5 Retirement Myths

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. Founding Father John Adams once wrote that facts are stubborn things, and whatever may be our wishes, they cannot alter facts and evidence.

I'm Rob West. Facts are especially handy for dispelling myths that could affect your retirement savings. First up today, we'll arm ourselves with those facts and do away with five retirement myths. Then it's on to your calls and questions. 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, where biblical wisdom meets today's financial decisions. So the first myth we want to get rid of is the idea that the withdrawal rate you anticipate for your savings in retirement is a set it and forget it kind of thing. The fact is, so much can happen between now and the day you quit working that it's prudent to revisit your calculation periodically.

Will you stick with the 4% rule of thumb? That's the amount of annual withdrawal advisors have recommended for decades on the assumption that a properly diversified portfolio could last 30 years with that level of withdrawal. That's assuming your portfolio continues to gain enough to offset inflation. If you've already retired or are about to, you want to get with your advisors regularly to review your anticipated withdrawal rate. You'll take into account how stock prices and inflation may impact your returns. You may have to make adjustments to your retirement income. Now younger folks might want to go with a safer withdrawal rate of 3-4%, but it could be higher if you faithfully contribute 10-15% of your income to your retirement plan.

Again, meeting with your advisor will help you set up a strategy that meets your goals and needs. Now, the second retirement myth that we need to dispel is that Medicare will cover all of your health care costs. It's a very helpful program for many retirees, but was never intended to cover 100% of health care costs. Deductibles and copayments can be high, and Medicare doesn't cover dental, vision, and hearing conditions. So you need to factor in the cost of a Medigap policy or a Medicare Advantage plan from a private company to supplement Medicare.

That will cover the cost for Medicare Parts A, B, and C, but you also want to add Part D coverage for prescriptions. Okay, our next retirement myth is that the Social Security program will collapse and not be there for you when you retire. While the program definitely has solvency issues that need to be faced, if you're in or nearing retirement, they're not likely to affect you. It's now estimated that without changes, Social Security's financial reserves will be able to pay full benefits until 2034. At that point, benefits would have to be decreased by about 25%, but will that actually happen?

It's far more likely that Congress will overcome gridlock and implement steps to correct the problem, either by increasing payroll taxes or raising the full retirement age, or perhaps both. But keep in mind that Social Security was only designed to cover about 40% of your retirement income. That's why it's vitally important that you begin early and save as much as you can to provide the other 60%.

If your employer offers a 401k plan, contribute enough to get the maximum match, then put additional funds into a Roth IRA where your withdrawals later will be tax-free. Alright, the next retirement myth is that you can simply keep working as long as you need to. The facts don't support this, and the COVID pandemic is a case in point. A recent survey showed that 7% of those responding retired earlier than expected due to the pandemic. Another 11% say they now plan to retire sooner than expected.

And here are two more surprising statistics. Listen to this, nearly 25% of people in their 20s will become disabled before reaching full retirement age at 67, and nearly 70% of people over 65 will need long-term care at some point during retirement. The point is, you have to plan on not being able to work as long as you'd like. Now, the last retirement myth is that you'll simply alter your lifestyle in retirement so that you don't run out of money.

Not that it's wrong to do that, it's actually quite wise, but you may not find it as easy as you think for several reasons. You'll have more time on your hands, which can lead to overspending, there's a temptation to take more trips, especially if you have family out of town, you may want to pursue a hobby that leads to unplanned spending, then there's inflation, which Ronald Reagan once called the cruelest tax of all right now. The Fed is predicting 2% annual inflation several years into the future. That might not seem like much, but remember, there's a compounding rate, so it adds up over time. All right, there you have it, five retirement myths.

Be sure to connect with your advisor to develop a plan for you. Your calls are next, 800-525-7000. This is MoneyWise Live. We'll be right back. So delighted to have you along with us today on MoneyWise Live.

I'm Rob West. We'll be taking your calls straight ahead, the number 800-525-7000, whatever's on your mind financially. We'd like to look at it from a biblical viewpoint and see if we can give you some practical guidance.

800-525-7000. We started today by talking about some retirement myths, and that line of thinking was our question of the day on Facebook. The question was, what do you think is the greatest myth about retirement? Robert said that being idle is fulfilling is a myth.

I couldn't agree more. In fact, studies indicate that being idle, not having a purpose and living out your calling, ceasing all productive activities, not good for your health. God designed us to be productive, and so it stands to reason. Anna said the myth that is the greatest in her mind is that retirement homes are inexpensive, and boy, that's true today more than ever with housing prices where they are now continuing to move higher. Perhaps there's an opportunity to pull some equity off the table and downsize, maybe move to a more rural location.

But homes are expensive, that's for sure. Then Asha said the greatest retirement myth is that retirement even exists in God's economy. I like that line of thinking. We talk often about retirement, but I take a completely different approach than the world does, in the sense that you won't see this idea of retirement in the Bible apart from the Levitical priests. But keep in mind, as I said a moment ago, God created us to be productive. We were workers before the fall, so we're to take God's creation and improve it.

And the calling that he's placed on our lives to be in service to him, well, it doesn't have an expiration date. So retirement is not as the world would present it, in the sense that we accumulate as much as we can so we can live a life of leisure. It's really about accumulating perhaps more than we need to spend today, setting a portion of that aside, so that when a day comes where perhaps we're no longer able to work, and I would refer you back to some of the statistics I cited a moment ago, about 70% of Americans over age 65 needing long-term care, and the number that will become disabled and unable to work. We need to take a portion of what we're receiving today from God's provision and set it aside so that when we can't work, we have the ability to provide for ourselves.

But that doesn't mean we're just walking the beach aimlessly picking up shells. We're continuing to ask God, what's my next assignment, even if we're transitioning out of full-time paid work. And so it's really a conversation between us and God to say, Lord, what do you have for me in this next season of life? And keep in mind, when we reach those golden years, well, that's when we have the most wisdom and experience to use in God's service.

So let's save diligently, but let's do it with a mindset towards serving the Lord and living out his purposes for our lives throughout the whole of our life until he calls us home. All right, let's get to your questions and calls today. Here's the number again. We've got a few lines open. 800-525-7000. We're going to begin today in Cleveland, Ohio. Sharon, thank you for calling.

How can I help you? Yes, I went to see a certified financial planner for a free consultation, and they are charging a fee for a long-range comprehension plan. And then after that, a percentage of my portfolio. Is that reasonable?

Is that normal? Yes, it is. So when it comes to a certified financial planner, providing a comprehensive plan, which they're trained to do, as evidenced by the CFP designation, that's going to cover all of the major areas. You know, basics of retirement planning, investment planning, retirement savings and income planning. It should touch on tax and estate planning, risk management and insurance.

And then also, if necessary, education planning. So that comprehensive plan would typically be charged on an hourly basis based on the needs that you have and the complexity of the plan to be delivered, not just so you get a big binder that sits on a shelf somewhere, but so that you have somebody looking at really the whole landscape of your finances to help you plot a course that is clearly going to change over time, but it's going to be a really instrumental document to make sure that you're addressing all of the needed areas financially. In addition to that, though, the same professional, or perhaps another one, it just depends on their competencies, would typically handle investments separately. And that is most commonly today charged as a fee, which is a percentage of the assets that are under management. So not uncommon at all for those to be charged separately. And the great thing about paying for a financial plan on an hourly basis is if you don't choose to have that professional manage your money because you're paying him or her for their time and expertise, then there's not any inherent bias.

They're not trying to sell you anything. They're just giving you a plan and their recommendations and thoughts on your current situation. You know, for their time. And that should be aligned very well with your priorities. Now, the reason we recommend in addition to CFP-CKA, Certified Kingdom Advisor, is because we want that person to have a biblical viewpoint. You know, I shared just a moment ago, Sharon, really a biblical worldview of retirement, at least from my perspective.

And I would want your advisor to share God's heart as it relates to how you approach accumulation and lifestyle and giving and all of these areas really running them through a biblical worldview. But to answer your question, that's not unexpected. And I think it's actually quite normal how you're being charged.

Do you have any further questions, though? No, this particular person for the comprehensive plan, they are charging a flat rate and not an hourly rate. There's a flat rate and we would meet with them approximately four times over the course of this. And as you indicated, it would tell us things as to like the best time to take Social Security and other things based on all of our assets and income. And then after that, you know, our portfolio and investments, as I said, they would charge us a percentage for the management or what we're seeing with that.

Yes. And the flat rate, again, would be very customary. It would be based on their estimate of how long it would take.

But, yeah, I would expect that flat rate is very customary. Is it are they saying that it's required that you use them for the investment management or could you just do the planning? They could just do the planning. And, you know, they said it's after we take a look at the plan, if we say, OK, we don't want to, you know, have an association with you or, you know, then we would just have the plan, they would have their fee and we could move on. But, you know, their ultimate desire is for us to become a long term customer so that they would manage all of our assets and continue to get that percentage.

Well, and clearly during the planning process, you'd have the chance to get to know the organization, the company, as well as the individual advisor or advisors you're working with and hopefully develop a rapport that would then lead to investment management. But I think that sounds like a good plan, actually. And I encourage just about everyone to seek out a financial professional to have the kind of plan done that you're describing on a comprehensive basis. So we appreciate your call today, Sharon. To Round Rock, Texas, Nancy, thanks for your call today.

How can we help? Oh, thank you for taking my call. Right now you're talking about retirement. I'm retired. I'm retired in 2018. I am empty net single and no debt other than my home. Right now, I have just a small balance that's owed on my home. It's going to be $6,000.

And I'm wondering if with the market booming right now and my home being triple in value, is this a time to sell? Yes. Findings. A couple of questions, Nancy. Let me ask you, how is your budget?

And maybe this is where you were going to go next. Are you having trouble kind of keeping the bills paid, making ends meet? Right now, my home is 15 years old. I'm running into appliances that need to be replaced.

How do I keep up with car maintenance, medical copays and things like that? So I'm managing, but it's very little left over. Yes.

Okay. And how much equity do you have in the home? Right now, are you saying from my purchase amount and what's owed? No, what you believe you could sell it for realistically, minus the balance on your mortgage. So I think it could sell for $254,000 and $36,000 was what I saw about $2,000, $220,000 maybe. About $220,000.

Okay. And so you believe that if you were to find something, let's say, you know, after the expenses that you'd incur on the sale and then the purchase, let's say you bought something for $200,000, which eliminated your mortgage. Would that help you to balance the budget or would you still have a shortfall?

It depends on what position I would be in at the point of move. And I had thought about probably maybe buying a house with my daughter, but I don't know if that's a good idea. She has children.

She's still raising and I thought I could be of help with them, but I'm probably not thinking that through completely. Sure. Well, here's what I would say. I mean, clearly the housing market is sky high right now. And so I suspect you're looking at the number that you believe you could get and think and thinking, wow, that's a lot of money in it. Keep in mind, you'd have the same issue in the home you tried to buy on the other side. So you're going to pay top dollar for those homes. So I would just want you to make sure that you visit with a realtor. That's probably your next call to see what you can realistically get out of this current home and then see what it's going to take to buy on the other side.

Realistically run the numbers and see how that budget comes out. Stay on the line. We'll talk some more off the air and we'll be right back. Welcome back to MoneyWise Live.

Thanks for being along with us today. Just before the break, we were talking with a caller who is really processing trying to make ends meet in retirement. She's seeing her home rise significantly in value, like most homes are around the country and thinking about an opportunity to either downsize to something smaller, perhaps eliminating a mortgage and or moving in and buying something with her daughter who has small children and off the air. We were just saying, you know, number one, she needs to connect with a realtor who can really help her evaluate what is she truly going to net from this sale based on comps and factoring in the expenses associated with selling it. What can she buy? Because she's going to sell for top dollar, but also buy for top dollar. So what can she buy that would really meet her needs and eliminate a mortgage?

And is that possible? And then we've got to make all the numbers work before we're going to proceed with something major like this. We also talked at length about her needing to really pray and think through moving in with her daughter just to make sure they're both going into that with their eyes wide open and make sure that's going to be a positive thing relationally. But appreciate the call very much and hope that was helpful to you. We've got some lines open today. Here's the number 800-525-7000.

Let's head to Norfolk, Nebraska. Ron, thank you for your patience. How can I help you, sir? Yes, I have money in my 401k and been hearing all kinds of talk about the stock market crashing and thinking about retiring here in the near future.

I was wondering if I should take money out of the 401k and buy gold or take the money out of the stocks and bonds and just putting it in cash, you know, just letting it draw like, you know, 2% interest where you can't lose if the stock market crashes. Sure. Yeah, I appreciate that question, Ron. And obviously we've got some headwinds against us. You know, we've heard as of late about inflation turning up. The Federal Reserve says that's transitory, which is there in their language. That just means it's short lived as the economy reopens and we get the supply chains in this country working again. You know, we're going to have a period of time here where demand is going to exceed supply and that is basic economics and causes prices to be driven higher. But as we get fully functioning and opened again as a country, they believe that will work its way through the system and they'll be able to keep inflation pegged at that 2% target.

And if they can do that, although that's meaningful over time because it compounds, that's realistic. The consumer is very strong. Corporate earnings are very strong. We've got a lot of debt.

There's no doubt about it. We've been spending incredibly in this country in part for good reason to stimulate the economy. The problem is the decade before that, when the economy was very good, we continue to spend in that way as well. And there's going to be a reckoning where we're going to need to address the growing and mounting debt in this country.

I believe we'll do it. We have a history of making some hard choices when we have to and I don't think we're heading for a debt crisis anytime soon, but it's something that's going to have to be addressed. In my view, Ron, it's not a time to go to cash and it's not a time to highly concentrate in the precious metals. Gold has a terrible historical return long term. When you compare it to other asset classes, it tends to be more volatile. It's something you don't want to do well because it means everything else is doing poorly.

But it is a store of value, but it only earns money when you sell it, which means that it doesn't provide any income. And it's going to be difficult if we got into real hard times to use it in any way that's actually productive. So I also don't like going to cash because if the Lord tarries and you have good health, you're going to need this money to last for decades. So I think the answer is to still believe in the long term success of the market vis-a-vis the strength of the U.S. economy long term. You want to make sure you get your allocation right, which means as you're nearing retirement, you dial back your stock exposure so that if that portion of the market was down 35 percent for a couple of years, which is typically as bad as it gets, you'd still be able to weather that.

I think you need an advisor, though, that can help you navigate that. I appreciate your call today. Trust in the Lord and let's stay properly diversified with a long term perspective.

Stay with us. Thanks for joining us today on Money Wise Live. I'm Rob West taking your calls and questions on anything financial. 800-525-7000.

That's 800-525-7000. Are you having trouble staying on budget? Do you have a plan, but you just can't control the flow of money in and out?

There's more month left than money on a regular basis. Well, I've found that the tried and true envelope system is the very best way to stay on track with your finances. In fact, a digital envelope system is even better because you've always got access to your envelope balances right there on your smartphone or on your tablet. We built over a year's time with three full-time developers what I believe is the very best digital envelope system out there, and it's found in the Money Wise app. If you haven't downloaded the Money Wise app, you can do that today. Just head over to your app store, Google Play or the Apple App Store. Search for Money Wise, biblical finance, and in addition to the digital envelope system, you'll also see our Money Wise community where you can post questions and get responses from Money Wise coaches. You'll also be able to access our Discover tab with all the best content, podcasts, articles, and videos in Christian finance all in one place. You'll also be able to get our broadcast archives as well.

It's the Money Wise app, and it's in your app store. We'd love for you to download it today. Two lines open, 800-525-7000 to Chicago, Illinois. Michelle, thanks for your patience. How can I help you? Hi, Michelle.

Are you there? Okay, I think we lost Michelle. We'll put her on hold to see if we can get her back on the line. Let's head to Oklahoma City, Oklahoma.

Diane, you're next on the program. Go ahead. Yes, I have a dilemma. I'm trying to determine if it's best for me to pay off my house or to save for retirement. I think I want to work for maybe another two years, but I just don't know whether I should put my monies.

Yeah, very good. Well, it's a great question to think about because clearly, Diane, these priorities with your limited resources are both good. We should be saving for the future. We should also be pursuing a life where we're completely unencumbered over time. I'd love, ideally, and it doesn't always work out this way, I'd love for you to time the payoff of the home with that period that you're entering retirement so you get your expenses as low as possible, and therefore you don't need as much to fund your lifestyle.

It also gives you some real great flexibility and peace of mind. I mean, it can always work out that way, but let's see if we can try to figure out how we can make that work. Give me a sense of, based on your current path, how long it would take for you to pay off the home. Well, if I accelerated by paying like double the note, I could pay it off in like two years. Okay, and you said two years was about the timeframe you believe you'd like to continue to work, is that right? Right, right.

Okay, alright. And how much have you saved for retirement at this point? Right now I have like $150,000 for retirement. Okay, alright, very good. Have you done a retirement budget, Diane, looking at, you know, if you were to pay off the home, what it would take for you to fund all of your expenses each month?

A little bit, yes. I think it would take about $3,500 a month. Okay, alright, very good. And what do you expect to receive from Social Security and any other retirement income, not counting the $150,000? About $3,000. About $3,000.

Okay, good. Well, here's the good thing, you know, if we were to take that $150,000 and whatever that will grow to over the next couple of years, and I wouldn't want you to be too aggressive with that since your proximity to retirement is so close, you know, we would typically use a 4%, just, you know, at face value, and we can obviously do more in-depth planning, but just for the sake of our conversation, we would typically use a 4% withdrawal rate. So if you were to apply that to $150,000, that'd be about $6,000 a year or $500 a month that you could pull out of that $150,000 and ideally have an investment strategy that allows you not to ever touch the principal. So you're just, in a sense, living off of the income.

And from what I'm hearing, although it might be tight, that $500 a month plus the $3,000 you're expecting from other sources would get you that $3,500 a month, wouldn't leave you a whole lot of margin, but it would get you there. And so I kind of like the idea that you would really work toward paying off that home between now and then so that when you retire, whether it's two years or maybe you delay it by a year, it's three years, you've got that home paid off free and clear, you get your expenses as low as possible, assuming you're planning to stay in the home, and, you know, you just contribute whatever's left to the retirement account, although I realize it would be less than you could if you weren't focused on paying off the home. Let that grow over the next couple of years.

Ideally, the market does well. And even if it doesn't, keep in mind, you still have a long need for this money. Even once you retire, you know, you could need this money to last you a couple of decades. So I think that's a good plan for you to really focus on paying off that house between now and retirement.

And I think with the prospects of the market probably not growing as much as it has the last couple of years, and certainly not over the last decade, I think that would be a good use of your money to get that paid off. And I think you'll be really glad you did it in the end. Does that make sense? Yeah, it makes sense. I just was in a dilemma and didn't know which way to go, which way would be the best way to go. Yeah, and I like that plan a lot. I think that makes a lot of sense.

I mean, I couldn't argue with either one. If you had a real conviction one way or the other, but I think if it were me, I'd like for you to enter that season with your expenses as low as possible. And the best way to do that is really to focus in on paying off that mortgage. So all the best to you in this next season of life. It will be exciting. And keep us posted on how it goes. All right, let's head back to Chicago. We'll try to connect with Michelle one more time. Michelle, are you there? Yes, I am. Sorry about that. Very good. How can I help you?

No problem. I wanted to find out, my mom and I are looking to do a will, or I'm looking to do a will for her. And I wanted to see what's the best place to start and how to just get started on it, where to go online or contact an attorney. I would typically encourage you to contact an attorney just to make sure that what you're doing is right.

You know, laws vary by state. This is an important decision. It's the last stewardship decision you'll make and your mom will make for your wills, respectively, to make sure that everything you have and has been entrusted to you will pass according to your wishes.

If you happen to have minor children, it's critical because that will name the guardian as well. The average cost for a will drawn up by an attorney on average is a flat fee for about $300 for a simple will. You'll pay, obviously, a higher flat fee for a larger, more complicated estate. It could be $1,000 or more, depending upon what the situation is. You certainly can go online to something like LegalZoom.

That would get the cost down to about $89. And although that's better than nothing, again, I like having somebody who's an competent estate planning attorney asking you the questions and making sure that, you know, things are done the way that you and your mom wants to reflect your wishes. You could also handle some other things at the same time, like a living will or a health care surrogate or a durable power of attorney so that end of life decisions are handled so that during a difficult period of time, those decisions are made in advance. And, you know, real focus and attention can be given to the care of the individual by the person that each of you name.

And that would be another reason, I think, to get an attorney. So perhaps call your local church and ask for a referral or connect with the CKA in Chicago and ask for a referral to a godly estate planning attorney. We appreciate your call today. Much more to come on MoneyWise Live. Stay with us. Delighted to have you along with us today on MoneyWise Live where God's word intersects with your financial life.

Just ahead, we'll get back to the phones. But first, it's well, normally it's Monday that we do our market commentary with Bob Doll because of the holiday yesterday. Bob joins us on Tuesday with his dolls deliberations. Bob is a good friend, committed Christ follower, but industry veteran on Wall Street, managing literally billions of dollars for a long, long time. And Bob, I know many count on your deliberations and analysis of the market.

We're so thankful you share them with us weekly and so fascinating to see how the narrative has changed somewhat. If we ever didn't remember that the market was a leading indicator, it seems just as everything is really beginning to catch some steam in terms of reopening. The markets having second thoughts about the prospects of higher ground. What say you?

I'm with you, Rob. It's been amazing how strong the market has been. You know, we're up from the low last March in the S&P 500.

Ninety nine zero percent. So a lot of the good news the market knows about and we are getting and will continue to get good news about the economy and earnings. But I call it the other side of that tug of war is with that comes the threat of modestly higher interest rates and inflation. And I think that's just going to create exactly what you said, choppy, directionless sort of market. And today's a perfect example. Market futures this morning were kind of up the limit. And, you know, then it's sagged all day and we're closing essentially unchanged. So I think we're getting a lot of that sort of back and forth.

It may frustrate both the bulls and the bears for a period here. Yes, no doubt about it. And obviously we've got a lot that's being discussed related to President Biden's infrastructure plan. He's got additional initiatives. Some of those are in jeopardy, including the prospect of higher taxes, because Republicans in the Senate have made it clear they're not for it, including a handful of moderate Democrats. How do you think that will factor in?

Yeah, I think you're right on. I mean, back a month, I probably said one of the threats to the market is higher taxes. And not that we're not going to get some higher taxes, but nothing like markets potentially feared just a few weeks ago. The spending initiatives and the proposed tax increases were gargantuan. You go back to the Democratic platform for the election. It was literally six trillion dollars of new spending, four trillion dollars of new taxes.

We're not going to get anything close to that, Rob. We may cobble together a bipartisan bill on infrastructure. Infrastructure, as you and I think about it, roads, bridges, et cetera.

Not the very broad definition that's come through. And you know what? We need some of that to get done, but probably not six trillion dollars worth.

Right. Well, speaking of six trillion, it seems like we keep hearing that T word related to all kinds of things, including covid stimulus. Bob, talk about that person on Main Street right now that's seeing the incredible rise in the dead in this country. They're hearing the inflation warnings and they're thinking this is a time to just get out. Address that for us.

You know, so I first of all, I commiserate with that concern. We are borrowing big time from the future, but like everything in the markets, timing is key. People, Christians in particular, rightfully, have been complaining about the size of the debt and the deficits.

But so far, frankly, it's not mattered. And the reason you and I have talked about this before is that interest rates have moved down faster than the debt has moved up, such that interest expense for our government has actually been falling through this period. That won't last forever, Rob. And so to that worried investor, I say watch interest rates like a hawk. If interest rates get out of hand on the upside, this will become a problem. But in the meantime, the strength of the economy and earnings is overwhelming any of those concerns, at least in the near term. And by near term, I mean the next bunch of months. Bob, if we were to see that, let's say interest rates start to head up and that combined with the debt levels, as you said, gets us into a problem area. We still have some levers to pull at that point, right? Yes, we do. I mean, starting with the printing press that the government's been running and we can criticize that and be concerned about the inflationary consequences of that.

No question. You can raise taxes. That happened after the Great Depression. Taxes were raised significantly. And that slows the economy, too. You can depreciate your currency is another way out of this.

None of those three alternatives, Rob, are much fun or real beneficial. But the tough choices at some point will have to be made because you know the saying, there is no free lunch. Yeah, yeah, that's right.

Well, Bob, so thankful for you. I think at the end of the day, we need to stay grounded in the fact that God's Word has some principles that we need to apply, including a long-term perspective. We need to have spousal unity. We need to be properly diversified and we need to understand where our trust lies ultimately. And that's in the Lord, not in our things. Leave us today with just some grounding. I endorse everything you just said.

What I would add to it is the obvious. Remember, it's not ours in the first place. God owns it all. And we've all been given stewardship over the things He has given us. Not just money, but our very lives, our bodies, our relationships. So when it comes to money, I say, if it were really my money, who cares what I do with it?

It's God's money. Therefore, I have a solemn and unbelievable opportunity to take good care of it. And that's what you, I know, give your listeners all the time.

Well said, my friend. We'll look for you next week. Thank you for stopping by. God bless.

You too. Bob Doll, good friend and weekly market analyst for us here at Money Wise. A great opportunity just to get Bob's take on what's happening around us in the near term, but also longer term as well.

He's certainly seen it all. All right. Back to the phones today.

Orlando, Florida. Michael, thank you for your patience. How can I help you? Great. Thank you for taking my call. Just pulled over so I don't lose you guys.

Bad reception there. Really kind of springboarding off of what your guests just said. Trying to be a good steward. My wife and I are praying about a decision. We have one child left at home before he graduates two years. I'm about four years from retirement. We were considering downsizing our home maybe now.

But as you had said to some other callers, it's just impossible. The real estate is so hot right now. My area is selling for five days and prices that are, I know, greatly inflated. So my wife and I are considering staying where we are and maybe investing some money in our home.

It's only six years old. We have a lot of equity. I think we owe about $130,000 to the house. And if I go by today's rate, we're probably at $375,000 to $400,000 equity in the house. And so we'll consider perhaps refinancing, asking out $30,000 or $40,000 to just do some upgrades and things around the property.

Michael, we are having some trouble hearing you. I think I got the gist of it. I think the key here is that whether or not you'd want to do a refi is really going to be dependent upon whether it makes sense for you to roll the whole mortgage into this cash out for some home improvements, or whether you'd want to leave that mortgage in place and just get a home equity loan, not a line of credit with a variable rate, but a loan with a fixed rate. You'd only want to include the whole mortgage if it made sense at face value without this additional cash out, meaning you can save at least a point and a quarter on the interest rate. You plan to stay in this home for at least five to seven years.

You're not going to increase the term. So if you've got 10 years left, I'd go with the new 10-year mortgage or 15-year at the most and make sure you build the amortization schedule so you're not decreasing the interest rate but just lengthening the overall term. Otherwise, if you can't really check those boxes, I'd look more to a home equity loan. Beyond that, it's really going to come down to can you afford it?

Does that fit well within the budget? What does that do to other priorities that you have in terms of your ability to save for the future and give or any other more short-term or medium-term savings goals? And then, depending on how long you plan to stay in this home, that's going to help you decide what things make sense in terms of renovations and improvements. If you think you're only five to seven years from selling, I'd be a little more judicious about how you go about selecting the things you're going to do just to see whether these are things that you're going to eventually get your money back out of versus things that if you were to stay longer term, it really comes down to what are you most going to enjoy.

So I think that's the approach. Nothing wrong with enjoying some of that home equity. You obviously are saving a good bit by not selling because you don't have those transaction costs on the sale and on the purchase and a new mortgage. So I like that, and if you've got the equity there, again, assuming you've counted the cost and it fits into the budget, then I'd say go right ahead, but only do that new first mortgage with a cash out if it makes sense based on the parameters that I set.

Otherwise, I'd go for that home equity loan with the fixed rate. Sorry we couldn't hear you terribly well, and you may have had an additional comment or two, but we were just losing you, and so I hope that helps you and we appreciate your call today, Michael. Well, that's going to do it for us. Beth and Zealand has been patiently waiting.

Beth, you hold the line and we'll talk a bit more off the air. Let me encourage you, if you've not supported our work here at MoneyWiseLive, we'd certainly be grateful. We can only do what we do each day based on your generous support, and so if you'd head over to our website after you perfectly consider a gift, we'd love for you to give. Just click the donate button at MoneyWiseLive.org and we would be grateful. MoneyWiseLive is a partnership between Moody Radio and MoneyWise Media. Producing today, Amy Rios. Engineer, Dan Anderson.

Research is Rich Rozell. Our call screener today was Gabby T, and thanks to Samuel for sitting in today as well. I want to say thank you to you for being here. We'll look for you back here tomorrow for another edition of MoneyWise Live. We'll see you then. God bless you.