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A God’s Eye View of Money

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
May 18, 2022 5:00 pm

A God’s Eye View of Money

MoneyWise / Rob West and Steve Moore

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May 18, 2022 5:00 pm

The Bible clearly states that our ways and thoughts are not like God’s. But we can know more of what God thinks by studying his Word. And a lot of the principles found there deal with money. On today's MoneyWise Live, host Rob West welcomes Howard Dayton to talk about having a “God’s Eye View” of money. Then Rob will take some calls on various financial topics. 

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How do you forgive a dead man?

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 pre-recorded, so our phone lines are not open. For my thoughts are not your thoughts, neither are your ways my ways, declares the Lord. Isaiah 55, 8.

I am Rob West. That's a profound statement that certainly puts us in our place. But don't think it lets us off the hook. We can know more of what God thinks by studying His Word, especially about money. I'll talk about that with Howard Dayton today.

We have some great calls lined up, but we won't be taking your live calls today because we're pre-recorded. This is MoneyWise Live, biblical wisdom for your financial journey. Great to be with you, Rob.

Always a joy to have you, my friend. Howard, today we're peeking inside your book Free and Clear, God's Roadmap to Debt-Free Living, and we want to gain a God's-eye view of money, if you will. You call it that in the book, and you point out that there are several reasons that Jesus said so much about money.

So let's begin there. And I'm convinced that Jesus said so much about money for two reasons. First, how we handle our money impacts our fellowship with Him. And secondly, He simply wants to help us to handle money wisely. And it's interesting that Jesus revealed a direct relationship between how we handle our money and the quality of our spiritual lives. In Luke 16, 11, He asked this really penetrating question, with the true riches. And what are the true riches? It's a more intimate relationship with Christ. Yeah, and you can't get any clearer than that, can you, Howard?

You really can't. And Rob, I personally have discovered that every time I applied one of God's financial principles, I found myself drawing closer to Christ. And on the other hand, the flip side's also true. If I was unfaithful, then my fellowship with Him suffered. But there's another reason why Jesus taught so much about handling money. He realized that money plays a huge part in our lives. We spend so much time working for it, deciding on how to spend it, grappling with debt, thinking about where to save and invest, praying about our giving. The Lord knew that money would be such a challenge and even source of conflict for so very many of us. And He wanted to give us the tools, the principles to handle money wisely. And that's why He's given us these clear, practical truths in the Bible that really work. They're His roadmap to guide us on our financial journeys. That's exactly right. And Howard, you point out that there's a division of responsibilities when it comes to managing money.

Describe that for us. Simply put, Rob, God has certain responsibilities, and He's given other responsibilities to us. And most frustration in handling money simply comes because we don't realize which responsibilities are ours and which belong to the Lord.

I mean, think about this. He created all things. He owns everything. Psalms 24, 1 tells us the earth is the Lord's and everything in it. And then there's even specific things in the Bible that God says He owns. Leviticus 25, 23, He's the owner of the land.

Haggai 2, 8, He owns all the gold and silver. Psalm 50, He owns all the animals. I mean, there's no question that God is the owner.

That's exactly right. And how does our perspective then on money and possessions change, Howard, when we acknowledge this ownership? Yeah, this is big, Rob. Every spending decision becomes a spiritual decision. No longer do we ask, Lord, what do you want me to do with my money? The question becomes, Lord, what do you want me to do with your money? And when we have this perspective, handling money according to His wishes, spending decisions are just as spiritual as giving decisions.

That's powerful, Howard. And then our responsibility regarding money? It can be summed up in one word, steward. Stewards manage someone else's possessions or money, and our responsibility is to be faithful. 1 Corinthians 4, 2, it's required in stewards that one be found faithful. And then we go to the owner's manual, the Bible, to see how it's done.

The good news, Howard, as you know, you counted them, 2,300 plus verses that teach us about money and possessions. Howard, always a joy to have you, my friend. Thanks for stopping by. Oh, thanks for inviting me, Rob.

That's Howard Dayton. You can find out a lot more about this topic and many more of God's financial principles in his book, Free and Clear, God's Roadmap to Debt-Free Living. It's great to have you with us on MoneyWise Live today, but unfortunately, today we're not live. We're prerecorded and therefore won't be taking your calls. 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. Thanks for joining us today on MoneyWise Live, biblical wisdom for your financial decisions. Hey, our team is away from the studios today, so don't call in, but we lined up some great questions.

We'll get right back to the phones here in just a moment. Hey, would you like to find a financial advisor, an investment advisor, tax and accounting professional that shares your values and has met high standards when it comes to character and integrity, but also experience? You can do so when you search for a certified kingdom advisor.

You can find one in your area on our website, Just click find a CKA. All right, let's head back to the phones.

Kissimmee, Florida. Hey, Leon, thank you for your patience. How can I help you? Hello.

Thank you for taking my call. My question is this. I own a house. We own a home. It's probably about $600,000 on the market value. I have probably about $130,000 loan or mortgage from it.

I was wondering, is there any way or any advice that you can give me in terms of what can how can I take advantage of that equity that I have on that house? Yeah. Well, so would you be thinking about, Leon, perhaps taking refinancing, pulling some of that equity out and then investing it? Is that what you're considering? That's what I'm thinking of.

Yeah. You know, I'm not a big fan of that approach. I think when it comes to your primary residence, the goal should be to pay it off. Now, there would be some that say, well, there's an opportunity cost there that, you know, you could take this money and put it to work in a stock and bond portfolio or another piece of real estate or a small business and, you know, get a better rate of return than you might get on the mortgage. And you could offset that mortgage and build more in the way of assets.

And that might be true. I guess that the way I look at my primary residence is not necessarily as an investment. Now, yes, you should expect to buy a piece of real estate that's going to increase in value over time. We're certainly seeing that significantly play out right now, especially given some of the inventory shortages we have throughout the housing markets around the country. And so as a result, prices are elevated.

You're referencing that yourself. But again, it's not an investment straight in the sense that typically with an investment, when it accomplishes its purpose, you sell it. So if something were to begin to head down in value, you might liquidate an investment. Well, you don't do that with your home because it's where you live. And the idea that you own your home free and clear, I think, is a good, worthy goal because it gives you more flexibility and peace of mind and it reduces your overall lifestyle. Now, that doesn't mean that we can't be saving for buying other investments, perhaps out of surplus cash flow to put money down on a rental property or to build investment portfolios with stocks and bonds, either in a retirement account or outside of it. I think that makes sense as well, but not to the extent that we're borrowing against our home to do it because if something were to happen with those investments, we get into a recession and see the stock market take a tumble or we get into a difficult housing market or you have a piece of property that just doesn't appreciate as much as you'd like or you have trouble renting it out. Now, all of a sudden, we put our home at risk in an effort to do that.

So from my standpoint, Leon, and this is just me, again, some would disagree, I'd say let's focus on getting that $130,000 paid off just as quick as you can so that you own your home free and clear. And then let's take that mortgage payment and let's use that to start building assets that can then be deployed in a way that's going to seek a return and that would be in whatever area you're comfortable with. But that's just my take.

Give me your thoughts. I mean, that's why I really need advice on that because everyone is saying, hey, you have that equity that you can have it invested and get more in return in terms of the investment. Then comparing it with the interest rate on the loan, you're getting more money than getting more money from your house.

I don't know if you understand that. At the same time, I can afford to pay, actually it goes up to the value of 80% of the $600,000, which is the loan. I can pay that monthly as well with the income that I have now or I can put the money or my income to maximize my 401k or anything like that, which is I do 25% of my income goes to 401k, which is I maximize whatever allowance.

Yeah. You see, I would just feel better about that. I mean, right now you're going to get a mortgage over 4%. You're going to spend a lot of money to do it, probably 3% of that new mortgage. Let's say it's a half a million dollar loan. You're going to spend $15,000 just in the refinance.

I'd rather see you just stay this course. Let's get this home paid off, own it free and clear and take that surplus you have. Look for additional giving opportunities. You've already increased your 401k contributions, perhaps start saving for a down payment on a rental property.

And once you build up enough to buy a piece of rental property, you do that, but it's not attached to your primary residence that you're on track to get it paid off. That's just my perspective. I'd feel a lot better about that direction, but you pray about it and see where the Lord leads you. Leon, thanks for your call today.

To Tennessee, Sander, thank you for calling. Go right ahead. Yeah, the thing is that I have a house that I'm paying $116,000 and right now I'm selling a property in my country which is a profit of $75,000. So what I want is to invest it in my house.

Some people tell me, no, don't invest everything in the house. Leave some money for you because of the situation, the financial situation right now. And I'm going to be retiring in January. Yeah, how much do you have in savings, not counting the $75,000 that's coming your way? I got like $10,000 in savings. $10,000 in savings.

And how much do you spend each month in expenses? Roughly $2,000, $3,000 more? Let me see, around $2,000. Around $2,000 a month. All right, let's say it's $2,500.

I'd love for you to have six months expenses in savings, Sander. So that would be $15,000 and you said you have about, how much do you have in savings right now? $10,000. $10,000, okay. So I'd love for you to take at least $5,000 to shore up your savings account out of this $75,000. And then the question is, does it make sense for you to put this all against the house? If you could pay it off, I'd say go for it because it would free up your mortgage payment. But you're not going to change your mortgage payment if you can't pay it off. Are you living paycheck to paycheck or do you have some surplus each month after the expenses are paid? No, I live like check after check. Yeah, that's what I do.

Yeah, very close. Okay. So I'd say from that standpoint, I'd probably just stay on track with paying your mortgage the way you are. Don't take all of this money and put it against the house. I'd probably take $5,000 and shore up your savings.

I'd look at the rest of it to perhaps not only pay the taxes on the sale of this property if you have any, but I'd probably look at hanging on to a portion of it, maybe use it to fund, accelerate your retirement savings if you're behind on that. I think a bigger question for you, Sander, is probably what is your plan? So I'd also schedule a time to visit with a financial planner to talk through all of this.

You stay on the line. We'll talk a little bit more off the air. And folks, we're going to pause for a break, but we'll be back with much more on MoneyWise Live. Biblical wisdom for your financial decisions. You're listening to MoneyWise Live with Rob West. Today's broadcast is prerecorded, and that means we're not taking any calls. But we've got some calls lined up and great information coming your way that we think you'll find helpful. So stick around for more MoneyWise Live after this brief break.

Thanks for joining us today on MoneyWise Live, biblical wisdom for your financial decisions. I'm Rob West, and our team is away from the studio today, so don't call in. But we've got some great questions and perhaps a couple of emails that we lined up in advance. So let's head back to the phones.

West Palm Beach, Florida, is where Heather is located. Heather, go right ahead. Hi. Good afternoon. Thank you for your time today.

Sure. My question is in regards to maternity leave and how I can best save for that. I am currently, I just came off maternity leave and went back to work, and I have used up most of my savings being out for five months. I usually save for about four to five months of being out for work, and I also take out short-term disability to help me.

So I would like to know how I can, if there are other options to help me better save or take care of that time when I'm not working and I'm on maternity leave. Yes. Okay. So you're just coming off of maternity leave, is that right? Correct. Yes.

Okay. And so you've already depleted those funds, but now you're going back to work and you're just looking for how you can replenish your emergency savings? Not replenish because my husband and I would like to have more children, but I don't want to end up on maternity leave again and use all of my savings. So I'm looking for other options or additional options of how to best prepare for when I go on maternity leave again.

Yeah. Well, short-term disability insurance is a great tool to cover the time you're on unpaid maternity leave. Policies do vary, but most cover between two weeks before and six weeks after. So that's a help, but obviously it's not going to give you five months, depending on how much you're looking for. I think the key here is just to take a hard look at your budget, Heather, for you guys to really go back to the spending plan and just say, what can we trim to free up more margin so that we can save?

So that as the Lord allows us to have more children, we've got enough in our emergency fund so that we can cover these work interruptions and perhaps lost hours, depending upon how you're compensated with a new baby, recognizing there's going to be a lot of new expenses you're bringing into the equation here, but also it could result in disruptions in your pay, and that will extend likely beyond what your disability coverage will provide. So I think this is really just a budget function that you guys need to take a hard look at to see what you can do to trim so that you'll have that margin to set aside. I'm delighted to hear you had the funds to cover this because that's really what this is for. Now, keep in mind that an emergency fund is typically for unplanned expenses. Obviously, if you know this is coming, I would kind of put this in a separate savings category, if you will. But the bottom line is you just need to try to have the proper insurance to the best you can to be able to cover as much as you can. And then secondly, save for what's not covered so that you can fund that out of your own savings.

Easier said than done, I recognize, but if you guys have some time to plan for this and you can really make some hard choices on what to do to free up margin, that'll go a long way to getting you ready for the next one. Does that make sense? Yes. Okay. Well, listen, congratulations, and how is the little one doing? Thank you. He's doing well. He's doing well.

Good. Well, I've been there, and I know how exciting it is. We had four in four years, so we had our son, and then 18 months later another son, and then twins kind of on the heels of that. So it was a busy time, but lots of blessing, so I understand full well what you guys are experiencing.

But stay focused on that spending plan, especially in this season as you're adding new expenses that you haven't had before, so you guys don't get in a situation where you're taking on any credit card debt or anything like that. Heather, we appreciate your call today. God bless you. 800-525-7000 is typically the number to call, but as I said, we're not here today, so let's do this.

We do get some great emails from time to time from those of you who listen to the program, and we don't often get ample time to take as many as I would like, so let's get a couple done today. This one comes from Larry, and Larry just writes, My aunt has run up a ton of credit card debt. We want to consolidate it and get it paid off. How can I help her without just giving her money to pay her bills? And I'm not a big fan, Larry, of consolidation loans where we replace debt with new debt.

I love the fact that you want to help your aunt get this taken care of. I'm going to recommend a credit counseling program. Our friends at would be a great resource for a couple of reasons.

One is, this is my preferred way to pay down debt, simply because it ensures that you do it with lower interest rates, which is going to allow you to pay through one fixed monthly payment, pay the debt back 80% faster. But here's the other piece, is they're going to spend some time with her and go over exactly what she's got, pray with her, encourage her, help her develop a spending plan, so now there's some third-party accountability, which if you're going to turn over some money to help her get out of debt, I think that should give you some peace of mind to know that she's accountable to somebody and there's somebody helping her working through her spending plan. And then, once they determine that she's able to do this out of her budget, they get the interest rates down, they get one fixed monthly payment, perhaps you agree to take half of that monthly payment and you could send it direct to Christian Credit Counselors, so you match every dollar she puts into this. And so maybe between the two of you, you cover that monthly payment to get that credit card debt coming down and ultimately paid off. So that would be my best advice for you today, is to check out and get her started and then just let her know once she gets enrolled in the program, you guys will cover half the payment. We appreciate your email.

Let me quickly take one more. This one just says we're trying to find a financial coach. Where should we start? Well, would be a great resource for you. We have financial coaches here that would be delighted to help you with a spending plan or a giving plan, perhaps a debt reduction plan, whatever you need.

Our coaches can help. Just head over to While you're there, create a free MoneyWise account. That will ensure that you get our MoneyWise Weekly Wisdom email and you can check out all of our great content there as well. We aggregate content from 14 content partners, the best in Christian finance.

It's all there at All right, we're going to pause for a break when we come back. Much more on the program, so don't go anywhere. We'll be right back. Delighted to have you along with us today on MoneyWise Live. I'm Rob West, your host. This is where we apply God's truth to your financial decisions.

Here's what we recognize on this program. God owns it all, and money is a tool to accomplish God's purposes because you're a steward, and so am I. We're money managers for the King of Kings. Here's the other reality, is that money issues are heart issues. My experience is that our financial journey is one of the key ways God shapes our spiritual journey. And really, money issues, the way we handle money, it's a training ground of the heart. It's one of the most tangible, visible expressions of what we value and where we've placed our trust. The question is, is there a misalignment between what's really important to us and what money says is important to us?

And if it is, perhaps we need to change the way we're allocating God's resources. Well, we can all get better at that, and so let's do that together. Our phone lines are not open at the moment because we're away from the studio, but we have some great questions that we lined up in advance.

So we're going to go right back to the phones. Michael, thank you for your patience. Sir, how can I help you? Sir, first of all, you are amazing, and the ministry that you're doing through the airways is amazing. So kudos to you. Thank you so much for that. Well, that's incredibly kind. Thank you for those remarks.

So here's my question. I'm 54, and I want to be better prepared for retirement. I'm hearing some rumblings that the Social Security system is being flooded with just the number of seniors who are living longer, and it's making it more challenging to support all of these individuals, and there may be a change where they move early retirement from 62 to 67. So how do I better prepare for when I reach 67? I owe about $120,000 on my mortgage.

The value of the property is somewhere around 400, 425. I feel like I can try to get it paid down or paid off in seven years or seven to ten years, I guess, because I only took out a 15-year mortgage. I'm struggling as to what's the best course of action for me.

I also have kids who are entering into college, so I want to be available to help support that and really need to understand if I have to go with a student loan option, what's the best loan option for me as an adult who's getting closer to retirement. Yeah, very good. Well, a couple of thoughts on this. I mean, number one, I think in terms of Social Security, we all know that the latest estimates are, I think it's 2035, that the Social Security trust fund will be out of money. Does that mean there won't be any benefits at that point?

No. If we were to stay on the current schedule, they'd be able to fund, just by the current flow of money into the system through Social Security taxes, they'd be able to fund, I think it's about 70% of the current benefits. We'll see some changes. Right now, it's still far enough off that they're just kicking that can down the road with regularity. There are some proposals out there about moving full retirement age higher.

We've been talking about that for a long time. There's some pretty controversial proposals out there right now as well, but it doesn't appear like Congress is really ready to do anything around any of these decisions right now. I think the bottom line is, recognize even in its current form, Social Security was only intended to cover at the most 40% of your pre-retirement income. That's why you need to be saving with diligence, and we'd say all things being equal, try to put 10% to 15% of your compensation away for retirement so that you have assets to supplement Social Security regardless of what full retirement age is when you get to that point.

Limit your lifestyle. Living within your means is obviously your most powerful tool to build wealth because your income is what can help you build wealth so long as you're not using it all up on your lifestyle. Having that margin to save for the future and to be able to use for things like college education is obviously really key. Doing that, living within your means, living modestly and saving regularly and doing that for a long, long time is really the very best way to go about this. In terms of your mortgage, I think you're on a great path. If you can find yourself in a position where you're completely debt-free to be able to reduce your expenses in retirement because you're taking what is your biggest expense off the table at that point, that's a great plan. I think for most folks, if they can just try to be completely out of debt, including their house, by the time they reach retirement, you're going to put yourself in a really strong position.

I think you just need to keep doing what you're doing, Michael. Save as much as you can. Don't hesitate to get those kids involved in paying for college.

Don't just automatically assume that you've got to pay for 100% of it. I just got word a few minutes ago that a good family friend, their daughter, just got a $5,000 scholarship from a local utility here because she found it and applied for it and went in to get an interview last night and today is getting a $5,000 cash scholarship. So between scholarships and grants and working in the summer and maybe an on-campus job of some kind, don't just assume that there's not money to offset that. If you have to go get a student loan and you're willing to do that, I would say prioritize your retirement first. And if you need to borrow, then be willing to do that, but make sure that there's a plan to pay it back. So I wouldn't borrow any more than based on the job that you believe your child is going to seek post-college that the income would be there to support paying this back within 10 years.

And I would say for any portion that you're going to obligate yourself to, make sure you can pay it back in a reasonable time and it doesn't put your own ability to save for the future in jeopardy. But Michael, clearly you want to honor the Lord with what he's entrusted to you and so that's coming through loud and clear, but I think you're making a lot of great decisions. We appreciate your call today. To Jackie in Chicago, WMBI. Jackie, go right ahead. Hi, thanks for taking my call.

So good to talk to you guys again. Thank you. I'm calling in regards to, so I'm working on a budget plan at this time and one of the things I was looking at is that I have whole life and I have term life insurance and they're kind of running around the same amount that I'm paying every month. But what I want to look into is, is that a good idea to have both or is one better than the other? Or I'm just trying to look into that. Well, a couple of thoughts on that.

Sure. So I'm a fan of term life insurance. So I wouldn't cancel any of them until you have what you need fully in place before you cancel it.

So let's say I'm just going to make up numbers. Let's say they're each $200,000 policies. So you've got a total of $400,000 on your life and you decide to go with just term insurance. I'd make sure you have that new policy of an additional $200,000 to replace the whole life or one new policy of $400,000 in place before you cancel anything because in the event you die suddenly and you don't have that insurance, now somebody's got a hardship that they're facing. But in terms of which type, I would rather see you go term, get the least expensive insurance possible, which is term insurance because you're just paying for the death benefit and do your savings outside of an insurance policy through a retirement plan at work or a Roth IRA or something like that. So let's figure out how much you need, probably at least 10 to 12 times your income, plus maybe paying off a mortgage or a college education. Let's get that in force with term insurance for as long a term as you can, 20 or 30 years.

Make sure it fits in the budget and then pull the money out of the whole life policy, redeploy that and then make sure you're saving separately and I think that'll get you going in the right direction. Thanks for your call today, Jackie. Well, one more call before we go to our next break. Claudia is in Cleveland.

Claudia, you go right ahead. Yes, I would like to know your opinion on U.S. series I savings bonds. Well, I really like I bonds. These are backed by the full faith and credit of the United States government. They are guaranteed for that reason. They have tax deferred inflation adjusted interest and you've got to hold them for a year, but here's the exciting thing, because of what's happening with inflation right now specifically and given that these bonds are tied to CPI, the consumer price index, you're going to get a phenomenal return in excess of 8% and likely to be adjusted to over 9% annualized here in the next few weeks.

They're adjusted each six months, but with inflation being elevated, I see them as a great investment for a long time. Thanks for your question and we'll be right back. Stick around. Thanks for joining us today on MoneyWise Live. I'm Rob West, your host. Our team is away from the studio today, so don't call in. There's nobody here to take the call, but we lined up some great questions that I know you'll enjoy. So let's head right back to the phones.

Pompano Beach, Florida. I know it well. Frances, thank you for calling. Go right ahead.

Hi. First of all, I love your show and listen to it every day. Thank you so much. You're welcome. Thank you.

My question is hopefully very simple. I read somewhere that if you sell your home and you make under a certain amount of income, you don't have to pay capital gains. Yeah, you're exactly right. In 2022, Frances, individual filers won't pay any capital gains if their total taxable income is less than $41,675. It's a pretty low bar, but anything under that in terms of taxable income, you're correct. Now, the rate jumps to 15% if you go over $41,675 all the way up to $459,000. So that's where most people fall, but if you happen to have taxable income less than that $41,675 this year, that's where the capital gains rate is zero. Is that $41,000 that's before taxes? Yeah, that's your taxable reportable income that you would report to the IRS.

All right, and then one more thing. What if I file as head of household because I read somewhere it was $53,000? Yeah, there is a table there, and I'm not quite sure exactly what it is, but you could look that up. If you just search for capital gains tax rates, you would find that.

I'm just looking real quick. You're exactly right. Yeah, so head of household goes up to $54,100, and married filing jointly, for instance, is $80,800.

So there's a table there that the IRS puts out, but you are correct, $54,000 if you're head of household. Okay, thank you so much. I appreciate it. You have a wonderful week, and keep up the good work. Thank you, Frances. You're very sweet. We appreciate your call today.

On to Minnesota, Virginia. Thank you for calling. Go right ahead.

Hi. Well, I just turned 55, and I have an insurance question. I have had a full life policy since I was in my 20s. I didn't have a policy for a while, but I never got that far. So I'm wondering if it would flat that point to cash that in, if not a whole life at the right of value, and then due to a term life policy. Yeah.

Yeah, you're breaking up just a little bit, but I think I've got it. So you're 55. You've had a whole life policy for quite a while. You said it doesn't have a whole lot of cash value.

Do you know roughly what that is? It's only like a couple thousand dollars because I had to borrow on it several years ago. All right. And what is the death benefit? $50,000. $50,000.

Okay. Yeah, I think that makes sense. You know, I'm not a big fan of whole life except for a few reasons for estate tax purposes, which these days doesn't really apply to most folks, at least in the current tax structure. You know, if you had a lifelong dependent or there was a real need for it, but I just think you can do better with a straight term policy and doing your savings in IRAs and retirement accounts and other means where you're going to do better over the long haul. And when doing that, you're buying pure insurance, so you're keeping the cost as low as possible, which allows you to buy the proper coverage. Because for most folks, you know, they're often underinsured when they have these whole life policies because, you know, at a starting point, if you're trying to replace, let's say, income, you know, you would need 10 to 12 times the income you're replacing.

And that's just kind of the starting point. We want to think about paying off a house out of that or funding a college education, things like that. You know, if it's for a non-working spouse on his or her life, you would want to make sure that if there's small kids at home, that it's enough to cover child care, which can be costly. So I'd like to really think about the amount of coverage that's needed and for what period of time and then go out and find the least expensive policy to provide that death benefit for the time period that's needed and, you know, make sure that that risk is then truly offset. And then with any additional funds that are available, you know, save in vehicles that are going to allow you to really maximize the growth over time. Does that make sense?

It does. And I'm single. My kids are both married and have their own families, so I don't have dependents or anything like that, although I'd like to, you know, leave them something. Sure. So I guess that question, you know, if the whole reason for it is just for an inheritance, I would wonder if it might be better, especially if, you know, they're doing well and you might need this money down the road for your own long-term care. You might, you know, down this, we're talking way down the road, Lord willing, but, you know, you might need some long, you know, some nursing home care or assisted living or something like that.

I mean, that can be very costly. So I think I'd rather see you take what God has entrusted to you and save it diligently, get it working for you. And then that money, if it's not needed for you, you know, obviously could be passed on at that point as to as opposed to continuing to fund life insurance that's going to get more expensive over time. And, you know, funds an inheritance that, you know, is funded by money that you actually might need at some point. So I guess that would be my preference. But obviously, if you're looking just to, you know, have a policy like that for their benefit, then I think the term policy could be a way to go there. Okay.

I have another question. My daughter recently got married and her and her husband are currently doing the Financial Peace University, so they maybe have been told this, but I was listening earlier and you had talked about that it would be more beneficial for them to have a term life policy. I have had a policy on her since she was little. It was initially just in my insurance.

And then when she turned 18, it went to $25,000. It's about $15 a month that I'm paying. But it's the same whole life, not a whole lot of benefit from it. So would it be better to take that policy and help them set up a term life policy for themselves?

I think so, because it's not, you're not providing a whole lot of death benefit. And, you know, I think if you want to provide assistance to them, let's do it in a way that can provide some meaningful insurance. You know, a lot of times people take out these small policies, you know, on children, you know, in the, obviously, you know, in the event that child were to die prematurely and cover burial expenses, something like that.

And, you know, they justify it by saying, well, it's just a few dollars a month. But especially at this point where she's out on her own, now she's married, you know, you continuing to fund this small policy, I'd rather you just recoup that money into your budget. And then if you want to find a way to bless them, whether it's funding a 529, if the Lord gives them kids for college, or, you know, just helping them pay for a term life policy that actually gives them the coverage they need, I think that'd be a better use of those dollars.

Okay. So what is a 529? Yeah, so that would be if they have kids and you want to help them save for those kids college, a 529 college savings. Think of it like a Roth IRA, but for college related expenses. So the money grows tax free. And then if it's used for qualified educational expenses, because it's been invested, all the gains from those investments are not taxed, and the kids can pull it out and use that to pay for tuition or room or board or books, things like that. So that would just be another way you could bless them.

Again, if the Lord gives them kids you want to help out, it would be a great way for you to, you know, help them put some money aside and invest it for college education. You may not want to do that. You may want to do something else that was just an idea. Okay. All right. We appreciate your call today. Virginia, thanks for checking in with us. All the best to you. Let's head to Ohio.

Matthew has been holding patiently. Go right ahead, sir. Thanks for taking my call. So my quick question is, I'm 58, and we recently downsized and we went to a smaller house, and we have now a mortgage of $88,000. And I want to know if I should, when I turn 59 and a half, take money out of my 401k and pay off the mortgage or just continue paying on the mortgage. So we do have about 26 years left on the mortgage at four and a half percent. Okay.

All right. You know, I love the idea of you all being debt-free. I don't love the idea of you taking what is your probably biggest, you know, retirement savings engine, if you will, and pulling it out of the market unless you just have a real conviction from the Lord to be debt-free. But apart from that, you know, taking this money out, paying a bunch of tax on it, and getting it out of an environment where it can be growing on a tax-deferred basis and compounding, you know, for the rest of your working life, you know, I don't think is my first choice. You know, if you get to retirement and, you know, you've not, you know, now that $88,000 loans, you know, down to 60 or 50 and over a couple of years, you want to pull that money out, you know, over two or three tax years to kind of spread it out, just to kind of knock that off and get to a place where your expenses are as low as possible.

I think that could make some sense. But pulling it all out in one year at age 59, when you're going to put it all in one taxable year and perhaps bump that up into a higher tax bracket and remove that amount of money as, you know, part of what's growing for your future on a tax-deferred compounding basis, that would probably not be my first choice, Matthew. Okay, so just leave it sit and go? So long as it's invested, yeah. And then, you know, perhaps you sink this paying it off up with retirement down the road and you can decide, you know, how you do that as you get a little closer. And if you want to send an extra couple of payments a year, if you have the ability to do so, I think that would be a good thing.

But, you know, in terms of just pulling it all out at 59 and a half, again, apart from a real conviction of the Lord leading you to be completely out of debt, I'd say I'd probably stick with that mortgage, keep paying on it, and let's try to get it paid off by the time you retire, not right at age 59 and a half. We appreciate your call. Well, folks, that's going to do it for us today. We appreciate you tuning in. I want to say thank you to my team today, Clara Seagard answering our phones today, Amy Rios producing, Mr. Dan Anderson was our engineer today and providing research for me today, Jim Henry.

I want to say MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Thank you for being along with us. So many kind remarks about how much you enjoy the program. That means a lot. Come back and join us next time. We'll see you then. God bless you. Goodbye.
Whisper: medium.en / 2023-04-14 11:35:02 / 2023-04-14 11:52:22 / 17

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