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2 Options for Paying Off Debt

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
October 11, 2021 1:09 pm

2 Options for Paying Off Debt

MoneyWise / Rob West and Steve Moore

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October 11, 2021 1:09 pm

You’ve decided to begin the process of paying off your credit cards and other debt. So, how do you determine the best way to begin? On today's MoneyWise Live, Rob West will talk about two great options for eliminating debt and he’ll explain which of them might be a better choice for you. Then Rob will answer your calls on various financial topics.

See omnystudio.com/listener for privacy information.

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This is Damon Baxter and I serve as business development director for MIDI radio. The only reason were able to spread the gospel of Jesus Christ on the radio is because of financial support from listeners like you. We also have businesses support us to like United States mortgage faith and family is at their core, it's why they choose to be such a close partner with our station is why they specifically advertise on Christian radio stations across the country. It's wife, father and son, John and Ryan still lead the company to this day.

Check out United faith mortgage and their direct lender advantage@unitedstatesmortgage.com thanks to you and to United faith mortgage for supporting beauty radio United faith mortgage is a DBA of United mortgage Corp. 25 Belleville Park Rd., Melville, NY license mortgage backer for licensing information, go to an MLS consumer access.org corporate MLS number 1330. Equal housing lender not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota and Utah. This is Damon Baxter and I serve as business development director for MIDI radio. The only reason were able to spread the gospel of Jesus Christ on the radio is because of financial support from listeners like you. We also have businesses support us to like United States mortgage faith and family is at their core, it's why they choose to be such a close partner with our station is why they specifically advertise on Christian radio stations across the country. It's wife, father and son, John and Ryan still lead the company to this day.

Check out United faith mortgage and their direct lender advantage@unitedfaithmortgage.com thanks to you and to United faith mortgage for supporting beauty radio United faith mortgage is a DBA of United mortgage Corp. 25 Belleville Park Rd., Melville, NY license mortgage backer for licensing information, go to an MLS consumer access.org corporate MLS number 1330. Equal housing lender not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota and Utah is the day you decided to take the bull by the horns and begin earnestly to pay off your credit cards another day for you Rob West now that you're committed to getting out of you've got two great options for doing all talk about that first today and which might be better for you. It's all your calls at 800-525-7000 number 24, seven, 800-525-7000. This is moneywise. Why is your essential decisions.

Regular list probably figured out that were talking about the snowball method of paying down debt and its big brother. The avalanche method. Now don't get me wrong. Both of these approaches are great and whichever one you choose will help you get out of debt in a hurry, but which one is best for you and which one saves you the most money. It's not necessarily the same answer we usually recommend the snowball method for reasons I'll explain in a minute, but first let's define these terms. In case you're new to this, the snowball method of debt reduction is probably the better known of the to our friend Dave Ramsey has been singing its praises for years on his program. Here's how it works. First you pay the minimum monthly payment on all of your debts, you're probably doing that already because you have to, but then you apply any leftover money to the debt with the smallest balance. To be clear, that's in addition to the minimum payment you're already making on that that this would be extra money put on your smallest debt, so it gets paid off first then once that debt is paid off.

You take its monthly minimum payment and the extra you were sending and apply that to your neck smallest debt. When that's paid off. You put all of that money on the neck, smallest, and so on till all the debt is gone. You get the idea of a snowball rolling down the hill getting bigger and faster as it grows with the snowball method, you get quick wins upfront and that's really encouraging you start to see progress right away.

Another advantage is that you have more and more money to use as you move on to larger and larger debts so the snowball method really is great for paying off debt, but the question is, is it the best.

Let's compare that to the avalanche method. It's similar but with an important distinction just as you would do with the snowball approach you make the mandatory minimum payments on all your debts but instead of taking your leftover money and applying it to your smallest balance you put it on the debt with the highest interest rate when that's paid off. You apply its payment in the left over to the next highest interest rate and so on. Now the difference is more than just lowest balance versus highest interest rate with the avalanche method you get a slower start on seeing progress. It'll probably take you longer to pay off the highest interest debt than the one with the lowest balance so it'll be a while before you get a psychological boost. That said, the momentum does build with the avalanche method is you get to the end of your debts you again have a lot of cash available and you're taking big bites out of what you still owe back to the question which is better. Well, that depends on you.

Do you need to see the progress you're making. If so, you want the snowball method because the results are more immediate and tangible like we said, you start getting wins early and that's encouraging but some people think more in the abstract and their content with watching the numbers and seeing the balances go down each month. They don't mind if it takes longer to get a win they want to make sure they paid the least amount of interest. Overall, in the avalanche approach gives you that let's say you've got 1/2 dozen debts ranging from one to $10,000 and they have interest rates from 6 1/2% to 18%. Both the snowball and avalanche methods will pay off all of the debt in the little over four years with around $8000 in total interest, but the avalanche approach paying off the highest interest first will save you a couple hundred dollars in interest.

So now you're thinking. What I recommend the snowball approach when it means paying more interest well because studies have shown that the best approach is the one you're most likely to complete and that turns out to be the snowball approach paying off your smallest debt first.

You see, it doesn't matter if you might save $200 by paying off your highest interest at first. If you get discouraged and quit which are more likely to do with the avalanche and that's why we say go with the snowball get the quick wins pay off your smallest at first and then go on to the next and don't worry about the interest rates because you're more likely to stay motivated that way. And the key is to get out of debt once and for all, but whichever method you choose. Let us know how it's going.

We'd love to hear from you and by the way what you get that debt paid off.

Make sure you get on that spending plan using the moneywise out so you don't ever go back and that again your calls annexed 800-525-7000 1900 525-7000 on Rob West will be right back. Thanks for joining us on moneywise live with us today at Rob West. Your post in just a moment will be heading to the falls to take your calls and questions on anything financial. Perhaps you want to talk about where we began today and that is how you effectively pay off debt, but would love to tackle that with you today. We teed up two different approaches the avalanche method, which may be new to some of you and the snowball method, which is been talked about for quite some time that we love to unpack that.

Or perhaps you want to talk about saving for the future.

Developing a spending plan.

Whatever it is will take a biblical approach to helping you move forward with confidence. Here's the number 800-525-7000 got some lines open 800-525-7000 that before we go to the phone and let me just say a huge thank you to the moneywise live community for your participation participation in our fall share last week here on Moody radio wanted incredible blessing to see God's people respond to keep the gospel loud and clear through Moody radio literally to the ends of the earth. We are so grateful for your involvement so many new supporters of this ministry.

Many of you have been regular supporters right there standing with us at all levels. It was God's people coming together to do this great work and we are so very grateful and certainly appreciate of the many kind comments. We saw regarding moneywise as well. Let's take your phone calls today were to head to the lines again. We got a few lines open here at 800-525-7000 will begin today in Baltimore, Maryland hi Marie, how can I help you make is possible for DLJ Tylenol. How can we prevent from happening yeah and unfortunately Marie there so many ways that the fraud is happening these days, especially with more and more transactions being conducted online and more and more ways that the youths are really thieves are coming in and stealing from so many especially preying on elderly folks. This is gotten a lot of attention lately because of some products that are out there claiming that they can protect you from this. I'm not so sure I'm not a fan of these. Let me just tell you, how this works. Essentially, someone could stroll into the County deeds office and essentially fake your signature thereby transferring your deed to someone else and then taking out a loan against the property.

Could that happen. Not likely, but conceivable the protection though that these companies offer really just doesn't live up to the hype. Now this isn't what's typically known Marie as title insurance, you should always get title insurance when you purchase a property that will protect you against any claim involving the validity of your ownership of the park property.

It's a one time purchase usually sever several hundred dollars. What though is called title theft insurance is a completely different product and it really is an insurance at all. It doesn't like you lock your title either as the name would would imply essentially what happens is they monitor whether your deed has been transferred out of your name at the county records office. There is actually no way to lock your title in any state. At least not yet. Now why I don't believe you need to take this on is because you can monitor whether a fraudulent transit transfer has occurred yourself.

Most counties now allow you to view the status of your deed online.

Some will even allow you to sign up for automated alerts involving deed changes, which would be most like what's being offered here. But keep in mind, even if this were to happen, Marie. This is fraud.

If someone forges your signature transfers your deed and then takes out a loan against it. It still fraud so the con artist. At that point didn't legally on your property and therefore the new lender doesn't have a legal claim to it. If they tried to foreclose on you.

It would be wrongful foreclosure and wouldn't hold up in court. So, from my standpoint, I don't think you need to pay for a product that's essentially good to do what you can do yourself. You likely are you have title insurance. It's just kind of an automatic when you buy home or take out a new mortgage and when that's in place at that transaction. That's really all the protection you need and you know if you want to stay on top of this I would check with your county deed office and just see if you can get an automated alert, and therefore somebody attempted to fraudulently change the deed, then you would be notified at that point.

Does that make sense okay very good. Will we appreciate you checking in with us today. Thanks for listening.

The program at Lord bless you have a great day. Let's itself, the Fort Lauderdale, Florida hi Winston, how can I assist you.

I don't some money to a family friend. Now you stomach that is broke so I said no I don't you take it from your retirement account. He says no you cannot enter the get. Still, retirement age, and from what I understand, you can always take money from a retirement account and they give you time for him to put it back if you don't put it back then you pay a penalty. So the question is, is there a retirement account that you cannot take money from. No, I mean, with a few exceptions, you know, if you had a pension, there may not be a way to get access to that money, but any self-directed retirement accounts, like a 401(k) for 3B step IRA traditional or Roth you can in fact take it out.

I don't recommend it, though I would use that as an absolute last resort you in terms of looking for funds to cover a short-term issue. Most notably, the reason is because often you would be treating the symptom of a problem as opposed to the problem you note. Usually money issues are symptomatic of other deeper issues like living within your means or may even be heart related so you don't. I wanted to to tackle those first and make sure that you've reined in the spending and done what needs to be done to correct the problem. Otherwise, that temporary fix by pulling money out of a retirement account is going to result in less funds available for retirement growing for the future. A pretty hefty tax bill potentially and you know the issue will probably resurface six months or a year later because you haven't solved the main issue in terms of what's available mean basically you if you take money out of those self-directed accounts before 59 1/2 you would have a 10% penalty on top of the funds likely being taxable so you could be talking 35% or more right off the top. The only funds you would have access to without any kind of penalty would be a Roth IRA where you're taking out your original contributions not to gain but the original contributions you can access those funds without any penalty or tax consequence.

But again, I would rather you not do that because the whole point of that is to put something away.

They can grow for the future, so hopefully that answers your question but I would encourage him not to take that approach and see if you can't solve the problem by your really dialing back is lifestyle focusing on a spending plan and trying to perhaps come up with the funds. Another way to settle make sense that Winston Prime Minister Mr. diamond PCD.

Well, now it's probably a local retirement is that based in Texas correct yeah that's just a retirement system of a particular County what your question specifically related to that now is talking to my son and he says in this particular retirement account. PCD's retirement account, you're not able to touch it. In that time that could be the case, it's going to depend on the retirement account and whether it self-directed or whether the funds were going in on your behalf automatically. Whether it's a pension.

What type of account. It is so that's entirely possible Winston that those funds are not accessible whatsoever. I don't want you anymore thank you very much for answer my question got my heart rates are. We appreciate your call today, middle, or bless you folks so glad to have your calls today and we got room for many more. So, we'd love to hear from you. Whatever's on your mind today will take a biblical perspective and try to help you move forward.

Answer the questions that you have no matter what your financial here's the number 800-525-7525 7000. This is moneywise live biblical wisdom. Your financial moneywise live around Western hose all the lines are. Sit back and enjoy great questions lined up in just a moment, Schaumburg, Illinois. But first, Austin, Texas hello Becky, how can I recently got married and my head and clean for retirement is putting her week out alone on her house to get started.

When it had think we need to keep it open like a line of credit able to keep borrowing money to buy investment hell and right now and I just wondering at what hiding out when it came that your answer, take it out and out air arena. It's a great question and obviously I'd love for you all to be able to do this without encumbering your primary residence for investment purposes, especially if you're not both on the same page because when we run through kind of the rules for borrowing if you will want to make sure that the money is being used for productive purposes. Economically, that the economic cost is less than the economic gain that there's not any disagreement between husband and wife in the out there's a series of things we want to move through and so for you all to take on debt. I really do want you to be on the same page and to the extent either view is gone comfortable with it. You know that would be a warning sign for me that we need to perhaps hit the pause button and it. I realize you all may be able to do this effectively. Perhaps he has some experience in this and I realize you're trying to generate retirement income, but I don't want you to get over extended by any means, especially in a red-hot real estate market that could turn over, you know here in a year or two, so I just want you to proceed carefully, tell me how the first one has worked out. How much did you borrow and what's happening from a cash flow standpoint, which we had to start her own it and made it happen.

But it did get time I met going towards our and he can't let you keep getting more help and when that not what the marker for wealth Yeah well I'd love for you to go into a real estate investment with at least 50% of your own cash just because you know as we look at investment properties were to have higher interest rates associated with them in a market like this. Your likely paying a premium for the purchase. In the first place and given the fact that you're an open come bring your primary residence, then it's no longer can a purely a business situation because now your personal finances are involved. Where as if you were to get loans on the properties themselves, and you're able to demonstrate that you could go in with enough cash which means you've got savings and reserves to put toward that and they begin to cash flow. Then you can come separate if you will the business side of your real estate investing from your personal finances and as long as the debt services covered, plus taxes and insurance and routine maintenance. And you got up fund there to cover all of that, then you know you can always liquidate those properties and take care of that. But the moment you begin to get your personal finances involved without a good cushion under you. That's where I start to get concerned. So given the fact you took the proceeds the profit from this property didn't pay off the mortgage you put it into a business that what's going on with that business and are you all having to come out of pocket to service the debt. At this point that I think it's growling and going well. I trained black. That equity from our personal how before we print anymore and that property I yeah I would know the you do that, especially with you taking this and plowing into a new business and new businesses always take longer than we expected cash flow they always take more money than expected and you know it doesn't sound like you have a real significant reserve underneath you that know if things take no more investment to get them going in things like marketing or equipment or whatever it is, and/or we see your softening in the economy. That's where things can begin to get out of hand quickly and so you all continuing to pile on more more debt to your primary residence without taking care of the debt you along the way you'll gives me a real concern, so I think you know it's fine if you want to take the proceeds and plowed into a new business, but if that means also then adding more debt to your primary residence or you can buy another property I'd caution against that just based on what I'm hearing about your own personal finances and your ability to fund that I would prefer you take care of that existing debt before you add another penny for another property.

I you're very welcome Becky, thanks for calling and listening. God bless you on to Schaumburg, Illinois hi Tori, how can I assist you in light of this great question. Let's do this were headed toward a break, but I've got the lay of the land here so I just on the other side of this break I give you my thoughts on how to think about investments as you just getting started thinking about retirement money you hold the line got a few lines open 805 five 7000. Perhaps you will be back with much moneywise live on Rob West. Your homelessness is biblical wisdom decision puts it back to the phones Tori is in Schaumburg Illinois just before the break, Tori was explaining that she is reached retirement age, but not planning on retiring anytime soon Tori it sounds like you've put aside about $5000 and you're looking to invest that for the benefit of for being able to access that down the road.

Do you have a certain amount that you could put aside.

In addition to that, each month you get a little bit of background noise there what you think your margin is each month. I wanted so I let you. I just listen and focus on the road. Here's my thought, you know, first of all the very best place to invest for retirement would be a company-sponsored plan. So if you have access to a company-sponsored retirement plan, especially if there's matching but even if not I'd see if you could set that up and try to put as much as you can away a goal would be 10 to 15% of your pay automatically into that account. If you can't do that and you back down from there.

If you don't have access Tori to a company-sponsored plan than another great option would be a Roth Ira skews me heading into retirement. I'd probably use a traditional IRA that's can give you a current year tax deduction based on the amount that you contribute so as to reduce your taxable income. As you make a contribution.

And if you're over the age of 50. You could put in $7000 for this year and then you could do another 7000 next year and beyond. So that would give you the ability to put that money away and get it working for you and get a little bit of a tax benefit. In the meantime, ill as you think about investing those funds. I probably check with our friends@soundmindinvesting.org they have a wonderful resource that would give you mutual fund suggestions that are low cost, very high quality you'd be very well diversified. Even with that $5000 and then that money could begin to grow, so you'd have something down the road and if you don't plan to retire anytime soon.

As always, you have a 10 year time horizon that I would say go ahead and get that invested and then be systematic. Perhaps every month of putting in you know if you could do 500 a month great, but I'd look for that company-sponsored plan first and then use the traditional IRA is your second option. I hope that helps you all the best to you in the days ahead, onto Birmingham, Alabama hi Judy, how can I help about maybe 30 or 35 $50 on that probably are mature and my question is with the government the way it is in the economy right I'm right and they're not really don't get back when night. They mature and should we go ahead and cash on me or just keep help on. Well, I appreciate the question Judy, I would probably catch them. If I were you, not because I would be concerned that the government will back them but just because of the interest that you're accruing in Arthur W.

Bonds that are likely paying about .1% and you know you can do better than that in the high-yield savings account.

You could get at least a .5%, so half of 1% a year with a completely liquid savings account that's backed by the full faith and credit of the United States. Now you mention the economy and whether or not the US you will be able to back any of this down the road.

Whether that's the Federal Deposit Insurance Corporation, which is part of the US government or your backing their bonds, government issued bonds and I would say you know it.

If you look at it you trusting in the United States government. Obviously, our trust and faith is in the Lord, but it is far as economies go for around the world, but we are still the biggest and the strongest.

The dollar is still despite our challenges in the debt that we have in this country and inflation in some of the other headwinds still the strongest currency, which is why even in the financial crisis of 2008 2009 you saw the dollar rally because there really is no viable alternative. When you look around the world doesn't mean we don't have to be wise soon as a nation in terms of how we handle our monetary policy.

But it does mean that we still have incredible strength as a nation economically monetarily and otherwise, and I believe as we have to make some of the hard decisions. Lord willing and the days ahead, we will, and so I would think in terms of where you put your money so you're not losing purchasing power because remember with inflation money that's not working for you is actually losing value every month. I think there's a greater risk there. Then there is a risk that the US government will default on its bonds or have some sort of collapse of the financial system or economically as we evaluate risk again with our trust squarely placed in the Lord as we evaluate risk.

I think there's a larger risk of you seeing that purchasing power eroded over time because of the inflation and because you're just not earning a whole lot so if it were me I would look at cashing these in and see where you could position it yelped by still having US government backing through FDI Siebel where you could get instead of .1% .5 you have the ability to redeem a US savings bond anytime you'd like provided at least two years passenger purchased.

It sounds like it has you perhaps will give up a little bit of interest when you do, but the place to evaluate. That is a treasury direct.gov that's the government's website for savings bonds for the U.S. Treasury treasury direct.gov and that you could look at the individual CUSIP's and see exactly what the status of these bonds is and you can also find out if they're still earning interest. There's a button that says are your treasury security still earning interest and will tell you very plainly so I checked that out and consider perhaps redeeming these and seeing if you could find a bit more yield somewhere else. I hope that helps you. We appreciate you calling today.

Let's head to looks like Brownsburg, Indiana WGN R hi Mark, how can I help you absolutely sure down the house and am looking at building some of the craftsmanship is standard outlet. What do I have to well I mean obviously you have a contract, you have earnest money down and I would talk to an attorney about that, a real estate attorney to evaluate both the contract to see what legal remedies you have for them to correct whatever issues are there, and/or the ability to pull out of the contract if you're just not happy. I would start with the language of that contract and have a professional who represents you an attorney to take a look at what your rights are and what spelled out in the contract in terms of being able to remedy what it is that's going on here in terms of you not feeling like the.

The craftsmanship and work is being done to your standards and all of that will be described as a legal matter. In that contract so you know what your rights are and then you'll need to proceed however you see fit. Obviously they want to get this job done and be paid in full beyond just the earnest money so there's an incentive for them to correct whatever is going on here.

Your incentive is not to have to walk away in the earnest money, and hopefully you'll be able to come to a resolution on that. So I would start with the contract to find a godly real estate or contract attorney to assist you and let us know how that turns out. Appreciate your call today. I'm so sorry folks, we got more to come in moneywise like I come to stay after for a little bit today got extra minutes. I'd love to hear from you 7001 back to moneywise not listed for your financial decisions. In just a moment, will head back to the phone but first it's Monday which means were joined by our good friend Bob Dole chief investment officer of cross mark global investments were investments and values intersect. You can learn more about cross mark global and the funds that Bob manages@crossmarkglobal.com Bob market's been interesting as of late. What's catching your attention as you look out over the economic and market landscape yo-yo nature of the market since we last talk. We had three updates and two down days that the pattern we've been experiencing that straight up that lasted 18 Months Had Given Way to sidewise shop and the reason is it's no longer just Katie bar the door the economy and the earnings are indescribably good and were going up. Not that that's gone. It's just slowed somewhat ambitious quote transitory inflation doesn't seem to want to be very transitory. We have for fiscal chaos in Washington DC. We have uncertainty about not just what the Fed is going to do. But who the Fed shares going to be so things have turned a bit mixed and so the market has as well rough yeah I noticed in your dolls deliberations this week you made reference to the 45% of earnings calls for Q2 mentioned inflation, which means these corporations are taking note of higher costs.

Absolutely that's in the context of about 1/4 that connection. It typically overtime so almost double the amount. Inflation is an issue we have to do is live life and go to the supermarket or the asked patient to figure that out is not that hard and wages are moving up and I said on this program before wage rate.

Inflation is the most insidious hardest to root out of the system. I'm not talking about runaway inflation. I'm just talking about.

Unlike the last decade where it's been 0 to 2%.

I think during the 2 to 4 zone, which is picking number of three and that's very different from where we've been, not just for consumers who live life but also for markets about last time you were here and we talked about supply problems, let's talk about perhaps some good news: the case is declining may be an end to the supply problems or at least the beginning of the end and you've talked about consumer confidence being assigned that you know we may be starting to turn when it bottoms out and perhaps were seeing some of that one of the good things using other you just mention that three very important ones, but I might add to that list that while earnings growth is not going to be 89% like it was in the second quarter still going to be way above normal with the poster use around member. It's up 20% in the third quarter. I need to remind all of us that the long-term average is slightly less than 10 so profitable still going to be double. We have good economy and we have good earnings to feed that as well and will interest rates are up some out the curve there still low which it is an incentive for people to borrow money and do business so we can't get too negative about things, but then the bear will come back and for Bob but the market knows that that's what's selling at 20+ P/E ratio and they are right and I come back to the union the gang the up in the down the choppy sidewise action Last question is a Christ follower in lot of believers right now are discouraged just what's going on in the political climate. Economically, they see the decisions were making the debt skyrocketing loose money they're getting concerned and I think perhaps in some cases fearful about where the US is headed. How do you evaluate the US our strength as a nation economically vis--vis the rest of the world and you know we know the end of the story, as believers, and so how does that factor into it. How many hours do I have to answer the question. There are also many crosscurrents and troublesome items on the agenda look you and I both have heard from Christians for my ticket for decades now, what about that that what about the deficits and that's proved to be something not worth paying attention to his investors but will be a day of reckoning. We all borrowing from the future and interest rates won't go down forever.

We don't need high interest rates for interest expense as a percentage of our federal budget to be an issue. So II agree with the concern people to say there are some trends out there that bother me a bunch economically and can I say, morally, and that we gotta keep our pulse on that we need to be salt and light we need to be beat get the church to be to be united around some of these key biblical issues that God cares about big time doubts is it fair to say Bob that there is a greater risk in pulling out completely in terms of the purchasing power, eroding with inflation versus the actual risk of our economic company. Our economy coming tumbling down.

Yeah, thank you for bring it to the market. No question because markets have done so well, I see. If you enjoy doubling your money and the last that the 18 months in the stock market to kill off the table is fine, but don't push the panic button and sell everything because you think the US is going to hell in a hand basket. If it is the good news is we do know the end of the story, but in the meantime we gotten economy is doing reasonably well.

You need some equity investments in your portfolio. Thanks to step up. I will talk to my friend. All the best, but I Bob Dole chief investment officer across Mark global investments. Bob joins us each Monday afternoon were grateful for his insights.

Let's head back to the phones. Therese is a bum saying that right Chicago Illinois tries how can I help you out to a 14 month income and I'm just curious what I should deal with trying to be about $80,000 money and I know 14 years old 14 month billing considered inherent in me LR and if I should put it down my mortgage are what I should yeah that's a great question. So this was given to you as a part of the will and just taken this long for the probate process to encourage that right about my brother fighting seats, so the cost basis is going to be as of the date of death, and so increase since that time would obviously be considered capital gains and you can have to look at that, but I found that in terms of how you should handle these funds. I think you've just got to go back to looking at the priority use based on your current financial situation. Tell me this. Do you have an emergency fund. And what about consumer debt that you have one car loan and mortgage, and we have an American finally have air IRA looking like three years to be retiring now that they get that we have a mortgage at the hundred 42,000 probably 30,000.

Okay, how many months worth of expenses do you say roughly you have in savings okay great and so you obviously are living within your means you're continuing to put money toward retirement and you believe you're on track at this point in terms of having the funds you need to maintain your lifestyle once you fully retire okay great so I like the idea of apart from any giving you'd like to do out of this money. I love the idea of you accelerating that mortgage payoff because if you've got debt under control you're on track to get that continued to be paid down, obviously get that car paid off. You get six months of reserves you feel like you're on track for the retirement savings if we could go and accelerate that home, pay off so that when you retire your completely debt-free including the house and the car that just means your monthly lifestyle expenses even lower, which gives you even more freedom and flexibility because you don't need as much money in retirement, which is a great thing and not to mention the peace of mind that comes from being completely unencumbered. So just based on the information I have five proceed with paying that home mortgage down. You're welcome. We appreciate your call today quickly to Franklin, Tennessee. A beautiful part of the country. Hi Sherry, how can I help you delete the job right now, I'm not shot Ronald out retirement me to continue chat that many of the Roth IRA outlining that Roth IRA out your traditional IRA download yeah what are you concerned about Sherry in particular something related to Social Security or where you get the most tax benefit. What it what you think about that option.

Yeah so you're continuing to work you just to have a new employer.

Is that right job healthy, I see okay very good.

Well, you know, I think the key is for Social Security is concerned, they don't care how many jobs you have and you know that really all that matters is that you contribute into the system and they're gonna face your Social Security benefits based on your highest 35 years of earnings on your record, so any year that you earn higher than a previous year.

Among those highest 35 it's going to benefit you over time. In terms of, you know, continuing to fund retirement. I would just be systematic in funding that accounts and given that your fairly close to retirement. I'd probably opt for the traditional IRA which gives you the current tax benefit as opposed to the raw which will help typically is most advantage when you have a long time to let that compound stay low.

I will talk just a bit more off the air and make sure we get all your questions answered because we have a time called as a partnership between radio moneywise media.

Thank you for stopping by today. Thank you for listening part of the program was a thank you, Dan Jim Henry, thank you for being here tomorrow. Will you be here


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