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No Credit Score? No problem!

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
October 7, 2021 1:03 pm

No Credit Score? No problem!

MoneyWise / Rob West and Steve Moore

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October 7, 2021 1:03 pm

For more than 25 years, having a good credit score was the only way to get a credit card. Now there’s a movement to put credit cards in the hands of folks who have no credit score at all. On today's MoneyWise Live, host Rob West will talk about a government initiative to make credit available more broadly. Then Rob will answer various financial questions from a biblical perspective. 

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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 the direct lender 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 banker for licensing information, go to an MLS consumer 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 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 banker for licensing information, go to an MLS consumer corporate MLS number 1330. Equal housing lender not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota and Utah. Today's version moneywise live is recorded to our phone lines are not more than 25 years having a good credit score was the only way to get a credit card. Now there's a movement to push credit cards in the hands of folks who have no credit score at all.

Rob West, it's all part of the federal government initiative to make credit available to folks banks didn't consider trustworthy before talk about that first today that we have some great calls lined up but please don't call him today because we are recording this is moneywise live biblical truth, meet your financial decisions has been the major tool. The banks use to decide whether they will lend you money or issue someone a credit card that credit score. Of course, is based on how individuals handled credit in the past, but if they've never been extended credit, they won't have a credit score at all, a condition that affects millions of Americans today. Banks, however, are now viewing this group is a vast untapped market for credit cards and other loan products. The plan is banks will start to share their data on customers deposit accounts with other banks. The government is pushing this as a way to extend credit to people who been denied opportunities to borrow so 10 of the nation's biggest banks, including J.P. Morgan Chase, Wells Fargo and U.S. Bancorp will now consider credit card applications based on a person's checking or savings account history and not just for their customers but also for folks banking with their competitors, but to be fair, this isn't a move intended to give credit cards to folks who have bad credit, but rather it's for folks who don't have credit scores but, and here's the key who are financially responsible banks will look at it. Applicant's account balance over time, along with their overdraft history. This is a huge departure from the time honored tactic of banks looking only at credit scores and credit reports to determine who the loan money to the credit score.

Of course, is a single number that reflects a person's borrowing history and whether they make their payments on time so it leaves out people who use only cash or debit cards. And that's an awful lot of people fair Isaac, the company that puts out fight go scores says 53 million adults in the US fall into that category, then to a great extent.

These are folks who resort to dreaded payday loans and other high interest forms of credit of the consumer financial protection Bureau says that Blacks and Hispanics are more likely to fall into that group than white or Asian Americans. The idea of extending credit to people with limited or no credit history actually is a new banks have wanted to find a safe way to do it for years and several have attempted small pilot programs to do it in about three years ago fight go rolled out a scoring system that relied on how faithfully consumers manage their bank accounts, but no banks have signed up for that shows just how big an attitude change has come over banks as 10 of them have now agreed to exchange data to get the latest initiative off the ground that the main government agency behind the push is the office of the Comptroller of the currency. Its mission is to remove barriers for minorities and underserved people to fully and fairly participate in the nation's economy.

Now that sounds like a good thing. Or is it at best. It's probably a mixed bag, but no doubt it will help responsible people who've made a decision to go cash only. By doing so, they've been locked out of various forms of credit. But it will no doubt also be a huge temptation for many others to run up debt. Just because someone has avoided checking account overdrafts doesn't mean they won't be tempted to run up a credit card balance if given the opportunity that maybe that's the idea. Why are banks suddenly willing to extend credit where they haven't before.

Well, aside from government pressure.

The covert pandemic may have produced an incentive for banks to loosen their requirements for credit cards that possibly as a response to their income being threatened by covert shutdowns Americans in 2020, made significant cuts in their credit card debt.

A new study by wallet hub shows that Americans lowered their credit card balances by record $83 billion last year. That means they also paid a lot less interest to issuers who might now be looking to make back those losses by extending credit cards to folks who never had them before, but there's no question that credit cards are a double-edged sword. They can be a huge convenience and most pay rewards, but they can be a pathway to debt and huge payments. The only safe way to handle a credit card is by paying off that balance in full every month. This is a reminder that were not alive today, but we do have lots of great information coming up to the rest of the program. This is moneywise live biblical truth meets your financial decisions. It's great to have you with us on moneywise live today but unfortunately today were not live or prerecorded and therefore won't be taking your call.

However, we've lined up some calls in advance that we think you'll find helpful.

So stay tuned and enjoy the rest of the program. So glad to have you with us on moneywise live, I am Rob West will tackle your financial issues, but do it from a biblical viewpoint because here's the thing. Folks the Lord has a lot to say about how we manage money and I believe it's because money is often the chief competitor to Lordship something is going to dethrone God from first position in our lives.

Since most often going to be money are the things that money can buy.

What I've come to know over the years in counseling literally thousands of folks in so many, many thousands of hours on the radio is that your financial journey is one of the key ways God shaped your spiritual journey. When you hold everything that God has entrusted to you loosely and you understand that it can be used as a tool for God's purposes, not just to build bigger barns but to share with those in need, and to provide for your family and to make memories with those you love and really understanding God's heart related to your money. It has a profound impact because when you get this area of your life under the Lordship of Christ. My experiences it will lead to a more intimate relationship with him, but it does require that we start on her knees and say, Lord, what would you have for me what lifestyle you called me to how much should I keep how much should I give away. It's not that 90% is ours, and 10% is is it's all his.

The question is what portion should we keep and then how should we share with others in need and after we get to our knees. We need to go to God's word because there's 2300 versus the deal with money and possessions generally started today by talking about credit scores and there's a lot in there and God's word about that. Proverbs 22 seven the rich rules over the poor, the borrower is the slave of the lender. It seemed that changes the relationship and so we want to move toward a place of being debt-free.

Does that mean borrowing is assent. No, I wouldn't say that. But I do think we ought to position our lives so that over time we are unencumbered as we are able then to respond to the leading of the Lord.

Well, that's the perspective we want to bring to all of the financial questions we tackle on this program so were to begin today in Chicago, Illinois.

W MBI David, thank you for calling I can help user I greatly got married but we want to start our financial future Can. I've gotten bathing start our own bank account together. How much would you tell it that we should save after Bill and everything you well. I just backing up a bit, you know, I think you had so great that is a recently married couple you're really thinking about your financial future.

Because as to become one flesh.

I think that absolutely includes this area of finance it doesn't come naturally, you need to recognize you both bring to the marriage relationship different money personalities money may have been handled differently in each of your homes growing up. Maybe somebody had more than another, and that all of that really informs how we view money how we spend it how tightly we hold onto it, but the key now is to bring those two perspectives and personalities to the table in a way that you can craft a vision for your future together as a family. As a new married couple and say Lord. This is now money you've entrusted to us as one flesh. How can we use it as a tool to accomplish what's most important to you what's on your heart related to where were headed and as you begin to talk about that perhaps have a at least a monthly money date to look at your spending planted to talk about your values and what's most important to you and how you spend money that can reflect that. I think that really is the key foundation there, then we want to move to a place where you're setting up a spending plan that reflects that because the day today controlling of the flow of money and even the sacrifices you make in the short term to achieve that longer-term vision I think is really key and staying on the same page about that as husband and wife is going to be really critical in terms of the priority order.

David of that to me. Clearly I would say that give first and so one of those conversations you will need to have if you have it already is just what you're starting places on getting systematic and even sacrificial and then beyond that obviously you're gonna want to meet the needs of the family. Both the discretionary and the fixed spending you want to make sure all of that balances in the idea would be to live well within your means, so that you have margin now as to the party use of that margin really the only thing we can do with that margin is to save it or we can give it away after we've dealt with our lifestyle and we paid her debt in her taxes so the question then is the priority use of that.

I would say you'd want to start with an emergency fund of 3 to 6 months expenses.

That's really going to be there as liquid safe money that you can access when the unexpected comes and it will.

Beyond that, I would be looking toward reducing or eliminating consumer debt. If you have it, and then beyond that, start looking to fund longer-term savings.

So starting with the euro any matching portion you have on retirement plans moving to a goal of 10 to 15% going toward retirement. Then we can start looking at things like perhaps medium-term goals seal at some point saving for college if you will decide in the Lord blesses you with children you looking beyond that to a home purchase and saving for a down payment. Things like that but reflect on what I've shared after a lot at you and tell me what additional questions or thought you have, I have a pretty good amount for emergency fund and savings and over that last one yeah well yeah just want to understand kind of specifically what it is now that you got that emergency fund in place are you looking for what is the right retirement savings target or something else we just purchased the home to do and I have paid all well okay you have a good bit of margin over and above the other monthly expenses. So I love the fact that you're quickly moving toward becoming completely debt-free including your home that's phenomenal. Are you funding long-term retirement savings in a tax-deferred environment.

Yeah okay so the goal there would be to get to 10 to 15% of your take-home pay and IRAs get it Out probably before you get that even with a spousal IRA so are you self-employed or do you have a retirement plan at work plan okay great yes he just want to make sure that they you know you're funding enough there. So you take full benefit of the compounding. Over time, and like you say that 10 to 15% goals and get you on the right track there. The nice thing is you know there's only five things you can do with money but we can spend it on our lifestyle we can save it. We can use it to pay down debt. We can give it away or we can pay our taxes and you know once you get to a place where you eliminated that you've capture lifestyle and said we don't need to. We don't need any more lifestyle spending yellow. Ultimately it comes down to you. Once you've paid all the tax you gotta pay. Do we want to give more do we want to save more and you're just going to constantly be striking the balance between the two because we don't want to just mindlessly accumulate more and more we want have a plan and were saving for retirement at a certain level. That's well determined in advance. We want to look at other medium-term goals. You arty have prioritized paying off the house.

That's great. And at some point, you can get to a place where you can just begin to really dial up your getting, and that's to be a really fun experience for you so boy it sounds like you guys are on a great track of. Let's do this you hang on the why don't want to send you a copy of the book money and marriage God's way by our date and I'd love for you and your new bride to sit down perhaps weekly.

Each of you commit to reading a chapter and then just talk about it and let's see where God is taking you guys and we appreciate your call very very much today you folks as we think about marriage and putting the marriage relationship and the money together. Your money can be a real source of conflict. But here's the thing. It doesn't have to be. I believe the budget spending plan can actually be an instrument of peace springing you closer together but it's all about a shared vision for what where God is taking you, and how the money is the tool to accomplish that. Make a priority to sit down and talk to your spouse. They were this morning, but he was listening to an encore presentation of moneywise live. You can find out more information about the topics were talking about when you visit our website moneywise Today's program is prerecorded, so keep that in mind, glad you're with us today for moneywise live on Rob West. This is the program where we run today's financial decisions through biblical lengths and try to apply biblical truths and principles to what's going on in your financial life have you downloaded the moneywise app. It's available and it's a free download in your app store. It has our digital envelope system, or you can download your transactions automatically and apply them to your envelopes you and your spouse can stay on the same page with your budget in your hand vis--vis your smart phone. It also has her moneywise community where you can post questions and get answers. You can also access or discover tab with the best content, podcasts, videos and articles in Christian finance. It's all there in the moneywise app you can download it today. Just search for moneywise biblical finance.

All right, back to the phones taking your calls 800-525-7000 to Charleston, Tennessee Robert, thank you for your patience, or how can I help you out your height for about waiting six. Most are here to say that the building calls will go down probably around $80,000.

Patient and get your thoughts later. Yeah well you is no question Robert. The construction costs are elevated right now lumber in particular is very expensive.

Concrete is up. And then there's just a lot of disposable money running through the system right now, both in the form of stimulus as well as home equity that a lot of folks are tapping into, so contractors are just very very busy and that supply demand dynamic that they taught us in economics is at work here, which is pushing prices higher.

A lot of folks believe that will work.

Some of these supply constraints through the system.

As the economy fully reopens and we should see a cooling off of the some of these prices is that a guarantee does that mean necessarily that year or two from our to see lower prices. Certainly we don't know for sure but I think that would certainly be reasonable so I would consider waiting perhaps you could get with the contractor and you do a bit more of a detailed bid than what you have now just to see what their professional opinion is I think the bigger question Robert is, is this the right time for you all to do it financially. Number one do you plan to stay in the home for a while and if so, that's great. You have the resources to do it and enjoy it. I think that's a great idea. But then, secondly, how are you gonna pay for dessert and required that you get a pull from existing assets. Have you been saving for it. Give me a sense of that side of it will borrow 80 or 90% probably out the money we have already course that would house just to get that otherwise we would not got mail pretty okay yeah that's great you know I don't love pulling it from an IRA. Are you over 59 1/2 year 66 okay so you wouldn't have any penalty but obviously anything you pull is going to add to your taxable income. I think the key is if you're just pulling an amount that's modest and not get to make you a big dent in the sense it's good to push that portion up into a higher tax bracket or something and you've got the ability to do it. Meaning it's not going to hamper long-term your ability to supplement your Social Security and it just the fact that you've got.

And obviously this debt service to your budget. But if you've worked all that through the system. I think that's a good thing. So then it's just a matter of timing and I would say that a year or two from now. I would expect that you could do it a bit less, but I probably get a couple of opinions on that. And like you say sit down with the contractor to think it through. If you've got the money available or you got the ability to pay for it and you will want to enjoy it. Now I think there's no reason that you would want to proceed. But the idea that you could save your 10 or 15%, perhaps a year or two from now is real and if that made a big difference in you and your wife deciding to proceed or not. You may want to wait so I would make it a matter of prayer, but I think it sounds like a good plan as long as you work to to the budget.

Looks like everything will work out. We appreciate your call today to South Florida. Erica thank you for your patience. Can we help you.

Great. Very good shout Your Honor nitrite and appreciate how you are here on. I really appreciate that shout well that's very kind of you Erica.

Thanks for saying that. It means a lot. Thank you. Question to question 45. I have an IRA. That okay but the hundred and 25,000, and 12% of my income might fire and not clear about $600 a month and a variable annuity that picked out so I'm sure 20 years in the parking lot and how it at that income chocolate peanut years and in January. Make extra money toward my home felt pain down my dad. My need for retirement on projected you have money, yeah. It's a great questionnaire that so many people are thinking about and there's rules of the benchmarks that we can use in some respects are little scary because they tend to be a lot more than we think we might need, but it really comes down to what is it actually can it take to find your lifestyle and I love the fact that you're on the path to be debt free. Because that's going to keep that as low as possible. So let's do this work in a pause for a quick break and ask you to hold and we come back all way and specifically in your situation stay with us. More to come. Just after this talk about the moneywise live on Rob West.

This is where God's word intersects with your financial life along with us today for our team is taking some time off today is program is pre-recorded so don't: today we too were 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 with us now is Erica in South Florida. Erica is a single parent she has about 125,000 saved up in a 401(k), plus an annuity that has about 55 to 56,000 in cash value and she's wondering, is she on track for her long-term savings for retirement at age 45 and let you know as I said to Erica, there are some savings benchmarks that you can find them in what you will see typically out there is that you know it that 45 you should have somewhere between 2 1/2 and four times your salary saved to as kind of a barometer as to whether you're on track or not. So you you may be in that meal area, you may not be the key though is to allow the compounding to work for you to keep your lifestyle at a minimum to save consistently over time so that you can build up assets to be able to fund your lifestyle when you get to that season where you can no longer work for God redirects you the good news is, as you said, you're on track to pay off your home in a reasonable amount of time probably well before you reach retirement to you're on track to pay off your car and I'd love for you to continue to say that payment so you can buy the next one with cash or close to it, but I think because you've limited your lifestyle you purposed yourself to be debt free, as best you can and as quickly as you can when you get to that season it's gonna mean that you don't require perhaps quite as much as even you do right now.

Perhaps you could live on it of 70 certainly less than 80% of what you are living on today. The good news is, you know, if you take 125,000 and you grow that it 8% over the next 20 years, and by the way the S&P 500 is done more than that. Over the last you know number of decades probably to go back 5200 years.

It's it's done quite a bit more than that, but let's just say grows at 8% in the next 20 years, and you continue putting in that 600 a month. You have nearly $1 million. Now, obviously, inflation is gonna road. Some of that purchasing power, but you should be able to convert that you let's say it's 950,000 to about 40,000 a year in income that you could use to supplement your Social Security if it grew it 7% it be you know about a 800,000 which you could convert to easily to a $32,000 income. So I think the key is because you're limiting your lifestyle you purposed yourself to be a saver and you have time on your side you can have plenty of resources and I think the key is just a gonna run that through your budget. Over time, maybe look at that each year just to say what I expect my retirement budget to look like and how much income what I need at some point you get to know an idea of what Social Security is going to pay you and obviously would could see some changes and even some reductions between now and then because we got some challenges with that system that I believe will fix, but I think the key is you've saved up a good bit of money and you're on a good trajectory.

I would stay on that and then perhaps if you can bump that up a bit over time as you have the kids come off the payroll and you have a bit more discretionary income that would always be a good thing as well.

The set help though okay will hey I appreciate you calling and I think at some point along the way he would probably do you some good to sit down with a financial planner just to do a bit more of a deeper dive into this so you have a appreciation of gonna what your current trajectory is because keep in mind, I didn't even factor in that annuity and obviously that's gonna continue to grow and you could convert that into an income stream as well so I appreciate your call today. Lord bless you and will hope to talk to you again real soon. Let's head to Minnesota. Gordon spent holding and a Gordon how can help you today. I'm trying to figure out my finances after being married for 27 years I've all of a sudden going to be single and I'm just trying to figure out finances assets and try to figure out how I can stay in my home.

Gordon first of August. I'm sorry to hear that about what's going on in your life and will ask of the Lord to just really give you a vision about what the future will look like and clearly the finances are part of that. Do you have an understanding of what that will look like in terms of the assets that will be yours and the income that you have moving forward. Well, it's a bit confusing for me right now. Okay alright well I think that's obviously gonna be a big piece of this because as you get a bit more clarity Gordon about what two decisions are made on the part of the court that tells you which assets are to remain with you and what can happen with the home in which your income looks like. Moving forward I think the key is really just to get everything in order so that you have a real appreciation of what you have in terms of assets and what income you have, so that you can build your spending plan around that and and perhaps getting some objective for the Council to walk with you in that process would be good.

I'd recommend you connect with one of our money wise coaches when you're going through a major transition and obviously just a difficult season like you are right now, given what's happening here with the divorce. I think having somebody who can only pray with you and encourage you spiritually, but also just bring an objective fresh viewpoint to the table to help you get things in order. Both your assets as well as developing a new spending plan that balances that to prioritizes it. What's most important to you would be really key so we encourage you to head over to our website moneywise click connect with the coach of these are wonderful men and women that are trained to walk alongside God's people to help them in this area of finance and I know they be delighted to do that solicit work and asked the moneywise live community to be praying for you right now and check back in with us along the way. Let us know how it's going. Especially if you have questions as you get a bit more clarity. We appreciate your call today to Florida. Cecilia Harris gives me Celia how can I help here where I have a mortgage and in $1000 and one on that 5% for 14 years and it financial company put aside 8000 that after the I would start paying that this now, I haven't.

Like the same type of monument and audit loan company calling that money they put aside immediately and they wanted to roll into their payment by bending their payment went sky wondering should I do combine amount time call it 101,000. I have a company would reach for me, I might talk to out it would be told, so the hundred and six Fifth Avenue putting the cost 3.375 per interest. My payments would be $910 okay no I like the idea with this modification.

They put a balloon on the end you have to look at the terms as to whether or not that is callable, but in either case, if you plan to stay in the home don't lengthen the term getting that interest rate down is key in making sure that the new payment fits well within the budget I think would be a great thing. So I'm in favor of the direction you're headed. Stay on the line will talk a bit more of fear and will be back with more moneywise live after this is our final segment of the broadcast. We previously recorded.

Thanks so much for being with us today and we hope you'll stick around and enjoy the rest of today's program and are grateful you decided to tune in the moneywise live today were God's or sex with your financial life back to the phones in Ohio.

Debbie has been waiting patiently. I can help you. Debbie good afternoon.

I'm calling because I have some money set aside in a retirement account but I'm not. I'm under the age of 9 1/2 and I have some money set aside and on and just a regular emergency fund, but a friend is recommending that I apply for a HELOC in case an emergency comes and that way I won't have to touch my emergency fund or my retirement money and I'm wanting to get your thoughts on that yet. Not a big fan of that especially there's a cost to even opening the HELOC whether or not you draw from it. Just because that's money that your spending, perhaps unnecessarily, you know, one of the downsides of the HELOC is you got a variable rate and rates are heading higher so that's gonna be money that's expensive to access and you know if it's just for emergencies. I'd rather you have that in a liquid savings account as opposed to funding that with debt so you have 20,000 I think the goal is there should be 3 to 6 months expenses you probably already in that range. So that's a good thing and if you needed to tap your home equity down the road for some reason I'd rather you do that with a home equity loan where you can get a fixed rate.

So paying to have that line open for some purpose. The is unknown at this point I think is unnecessary. I'd rather you just keep that savings account there liquid safe, secure and available if you need it and then you know once it's established, which it sounds like it already is. Just focus on you know continuing to save for the longer term, or if you have no other medium term savings goals you can prioritize those as well. Does that make sense though yes, absolutely. Thank you so much I appreciate your insight. Absolutely Debbie, thank you for your call today to Orland Park, Illinois Roger, how are you today I am doing well thank you, great.

How can I help you well. Generally speaking, my wife and I are doing okay with finances. We just creditor her mortgage paid off 30 years, we have an we have investments going with an advisor.

I keep asking my advisor to hear so much about Roth IRAs and I don't have one. And I've asked him about it and he is responses.

Generally you're too old not benefit you that much and kinda kindly shrugs it off with me but I keep hearing about it is 100 your thoughts on 57 years old. Yeah. What are your thoughts on starting a Roth IRA sure why think the first question Roger is always what is your savings goal. So if were talking specifically about retirement savings have you done some planning to determine what you'd like to have available when you reach that time were perhaps either you can't work anymore, Lord redirect you to some something else. Let's say that's somewhere between 65 and 70. Have you determined what you're ultimately trying to have saved up by that point. No, not at that point were on the program kind of okay yeah I think that's key because, you know. So often we think what we just need to save as much as we can and if we got a late starter.

We haven't been putting enough aside that may be true, but it's not true for everyone. We don't want to just save for saving sake.

So I think we really need to define what is our finish line and you perhaps doing some retirement planning with the advisor that you already have doesn't have to be elaborate or expensive but just to look at what we project our expenses are to be in retirement once were no longer saving for retirement and perhaps if were debt-free and maybe the kids are off the payroll. But with inflation factored in your what we can and need to have and then what might we expect based on our current understanding of Social Security and then what gap are we trying to solve for that were trying to build up assets to go turn into income and then with your current trajectory. Where will you be and do you need additional retirement savings going again.

And if you do, what type of account is the best one to do that in did you say your currently saving in a 401(k) at work in this raw figure considering would be in addition to that, yes. Okay. And so I think the first question would be, would you benefit by just increasing your 401(k) contributions. There is something to be said Roger about the Roth IRA losing a benefits benefit as you get closer to retirement because it's going in on a tax bill after tax basis.

So you're not enjoying that deduction today, but you're getting the tax-free growth but arguably you as you start to get closer and closer to retirement age.

Getting more conservative. You're losing a bit of the benefit of that because you're not going to get as much in the way of tax-free growth through the compounding.

If you as you would have if you would've started that in a Roth IRA. 20 years ago, so I think that's perhaps what your your financial advisor is getting at, and I think the key there is you know should you just increase your 401(k) contributions.

The only thing I would say about having that Roth is. I kinda like the idea of you having both the tax-free and the tax-deferred buckets so you can determine which is the best of pull from. When you get to that season because you know we may be in a very high tax bracket.

Yet we may see increases in in tax rates between now and then. Certainly, the Biden administration is proposing that whether or not there successful. It remains to be seen.

And you know which segments of the income murders that applies to is unknown as well. But yeah, let's say 10 years from now. Tax rates are significantly higher than they are today. Then you would want to have some money in a Roth that you could pull from tax-free before you pull from the IRA because all of that would be taxable income as it comes out so I think that's one of the benefits that might no argue in favor of well even though were saving in the 401(k) assuming were not quite on pace with where we want to be and we want to put more away. Let's start the second bucket, the working to contribute to in the form of a Roth IRA and then will have both options available in that season based on tax code and other situations going on around us. Does that make sense. Absolutely.

You sound do I have to open a Roth through him that something I can do on my own. Oh no, you can absolutely do that on your own. I think especially if you're just getting started.

Let's say you're gonna put in 500 a month or you know which would get you to the 6000 a year limit. Although you're over 50 years old so you can add another thousand to it but yet you can open that anywhere you can open that with fidelity and an O or Schwab and use their intelligent portfolios you could use better mentor.

The Vanguard Robo advisor. Any of those would be great. Their low cost, you'd get the ETF's that are indexes they be broadly diversified and you could just set up an automatic contribution directly into that account every month or you could make a one-time contribution before you file your taxes however you wanted to do it. Okay.

All right.

Well thank you very much well you're welcome Roger would appreciate you listening and thanks for calling today.

May the Lord bless you working ahead for final call today to Union Grove Wisconsin Matthew, I thank you for holding. How can I help you I question regarding making a contribution for my corporation to my cell. In terms of some sort of a retirement or what they are Roth IRA and tell you right now that I literate when it comes to the I don't have 49 hectic but white all we've invested in land and mostly out country the company very well diversify a little bit night know that I can take money in the thumb started oil from my corporation, but I'm not sure how much I could put it in know what might limit darling that yeah so you don't have a retirement account set up currently is the right yeah great well there's some real simple ways to do it as a self-employed individual Matthew, one of the simplest is called ASAP IRA which stands for simplified employee pension, IRA, and the benefit of that is you know, unlike a 401(k) is not a lot of administration or fees to manage that on an annual basis in terms of filing fees and you can contribute up to 25% of your compensation or a max this year about believe $58,000, whichever is less. And you know if you're self-employed. Your contributions are generally limited to 20% of your net income so that would be probably a great starting point you another option is what's called a solo or a solo 401(k) or an individual 401(k) which would be another great option to look into, but I think either of those. The setup or the individual KI think would get you started and allow you to set up systematic contributions into that account, so you got something that you're saving. In addition to your real estate that you could grow over time, especially now that you got some good revenue coming in and perhaps the money that you could direct into these accounts on a tax-deferred basis which will really help so I would look into both of those, perhaps, check with your tax preparer or you can even set them up yourself you can you Schwab or Fidelity or Vanguard.

One of the discount brokers that would let you set that up with very little cost and then you could go and start making some systematic contributions. I probably start with index ETF's are mutual funds just to get a broad diversification into the account and just make sure you put as much as you can in an 20 years from now. If the heart down the road when you register for the value you and those six kids.

Congratulations. Well, that's going to do it for us today. So glad you've been along with us today as we tackle your questions.

We covered the gamut talk to get that out with Hiram and credit scores. We talked about giving even marriage. How you handle finances as a married couple looking all added to biblical perspective is not as a partnership between Moody radio moneywise immediately say thank you to my amazing team today Emilio step Solomon T, Jim Henry sitting in with us today is Samuel Bowen. Thank you for being here will look for you tomorrow will do it all over again. Come back

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