debt-free. If you have the ability to do that, we realize that being unencumbered gives you flexibility, gives you greater peace of mind, gives you the ability to respond to the leading of the Lord, because you're reducing your expenses, your lifestyle and expense, and therefore you have more margin to follow God in whatever he's leading you toward. And as you said, there are other issues as well.

You named one related to estate planning. So I think we've got to consider both factors. I mean, clearly you all are very close in either case to being completely debt-free, having the home paid off. If you said we'd rather fund that payoff out of current cash flow and not have to pull out of our retirement account, which means we don't have to pay those taxes, you will pay them at some point. The question is, would you rather pay them now or pay them later?

And obviously, if you pass them on because you no longer need them throughout the rest of your life, then it could become an inheritance. So the opportunity to just, again, fund this out of cash flow, I think is fine. There's nothing wrong with that. And again, we're in either case, we're within four years of doing that.

So I don't have a strong conviction one way or the other. I just wouldn't let the financial side be the only driver. If that's really what he's looking at only and not considering these other elements that you've named, then I think those are worth considering and you should pray through that.

Ask the Lord to give you one heart and one mind as husband and wife as to how you should proceed. And if he leads you to become debt-free, then do it. And perhaps you spread it over two tax years instead of doing it in one year so it doesn't all come out at once if that were to bump a portion of this up into a higher bracket. But if you're okay waiting and hanging on to this debt and, again, funding it out of cash flow, that's obviously going to preserve that capital. It's going to take a little bit longer. It'll be a bit of a wash in terms of the expense that you're saving versus what you're earning on the money. And, you know, it'll be paid off in no time. So I'm not going to give you a definitive.

I would just say there's more to it than just the financial and I don't want you all to feel bad if you decide you'd rather just go ahead and get this paid off and be free and clear even if you have to pay the tax. Does that make sense? You bet it does. I appreciate your input on that and we'll prayerfully consider what you have suggested. All right. Very good. Well, we appreciate your call, Dale. May the Lord bless you and I appreciate your desire to be found faithful as you manage his resources. Let's head to Charleston, South Carolina. Michelle, you're next on the program. How can we help you?

Hi. I have a 403B through a previous employer and I'm trying, they're going to take it and they're going to move it from one company to another. And it sounds like I can potentially lose out a lot of money by doing that. Should I close the 403B and take the money or should I roll it into an IRA?

And if I do that, what type of IRA should I go to? Yeah. Very good, Michelle. So as you look at this, let me just ask what roughly is in the account? What's the value of it? A little over $17,000.

A little over $17,000. All right. You know, it does make a lot of sense to actually roll out a 401K or a 403B when you separate from your employer. Oftentimes the expenses go up when you're no longer with the company. You can roll it into your new 401K or 403B if that's allowed. It depends on that particular plan as to whether you can do that.

That's going to help just from a simplicity standpoint. Now you have one account to manage instead of two. The other issue is if you go ahead and roll it to the IRA, you have more flexibility, more choices, both in terms of the investment options as well as the cost, the fees associated with it.

As soon as you get it into an IRA, you can invest in any stock bond or mutual fund, exchange traded fund, as opposed to the limited universe inside that 403B. So I think you probably want to roll it out again if you have a new plan and you'd rather just keep it all together. I think you could look at that as option one.

Option two would be go ahead and roll that out. It would just be a traditional individual retirement account, a traditional IRA that you would open. You would complete the surrender paperwork with your previous employer's plan administrator, provide the account number to the new account that you've opened, and you would never receive that money, thereby creating a taxable event. Instead, it would be going directly to the new custodian. They would then deposit the cash into the IRA, again, a non-taxable event, and then you would begin managing it.

Now, where would you do that? Well, again, if you don't go into your new company's plan, if that's available, you would probably want to look at perhaps one of the robo-advisors where you could get a low-cost, properly diversified investment strategy with either Charles Schwab Intelligent Portfolios, the Vanguard Advisor, Betterment, one of those where, again, you're going to answer a series of questions. They'll build a low-cost ETF portfolio. That just means you'll have investments that cover the landscape of the investment universe, both stocks and bonds, appropriately allocated for your age and risk tolerance, where the cost is very minimal and you're just going to capture the broad moves of the market between now and retirement, which I suspect is a long way down the road.

I would look at one of those three, again, the Vanguard Advisor, Schwab Intelligent Portfolios, or Betterment, and again, that'll be a very simple, easy to use, and low-cost solution to get good, broad diversification so that this money can just keep growing well into the future. Does that all make sense, though? Yes, it does. Okay, very good. Well, we appreciate your call today. I hope as you head into this next chapter of employment, God is doing a new work in your life, and you're asking Him what He has for you, and I appreciate your desire to steward these resources really well. I'm sure the Lord will honor that. If you have other questions along the way, give us a call back.

Well, we're going to pause for a brief break. We do have lines open, though. More calls just around the corner. Here's the number, 800-525-7000. That's 800-525-7000. This is MoneyWise Live.

Stay with us. Thanks for being with us today on MoneyWise Live, where we apply God's truth to your financial life. We have phone lines open. Looking forward to hearing from you with your calls and questions today. Here's the number, 800-525-7000. That's 800-525-7000. Let's go back to the phones.

Homestead, Florida. Faye, you're next on MoneyWise Live. Go ahead. Good afternoon. Thank you for taking my call. I really appreciate you guys, your organization.

God continues to bless you. My question is, I'm purchasing a new home for my children, actually a large home. I want to get a VA loan, but I don't want to put anything down. I want to actually put an extra $1,000 down a month. I can put as much as $4,000 towards the mortgage each month. My question is, is it best that I do that, or is it better to go ahead and put the money down?

That's my new issue that I'm losing. I'm not using the savings at all. I see. Is this a home you're going to live in as well, or are you buying this for your kids? Well, I will be there as well, but it's for my children. I see.

All right, very good. Just because you can get the 100% financing from the VA loan, I still would love for you to go into this with some equity. Talk to me about the funds available.

I realize you have good cash flow, and you said you could add an extra $1,000 over and above the mortgage payment, even if you were to borrow 100%. That's great, but what assets do you have that you would draw from if you were to put a significant down payment? It would be my TSP account and my RRA. I have, like, three different accounts. Yeah, okay. Do you have some liquid savings that you could tap?

Yes, I do. Okay, what do you have right now? I have $40,000 that I can actually be, well, actually it's $55,000 I can actually have my hands on right away. Okay, and that wouldn't come out of retirement accounts? Those are retirement accounts, but it wouldn't touch my TSP account, which is my large account.

Okay, but it is a tax-deferred account, meaning if you tapped into that $55,000, it would become taxable income to you? No, they're Roth. They're Roth. It's a Roth. Roth IRA. Okay, very good. And the $4,000 a month that you could put toward this, you said this is coming from an annuity?

Is that right? Yes, I'm retired, so my annuity is actually $4,500. I will not be paying utilities. My daughters agreed to do that, so I'm just responsible for the mortgage and, you know, the insurance. Yeah, and what is the value of the home you're looking to buy?

$450,000. Okay, well, you know, at a minimum, Faye, I'd put down 10%, so I'd look to put down $45,000. And then, you know, if you wanted to rebuild that with that $1,000 a month, you know, over time, or at least a portion of it, because I want to make sure you have at least a three to six-month emergency fund, I would prioritize that over, you know, continuing to pay down the mortgage. That way, you go in with some equity, you reduce the overall amount of the mortgage and the total interest you'll pay over time, and then you still have that great cash flow that you can use to build up some liquid savings outside of retirement accounts that's going to be your emergency fund if something comes that's unexpected.

As soon as you get to three months expenses, if you don't have any other goals you're solving for, then absolutely, you could begin adding an extra $1,000 a month to the mortgage, and you'll see that drop pretty quickly. I realize it's a low interest rate environment. I would just feel better if you went in with at least a 10% down payment. So that would be my recommendation. Let's put the 10% down and then let's, you know, replenish that emergency fund or start it if you don't have one already outside of retirement accounts using your monthly surplus. And when you hit that three months worth of expenses, then you can pivot back to the mortgage and continue to pay it down more aggressively.

Does that make sense? It sounds great. I really appreciate the information. All right, Faye. Thank you so much. Well, and Lord bless you as well, and I appreciate what you're doing for your family and your desire to be found faithful as a steward.

God bless you. 800-525-7000. We've got several lines open.

800-525-7000. Let's go to Illinois. Marilyn, you're next on the program. What's on your mind today?

Hi. Thank you for taking my call. I am 65 and I'm retired, and I have several IRA accounts and T. Rowe Price and some bonds. And I, you know, have some advisors that are affiliated with those accounts that I can talk to, but I want to sit down with someone and just go over, like, should I combine my IRAs? You know, I'm going to be taking Social Security.

That's going to raise my income level. And every time I call an advisor, they want to take all my, you know, they want to liquidate and they want to invest it all for me. Yeah. Yeah. Are these advisors, Marilyn? Yeah. Yeah. Are these advisors that you've selected or were they assigned to each of these accounts?

No, no, no. I talked to the ones that are assigned to the accounts, but they can only give me information about that account. And I want to sit down with someone and say, hey, should I combine these IRAs? So I have talked to several financial advisors in my area, you know, Edward Jones and a few others, and they want to do, you know, they want to have me complete all this paperwork. And they say that they have to, I have to trust them that they have to liquidate some of my assets and they will invest it. And that's the advice they can give me. They can't advise me unless they manage my money. I see.

Yeah. It comes down to how these professionals are compensated. It sounds like what you're looking for is not an investment advisor compensated based on the assets under management, but a financial planner who's paid by the hour for comprehensive financial planning to look at the investment strategy, to look at the tax picture, to look at your income sources and to do it all from a biblical perspective.

And then if you decide to consolidate it under the management of one advisor, that's a separate decision. So I'd head to MoneyWiseLive.org, look for Find a CKA and choose a financial planner specifically who has the Certified Kingdom Advisor designation. Stay on the line. We'll talk some more off the air and we'll be right back.

Stay with us. So glad you joined us today on MoneyWise Live where we apply God's truth to your financial life. Hey, let me remind you as we just passed the middle of the month, how important your financial support is to our ministry here at MoneyWise Media.

We can't do what we do on the radio, in our app, on the web, with our coaches. None of that would be possible without your generous support. So let me first say thank you for being here and listening. Second, for many of you who already are givers to MoneyWise Media.

But if you haven't prayerfully considered it, I would just simply ask that you do that, consider it. And if you decide you want to be a part of our team, of those who are undergirding our ministry with financial and prayer support, that you'd head over to MoneyWiseLive.org, just click the donate button and we would be grateful. Phone lines open today, 800-525-7000. Let's go back to the phones. Charles is in Boynton Beach, Florida. Charles, how can we help you today?

Yes, thank you for taking my call. My wife and I are in the process. We're looking to purchase, build a home. The home that we are in now, we have, we still have a mortgage on it, about $130,000. The value of the home is valued at probably around about $450,000. And we have also a rental home. And what we were thinking about doing is selling both properties, which can cash us out close to about $500,000, $550,000 in cash after selling both properties. But the house that we're looking to build is going to cost us somewhere around about $450,000, somewhere around there to build. And so I wanted to know, would you think that would be a good thing, if it was going to take all the money we get from both sales, or sell one and keep the rental, and just put down as much as we can, $250,000, $275,000 down on the new property, a home that we're getting ready to build. I wanted to get some suggestions on how should I go about that.

Yeah, I appreciate that. Charles, tell me about the rental home. How is that cash flowing, and are you able to pull some income out of that over and above the expenses? Yes, with the rental home, I'm probably pulling gross netting. I'm probably grossing about $800, almost $900 every month from the rental. Okay.

And if you were to go in, go ahead. Yeah, that's above after paying the mortgage on that rental. Okay, very good. And are you setting aside anything for maintenance and reserves on that, also to pay the property taxes and insurance, is that recognized? Yes, all of that is included into the mortgage. The taxes and insurances are included into the mortgage.

Okay, very good. And then obviously you'd have miscellaneous expenses if you needed to make repairs or things like that, but I suspect you have a reserve account. I think there's the financial side of this where you'd have to look at just the dollars and cents of, we love the idea of being debt-free, but from a business standpoint, is the rental home providing more income each month than you would save by paying off the mortgage?

That's just kind of the first consideration beyond this idea of just being completely unencumbered. I think the second issue is perhaps, depending on how long it's been since you had this estimate of building this home for $450,000, you may want to take another look at that before you make this decision, just because of what's happening with the price of construction right now. I mean, lumber has kind of gone through the roof right now. Many think that's temporary and that, again, as the economy reopens and supply chains normalize, we get the economy fully functioning again, some of these prices that have run up, lumber in particular, but just construction across the board is more expensive right now, that some of these will soften. But you'll want to get with the contractor and make sure you really have a not-to-exceed bid so that you understand based on today's environment what it's actually going to cost to build this home, because that $450,000 could easily turn into $600,000 if you're not careful, and you may be frustrated that you get to the end of this, and you end up with a mortgage that you didn't anticipate and cost overruns. It's just an interesting environment right now, and I don't know how it's all going to play out, but we may see a year to two years down the road that construction prices come back down.

It may be a better environment. You could argue that at the same time you could get top dollar for these properties in a very strong seller's market right now that would offset that, and I wouldn't argue with that because there's a case to be made that the housing market is going to soften at the same time that some of these construction prices will soften. So I think we've got to look at all of that. Number one, your conviction and desire to be debt-free, which I would absolutely affirm. Number two, the financial side, trading the cash flow from the rental versus the payoff of the mortgage and how you're going to come out at the end of the month in terms of are you going to have more or less funds available? And then three, do you have a true accurate picture of what it's going to cost you to build this home? And I feel like once you put all of those together and pray through it, it will become clear to you how you should proceed. Does that make sense, though?

That definitely makes sense. Next week I am going to go down and sit down with the builder and have him to revise the estimate that he gave me. This was about maybe a month ago, and I know that they increased. Everything has increased, so I know it has to be revised to what then I think that price that he gave me, I said it was probably around about $350,000 to build, and so I'm just estimating that it's going to cost me about $450,000. So I already made that increase, $100,000 increase.

I don't think I want to go above $450,000, so I've already increased about another $100,000 compared to what he already quoted me before. Okay. Well, I like this plan. I mean, you know, if you've got the ability to see a construction project like that through, which, you know, people coming out of the other side of building their own homes often say, oh, I'd never do that again, not to scare you, but just know what you're going into. It sounds like you're a real estate guy. I mean, obviously, you've had rentals, and you kind of understand what goes into that. But, you know, in this environment, just be prepared. It's going to be more expensive and take more time than you expected. But at the end of the day, building a home that you've designed, being completely debt-free, coming out of it with a strong financial footing and some peace of mind, as long as you've got good income, you know, after that, and you can live well within your means, I'm not going to argue with any of that. I like it. I just want to make sure you have all the information you need to make the good decision before you proceed.

And I think meeting with that builder next week is a key part, getting a real good understanding of what you can get from both properties, so you know what you're going to come out with in terms of equity, evaluating your cash position and your cash flow on the other side of this, once you input all of those numbers, and then praying through how important being debt-free is going to give you, ultimately, the decision you need to make. And so I'll be praying that the Lord will give you some real clarity in that. We appreciate your call today, Charles. God bless you. And I really appreciate it.

God bless you, too. Yes, sir. Absolutely. Well, you know, that's what it's all about, folks. It's really about understanding that, first of all, God owns it all and we're his manager, and that there's principles in his word that really help us to understand how should we handle his money. It's as simple as let's live within our means. Let's avoid the use of debt, just as Charles was trying to do. Let's have some margin or some liquidity in our financial life so we're not consuming everything the Lord gives us. Let's set long-term goals because the longer term our perspective, the better our decision today, and let's give generously. And when we give generously, it breaks the power of money over our lives. And that's what it's all about. More to come just around the corner.

Stay with us. This is MoneyWise Live. We're grateful you've decided to tune in today on MoneyWise Live.

This is Rob West. We've got some phone lines open, 800-525-7000, as we apply God's truth to your financial life. Just around the corner, we're going to talk to Sondra in Tampa Bay about mortgage interest, what you can do about that, whether or not you can do that, and what you can do about that.

Whether or not you should build a home in this environment. We just tackled that a moment ago. We've got a call from Joliet, Illinois, that wants to tackle that one as well.

But first, West Palm Beach, Florida. Mike's on the line. And Mike, I understand you want to reduce your taxes, is that right? Oh, absolutely. Yes, sir. Bottom line, Rastak, yes.

How can I help? I would like to reduce my taxes, what's my best way to do that, as far as I thought about giving more into my 401k and IRA and stuff like that. And I just wanted to know if there's a cap, what sort of number I should be looking at, and what your idea was as far as my best options. Yeah. Mike, is it W-2 income, or do you have a small business that's driving the taxes you're paying? W-2, okay. W-2, yes, sir.

Yeah. You know, so the two best ways to drive down your tax liability, which is all about reducing your taxable income, is, first of all, giving. Charitable giving, looking at opportunities to make additional gifts out of your cash flow, which reduces your tax liability, which allows you to give even more, and perhaps doing that not only out of cash, but also doing that out of assets.

Because keep in mind, 90% of charitable giving is done in the form of cash, but only 10% of our wealth is held in the form of cash, which means our greatest opportunity for giving is over on our balance sheet. You know, whether you have appreciated stocks in a taxable account, or a business interest, or an asset you might want to give away, a car, something like that that you don't need anymore, you're looking to replace, you can make a contribution, a gift of that to a ministry, a 501c3. So that would be the first opportunity is to say, where can I be more generous, do that in a way that's smart, so that I could get my tax liability down and give more to the kingdom. The second is absolutely retirement contributions into a retirement account that, as that money goes in, would give you tax deferral. So if you have a 401k at work or some other type of retirement account where you can increase contributions, thereby decreasing your overall taxable income for the year and your tax liability, which then gives you more growing and compounding for your future. You know, there would be some other options would involve insurance products, and if you've already capped out your retirement savings that you can do through your place of business, things like that. But generally speaking, if you haven't, you've still got more room to do more in the way of retirement savings, certainly more opportunity in the area of giving.

Those would be your kind of first items that I would check off before you look at other options. Does that make sense? Yes, sir. So as far as the charitable giving, I get that. I mean, I don't want you to think I don't do that at all.

I mean, I've hired and we also do a lot of different things. I was just concerned about the cap as far as putting into my retirement. Is there a cap amount that you're allowed to put into it? I know I have one IRA that's like 5,000 a year or 6,000 a year before. Yes.

I mean, this is more about that as far as if they were all like that or not. What type of retirement accounts do you have access to? Do you have a 401k at work? I have a 401k through my company, yes, sir, and then I have an IRA on my own. Okay, so you could put in $19,500 for 2021 for that 401k and then an additional $6,000 in your IRA. So that's going to give you $25,500 kind of right off the top. Are you maxing out that 401k? Yes, I am. Okay, so you're putting the full 19-5?

Absolutely. Okay, and then what about the – are you putting in the full 6,000 for the IRA? So I did that two years ago at 19. Last year I was a little nervous about getting rid of liquid cash, so I did not. I just held on to that and I did not put the full 6 in.

This year I will again put the 6 in. Okay, all right. Yeah, so that would be the next option there, and are you married?

Absolutely. I was going to bring that up also. My wife's company matches whatever she puts in her 401k, and as of recently I explained to her I thought she was putting a lot in there. She was not. I explained to her it's free money, so I don't know. I wanted to put more of her money away as well. Yeah, so that would be the next option, which if you're filing jointly would obviously reduce your overall tax liability, and she could put in the same 19,500.

At a minimum she should take advantage of that matching portion, and then she could have an IRA as well and put another 6,000. So I think between the two 401ks, the two IRAs, the charitable giving you're doing, you have some real opportunity to get that tax liability down and get more growing for the future and more going into the Kingdom. So hopefully that helps you, sir. We appreciate your call today. Let's head to Tampa Bay, Florida. Saundra, you're next on the program. How can we help you? Yes, hi. Thank you so much.

Our God is able. I was checking in reference to I have a mortgage. I've been in here almost 25 years now, and I'm retired about three years ago. I have a disabled adult son, however, and I noticed that I'm with a servicing company because my rate is up. I was wondering if I should refinance or try to go ahead and get some stimulus money. I don't know what's available. I tried, but the websites are showing me here that they are for people that rent, and I needed some help with the mortgage if possible because I'm on a limited, very limited income until this pandemic is over. I see. Okay.

Well, a couple of thoughts there. If you are entitled to the stimulus check, which it sounds like you should be, I'd go to the Get My Payment portal at IRS.gov and find out the status of that. Number two, the mortgage companies are willing to work with you now more than ever, and so if you're in a situation on a fixed income, especially where you've been impacted by the pandemic, it's worth a phone call just to see if they could give you some sort of assistance in terms of mortgage forbearance, perhaps temporary reprieve for that payment where they put it on the back end, something like that.

Depending upon your credit score and the income you do have, you may qualify for a refinance. What is the value of your home and what's the remaining mortgage on it? Yes, I'm in a pretty good area, and right now it's at $325, something in that area. The last time I checked, I know one of the new homes that's coming up from the older model homes from mine.

They built one here about three years ago, and it sold recently for $400,000, and that's right within my area. What's your mortgage balance? I have about $90,000 still left. Okay, and what interest rate are you paying? Seven and a half right now. Oh, wow.

Okay. Yeah, so that's really high. And what is your credit score, do you know? I haven't checked lately.

The last time I checked was before the pandemic hit in 2019, and I haven't just went in and got it. I should right now, but I haven't done it. Okay, and have you missed any payments in the last year?

No. Okay, I'd go to Credit Karma, or you could go to AnnualCreditReport.com just to check your credit report. Credit Karma would help you to check your score. You may have a credit card that would allow you to do that as well.

But if you can document your income, you've obviously got a lot of equity in this home. I mean, you should hopefully, again, assuming you have the income to justify it, you should be able to get a rate a lot lower. You would want to make sure, though, that you don't extend the term. So if you've got 10 years left in this mortgage, I'd look at a 10-year mortgage, not a new 30-year mortgage. So I'd talk to your current mortgage provider first to see what they can do for you in terms of recasting the mortgage, perhaps just lowering that interest rate, save you on some of the closing costs.

Beyond that, you could go to Bankrate.com to find out who has the best loan programs out there right now that would match your needs and see if you could get a significant reduction in that interest rate that would help take some of the pressure off that payment. And a minimum, you may want to explore some forbearance options. So it sounds like you've got a little bit of homework to do, Sondra.

I would start there, and then after you get that information, give us a call back and let us know what you find if you have further questions. We appreciate your call today. We're going to finish in South Florida. Duane, we've got just a minute left.

How can I help you, sir? I have an IRA, and I'm 71, and I'm going to start making RMDs next year. And I was wondering if I should take a portion, maybe 40%, and put it in an annuity just to reduce market risk. Yeah, you know, I think, I mean, annuities have their place. They're certainly not my favorite tool, nor my first suggestion for most folks, just because I'd rather not use an insurance product for my savings and investments.

It tends to be somewhat complex. It tends to be limiting in terms of when you turn over that money, you lose access to your principal without a lot of fees and surrender charges. And the investment universe obviously is much more limited, although if you're looking to offset the risk, meaning transfer the risk away from yourself to an insurance company, and that gives you peace of mind and you can exchange your principal for an income stream for life or a guaranteed return where you don't have to assume that risk. Some people like that option.

I just know that it's more costly and they tend to be complicated, these products. And if you needed access to that principal because you needed long term care, you had a major medical event, something like that, you know, you're giving that up. So my first suggestion, Duane, would be to either with your current advisor or with perhaps a new advisor, look at how you might structure this portfolio to give you that conservative, diversified posture you're looking for.

So you've got a much smaller allocation to stocks, let's say, where you could weather a downturn that lasted 18 months or two years, but where you've got good cash flow, a good conservative portfolio, and you still have access to your money. If you want to find an advisor in your area, you could do that on our website, MoneyWiseLive.org. Just click Find a CKA. Stay on the line. We'll talk a bit more off the air.

And that's going to do it for us. Thanks for tuning in. We appreciate you joining us each afternoon.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Let me say thank you to Gabby T., Rich, Dan, and Amy. And thanks to you for listening. We'll be back tomorrow. Hope you'll join us then. May God bless you.