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Not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota, and Utah. Today's version of MoneyWise Live is prerecorded so our phone lines are not open. Founding father John Adams once wrote that facts are stubborn things and whatever may be our wishes, they cannot alter facts and evidence.
Hi, 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.
And we have some great calls lined up, but we won't be taking your live calls today because we're prerecorded. 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 to 4%, but it could be higher if you faithfully contribute 10 to 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 co-payments 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. All right, 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. Today's program is prerecorded, so keep that in mind when you hear phone numbers. We're going to pause for a brief break now, but Rob West will be back in a moment with more MoneyWise Live. Welcome back to MoneyWise Live. I'm Rob West.
This is where God's Word intersects with your financial life. So glad to have you along with us today. Hey, our team is taking some time off today. This program is prerecorded, so don't call in today. Wait till we're live in the studio, but we do have some great calls all lined up ready for you today.
I'm sure you'll enjoy them. 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. And then Asha said the greatest retirement myth is that retirement even exists in God's economy. And I like that line of thinking. You know, 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. 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 the 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 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 that's not unexpected. And I think it's actually quite, quite normal how you're being charged.
Do you have any further questions, though? This particular person for the comprehensive plan, they are charging a flat rate and not an hourly rate. That'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 retired in 2018. And I am empty nest, single, and no debt other than my home. Right now I have just a small balance that's owed on my home, 36,000. 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. Yeah, 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 co-pays, 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? 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 and 36 was what I saw about 2,000, 220 maybe.
About 220,000. Okay. And so you believe that if you were to find something, let's say 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. And 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 Money Wise 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.
Let's head to Norfolk, Nebraska. Ron, thank you for your patience. How can I help you, sir? Yes, I'm have money in my 401k and been here and all kinds of talk about the stock market crashing and thinking about retiring here in the near future.
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 in cash and just letting it draw like 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. 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'll 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, you know, 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. You're listening to MoneyWise Live, and you can find us online at MoneyWiseLive.org.
However, today we're not live. So if you hear that phone number, please don't call. But do stay with us.
There's lots of great information ahead. 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 MoneyWise app. If you haven't downloaded the MoneyWise app, you can do that today. Just head over to your app store, Google Play or the Apple App Store, search for MoneyWise biblical finance. And in addition to the digital envelope system, you'll also see our MoneyWise community where you can post questions and get responses from MoneyWise 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 MoneyWise app and it's in your app store. We'd love for you to download it today. 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 money.
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. And I'd love, ideally, and 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. Doesn't 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 time frame you believe you'd like to continue to work, is that right? Right, right. Okay. All right. And how much have you saved for retirement at this point?
Right now I have like $150,000 for retirement. Okay. All right. 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'll take about $3,500 a month. Okay. All right.
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 if 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 to Chicago, Illinois. Michelle, thanks for your patience.
How can I help you? 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 wanted to see what's the best place to start and how to get, you know, just get started on it, where to go online or contact an attorney or yeah, where should we go? You know, I would typically encourage you to contact an attorney just to make sure that what you're doing is right.
You know, things, laws vary by state. You know, 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. Could be a thousand dollars or more, depending upon what the situation is.
You certainly can go online to something like Legal Zoom. 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 a CKA in Chicago and ask for a referral to a godly estate planning attorney. We appreciate your call today. Hey, this is a reminder that we're not live today, but we do have lots of great information coming up in the rest of the program.
So please stick around. If the heavy burden of debt is robbing you of freedom and peace of mind, Christian Credit Counselors can help. We're a nationwide nonprofit credit counseling organization that has helped over 300,000 individuals in the last 27 years get out of credit card debt 80 percent faster while honoring that debt in full. To learn how Christian Credit Counselors can help you, visit christiancreditcounselors.org.
That's christiancreditcounselors.org or call 800-557-1985. Do you know if you have enough? Enough money? Enough house?
Do you know how much is enough? If not, Ron Blue can help with his book Master Your Money, a step-by-step plan for experiencing financial contentment. Learn how to save, invest, and give wisely, how to create a long-term financial plan, and how to get out of debt.
You'll find it all in Master Your Money by Ron Blue, available when you click the store button at moneywiselive.org. Hi, I'm Barry McGuire. I'm a layman here to remind you that face sharing is a barometer for your spiritual health. You know, the things you're most excited about are the things you talk about, and judging by our conversations, most Christians are most excited at this moment about bad stuff. Christians have become preoccupied with all the evil we're seeing and our freedoms being lost, and they're not happy. A recent poll just found that almost 80 percent of all Christians are upset and living in fear. At this moment in time when it's never been easier to share our faith, most Christians have lost their faith.
Think about it. James 1 describes praying Christians who are worrying as double-minded, unstable, and unable to expect anything from God. If that's where you are today, you want to stop worrying. God is telling you to return to Him as your first love and return to doing the first thing you did when you first got saved. Tell everybody about Jesus.
Get help sharing your faith at igniteamerica.com. We've all been hurt. We've all hurt others. That's why forgiveness is critical for our spiritual and emotional well-being. But how do you forgive when it's hard? In Forgive Your Way to Freedom, Gil Mertz shares his inspiring story of forgiving his difficult and distant father and lays out a practical biblical process of forgiveness. Learn to forgive and be set free.
Forgive Your Way to Freedom. More at moodypublishers.com. It's been lingering in your mind for the past few months.
Is it time to move on from my current job? Maybe you're feeling drawn to ministry. Here's a thought. How about investing in the mission of Moody Bible Institute in Chicago? Moody is all about teaching students the Word of God and preparing them for service. But that mission also involves Moody's sister ministries like broadcasting and publishing. Help make an impact in ministry at Moody. Check out all of the career opportunities at moodyjobs.org. That's moodyjobs.org. We're glad you're with us today for MoneyWise Live, where we apply God's truth to your financial life. Back to the phones. Chattanooga, Tennessee.
Barry, how can we help you, sir? Yes, I was wanting to try to go ahead and follow the advice and buy a car with cash. I do have saved the money and I'm finding out that this is not the mode of a lot of dealers. They want to actually steer people into a deal that involves a load and that gives them, I understand that gives them money, that chance to make money over and above the cost of the sale. I'd like to try to find out if there are some techniques about buying that car with the cash and not paying exorbitant fees as in dock fees, etc.
Yes, yeah, very good. Are you looking to buy a brand new car, Barry, or a used car? Used.
Used, okay, very good. It does seem counter-intuitive, does it, that a dealer won't want to give you a better deal if you pay with cash. And the fact is just what you said, dealers make money on each loan they arrange so they'd much rather help you finance the car. Now, smart dealers know that there's a benefit to them if their customers, their cash customers are treated right.
It means a quick sale and a better review on Yelp or another crowd-sourced review site. So I might check around for dealers in your area that are good with cash. A great website for that would be dealerrater.com, and there's any number of other sources. The way I typically buy a car, and I love buying cars just because I make it a project or a game, if you will, to buy it for the least expensive car as I can possibly afford, by looking at and finding the make and model I want, then I go to work on the research using the internet as my friend.
The last car Julie and I bought, I ended up jumping on an airplane and flying four states away to buy the car and drive it home because we found a phenomenal deal from a dealership that sells the most cars in that particular state. And you can do that if you're willing to put in the time. So once you know what you want and what the right price is, then I just start working the internet.
And I would talk to the internet salesperson. Those folks are typically doing higher volume and let them know right up front, listen, I'm paying with cash. And as much as they may not love that, because again, they're giving up some money, I think they're still, if you find the right dealer who's motivated to move cars, and they all are, especially at the end of the month, you're going to do better at the end of the month than you will any other time, then just keep doing your homework and you'll find somebody that'll give you a good deal.
But I applaud you, Barry. Don't let that discourage you from paying cash for this car. You've done the hard work to save it up. Now you continue to do your legwork until you find the right vehicle purchase for you. Unfortunately, used cars are at a premium right now.
They are quite expensive, but as long as you spend the time, you'll find the one that works for you. And I appreciate your call today. Down south to Florida, Olga, thank you for holding. How can I help you? Thank you. Thank you for your program.
It's very helpful. My question is, I married this person for more than 10 years. And when we divorced, he gave me two years of early money. And because of COVID-19, I lost my job. I went to bankruptcy. And now I have a part-time job.
And I have the money enough. But my question is, I had the right to have my ex-husband's Social Security. Yes, you do, as long as you're eligible, Olga. So, basically, you're eligible to collect spousal benefits on your former husband's earnings. As long as, and you already mentioned the first one, your marriage lasted at least 10 years.
You said it did. You've not remarried. You're at least 62 years of age. And your ex-spouse is entitled to collect Social Security retirement or disability benefits. As long as you meet those requirements, then you are absolutely eligible. Also, keep in mind, your ex doesn't have to be collecting his retirement benefits yet for you to claim expousal benefits.
He may have chosen to wait. You can go ahead and begin collecting. If this is the case, though, the divorce does need to be at least two years old. There's no such requirement for the two-year waiting period if your ex is already receiving benefits, only if he is not. So, sounds like you need to set up a call, a virtual visit with the Social Security Administration.
Just go to SSA.gov to do that. We appreciate your call today. To Grand Rapids, Michigan, Jim, thank you for your call today. How can I help you, sir? Yeah.
Hi. Hey, I just bought a new house up north about 100 miles away from where I'm living now. So, I just sold my house here and bought $120,000 equity. I'm going to put that, I owe about $128,000 on the new house. My thought is, you know, pay the credit cards off, pay the car off, put like maybe $70,000 on the new house, get that down. Work is willing to give me like a three-day week and my retirement could pay the new house off if I just took a new job up north and just kind of retired. So, that's kind of my question is like, do I do early retirement, work the three days and commute to 100 miles once a week or retire and pay the house off and just get a new job and put a little in savings? Yeah, yeah. So, if I understand correctly, do you already have a mortgage on the $128,000 that you own the new home?
Yes. So, by paying down 70 of it, that wouldn't help your mortgage payment. You'd still have the same mortgage payment until it's paid off.
Tell me about, so you really, it's going to come down to, do you take a job locally or do you take a job out of town and, you know, locally you may work five days out of town, you're going to work three, is that right? Right. Well, it's true, but I'm in the new mortgage where you can do an annuity or an amortization like up to six months where you can put, you know, the equity down and actually change your mortgage to lower the payment.
Sure. So, you're going to re-amortize the loan. Yeah, you know, I don't have a problem with any of these plans. I mean, clearly you're not living beyond your means, you've thought about what it takes to fund your lifestyle, you know, you're working toward becoming completely debatable, you know, you're working toward becoming completely debt-free. The fact that you have credit cards makes me wonder, you know, are you going to have the discipline to live within your means? But I love the fact that in either of these cases, you're trying to get out of debt, including your home as quickly as you can, which is going to get your lifestyle need, your monthly expenses down as low as possible.
Those are all good things. I think, you know, how you decide to slice and dice that, you know, vis-a-vis a job local, a job out of town, that's really a quality of life issue, Jim, in terms of the work that you're doing and whether or not you want to spend that much time in the car. But, you know, taking this money, I think at the end of the day, I'd love for you to have three to six months expenses in a savings account.
I'd love for you to have all your consumer debt paid off and then pay down as much as you can on the house with what's left, re-emortize the loan, and then you at that point, you'll know exactly what it takes to fund your lifestyle every month. And you just need to solve for that with whatever job you take. And ultimately, that's going to be a decision I would just pray through and think through very carefully. So I hope that helps you, my friend. All the best in this exciting new chapter and season of life. And we appreciate your call.
Our final call today is going to be in Pennsylvania. Sally, you've been very patient. Thank you for that.
How can I help you? Hi, Sally. Go ahead. Sally in Pennsylvania. Are you with us? All right. It looks like we don't have Sally.
Let me read what I believe is her question from my producer. I have a 401k and a Roth IRA. I want to retire in four years.
Are there other investments I should have? Am I on track for retirement? I can't tell you if you're on track or not because I don't know the amount, but here's what I can say.
You can figure that out yourself. So as to whether or not you're on track, I would just look at, first of all, what is your retirement budget going to look like when you get to that point in four years? Sally, go ahead and do a budget as if you were there today. And anything that's coming out of that budget, you know, because let's say you're not saving for retirement anymore.
You're already in it. You know, are there, is there insurance you were carrying that you no longer need? I mean, just look at all your expenses and determine what that retirement budget is and what the bottom line is you need each month to fund it. Then beyond that, I would look at, okay, what guaranteed income sources do you have?
If you're going to be collecting social security, how much is that? And then figure out what the gap is between any known income sources and what it's going to take for you to fund your lifestyle on a monthly basis. Ideally, you'd have enough in that 401k and Roth IRA such that at a four percent withdrawal rate, which ideally if it's managed right, you wouldn't ever touch the principal, that four percent a year would fill the gap between your known income sources and what your monthly need is.
And if you have that, that's great. If not, then you may need to work a little bit longer or reduce your lifestyle and perhaps sell a home, downsize, find other ways to cut back. As to the investment strategy four years out from retirement, you should be getting more conservative. You know, if we use the old 100 minus your age, let's say you're 65, you know, 100 minus 65, you would have 35 percent in stocks, maybe 65 percent in bonds. These days, folks are using a little bit more aggressive strategies, perhaps as much as 45 percent in stocks, 55 in bonds. That's up to you, but clearly you should be getting more conservative. But I don't want you to get out of stocks altogether because we need that growth component that's the engine that's going to keep this growing over the next, let's say, 20 years. If the Lord tarries and you have good health, this money needs to last a long, long time. Lastly, think about getting a certified kingdom advisor to weigh in on all of this. You can do that at MoneyWiseLive.org.
Just click find a CKA. We appreciate your call, Sally. That's going to do it for us today.
MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Let me say thank you to my team producing today, Deb Solomon, Engineering, Amy Rios, Providing Research, Mr. Jim Henry. Our call screener today was the fabulous Gabby T. and Samuel Bowen sitting in today as well. Thanks to you for being here. Come back and join us tomorrow, will you? We'll look for you then.
May God bless you. Bye-bye. With SRN News, I'm Keith Peters in Washington. FBI threats to investigate parents who speak out at school board meetings have sparked a backlash by citizens rights advocates. Bob Agnew reports. Florida Governor Ron DeSantis was quick with a promise to defend parents in his state from intimidation by the FBI. The Citizens Rights Group Alliance Defending Freedom has now sent a letter to Attorney General Mary Garland asking he rescind his order to investigate parents as a possible threat. ADF General Counsel Christian Wagner wrote, quote, parents expressing concern over critical race theory, gender theory, and COVID-related mandates in public schools do not qualify as domestic terrorists. Wagner notes citizens have the right to express their concern to elected officials with no fear of government punishment for doing so. Bob Agnew reporting. The federal government is temporarily relaxing the rules for a student loan forgiveness program.
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