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December 2, 2022 5:50 pm


MoneyWise / Rob West and Steve Moore

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Finishing Well
Hans Scheil

Hi, everyone. My name is Emma, and I serve as a producer here at Moody Radio. I want to take a quick second to tell you about our newest podcast, 52 Weeks in the Word. This podcast hosted by Trillia Newbell will walk you through the Bible cover to cover in 52 weeks. Each week, Trillia sits down with a guest for a 10-minute conversation about the weekly reading, Bible reading habits, and spiritual disciplines.

Some of these guests include our very own Chris Brooks, Jen Wilkin, Nancy Guthrie, and many more. If you've ever wanted to read the Bible in a year, now's your chance! Listen to the trailer, follow and subscribe on the Moody Radio app or anywhere you listen to podcasts.

Episode 1 drops on January 1st. We all want to align our faith with our investments, but are you only thinking of what to invest in or avoid? Hi, I'm Rob West. There are many ways you can make a real difference for the kingdom and provide for your family. I'll talk about that with Mark Regehr today, and then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. So our guest today is Mark Regehr, Vice President of Stewardship Investing for Praxis Mutual Funds.

He's been working in the field of faith-based investing for over 25 years. He's a good friend, and Mark, delighted to have you back on the program. It's good to be back, Rob, and it's really an honor to be able to share with your audience.

Well, I'm delighted you are. I know this is a topic that a growing number of people are very interested in. We're going to explore a number of investing opportunities, Mark, that have real impact for the kingdom in just a moment. But first, this whole idea reminds me of a passage in Romans 12 verse 2. It says, Do not conform to the pattern of this world, but be transformed by the renewing of your mind.

Would you agree with that? Oh, absolutely. You know, this is really a great passage of Scripture, because it can challenge us as Christians to be both humble and diligent, prudent and innovative, slow to anger and also committed to our community. You know, we should really keep that verse in mind and see it as a challenge as we approach investing. Yeah, I think it's something that should be in the forefront as we think about this topic.

All right. Well, you've been in the field of faith-based investing for a long time. And why do you think, Mark, it's taken so long for people to recognize that there are many ways to make an impact for kingdom values? I think we've had a long history of Christians reflecting their values primarily through the screening out of certain stocks. And while this is very appropriate, it also has limited real world impact. But there's also exciting newer work that's happening around the field of sort of targeted but often private investments. And these are often available only to high net worth investors. But today, I think we can explore a whole range of opportunities for making real change that are available to everyday investors. I love that, because, you know, as we think about applying our biblical worldview to every facet of our lives for so long, Mark, this idea of investing being one of those opportunities has just not been on the radar of many Christians. And yet to think about the opportunity to grow what God has entrusted to us and to do it in not only a way that aligns with our values, but it's going to make a difference in the lives of God's people. That's an opportunity, frankly, most people just didn't realize was available to them, right?

That is so true. And, you know, we've been really excited over the last number of years to build out at Praxis Mutual Funds seven different strategies that we apply across the range of our five mutual funds that allow people really to claim and to become involved in that real change that we think we can have help happen for God's values in this world. And we're terribly excited about that.

Well, I'm excited as well, Mark, and I know we're going to unpack these opportunities just after the break, but set this up for us. What are those categories of impact, if you will, that we're going to be exploring? Well, I think today what we're going to do is explore three particular areas that I think have the deepest and richest stories for how our investments can make a change in the world.

The first one will be positive impact bonds. This is the transformation of sort of that sleepy corner of fixed income and showing how it can be used to really make a difference in the world. Then we'll talk about shareholder advocacy, engaging the corporations that have so much influence on our world and affect the lives of millions. And finally, we'll talk about community development investing.

This is for us a real call to reach out to those on the margins, those on the edges of society, and to lift them up, bring them into the economic system, help them gain wholeness and opportunity in an economic sense as well as a personal sense. So very exciting work, and we're glad to share it with this audience. It's a great time as well. And Mark, you've been at this for 25 years, but just in the last several years, we're seeing a real change in trajectory in terms of folks becoming aware and choosing to use faith-based investments, aren't we? We certainly are. And it's really empowering, I think, for the faith community.

Yeah. Well, we've got a lot more to come on this topic. Mark Regehr with us today, Vice President of Stewardship Investing for Praxis Mutual Funds.

You can learn more at We'll unpack this and much more, plus your questions, coming up later in the broadcast at 800-525-7000. We'll be right back. Great to have you with us today on MoneyWise Live. I'm Rob West, your host.

Joining me today, my friend Mark Regehr. He's Vice President of Stewardship Investing for Praxis Mutual Funds. We're talking about the exciting developments in the faith-based investing space, and we're going to be talking about several of those impact opportunities, how you can have real impact through the deployment of capital, whether it's impact bonds or shareholder advocacy or even community development investing. But Mark, I want to start with impact bonds. What are they and how do they differ from traditional bonds that most of us have in some form in our portfolios? And to the topic today, how can they make a real difference for Kingdom Values? Well, impact bonds offer us the opportunity to not just sort of lend money to businesses or corporations, which is what traditional bonds do, but to lend that money in a way that generates a particular social or even environmental impact. And we call that climate and community for us. And the exciting part is that we can have greater control over how the impact of that money is being felt around the world.

I love that. You know, a lot of folks are thinking about including bonds in their portfolio, especially as we start to see the peak of the interest rates. But to couple that income and perhaps stability in the portfolio with real impact is something that hasn't been on their radar previously.

All right. You also mentioned shareholder advocacy or engagement. What does that mean to you? And how have you seen this process become a real opportunity for kingdom change in our world? Well, the process of shareholder advocacy is really the process of engaging companies based on our ownership of their stock. So we have sort of a seat at the table, if you will. And just as if you and I were in business together and we saw something of concern going on, it would be our responsibility to speak up and to say something. And so that's the process that hundreds of shareholders around the world and across this country do every year engaging corporations on issues of concern. We work closely with coalition partners through particularly the Interfaith Center on Corporate Responsibility, which brings together several hundred institutional faith-based and values-driven investors so that we have a unified voice in working on a wide, wide range of topics, engaging literally hundreds of companies every year. And I think it's a great witness.

It's a great opportunity to stand with. And most importantly, these changes where you're making changes in the policies and approaches of corporations, whether it be protecting creation, whether it be working in human rights standards, whether it be making sure that labor is treated with respect and dignity, these things change the course of people's lives and can do so in a much quicker way than many other sort of means of trying to allocate capital. So it's terribly exciting and it's hard work, but it's good work.

It sure is. Can you give us an example, perhaps, of one of these engagements and how it worked out and made a real-world difference? Sure. Well, we've worked on a wide range of issues over Praxis' 26 years. One of the ones that has, I think, made a lasting impact on our staff and on our shareholders as well is a long, long history of work in modern slavery and human trafficking, which we've been engaged in over 15 years. And we've worked in a wide range of forms of this sort of problem, including child labor in the cocoa fields, sex trafficking related to major sporting events like the Olympics and the Super Bowl, also forced labor, whether that be on shrimp boats in Thailand or in tomato fields in Florida.

There's just so many different forms today. You wouldn't think, but today we still face forced labor, bonded labor in so many different ways. But one of the more recent examples that I'd love to share with your audience today is the work that we've done over the last number of years with transportation companies, because human trafficking requires, of course, the movement of people, often against their will, to various parts of the world. And of course, airlines can be a major conduit for some of this work. And so through the collective partnerships at the Interface Center on Corporate Responsibility, we've been working with Delta over the last number of years to help them implement training programs, to help them help both their own staff as well as visitors and fellow travelers to be aware of this problem.

And as someone who travels fairly frequently and often travels on Delta, it's been very gratifying to hear public service announcements, to see ads in the back of seatback videos, to hear announcements, even personal anecdotes being shared by flight attendants who basically remind people that this is happening and subtly call us to all look around in the airplane and wonder, huh, is there somebody here who looks like they may be here against their will and how do we respond? So terribly exciting work that literally can transform lives of those who have been caught in this system. And what a great example of how corporate engagement and advocacy can actually work toward real impact. Alright, this final area that we're going to discuss today is community development investing. How is it different from other targeted impact-oriented investments? Well, community investments exist as a catalytic form of capital.

And so included in the Praxis Mutual Funds and every one of them is a 1% commitment to this space. Admittedly, many of these investments are below market, but they are generally secure and very productive in terms of their social performance. And so our goal in partnering, particularly with Calvert Impact Capital, who has been our longtime partner for over two decades, we allocate today about $18 million that goes to help nonprofit organizations work in a variety of fields, basically with those who would not have access to capital. So this could be through supporting the provision of low-income housing, can be offering microloans overseas. It can be working at helping certain communities access solar or renewable energy where they might not otherwise have access.

So lots of opportunity, but this capital is necessary at a discount to some degree so that this work can be done with a portion of our population that otherwise just couldn't buy into the system and make a better life for themselves. And this is really, I think, doing holy work. It's something that I just recently wrote an article about in Green Money Journal that sort of highlights why people of faith need to think about this space as part of their calling to stand with the poor, to stand with the marginalized, to lift up the oppressed. This is a unique opportunity to do that in a sustainable, life-giving, life-transforming way. And Mark, we have the ability to invest in these types of investments you're talking about, these impact mutual funds, and still seek a competitive return on our money, right? We're not necessarily giving up the opportunity to see this grow. Right. You're right.

And that's, I mean, obviously that's why we have chosen to include these types of below-market investments as a very small piece of a much bigger mutual fund that is very competitive, very focused on delivering to our clients and investors the type of returns that they need to provide for their families, to provide for their institutions. That's great. Mark, how can folks get more information? Well, we certainly welcome their visiting our website at and checking us out on the web.

Lots of information. That's great. Mark, thanks for stopping by. Thank you. Mark Regier, Vice President of Stewardship Investing for Praxis Mutual Funds, has been our guest today.

That website, again, for more information, is We'll be back with much more just around the corner. Stay with us. Well, thank you for joining us today on MoneyWise Live. I'm Rob West, your host. We're going to turn the corner now and take your questions on anything financial. What are you thinking about today? I'd love to hear from you at 800-525-7000.

We still have some lines open at this point in the broadcast. So if you have a question today, why don't you get in on the conversation? Again, you can do that at 800-525-7000. Coming up a little later on the broadcast today, great emailed questions that have come in recently. By the way, if you have a question you want read on the air, you can send it to us at questions at

We heard from Harvey. He asked about making contributions that is giving anonymously and still having a record for income tax purposes. I'll weigh in on how you can do just that.

There is a way. We'll tackle that one a little later in the broadcast. Again, send your questions along questions at or get in on the conversation today at 800-525-7000. Let's begin today in Chicago. David, you'll be our first caller. Go ahead, sir. Hello, sir.

Thank you for taking my call today. My question is about going to school and trying to minimize debt. Currently, I'm going to school full-time and working full-time, but my program is about to get more intense. I was looking to do a hardship withdrawal on my 401K and possibly use some of the funds that I put into my Roth IRA just to try to minimize debt. I was wondering if that was a good idea or if incurring the debt would be a better option in letting that money grow.

Yeah. Well, I never like to pull money out of a 401K if at all possible. You're obviously going to have to pay tax on it. Now, as a hardship distribution for up to 12 months of tuition and fees, you can miss that penalty. So, at least you'd just be paying the tax on the money that you put in and you got the deduction on it when you originally put it in.

So, essentially, it's kind of a wash. So, that would be a way for you to access this money, stay out of debt and get through this program. And then, the idea would be if you could graduate hopefully debt-free, you could get your first job and then you'd still have plenty of time, especially if you start right away contributing back to that 401K or whatever you have available to you once you start your working career. So, I'm not a big fan of pulling out of the 401K but I don't like student debt either. I guess the only thing I would say to you, David, is don't let the fact that this money is sitting there kind of prevent you from getting creative on how you might find other means to fund at least a portion of your education. So, can you work on campus? Could you get a job in the summer? Is there an opportunity maybe to still work but dial it back? Maybe you go part-time. Let's just try to really minimize what you're having to pull out so that hopefully you've got still something in that 401K when you're done and you're debt-free.

But if I had to pick between the two and I'm going to get myself in a binary trap of one versus the other, I would say given that you can miss that penalty, let's go ahead and use that 401K money. Since you're still young, you got plenty of time to refund it and let's keep you out of debt. Does all that make sense? Yes, sir, it does.

Okay. Also, don't miss out on the grants and scholarships opportunity. I've got a young son who's in a little different situation than you, probably a little younger, but he's 17, about to be 18 senior in college and he's spending a couple hours a week just applying for scholarships everywhere. I mean, there are lists and lists of scholarships and grants, perhaps some that are specific to your niche or program that you don't want to miss out on.

So I would spend some time maybe on the weekends when you have some downtime looking for opportunities to apply for some of these scholarships and grants perhaps that you aren't aware of but if you do a little digging, you might be able to get in on them and that can add up over time if you can accumulate a few of those. So don't miss that opportunity as well. David, thanks for calling today. To Charleston, South Carolina. Hi, Kevin.

How can I help you? Hey there. I've got several retirement savings accounts going at once, a 401K, an IRA money market and quite a bit in the TSP and the 401K doesn't have any contributions being made to it any longer. The money market has limited contributions and the TSP gets the most and I was wanting to know what your advice would be on consolidating those accounts given the market downturn and some value loss at least in the 401K and the money market recently.

Yeah. Well, a couple of thoughts. I would look at this in terms of buckets of money. So you want your emergency savings and a liquid savings account and the goal there should be three to six months worth of expenses. Beyond that, unless you have kind of medium term savings goals that would be bucket two of money that you're looking at needing somewhere between greater than one year and less than five years, that still needs to stay fairly conservative.

That's where you might want to look at I bonds as an opportunity there if you're saving for a down payment on a house or a car but you don't plan to use that for at least a year. That's another opportunity. But for that long term bucket, if you will, greater than five, preferably 10 years, I would love for you to keep that as consolidated as you can in one place. That's just going to simplify things. It's less accounts to keep up with, less statements to be reviewing and it gives you an opportunity to make sure that the investments are appropriate so you're not having to keep up with multiple accounts. So what you may want to do if your current plan with your current employer is the TSP, you may want to look at rolling the 401K into the TSP just to consolidate as many of the retirement accounts in one place as you can. I don't remember if you said you had an IRA, but if you do, that would need to stay separate. But at least you could get the TSP and the 401K combined.

Does that make sense? Yes, I do have an IRA. It's in a money market style investment IRA. And the TSP is what I'm currently contributing to as well as my employer. But the 401K was just leftover from a previous employer. I do have three months of savings for the for the emergency savings account. So this is all just retirement long term. So I'd leave the IRA where it is, but I'd combine the 401K into the TSP.

So at least you've got all that in one place and you're not keeping up with two accounts and just make that your focal point moving forward. Kevin, I hope that's helpful. Thanks for your call. We'll be right back on Money Wise Live.

Stick around. Great to have you with us today on Money Wise Live. I'm Rob West. We're taking your calls and questions today on anything financial. 800-525-7000.

That's 800-525-7000. We'd love to hear from you. This is Chicago we go. Betty, you're our next caller. Go ahead.

Hey, I have several concerns. My husband turned 65 in two months. He's considering leaving his job, but we have a mortgage. We've only had the house for three years, so we still owe a lot of money on it. My car note should be paid in a few months. He still has a car note and we're concerned if something should happen to either one of us about life insurance, which is the best type of life insurance for people our age. I'm 58.

Yes. So what income sources will you have in retirement? Will you all begin taking Social Security right when he retires?

He would. Yeah, he wants to take Social Security. I'll be the only breadwinner because I'm still 58.

Hopefully God, you know, keep me healthy. I have a pension that I've been paying into for the last 16 years. His pension he's been paying into maybe the last five years, so there's not a whole lot in there. We have something similar to a 401k. I just can't think of what it is because I have a pension. It's not a 401k.

I forget what they call it and there's not a whole lot in there either. So my concern is once my husband retires, you know, is affording everything. It's too flat and I mentioned maybe selling it if we can and getting something smaller like a single family that's more affordable, but the rates are really high right now. Yes.

Yeah, very good. Well, I think that's really the key is you've got to start with your family budget. Do you have a sense, Betty, of what it takes you all to fund your expenses on a monthly basis? What your total monthly expenses are? I'm guessing it's like four grand for everything, including light, gas, utilities, cable, telephones.

Sure. Well, it's more important now than ever as you head into retirement to really have that nailed down, just so you're not guessing and you have a real accurate budget. Hopefully, some of those expenses are coming down in this season of life because he's no longer working and there's just certain things that can come off the table.

We'll get to the life insurance in a second, but let me ask this. With Social Security plus your income, do you think you all can cover your expenses every month without having to tap into those other small retirement accounts that you have? You know, I haven't sat down to calculate it because he was still working and he just mentioned to me recently that he's considering retiring instead of working longer. He wanted to work till 67, but I think he's fed up with his job already. Well keep in mind, the longer you can delay Social Security, the better because every year he starts taking it before full retirement age, it's going to permanently reduce his benefits by about 8%. So I think if he could perhaps continue to work a bit longer, especially if you feel like you're behind when you do your budget and look at your income sources, it'd be better to let that Social Security continue to grow, even if that means he works longer or perhaps changes to something else. The other option is to work part-time, maybe to begin to phase into retirement. But I think it all starts, Betty, with you getting an accurate understanding of what your monthly expenses are and then comparing that to what you would have in Social Security plus your income and making sure it balances. And if not, then you need to look for other income sources, namely him either working longer or switching to something part-time. And with regard to the life insurance, I think you all are just getting a term policy of maybe 10 years on your life so that if something were to happen to you, he's able to replace that income and then the same perhaps on him. Let's keep that duration as short as possible because the goal is to get to a place where you all have your income sources in place through Social Security and retirement savings so that if something were to happen to either of you, there's not any kind of hardship that's created for the other because those income sources persist.

So I think your next step is really to do the math and for you all to then sit down, look at the budget, look at your income sources and make a decision on the appropriate timeline for his retirement based on how you'll actually pay your bills and then go ahead and get this life insurance policy in place as well. If you have further questions at that point, give us a call back. We appreciate you checking with us today. All the best to you as you think through this.

To Cleveland, Ohio. Hi Sue, how can I help you? Hi, my husband is 70 and I'm 64 and we have about $300,000 in stocks in like mutual funds and I'm just concerned about what the stock market might do.

And I was just wondering like should we take it out like take half mine out this year and I mean take mine out this year and take my husband's out next year. Yeah, a couple of questions for you, Sue. I can certainly understand with the volatility that we've had as of late how that can be concerning. I think the key is not to react emotionally and really to think this through methodically and based on your investment strategy in light of your needs, goals and objectives.

A couple of questions for you. What do you all have in retirement accounts that's currently invested right now? What's the total amount? About $300,000. Okay. And are you pulling an income from that or you've taken out a monthly amount?

No, we're not yet. Okay, very good. And what percent is in stocks versus bonds? Do you know? I do not. Okay. Do you think it's almost exclusively stocks or do you have no idea? No, I think it's a combination.

Okay, yeah. So the way we would typically go about this for somebody who's, you know, 70 or you would typically want to have somewhere between 30 and 40 percent in stocks just as kind of a rule of thumb as a starting point and then the balance somewhere between 60 and 70 percent in bonds. That would be the typical approach and what that would do is give you some growth component to this thing but it's also going to help to moderate the volatility because those bonds, especially in normal situations that's been a little unusual this year because the Fed has been raising interest rates so rapidly, the bond prices have been falling just as fast as the stocks in some cases but that's not typical. Normally, the bonds would be a more stable portion of the portfolio which would kind of temper some of that volatility. So if the market's down 30 percent, your portfolio might be down 10 to 15 if you had 60 or 70 percent in bonds but what it would do is allow it to continue to grow so that you could draw an income from it and still maintain the principal balance and we typically look at about a 4 percent withdrawal rate.

So for you all with a $300,000 portfolio, when you're ready to start drawing something out, we would start thinking around, you know, ideally not more than $1,000 a month that you'd be pulling out but with that $1,000 a month coming out, the idea would be that you could maintain the balance, the principal balance because the stocks and the bonds are replenishing it. If you are more highly concentrated toward the stocks which is giving you more volatility, what I would wait for is for the portfolio to recover. We could go down a little more before we go up but this market will recover ahead of the economy.

Remember, the market looks out six months or more, Sue, so if it were up to me, I would probably sit tight but I would connect with an advisor if you don't have one so that once it recovers, you can reposition it to be a bit more conservative if you're too aggressive but do it when it recovers, not right now. Stay on the line. We'll talk a little bit more off the air and we'll be right back. Thanks for joining us today on MoneyWise Live. I'm Rob West, your host.

Jerry Boyer joins us in our final segment of the broadcast each Friday. We'll talk to Jerry in just a moment but first, an email from Harvey, he writes to us at questions at By the way, you can send a question and we'll try to get it on the air.

We'd love to hear from you. Again, questions at Harvey writes to us, how can we contribute anonymously and still have a record of our giving for income tax purposes? He wants to make a gift to perhaps a ministry or his church but do it anonymously and generally speaking, to get a deduction, you need a receipt for any donation over $250 and that needs to include your name which makes it hard to give anonymously. However, there is a way to do it, Harvey, where you can give anonymously and get the tax deduction and it's using a tool called the Donor Advised Fund.

That's right. When you put the money in your Donor Advised Fund and I like to call it a charitable checking account, that's at least the way to think about it. When you make the deposit into the Donor Advised Fund, because at that point it can only be given to a not-for-profit, you get the deduction as the money goes into the fund and then it sits there until you make the contribution to your preferred ministry or charity and when you make that distribution, you can choose to do that with your name on it or not. I would love for you to head over to our friends at the National Christian Foundation. Their version of this is called the Giving Fund and you can set it up at You can make a contribution at any time in whatever amount you want, one time or regularly and then whenever you're ready, through the couple of clicks of a button, through the online interface, you can grant it out to any ministry or charity you want and you will choose whether or not you disclose your name.

It's a great tool that's often overlooked when it comes to giving strategies. So I hope that helps you, Harvey. Thanks for writing to us. All right, let's head to talk to our friend Jerry Boyer. He's president of Boyer Research. He is a columnist at the Christian Post and he joins us each Friday with his market commentary and analysis.

Jerry, interesting week. Jobs report out today. What did you make of it and what did it mean for the markets? Well, of course, we live in the world of good news is bad news because of the strange economic system we have where the largest participant in financial markets is our own central bank, which is not normal.

That's not historical. So what that means is if the economy is doing well, then that is interpreted by markets as saying, oh, well, the economy is doing well. So the Fed can focus on inflation fighting, which means it can tighten money supply. It can sell securities and yeah, they'll go down, but it'll sell the securities and it'll pull the money out of the economy and that will help fight inflation. Now, most of the week, the trades were kind of like, well, the Fed is going to be, you know, the economy is in trouble and so the Fed is going to be easier. And the Fed chairman made some comments earlier in the week indicating that they're not going to be quite so tough and pulling money out of the system. But all that reversed today with a good jobs report. And so what does the jobs report have to do with this? Under Keynesian economics, they believe that if you've got a healthy labor market, low unemployment, lots of jobs that gives workers leverage, which in fact it does. And that's a bad thing because they think that high wages cause inflation.

Now that's wrong. That's not a biblical view of the world. The biblical view is six days thou shalt labor. Work is a good thing. Lots of people working is a good thing. High wages is a good thing.

We're supposed to be productivity, supposed to be productive, but that's not the Keynesian model. So when that happened, what markets response to that was, okay, well, the Fed's going to go back to its inflation fighting mandate. And of course that, you know, that's switched up. So markets switched up, you know, today in response to the jobs report.

Fascinating. Jerry, what about on the global front? Obviously, China all over the news with the protests. If those lockdowns continue, Jerry, economically speaking, what is the potential impact and fallout that might be felt here in the U.S.? Well, we've had supply chain problems. And so, you know, we have a very close economic relationship with China for good or ill. That's the system that we have.

And so we're kind of dependent on China for lots of things and technology, et cetera, pharmaceuticals. And even though there are moves to decouple from China, that hasn't happened yet, which means when they've got problems, we've got problems. Now, some people are thinking that you're going to have you have these widespread protests and that that means that maybe we're going to have a revolution in China, et cetera, et cetera, and maybe move towards a democracy. That wouldn't be my view, because China, well, honestly, China, young people are the people who cause regime change.

Right. When you have revolutions and when you have moves towards democracy, that's usually led by young people. But China killed half a billion of its young people with its one child policy.

So it's an older society. So I don't expect there to be widespread civil disorder, the sort of thing that would lead, say, to a civil war. So it is roiling financial markets around the world.

But generally, for the past few months, the world has done better than the United States. The bet has been the Fed is going to fight inflation. It's going to pull money out of the system and it will probably in doing that, cause a U.S. recession.

We won't be a haven. That's what markets have been signaling. And that's, you know, largely what that story is largely continued. Jerry, is that your base case as we head into next year? Yeah, my base case is we first of all, my past cases, we already had a recession for six months of the year were negative. That's a recession. Exactly the same thing happened in the 1970s with the same policy mix, persistently high inflation and then a two or three short recessions. So for the first six months of this year, the economy was shrinking.

I think we're also going to have shrinking next year. I don't think we're in a recession now. It looks like, you know, currently the economy is growing. But I think early next year we have another small recession. And because of that, the Fed is not going to be able to focus on its inflation fighting mandate. They're not going to keep tightening credit when we're entering a recession. And markets are betting that they won't do that. Markets are betting that the Fed eventually is going to flinch in this game of chicken with inflation. And that's why we get continued inflation, not hyperinflation, not economic collapse, but higher inflation than average and lower growth than average.

Exactly the same thing we had in the 1970s because we had exactly the same policy mix in the 1970s. Yeah, fascinating. All right, Jerry, I appreciate your comments. As always, my friend, I hope you have a wonderful weekend and we'll talk to you next week. Same to you. God bless.

All right, Jerry Boyer, president of Boyer Research and regular contributor here on Money Wise Live. All right, back to the phones and our final moments of the broadcast today to Orlando. Jose, you're next on the program, sir. Go ahead. Hello, Rob. Thank you for taking my call.

Yes, sir. I really appreciate your ministry and recent from my call today is I'm reaching retirement and I was talking to my financial advisors. I have two of them and they're both kind of leaning towards switching my IRA account into a variable annuity. And I don't know much about annuities, but they're telling me there's a variable annuity that has a 30% protection. We lost the first 30% protected again, but it also has the same growth as my IRA account has now. I just wanted your opinion and see if you could give me some more information regarding these annuities.

Yeah. You know, I'm not a big fan of annuities just because they tend to be complicated and expensive and you lose access to your funds through surrender penalties and so forth for at least some time. What's going on with your current plan? Tell me what you have today, how much you're down and what your age is.

Okay. So I'm 61. I'll be 62 in March. And the account I had moved from my 401k a half a million into an IRA because I wanted to have that protection. They said it was protected better against the downturns of the market, but it's losing as well.

And when I called them to see if there was anything else we could do, that's when they suggested this annuity. That's a little confusing to me Jose, because there's no difference between a 401k and an IRA in terms of protection against principal loss. It only has to do with the investments that are inside it. So you're going to be inside a 401k. You're invested in mutual funds inside an IRA. You could be invested in anything, mutual fund stocks. They all have the ability to lose money. It's just a matter of how the investments are performing. But the IRA in and of itself provides no protection against principal loss. It's only about the investments that are inside it. So you didn't improve your situation at all by moving from a 401k to an IRA. You could have stayed right where you are and gotten more conservative by just selecting a different lineup of investments.

So something's not quite right about that. I might get a second or even third opinion. Are you living off this money or are you still working? No, I'm still working. But that's one of the things I was trying to find out if I could live off of this money beginning in March of next year. So you've got about a half a million today.

Is that right? All in? That's an IRA and just about 200,000 still in the 401k.

Okay. And what would you want to pull out per month if you were to start living off of it? I would estimate about $5,000.

Yeah, that's going to be a little much. I think you're going to need to continue to work for a while because even at 700,000, we would typically say you ought to think about pulling about 4% a year with a portfolio where you could preserve the capital, but that's only 28,000. By pulling 60,000 a year, you're talking about pulling 8% out of that and that's going to start depleting the principle every year, and eventually you'll run out of money. So I think at this point, the thing to do is to leave these right where they are, let them recover, get another advisor to weigh in on the right investment mix for you moving forward, not using an insurance product, and keep working as long as you can and let this grow. I'm out of time, Jose, but I appreciate your call today.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Thank you to Jim, Amy, Clara, and Tahira. Thank you for being here as well. We'll see you next time. Bye-bye.
Whisper: medium.en / 2022-12-02 18:41:47 / 2022-12-02 18:58:06 / 16

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