Future Job Insecurity

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Particularly when he's your grandfather? My name is Brian Dolan, host of a brand new podcast called The Grandfather Effect. This podcast is five years in the making. It contains interviews, ponderings, and wrestlings with my family, my faith, and what forgiveness really looks like in the face of generational sin. If you listen carefully, you'll hear more than a story about my family. You'll hear a story about yours.

Streaming now on the Moody Radio app and anywhere you listen to podcasts. Today's version of MoneyWise Live is prerecorded, so our phone lines are not open. Bill Gates once said, the advance of technology is based on making it fit in so that you don't even really notice it. So it's a part of everyday life.

Hi, I'm Rob West. Well, that may be true for things like computer operating systems and smartphones, where we often don't even notice technological advances. But if technology eliminates technology, it's a part of everyday life. If you eliminate your job, you'll notice it plenty. I'll talk about that first today. Then we have some great questions lined up for you.

But don't call in today because we're prerecorded. This is MoneyWise Live, biblical wisdom for your financial journey. If you Google future, jobs, and eliminate, you'll get scads of lists about jobs that technology might do away with in the years ahead. Some could be expected like mail sorters and meter readers, but others are surprising and include air traffic controllers and even pilots. It's been said there's no such thing as job security, but there is employment security. That means there will always be work.

The trick is to make yourself ready for it. It could also mean choosing a career that's less likely to be eliminated by technology. These would include things like healthcare workers, software developers, specialized repair technicians, and teachers. And with today's employers desperate to find new workers, it's a great time to consider a career change.

Employers are easing prerequisites and more willing to provide on-the-job training. They're far more likely now to consider hiring someone who's trying to switch over from another field. Making a career change is much more difficult when unemployment is high.

So if you're thinking about a career change, what's your first step? Well, it's making sure you actually need or want to switch careers. Your current job might not be in danger of being automated.

And you might enjoy what you're doing, just not where you're doing it. So companies, not careers, might be a better move. But if you really don't like what you're doing, start by making a detailed assessment of your skills and interests. Take a career assessment.

Many of them are offered online. Your answers will generate a list of occupations where you're more likely to achieve success and satisfaction. Job satisfaction is important. But through this entire process, you also have to keep earning potential in mind. If going into a new career at entry level means temporarily less pay, well, you'll have to adjust your budget accordingly.

And again, you want to choose something that's automation resistant. Now that you have a list of new career possibilities, the next step is whittling them down. It could be a long list, but consider each possibility carefully and cross off those that aren't appealing to you.

With that complete, you now have a much shorter list with maybe five possibilities or so. These are the occupations you want to start researching and try to keep an open mind. Start rounding up job descriptions for each of your remaining career possibilities. You also want to look at education requirements. Will you have to go back to school?

If so, for how long? And how much will that cost? What are the advancement opportunities and earning potential? And again, pay attention to job outlook. Will there be fewer or more of those jobs in the future? One of the best examples I could give you of why that's important is the job of pacemaker technician.

They travel around to clinics and doctors offices and adjust pacemakers when patients are having a problem. With an aging population, you'd think there's real job security in that profession. But the technology is advancing so rapidly that the industry will likely be doing most of that work remotely in the future, eliminating many of those positions. So you don't want to switch to a new career that won't be around long. After gathering all of that information, you'll probably eliminate a few more occupations.

Maybe you only have a few left. Well, prioritize them, then take the one that best meets your needs and put an action plan in place to prepare for it. Talk to employers and workers in that field to find out what's needed. It could involve going back to school or getting the necessary training some other way, maybe an internship. Some of the skills you've picked up from previous jobs may also apply to the new career, so you may not have to start from scratch. This leads us to the most difficult part of changing careers, making a commitment to landing a job there. If you have to start at a lower level, be willing to do it if you can earn enough to still meet your monthly obligations. If it requires formal training, well, you must have the discipline to pursue and obtain that training. But once you have it, you're ready for your career change and you can start applying for jobs in your new field. A good verse to meditate on during this process is Proverbs 16 three, commit your work to the Lord and your plans will be established. Be sure to talk to trusted friends and wise counselors along the way. I'm sure they'll give you some great tips and advice as you pursue your new career. 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. Hey, thanks for joining us today on Money Wise Live where we apply God's wisdom to your financial decisions. Let me remind you, Money Wise and Money Wise Media is listener supported. That means we rely on your generous support to do what we do on the air each day. And if you consider a gift, we'd certainly be grateful. You can do so one time or become a Money Wise patron that is a monthly supporter of the ministry. If you just head to Money Wise dot org and click the donate button, you can give online over the phone or find our mailing address to send a gift in.

Again, Money Wise dot org and click donate. We're going to head back to the phones. By the way, our team is away from the studio today, so don't call in.

But we lined up some great questions in advance. We'll head to St. Louis, Missouri next. Stanley, thank you for your patience. Go right ahead, sir.

Hello. I'm some 22 years old. I'm getting married soon. And I was thinking about getting a house because I don't want to pay rent. But the economy is kind of doing bad and all the house prices are kind of going crazy right now. So I was wondering if it's a good idea to wait and like, I don't know, rent or something or just like rent an apartment.

Or like what's the best option to do? Yeah, Stanley, I appreciate that question because we certainly want you and your fiancé to get started off right financially when you all get married. And I'm delighted that you're thinking about this now. I can also appreciate your desire to own a home as opposed to renting. So you're sending money and making that payment and building some equity and something that you own and can ultimately own, you know, Lord willing, free and clear. And I realize this will be a starter home and probably one of many that you'll own.

But the timing is really key. And yes, it's a challenging market right now. And yes, mortgage rates are headed higher. But the last thing I'd want you to do, Stanley, especially as a brand new married couple would be to get overextended and try to get into the housing market before you're ready and find yourselves really squeezed financially. So because of that, I would really rent and delay this purchase until you can put at least 20 percent down. So if you're going to buy a $100,000 home, you'd have $20,000 ready to put down over and above your emergency fund of hopefully three to six months expenses. Or if you're buying a $200,000 home, you'd have, you know, you'd have $40,000 to put down.

And that's really going to ensure that even if the price of the home were to dip a little bit, that you're never upside down. I'd also want to make sure that that mortgage payment is not more than 25 percent of your take-home pay. So you've got plenty left to deal with all your other expenses. So you all can, you know, obviously cover your bills, but also handle the discretionary expenses and, you know, fund things like putting something away and starting a retirement account or paying off your student loans if you've got them, those types of things. So give me a sense of where you're at just in terms of any savings that you've put aside at this point.

So I have like a couple of different things. So in my investing account, well, right now it's really low. It's around eight grand. But if it was like the break even point, then it would be 18 grand.

But I'd have to wait for the economy to like come back up because it's heavily, you know, the market kind of just terrible right now. And then in savings I have between because of like help from my family and stuff, I have around like $36,000. Okay.

All right. And what would your budget be, do you think, when you all are married per month? How much would you be spending in expenses? I don't know.

Like probably like $1,500 to like $2,000. All right. And does that include your rent or mortgage payment? Yeah.

Okay. I think that's going to be challenging just to make sure that you're putting food on the table and putting gas in the car and, you know, covering that rent or mortgage payment. And if it's a mortgage payment, then the utilities on top of that.

So I think the key for you is really to, you know, go back to that spending plan and just look at what is it going to take for us to pay all of our bills and live within the income that you've got. Do I see her in the notes that you make about $40,000? Is that right? Yeah, around there. Okay. Will she be working? Yeah.

Okay. So you're going to want to look at what your combined income will be and then after taxes and any other deductions that are coming out of that, like health insurance, that type of thing, any debt payments. Hopefully you don't have any debt, but you got to include that in. And after any giving, what do you have left? And then, you know, out of that, you've got to work on a budget that covers the rent or the mortgage plus, you know, all the other expenses.

And that's really critical. And so if you're spending, let's say, $2,000 a month, I'd love for you to have, you know, at least $6,000 between $6,000 and $12,000 in emergency savings. Let's say it's $12,000. That would mean that you'd have about $24,000 left for the down payment on the house. And, you know, that would be a home of about $100,000. So I think, you know, you could begin looking for a home, but based on where you all want to live and what you need for your starter home, that may or may not be possible, you know, there in Missouri. But at least that gives you a starting point to say, okay, if we want to spend $100,000, we need $20,000. If we want to spend $200,000, we need $40,000.

And if you're not quite there yet, I'd probably delay that purchase until you're ready to make that down payment of 20%. Does that make sense? Yeah. And we can delay it just because, like, and just like getting an apartment or something like that. Yeah.

Because apparently it would help with like rent. Okay. There you go.

Yeah. And I think the key would be for you all to really develop a plan that says, okay, here's what our budget looks like. Here's what we're saving for. Here's our goal for not only our emergency savings, which you've got a great start with this $36,000, but here's our goal for the down payment on the house. And then begin praying that as you get that put away, that God will provide just the right house for you guys.

But there's something to be said about waiting and working hard. And then ultimately, you know, God providing and you all knowing that we didn't get overextended. And, you know, we waited until we were ready to buy this house so we don't put ourselves in really a financial strain. And also just really encourage you as a part of your marital premarital counseling to really talk about finances.

What are you all thinking about lifestyle and how much you want to be giving and, you know, who's going to be the bookkeeper and just all of those things so you guys get ready for that. Lastly, you stay on the line because I want to send you a book called Money and Marriage God's Way that I want you guys to read together. And Stanley, I appreciate your call today, sir. God bless you. To Ohio, Mary, thank you for calling.

How can I help? Hi, Rob. Thank you so much for taking my call. Sure. I opened a high yield savings account last year with my late husband's life insurance money who died last April. Last November, that same year, I prayerfully moved all but my emergency fund to an investment account and a Roth IRA. OK.

I'm now questioning that I did the right thing with how much, you know, I've lost with the current market and stuff, and I'm just wondering if I did the right thing and shouldn't have left it in the high yield savings. Yeah. Well, I can understand.

I mean, hindsight's 20-20, Mary, and I know that that can be frustrating. How much did you get from the life insurance that you put to work? Yeah. So I put $423,000 into an investment, $423,000, and then started, you know, a 401K Roth IRA for $7,000.

Gotcha. And then I added $7,000 to it this year. OK. And is this money you need to live off of, or is this money that can just stay invested for a long time? That's a good question. I think it can stay invested.

I'm also having half of my pay go to my work 401K because I've never contributed to it all these years. OK. So I'm trying to make up for lost time. Yeah, I get it. Well, here, let me give you a quick answer, and then we'll talk a bit more off the air.

I'd leave it invested, but I'd make sure it's properly diversified and it's invested according to your age and risk tolerance, and you'd want to do that with an advisor. You stay on the line, and we'll be right back on MoneyWise Live. Thanks for joining us today on MoneyWise Live. Hey, our team is away from the studio, so we're not here.

Don't call in. But we've got some great questions we lined up in advance. We'll go there in just a moment. But first, let me remind you, MoneyWise is a partnership between Moody Radio and MoneyWise Media. We rely on your support to do what we do on the airwaves each day and in our app and on the web. So if you'd consider a gift, we'd certainly be grateful. Just head to MoneyWise.org and click Donate. All right. To Evansville, Indiana. Hey, Steve, thanks for your patience, sir.

How can I help you? Thanks for taking my call, Rob. I have a credit card that I would like to cancel. It has been compromised, and we've been through quite a bit with the bank that handles the card, and I would just rather cancel it and be done with it. But I'm concerned about what it would do to my credit score, and there is a way that I can actually find out how to check that. Yeah. Let me ask, and I'll answer your questions, Steve, because you will probably see generally a lower score, but it'll be temporary. But does that matter in the sense that are you going to be out seeking new credit in the near future? No, not really. Okay.

Yeah. So I think from that standpoint, I wouldn't worry about it because your lower score will be temporary. Here's why that happens. It affects three of the five factors that measure your credit worthiness. The first is potentially three of five. The first is credit utilization, which is 30 percent of your score. By closing this card, if you're carrying balances, whether that's a balance you're carrying month after month and just paying down a little bit at a time, or you're charging up a balance that's being reported to the bureau and then paying it off completely, that balance is now a higher percentage of the total available across all your cards because that particular card you closed, the limit of that one is now off the table. So if that had a $10,000 limit, now your total available credit is $10,000 lower. And so any balances you're carrying are a higher percentage. And if they're now 30 percent or more of the total limit, well, that is going to hurt your score. It also affects the average age of your account, because if this was an older account, that perhaps is now out of the equation. And then the third thing is the types of credit you have, the more credit you have that's being handled responsibly shows that you're a lower risk. All of those factors, though, when you close an account, will rebuild themselves over time.

And you're probably looking at somewhere between 30 and 50 points in a reduction. So I wouldn't be terribly concerned about it. I think what's more important is if this is an account that's been compromised, if you're not using it, it could be compromised again.

I'd get it closed if it were me, and it's just one less account you have to think about. Okay, sounds good. I really do appreciate the information, and God bless you for the work you're doing. All right, Steve, thank you for calling, sir, and God bless you as well. To Ohio, Craig, thanks for calling, sir.

How can I help? Yes, I was calling in regards to the I bonds. I was wondering how I would go about investing into that.

Yeah, I like I bonds a lot. I standing for inflation bonds issued by the U.S. government, the U.S. Treasury, in fact, backed by the full freight and credit of the United States government. The interest rate adjusts every six months, and the portion of it that's pegged to CPI, the consumer price index, is what's driving these elevated rates right now.

It's going to be near over 9% projected to be in May, and then it'll adjust again in November. But given the fact that we're counting on elevated inflation for some time, I think these are going to be a great investment. You've got to hold it for a year, and if you take it out less than five years, you'll just give up the last three months' interest when you redeem it. You would buy them, to your question, Craig, at treasurydirect.gov. Treasurydirect.gov. That's the Treasury's website where you can buy these. You can do it all online with an electronic transfer, and it'll be an electronic bond.

And then you hang on to it, collect that great interest rate of nearly 8% right now, soon to be over 9%, and I think it'll be a great thing for you for up to $10,000. Okay. Now, I really haven't gotten in online and all that. Is there another way of doing that?

Yeah, there really isn't. I mean, the only other way to do paper bonds, paper I bonds, would be through your tax refund. Are you expecting a tax refund? I was expecting one from last year, which I still haven't received.

Okay, yeah. It'd be a little late for that one, because you'd have to refile. No, unfortunately, you're going to have to do it through the website, so perhaps there's a family member or friend that could help you with that. It should be fairly simple and a secure process for you to go about, because if you go directly to the website, you don't have to worry about any kind of phishing schemes or anything like that.

You just want to type directly into a modern browser, treasurydirect.gov, and then find the process of getting those funds transferred. But it will need to be done online. Online. Okay. All right. Yeah, my daughter is well with all that computer. There you go. Yeah, your daughter or probably any 10-year-old. Yeah.

These younger kids seem pretty adept at all this stuff. I was joking with that, by the way. But, yeah, I think that could be a great option for you, Craig, and I think you'll be glad you did it. So, listen, thanks for your call and for listening, sir. God bless you.

We appreciate it. Hey, before we take a break, a quick email that came in, Gloria wrote to us and said, I asked all three agencies to freeze my credit. She's talking about the credit bureaus, Experian, Equifax, and TransUnion. Now I don't know, Gloria says, if that was a good idea.

What do you think? Yeah, I like freezing your credit, especially if you've had some accounts compromised. Here's what that's going to do. No one is going to be able to access your credit for the purpose of opening a new credit line or taking out a loan in your name without a PIN number that you've established, Gloria, at these three bureaus, which means if somebody is trying to compromise or assume your identity and open accounts fraudulently in your name, they'll be stopped in their tracks. And so that's a good thing. It's going to create a little more hassle if you try to go get your own loan because you've got to unlock or unfreeze these bureau reports. But apart from that, I think this is a great thing and something that most of us should be thinking about, especially if you've been notified that your information has been compromised.

It's very easy to do and it doesn't cost anything as of new legislation a couple of years ago. So just go to Experian, Equifax, and TransUnion, and they'll all give you very specific instructions on how to freeze your credit. We're going to pause for a break.

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Request your copy of Finding Joy in the Empty Nest with a gift of $25 or more at moneywiselive.org. For SRE News, I'm John Scott. The U.S. has announced a shipment of 100 million in military equipment to Ukraine, separate from what will be coming from the 40 billion approved Thursday by Congress. The latest package includes 18 howitzers as well as anti-artillery radar systems. Vote counting in Pennsylvania's Republican primary for U.S. Senate dragging on down to a third day as Dr. Mehmet Oz and former hedge fund CEO David McCormick remain essentially tied with tens of thousands of ballots left to tally. Oz led McCormick by just over 1,200 votes as of midday today. Stock sending another volatile day lower on Wall Street. The Dow was down 237 points. The NASDAQ lost 29. The S&P dropped 22.

This is SRN News. We're so glad you're with us today on Money Wise Live where we apply God's wisdom to your financial decisions. Hey, our team is away from the studio today, so don't call in, but we lined up some great questions in advance. So let's head right back to the phones.

Streamwood, Illinois. Desiree, thank you for calling. Go right ahead.

Hi, thank you very much for having my call. I am retired and I have a little bit of a bucket of money that is about probably $500,000 that I'm looking at and I won't need it. I've already looked at all the financial planner stuff and my goal is to try to maybe do something with that money so that it winds up being converted over to an IRA that's a Roth. Right now I have no Roth IRAs. It just didn't work out that way with my 401K and things like that. So basically some of it got rolled over out of the 401K into an IRA and now I'm looking at potentially rolling it to an IRA that's a Roth, but I don't know if that really matters. If the tax burden while I'm alive is able to help protect that legacy even more for my son, then that's what I'm going to do. He's 31 years old. I'm 60. Lucky and God blessed me incredibly to be able to be retired at this point with pretty much no need to worry about anything for the rest of my life. So that money, but my thought is while I'm still alive, do I take the tax burden and pay that and then let it roll for that next however many years till I pass as a Roth?

Yeah, yeah. Well, I think that's something certainly to explore with your CPA. Do you use a tax preparer?

I do, but basically it's gotten, I'd probably have to get a different one. And right now the big question is when and how, if I even do it, if it's even, I mean, you know, ultimately somebody is going to take a tax burden on it, but that would be growing. It would be growing tax free at that point. And I'm not sure that's not smart for everybody, you know?

Yeah, no, I hear you in that, especially since you don't need it. And, you know, if the Lord tarries and you live a long time, then you wouldn't be subject to required minimum distributions either. You know, typically the time to convert to a Roth is when you're, you believe you're in a lower tax bracket. And, you know, in terms of from a legislative standpoint, I would say that, you know, taxes are about as low as we're going to see right now.

I think if anything, they're going up. So could you make a case while you're no longer working and, you know, that then you have some disposable income that it would make sense for you to go ahead and pay the tax now? You certainly could. I mean, I think the real benefit to a Roth is when you have a lot of time and you can get those compounded tax, you know, free growth going on, depending on your investment strategy right now, given that you're not working. Although you don't need the money, so you may still be pretty much fully invested. But depending on how you've structured that, if you're not going to get a whole lot of growth in the years ahead, you know, you're obviously blessing your heirs by paying this tax now because they don't have to pay that when they inherit the Roth. Whereas they do, even though they wouldn't have a penalty, they'd pay the tax at their ordinary income rates as they take out of an inherited traditional IRA. So I think it's really just a matter of, do you want to kind of bite the bullet now, so to speak, and pay that tax for them and then get that tax-free growth and not have to pull it out, you know, when you reach the age where you normally would with an RMD at 72? Or, you know, do you want to just let this continue to grow in a tax-deferred environment, pass it on, which would be a great blessing to them, and then they can just pay the tax as it comes out? I think that's really just a planning conversation for you to look at with a CPA. You certainly wouldn't want to do all of it because you'd bump a significant portion of that up into some really high tax brackets.

So if you did anything, you'd want to stagger it over a number of years. But I think working with your CPA on that strategy would probably be the best option. That's awesome.

Thank you very much. I appreciate you taking my call because that was the big thing is, do I take it because I'm an extra person that could take that hit right now because, you know, and then whatever is growing, if I live another 20 years, but it's in a fund targeted as if it was him being retired, because that's basically kind of, he's a teacher and he does not make a lot of money and they change the pension laws and stuff. So he is doing what he loves to do, but he's not going to have a big resource when he retires. And so looking at kind of paying that retirement forward to him because I'm doing well. So, and almost doing it as a 2050 fund or 2055 fund. So it's kind of targeted to him and take it little by little. Right now, I'm lucky I'm in a 12% tax bracket.

Yeah, yeah. Well, so I think there's something to be considered here because as you said, you can invest it as though it's his money, which that's the way you're categorizing this. If you've got the margin to go and pay the tax, what a blessing for him to be able to not only get this tax free, but allow it to continue to grow tax free down the road. So I think it's a good strategy. I'm on board with the Desiree.

Just work with your tax preparer as to the mechanics of how and when you go about it. We appreciate your call today. Mary's in Ohio, WCRF. Mary, go right ahead.

Hello. I go to garage sales options for thrift stores. Yesterday on the show, you said to avoid impulse spending. Yes. Well, those kind of places don't have a routine inventory.

You never know what to get. That's right. How do you avoid impulse spending there? Yeah.

Well, it's a question I can't say I've gotten before, but it's a really good one, Mary. And obviously, shopping at garage sales and thrift stores are a great way to spend less for the things that you need. There's no question about that, but you can absolutely do impulse buying at a garage sale. In fact, if you don't know what you're going for, which is typically the way it is with garage sales, they lend themselves to impulse buying because you see something and the fact that it's at a discount makes you believe, well, this is a great deal.

I ought to go ahead with it. But the problem is, even though you're getting a good deal on it, you end up buying things you don't really need. And so I think the option for you would be, number one, make sure you're using an all-cash system because you're going to spend less with cash. That's typically the way people pay for things, though, at garage sales.

So that's nothing new. But number two, I would really have a list of the things that you need and not just go browsing because browsing, whether you're in a retail store or a garage sale, is what gets you in trouble because, again, we spend money on things we don't need. Thirty days later, we're like, why did I buy that?

I don't really need that. And we end up buying a lot of things in the name of saving money that we really don't need at the end of the day. I think the third thing is just make sure there's a line item in your budget for your garage selling and thrifting because, again, if we're buying things we don't need or we're buying things with money we don't have, that's problematic.

So if you use all cash, you make a list of what you're going for in advance, you make sure there's money in the budget and you don't go over that, I think those would be the three keys. Does that make sense? Okay, sure. All right. God bless you, Mary. We appreciate your call. Quickly to Portage, Michigan.

Janine, how can I help you? Yes, I have a question concerning an IRA. I have lost about $5,000 or $6,000 in that. The last six months I went from about $81,000 down to $75,000.

I was talking to my financial man who handles this IRA and he suggested that I could put that money into three CDs that would probably go from about 2.5% to 3.5% and you could buy one at around 30 months and another one from anywhere from 18 to 24 months and then another one at about the same. And he said that and I told him, I said, I still want to get about $400 per month, which is what I'm getting now. Yeah. Yeah, very good. Let's do this, Mary. I don't want to cut you off and I want to be sure to give you plenty of time to answer your question. So I've got to take a quick break.

I heard the first part. I'm going to let you finish that on the other side of this break, which will be really quick and then I'll give you my thoughts because I want to make sure we cover this fully and give you the time you need. You stay on the line. We're going to pause and we'll be right back with Janine in Michigan.

This is MoneyWise Live biblical wisdom for your financial decisions. Stay with us. We'll be right back. Thanks for joining us today on MoneyWise Live. I'm Rob West. Our team is away from the studio today, so don't call in, but we lined up some great questions.

We're going to head right back to the phones. Janine, before our break, you were sharing that you've got $75,000 or thereabouts in an IRA. You've seen some volatility with the market. You've lost about $5,000 or $6,000 since January. You're in your 80s and you've been talking to your advisor about whether you should cash out of your current investments and move this money into a laddered, and that just simply means a set of CDs that are staggered based on their maturity date.

So you could do a one-year, a two-year, and a three-year, something like that. Let me ask you, did you say you're currently drawing some money each month out of this account? Yes, I'm drawing around $430 to add to my Social Security, and I would like to keep doing that if I can get that much out of the CDs.

Yeah. OK, so $430. So you're taking about $5,000 a year out of this, and at $75,000, I realize it was higher, but at 4% a year, which would be what we'd be targeting typically with an investment strategy, I'd say we'd be looking at about $3,000 a year. So I'd love for you to get that down to about $250 a month or just recognize you're going to be eating into some of the principal.

I'm not surprised that you've lost this since January. Do you know what portion of your portfolio is in stocks versus bonds or other assets? He's got it 80% fixed and 20% that he works with. I see.

It's 80-20. I think that's about right. Now, obviously, in a market like we have going on right now, I mean down another $600 today, down $1,000 on Friday, we are in a situation where we're going to continue to see challenges in the market, and we could hit a recession a year or two from now. I think the key would be to recognize, listen, when we get into a period like this, we're going to have these kinds of declines, but they're paper losses until we sell. So that's why with the 20% or in some cases 30% with an income portfolio that's in stocks, we realize that's going to be down, but we count on those decades of upward trends to make up for the year or two. In some cases, usually it's not more than that, that we might have a down leg of the market. So I think from that standpoint, as long as you're prepared for it, you've got the right investment mix that's consistent with your age and your goals. In this case, trying to generate income, we just recognize that's a part of the equation.

We ride it out knowing that if the Lord tarries and you're in good health, you need this to last potentially a couple of decades. So having a growth component to it, especially in light of what we're experiencing right now with inflation, is a good thing. But if at the end of the day, Janine, you'd say, you know what, I just really can't sleep at night unless I protect what I have and I don't want to take this risk. Even though I've made money in the last few years, I just don't want to see those statements where that money is down. And if that's the case, then you probably need to move to something that is along the lines of what he's talking about. The challenge is, let's say that average return is only 2%. Well, if you cash out right now at $75,000, we're only talking about $1,500 a year. And so that's $125 a month, and that extra $300 that you're pulling is going to come right out of principle. And so that account is going to be declining over time.

So I think that's the question you need to answer is, can I take the long view and recognize that the volatility is going to cause me to, on paper, lose value, and I'm okay with that because I've got the long term in mind, or is it just robbing me of my peace of mind and I'd really rather shore up what I have, but I'm also willing to accept the fact that it's not going to generate enough each year to cover what I'm pulling out. And so over time, that balance is going to be declining. Does that make sense? Well, before I say whether I think it makes sense, he did say he would put the three CDs in $20,000 apiece, so that's $60,000, and then take out $15,000 in cash. And I think he was referring to me taking out the extra money to make up the $400 a month out of this cash, but I'm not sure that that's what he meant.

Yeah, that doesn't make sense to me. I mean, I don't know why you wouldn't keep it all working for you as long as you can. You know, putting it in cash, number one, you're going to pay the tax on it when you pull it out, then you're going to stick it in a bank account. You know, obviously you need to be able to draw on it, but there shouldn't be any reason why you can't just take a scheduled distribution every month.

I'm not sure what you solve for by pulling the $15,000 out and putting it in your checking account or something like that. So I think that's where you just need to look at what is the right long-term investment strategy for you to try to get this money to last as long as you possibly can, and do you feel comfortable with that at the end of the day? Well, if I could see maybe some market go up a couple times, that would be encouraging. Well, you just have to look over the last 10 years and see what the market has done to be encouraged, because this is a pretty new anomaly. Now, it happens, so that's why even when the market was going straight up, we say, when's the next recession?

Because there always is one. The question is, is it six months away or is it six years away? And we're probably closer than we are farther because of how far this market has come, how high the valuations are, and how well it's done over the last 12 years or so, or 14 years since the 2008-2009 collapse. So I think that's, at the end of the day, what you need to decide, and this is your money that God has given you to stewards, so you need to have peace of mind about it. And I think you've got wise counsel there, so you need to hear the advisor out, talk through it, and come to a conclusion that makes sense, but you need to understand the implications of that plan in terms of how long this money is going to last.

Yeah. I realize there's not a perfect solution here, and so I'm sorry about that, and I'm just going to pray the Lord will give you some wisdom. You go back and talk it through with him, try to understand why he was recommending you pull the 15 out, and perhaps consider whether you should stay with the current strategy, which has the prospects for longer-term growth that's going to meet your withdrawal rate.

But recognize with that comes increased risk and volatility, and you'd need to be able to weather that without getting anxious. So ask the Lord to give you some wisdom, and check back in with us and let us know what you decide. We appreciate your call today. To Cleveland, Ohio, Carolyn, thank you for your patience. Go right ahead.

All right, thank you so much. I am unfortunately getting a divorce, and I'm wondering what to do with a joint credit card that we've had in excess of 30 years, and how it's going to affect my credit score. Yes. Well, so you generally can't remove a name from a joint credit card. It has to be cancelled. So in most states in a divorce, both parties would be responsible for the credit card debt on a card held jointly, and this applies even if one spouse was the one who used it the most or made the payments. A judge, however, could decide that one spouse is able to pay more than the other, and that would be spelled out in the settlement agreement. But in terms of the creditor, you're jointly and equally responsible for that debt.

I have to tell you, there's no debt on it. Okay. All right. So the question is just how is it going to affect you when it's closed? Correct.

Okay. Yeah, I wouldn't worry about that. When you close an account, you'll see probably a temporary drop. One card's going to be pretty negligible, number one. The reason that it happens is it removes that in many cases from your history, so that's just one less account, especially if it's one that's been open for a long time that's factoring into your credit score. Number two, if there's balances on any other cards, it reduces your overall limit, which makes the balance you're carrying a higher utilization ratio. If that tips over 30%, that'll hurt you, but if you're not carrying any balances, that's probably not an issue. So I wouldn't worry about it. The other thing is if you're not looking to go out and borrow money, buy a house, take out a new loan, buy a car, with debt, it doesn't really matter because a temporary drop in your score because you closed a card is not really of much concern.

And the bottom line is if you're divorcing, this needs to be closed, so you really don't have another option, but a minor drop in the score, Carolyn, is not something to be concerned about in my view. Okay. I appreciate your advice on that. Thank you. You're welcome. God bless you. We appreciate your call today.

Let's finish up in Illinois today. Joe, you go right ahead, sir. How are you today, Rob? I'm doing great, thanks.

Thank you for everything you've been doing. My wife was listening to your show one day last week and she was telling me that you were saying that you need 10 to 12 times as much as your annual income to retire on. Yeah.

These are rules of thumb, Joe, and that's all they are. So you may listen to that and say, well, that's crazy. I can't do that.

Who can do that? And you're right. I mean, that's a lot of money. It's going to take a long time to save that. The idea behind that is, you know, what you're looking for is to offset what is not going to be paid by Social Security. And so, you know, if you were to take somebody who's making $65,000, you know, that'd be 780 grand at 4% return. We could throw off with 780,000. We could throw off 31,000 a year. That plus Social Security should make up, you know, what most people spend on in retirement, which is about 80% of their pre-retirement income.

So that's if you want to fully fund, you know, your pre-retirement income minus about 20% through just your retirement savings plus Social Security alone. That's what it's going to take. Now, some people say, listen, I started too late. I'm not going to get there. I'm not going to have that much.

Well, that's fine. Just you've got to make the numbers work and you've got to work up your budget and make sure you have what it takes to cover your expenses, whatever that is, whatever God's calling you to in this season of life. But that's at least the rationale behind that multiple of your income as a goal.

But give me your thoughts. I was thinking, like, if your annual income was $100,000 a year, so you wouldn't say you would need a billion dollars to retire? Are you asking whether you'd need a million? Yeah. Yeah.

Yeah. I mean, if you want to live on 80% of your pre-retirement income, that'd give you 1.2 million. And if you pull out 4% a year, that's only $48,000 and you were spending 100. So you're going to take a pretty drastic cut in pay unless you want to pull out a principal. And that's at least the thought behind it. Let's do this. I've got to wrap the program.

You stay on the line. We'll talk a bit more off the air just to finish up. That's going to do it for us today, folks.

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