If you've felt discouraged, worn down, or are thirsting for hope, you need rest and renewal. Hi, I'm Deb Gorton, host of Becoming Well, and I want to invite you to join me at the Renew Women's Conference this September for a time of deep encouragement and challenging teaching. You'll hear from me, author Heather Holman, and so many more wise and wonderful women of faith. Learn more and sign up for Renew 2022 at moodyevents.org.
Today's version of MoneyWise Live is prerecorded, so our phone lines are not open. Go therefore and make disciples of all nations, baptizing them in the name of the Father and of the Son and of the Holy Spirit. Hi, I'm Rob West. Jesus giving the Great Commission to his disciples in Matthew 28 should be a constant reminder to support mission work, especially if you're not the one going. I'll talk about some ways you can do that best today.
Then we have some great calls lined up, but please don't call in today because we're prerecorded. This is MoneyWise Live, biblical wisdom for your financial decisions. So the other day our team came across a great article by the Gospel Coalition about how those of us left behind can best support mission work in the field, and I want to go over several of them. Interestingly, not included in the list is sending short-term teams, like a church might put together over a spring or summer break. The article points out that while these short-term teams spring from a sincere desire to help, and most certainly do, no question about that, but they need to be carefully coordinated with the folks in the field so as to not distract them from ongoing ministry. Just hosting a church team may put a strain on missionaries with limited resources. So what should we do then to help our missionaries? Well, obviously first is regular prayer and letting your missionaries know that you're praying for them in their work. If a missionary sends you a prayer request by email, make sure you read it carefully and follow up with prayer during service.
Let the request be known in your regular church email to members also. Next comes financial support, and while the occasional single donation is always appreciated, churches and individuals need to commit to regular and consistent financial support for their missionaries. This is crucial for eliminating the worry that missionaries often have about maintaining their support and whether they'll be sent home to raise funds, something that most missionaries dread having to do. Their work isn't easy on a good day without having to worry about future funding. They face daily cultural and linguistic differences, resistance, even persecution and often harsh living conditions.
We can take away at least one of their concerns with regular funding. And keep in mind that financial support blesses you as well as your missionaries. Okay, next on the list is doing something about homesickness that often plagues missionaries. The article recommends sending an occasional care package to your missionaries. First, ask them if there's anything they need or miss from home.
This could range from sermon development materials to foods, spices, toys and games. Pack them up and send those packages overseas to bless your missionaries. The next way to help them is during their furloughs or home assignments. Often these aren't particularly restful times for missionaries. They have to cope with cultural transition and all of the logistical problems of returning home. Well, you can help your missionaries cope with the stress of returning home in any number of ways, like donating frequent flyer miles, picking them up at the airport, setting up housing for them, finding a car they can borrow while they're home, or help with childcare if they have to make rounds to several supporting churches.
You may have a professional skill you can provide at no cost, like medical or legal assistance. In short, make their needs known to your church and encourage members to volunteer their time and other resources. Now, if you really want to visit a missionary overseas, make it a vision trip where you try to acquaint yourself with the area and work that's underway. You can then return home and share that vision with your fellow church members to encourage more and faithful support. If you are planning a short-term team visit, don't go into it with any preconceived notions about the kind of help that's needed. Be sure to consult with your missionary about what kind of work will really be helpful.
And if a monsoon hits while you're there, well, be ready to scrap your plans and help mop up. When a catastrophic earthquake hit Haiti in 2010, short-term missionaries who thought they'd be helping with building projects found themselves helping medical missionaries treat victims. The next item on the list is being or sending a medium-term missionary.
This may be something for retirees to consider if they're financially able to spend one or two years in the field. That's enough time to learn a language and make a significant contribution. Medium-term missionaries are able to forge meaningful relationships with locals that will help sustain the ministry in the long run. Even just the ability to teach English to locals served by the ministry could be a big help. So you see there are plenty of ways you can support missionaries. Hebrews 13 16 tells us, do not neglect to do good and to share what you have for such sacrifices are pleasing to God. 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. Thanks for joining us today on Money Wise Live, biblical wisdom for your financial decisions. We apply God's word to what you're dealing with financially as we try to live within our means and avoid debt and have some margin or flexibility, live with contentment, give generously.
These are all principles we find in God's word that we can apply to how we manage His money. Our team is off today. We're taking some time away from the studio, so don't call in. But we've got some great questions we lined up in advance, so let's head back to the phones. We'll head to Mississippi. Elaine, thank you for your patience. Go right ahead. Thank you.
I love your show, and thank you for taking my call. I'm 76 years old, still sharp-minded, thank the Lord. But my son, who's only 50, died, and he left suddenly from sleep apnea, and he left all of his 401Ks and all of his investment-type things to me as his beneficiary. I was the only person he ever trusted, his dad and me. So the problem is he has a teenage daughter. That's why he had it, I know, like that.
But he did not leave a will. Okay, this has left a really disastrous situation. She's now 18.
How can I give her more? I had to move all the IRAs and 401Ks over into my name, of course. They wouldn't let me do any different.
It's just really complicated. I'm so sick of it. She and her mom think that she should have 100% now, and you can't, the government won't allow it. What can I do?
I give her the 16,000 that you can give one person, I mean a person per year. Do you have any ideas? It's driving me, it's destroyed my relationship with my precious granddaughter, who I practically raised, and it's broken my heart. What can I do? Yeah, I'm so sorry to hear about your son's passing and the challenges that these finances are creating in the relationship.
That's the last thing we want here. What is the concern on the part of your granddaughter? It's that she just doesn't understand why you can't get her more money now, or is there something else? She thinks it's mine, that's all. It's mine, it's mine. She doesn't understand anything.
She doesn't want to, neither does any of her mother's side of the family. And even other people who know a little bit about this, you know, they're very critical of me. I want none of it. Do you understand? I really don't. I totally do, yeah.
Certainly. I think the first thing is really clear communication, Elaine, and you can't control what she receives out of that communication, but you can make sure you're consistently and continually communicating very clearly about your intentions, which is, my desire is for you to have this money. Now, I need to do that within the bounds of the law and what the IRS is going to allow me to do, but my intentions are very clear.
So that's the first thing, is to make sure there's clear communication. The second thing is then, how do we practically go about that? Now, with the money that's outside of retirement accounts, it's a lot easier. You reference the annual exclusion, which for this year, 2022, is $16,000. That means that you can give $16,000 without filing a gift tax return based on that annual exclusion. But you can actually give quite a bit more than that because then there is a lifetime exclusion of $12.06 million that you can give to someone without paying any gift tax.
Now, you'll still have to file that gift tax return when you go above the $16,000 that you can do annually, but it's not going to trigger any tax until you get above the lifetime exemption of $12 million, which most people aren't going to get. So for that reason, you can really give, again, outside of the retirement accounts, as much as you want, as long as you're filing appropriately the gift tax return to report it to the IRS for any gifts beyond $16,000. Then there's the issue of the retirement accounts, which is not quite as simple because you're going to generate taxable events as you pull the money out, and I think that's where you need to do some planning. Perhaps, Elaine, the other step you could take is to put a trust in place, basically where you would allow the trust to talk about the purpose of the money and how it's to be used and distributed over time to your granddaughter. You could talk to an estate attorney about that. I think obviously you'll want to make sure that you have her named as the beneficiary on those accounts, and there are specific rules as to how you have to pull that money out anyway of those inherited, let's say, IRAs, for instance.
With an inherited IRA as a non-spouse, you have a couple of different methods by which you have to pull that money out, either over your life expectancy or over a 10-year period. You'll want to talk to your CPA or tax preparer about that. But as that money comes out in a tax-efficient way and according to the IRS rules, then again, going back to that lifetime exclusion on gifting to anyone, frankly, you have the ability to give her as much as you want right now as long as you're just reporting it. Does that make sense?
With the government rules and everything, anything makes sense. But the biggest thing I want to ask about the lifetime exclusion, will that affect my Social Security? Will that destroy my tax situation if I give her more and report this each year? No.
No, it has nothing to do with that. You have the ability to essentially, up to the annual exclusion and then beyond that, up to the lifetime exclusion, give as much money as you want away, and the gifting of that money, as long as you report it, is going to have no bearing on your tax situation, either your benefits from Social Security or the tax that you will pay on ordinary income. The taxable events are going to occur for you prior to you giving this money to her because as that money comes out of the retirement accounts, that's going to create taxable income. You're going to want to allow for that tax that's due to be held back because that is something that you're going to have to recognize each year as the money comes out of those qualified accounts. And then the net amount, the amount that you will have available after tax, you can give that away as much as you like, and that's not going to have any bearing on you. So I think the key is for you to have a relationship with the CPA who can help you determine the tax that's due. As the money comes out of the retirement accounts, you can hold that back and then pass 100% of the net proceeds on to her.
And again, you just need to report that in a gift tax report to the IRS beyond $16,000. Let's finish up off the air. We'll be right back on MoneyWise. Stay with us. 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. You know, just before the break, we were talking to Elaine and we were talking about how to get this money to her granddaughter that was left to her by her son. And this really raises a couple of issues that I think we really need to be thinking about. Number one is we need to have the right instrument in place to pass our resources to the next steward in a way that's thoughtful.
We need to have the next steward chosen and prepared. Now, the legal instrument to do that is most commonly a will. The challenge is that Gallup's latest polling finds that slightly less than half of adults, 46%, have a will that describes how they would like their money in a state to be handled after their death.
That's a problem. We need to solve that, folks. We need to have a will.
We don't want the probate court deciding where our things go. But then the other side of this is, is the next steward not only chosen but prepared? And I think as a part of that preparedness, we need to be communicating. Here's our intentions. This is who I'm leaving it to. Here's why I'm leaving it to you. I'm not leaving it to you. I'm giving it away.
And here's why I'm doing that. There's a communication element. There's also a training element as well. Because we recognize first we need to pass spiritual capital.
That's preeminent. Then we need to pass character capital. Then we pass financial capital when it's ready. Because the last thing we'd want to do is pass a significant amount of money to someone who's ill-prepared to handle it. Or where it could actually derail their spiritual journey. It could be a hindrance toward them growing in their relationship with Christ. In this case, poor Elaine, it's wreaking havoc in her relationships with her granddaughter and with others. And that's because of a lack of communication prior to this passing that resulted in this inheritance and not effective planning. Elaine's also concerned just about her granddaughter's readiness for this. And that's a real concern which is where planning comes in.
Things like trusts that can allow the money to be distributed only after certain conditions and triggering events are met. So this is really a critical topic that I think we as believers and Americans need to do a better job with. Let me recommend a resource if you want to think more about this topic.
I would encourage you to pick up a copy of Ron Blue's book, Splitting Errors. I think it's the best book out there on a biblical perspective of wealth transfer. Really the decisions, the principles you need to be thinking about. Not necessarily the mechanics of the legal instruments, but really all the decisions that will lead to which legal instruments you select.
And how much is given to either charity or ministry or your heirs because other than the government, those are really the only two places it can go. So I would pick up a copy of that book if you're at all thinking about this. And if you don't have a will, let me just say very clearly, today is the day.
Reach out to the godly attorney and get one in place. All right, I'm going to step off of my soapbox here and we'll head back to the phones. Jim's in Tennessee. And Jim, you've been waiting patiently.
Go right ahead, sir. Thank you, Rob. I am calling about thinking about – you said to try to pay off your debts as much as possible. And my biggest debt that would maybe help being paid off is my mortgage. I've got about $60,000 left on it in maybe 20 years at 3.78% interest rate.
Would you recommend maybe paying off the mortgage with my 401K money, which is not a huge amount. It's maybe around 120 to 140. Yeah, yeah. What did you say your age was, Jim, if you didn't already? I'm 69. Okay.
I've been working, have not started Social Security. I plan to start that when I turn 70 and hopefully keep working for a year or two. Yeah, excellent.
Or more. Yeah. Well, once you reach full retirement age, you probably realize that you can make as much money as you want and that's going to have no bearing on your Social Security.
And waiting until 70, your check is likely going to be as much as 24 to 32% more because it's growing by 8% a year. So that's great. Are you trying to continue to work just as long as you can, Jim?
Yeah, pretty much. Okay. Yeah, I like the idea of getting that mortgage paid off. You've got $60,000. You said the runway on that, the remaining term is what, about 20 years?
Yeah, it's pretty long. Okay. Here's what I would do. Rather than pulling out of the 401k, which is going to create a taxable event, and it's likely down right now with the market, right? So now is not a great time to not only create the tax but to realize and lock in those losses. So what I do is leave the 401k there, let that rebound and continue to grow, and then pay down the mortgage accelerated out of current cash flow. In addition to that, as you start collecting Social Security, if you're still working, I suspect that's going to be all surplus that you have available. And so at that point, I would take 100% of that and start putting it toward the mortgage as well. So unless you have just a real conviction from the Lord to be debt-free absolutely as soon as possible, I would say I'd stick with that mortgage but just look for every way you can to accelerate the payoff. And let's kind of resist this urge, which is just natural, that as income rises, and you're about to have a significant rise in income as Social Security kicks in, let's not allow lifestyle creep to chew that up. Let's take 100% of that and put it toward the mortgage, and maybe we get that 20-year payback down to 10 or less. Does that make sense? It does. So paying on the mortgage extra comes off of the tail end of the mortgage?
No, sir. You want to make sure that goes to principal right away, and with an amortized mortgage, you're paying interest on the interest. So every dollar you reduce that principal by is money that you're not going to be paying interest on for the remaining term of the mortgage. So you're going to want to talk to your loan servicer about how they want you to make the payment. If you pay online, you'll want to check that box that says add to principal, or if you pay by the mail, you may have a coupon that allows you to do that. Most of them are equipped to handle that.
You're just going to want to make sure it's applied appropriately, which is reducing the principal immediately as they receive the funds beyond the scheduled monthly payment. Yes, sir. All right. Very good. I appreciate your good work. I appreciate that. Did you have a quick follow-up on Social Security? Yeah. My wife is 66.
She has not started her Social Security either, and I know she'll have different rules from, because of her age, being a little younger than mine. But I was thinking about, if inflation is 9%, and if the IRS is paying another 8% if I wait until 70, is it kind of a wash? It is right now, but see, that's temporary. I think we're looking at really a temporary situation here. I don't think we're going back to the Fed's target of 2% any time soon. We're going to be in an elevated inflation period here for quite a while. But I think we are headed back probably closer to 4%. So if you're still working, you don't need the money, and you're in good health, I'd wait as long as you can.
That guaranteed 8% is really nice. Jim, thanks for your call. Folks, we're going to pause for a quick break.
Again, we're not here today taking some time off, so don't call in, but more questions just around the corner. This is MoneyWise Live, biblical wisdom for your financial decisions. I'm Rob West, and we'll be right back. Don't go anywhere.
This is MoneyWise Live with Rob West. Hey, if you hear a phone number mentioned today, please ignore that number and don't call us, because today's broadcast is a reprise edition. But we think the upcoming information will help you and make you a wise steward of what God's given you, so please stay tuned. Let's head back to the phones. Tennessee, David, thank you for your call, sir.
Go right ahead. Hey, so I'm a retired military guy, still work for the government, and my question is about the TSP. I'm 55. I had moved most of my principal into the G Fund when the new administration took place, but I had left my allocation still in the C and the S Fund. And I was wondering, about a 60-40 ratio respectively, and I was wondering if that's still, I just got my TSP statement where I had lost a little over $7,000 over this last quarter. Wondering if I should move it into the G Fund for safety, or if you think that strategy, I guess just curious about what your strategy would be for those of us that are in the TSP with the current. Financial instability.
Yeah, well, it's a great question, David. First of all, as retired military, grateful for your service, sir. You know, this is a challenging question, especially if you're right on top of retirement because, you know, a typical allocation, you know, where we might be 60-40 stock and bonds. You know, as we head into retirement, we might flip that and go 40 stocks, 60 bonds, or even less towards stocks. You know, with bond prices falling as interest rates rise on top of the pretty significant pullback we saw in the, have seen in the stock market, you know, a lot of folks just really struggling to kind of figure out what do I do with all of this. In light of that, let me ask you a couple of questions. What do you have in this TSP right now? It's almost 300,000. Okay. And when do you plan to retire?
Probably right between 62 and 65. I just got my master's at Keaton and I want to get into the schools. I feel like that's the new battleground for the kingdom. But, oh, yeah, I love that. Depends on how that schooling goes, whether or not I can make it to the public schools. Sure. Well, that's great. Delighted to hear that that's what you're thinking about. And so you said you're 55 now, so you've got somewhere between seven and 10 years? Yes, sir. And, you know, if it goes well in the school, I love kids.
I probably stay there to see how that, you know, you never know what's going to happen. Yeah. And what is your allocation right now just to break down between G, C, and S?
So nothing to the G, but it's about 60-40 between the C and the S. Okay. Yeah. So you're really 100 percent in stock, though? Yes, sir. Okay.
Yeah. Just for the benefit of our audience here, when we throw around these terms, TSP, GC, and S, you're probably like, what is that? So the TSP is the retirement plan if you're a government employee or in the armed services. And the GC and S have to do with the various fund types that they have inside the plan. The plan G is the government securities fund, the C is the common stock fund, and the S is the small cap stock fund.
So these are smaller companies that are more growth-oriented. So because you're 100 percent in stocks, and given that you've got still seven to 10 years, I would say if it were me, I would not make that allocation change right now. You've still got time on your side, and if everything goes according to plan, you're going to be working beyond that, so you probably won't have to touch this. I'd let this recover. But then after it recovers, and I'm thinking sometime next year, I think the market will recover probably six months before the economy. We're probably in a recession now. I think it'll be mild based on the economists I talked to. And even though longer term, we have some challenges ahead of us, and I think we're probably going to be in a sideways market here for a little while, I think it will recover.
And we still, for all intents and purposes, are the strongest and biggest economy in the world, and through innovation and a whole host of other things, again, despite our debt challenges and some policy challenges and energy and a whole host of others, I think the market will be the very best place to build wealth and overcome the effects of inflation. So in light of that, David, I would probably let this recover, and then I would begin to shift more toward a balanced approach. You could either use the L funds in the TSP, which is the lifestyle funds where it would automatically get more conservative as you get closer to retirement age, or you could just start to do that yourself as you move into the F, the fixed income investment fund. And then probably once you reach retirement, we're probably looking at wanting 60% in fixed income, 40% in stocks if you're continuing to work. Or if you want to draw an income, you probably are as much as 70% fixed income and 30% stocks. That would probably also be the time to look at rolling it to an IRA and having an advisor manage it for you with your goals in mind.
But give me your thoughts on that. So, yeah, that sounds good. So would you recommend moving from, if you think it's going to recover, should I move the principal back from the G fund back into like the L 2030? Yeah. So you do have some in the G fund now. I thought you said the G fund was at 0% allocation. It's a 0% allocation, but I had moved all of the principal when Biden took over, you know, into the G fund just to kind of keep it safe.
I didn't want to lose it all. Yeah. So you missed a lot of that downside then, correct? Yes, sir. That's correct. Oh, that's great. Yeah. Yeah. So I think this is a great time then.
I apologize. I missed that. So I think this is a great time given that we're down in the market. And yes, we could be down more for sure. But given where we are today, for you to start to move toward your longer term allocation, that makes sense in light of your age and proximity to retirement. And so that's moving it back into the L 2030? Yes, sir. The L fund is going to be a great way to go there.
I think that gives you an automatic rebalancing as you get closer to retirement. Okay. All right. Great. Thank you for your ministry. All right, David. God bless you. And again, thank you for your service, sir. Let's head to Kansas. Don, thanks for calling today.
Go right ahead. Yes, this is Don. And I have a question about my 401k. I am 73. And I have a 401k with my work here. I am still working with fidelity. And I recently I've lost quite a bit, of course. And I got to think of well, maybe a 73.
I'll never see much of a rebound. So what I went in and I moved 80% of my value into a fund called Putman stable value funds that hadn't lost anything but don't gain very much as bond investments. Right. Then I moved the other 20% into Pioneer straight incorporated and fed us bond index. And I was and I got seven fed FDM IDX. I don't know what I'm just reading off on my sheet. I don't know. But do you think I unwise by pulling I can always go back and put it back into the stock market. But I thought, well, it's 73.
If this can, I thought at least wait till after the election after the first year and see what happens. I might not be live long enough to see this rebound. Yes, sir. What do you have in this 401k right now, Don? How much? 1,000, basically.
All right. And are you living on any portion of this? Are you pulling an income from this?
Or is this just out there? No, I'm not. Okay, I'm not pulling on. Yeah, I actually kind of did what your other I listen to your prior I waited till I 70 to draw my social security. My wife did the same thing or both.
She works part time and I work full time. So I don't need this money. Yes, sir.
Very good. Well, I think in light of that, you know, I essentially in this stable value fund, you're in a cash or cash equivalent uses cash alternatives and, you know, wrapped accounts to essentially maintain a stable or a level return with, you know, some sort of yield on it. So, you know, this is about protecting the capital. So you're essentially in a cash equivalent. The question you're asking is, should I go back into the market?
I mean, I think, you know, given where we are today, and the fact that you missed the downside, or a good bit of it, I realize you have some concerns about the policy decisions where we're heading as a nation, even economically, and I would agree with a good bit of that. I think, you know, the very best way for you to grow this portfolio is to have, you know, a balanced account. So I would have probably a 20%, maybe 30% allocation to stocks in an account like this, even at your age of 73. Just because I think over time, that's going to be the very best way to, you know, have this return be better than what you would get in a cash type account, which is losing purchasing power every day.
And I realize there's risk with that. But especially as we peek out on interest rates, then you could have the lion's share in a bond strategy, where at least you're getting, you know, a decent yield with high quality government and corporate bonds. So I think over the balance of this year, if it were me, I'd probably begin to move back in systematically to the market with the right allocation of stocks at probably 20 to 30%, and fixed income at 60 to 70%. And do that systematically between now and the end of the year, so that as the market recovers, and we could all debate whether that's going to happen and in what time period, you'll have the benefit of taking advantage of that. The other option, Don, would be to connect with an advisor who could really take responsibility for this and make these decisions on your behalf if that was something you wanted them to do.
And you could roll it out to an IRA, which gives you ultimate flexibility on the types of investments. I've got just about 30 seconds left. Give me your thoughts. Well, I appreciate that. Thank you very much.
Yeah. I'll look into that. And I appreciate your advice. Thank you very much. Well, we appreciate your call today, sir. And may God bless you.
Well, folks, that's going to do it for us today. So thankful that you stopped by as we together in community try to find God's heart for managing his money. You know, when we think about our role as steward, it's a high calling. We're money managers for the King of Kings.
Well, doesn't get any bigger than that. So we want to be found faithful and we want to go back to his word so we understand how to go about that. Well, our team is essential to what we do here every day. So let me give them some thanks. Want to say thank you to Amy and to Courtney and to Melody and to Jim, the team serving us today, doing an amazing job, pushing buttons and serving you as you call in and doing all the things that makes this show possible.
MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. That's going to do it for us, but I hope you'll come back and join us next time. We'll do it all over again. In the meantime, may God bless you.
Whisper: medium.en / 2023-03-01 07:05:15 / 2023-03-01 07:18:41 / 13