Financial Tweaks for 2023

Have you ever wanted to read through some of the things that happen? Hi, I'm Rob West. If you don't have any control over the national economy, but you have a great deal of control over your own economy. Today I'll share the steps to strengthen your financial condition and give you peace of mind in the bargain. Then it's on to your calls and questions at 800-525-7000.

That's 800-525-7000. This is the new Faith and Finance Live, biblical wisdom for your financial decisions. Well, there's no question that the number one thing you should do in 2023 is get out of debt. With today's higher interest rates, you're paying even more to carry balances on credit cards. Use the snowball method to pay off those cards, that is prioritizing them by smallest to highest balance, paying all the minimums and using any extra funds to pay more on the smallest balance. When that's paid off, use extra funds to pay off the next smallest balance, and so on. Of course, you'll need to be on a budget to determine how much extra cash you have to pay down your debt.

Spending without a budget is like a circus performer working without a net. So if you don't have a budget yet, well, download the Faith Fi app. That's Faith Fi. It's got three different ways to set up your spending plan, and one will be just right for you. Again, you can download it at faithfi.com.

That's faithfi.com. Now, another great financial tweak for 2023 is to start or increase your savings. We don't know what lies ahead for the economy, but having an emergency fund will help you prepare for anything.

A 2022 survey by YouGov showed that 49% of Americans couldn't cover an unexpected bill of just $400. That was a big jump over the previous year, probably due to higher interest rates and inflation, so it's vital that you start putting away something from every paycheck into a savings account. Start with a goal to save $1500, then keep going until you have one month's living expenses, and don't stop until you have three to six months living expenses saved up in your emergency fund. That covers your short-term saving needs. But you also have long-term savings needs, and that means retirement investing for the day when age or health prevents you from working. So another great financial tweak for 2023 is to make sure you're at least maxing out any matching contributions in your 401k. If you want to go further, you can contribute up to $22,500 to a 401k or 403b this year.

If you have an IRA, either traditional or Roth, you can contribute up to $6,500 in 2023 and an extra $1,000 if you're over age 50. Here's another way to improve your financial condition this year. Improve your skill set by taking web courses. Online learning exploded with COVID, and it remains easier than ever to get professional certifications and specializations, even undergrad and master's degrees without leaving home, and often at a fraction of the cost of in-classroom programs.

And if you're looking for a career change, there's an increased demand for tech talent, so schools are offering a lot more options for computer programming and coding classes in particular. So those are the offensive tweaks you can make to improve your finances in 2023, but what about the defensive tweaks? And by that I mean protecting yourself from fraud and identity theft. One way to do that is by signing up for a transaction or account alerts with your bank and credit card issuer.

You should be able to do that online. Once you've logged into your account, look for security settings and select the transaction monitoring option. The system will then text or email you whenever money is taken from the account, and you can take steps to minimize the damage if fraud has occurred.

The credit card issuer will investigate any false charges and remove them from your account. You can also put a freeze on your credit at the three credit reporting bureaus, Experian, TransUnion, and Equifax, and that will prevent thieves from setting up new accounts in your name by blocking credit checks. It's free and easy to do, but you'll have to do it at each of the three bureaus individually. While you're doing that, it's also a good idea to get your credit reports. You can do that free at annualcreditreport.com. I would pull them at least every six months, if not more often. By the way, when you get those reports, look for any errors or suspicious activity.

If you find something that's inaccurate, be sure to dispute it and they'll have 30 days to resolve it or get it dropped from your report. And those are your financial tweaks for 2023. Your calls are next, 800-525-7000. This is Faith and Finance Live, and we'll be right back. Great to have you with us today on Faith and Finance Live. I'm Rob West, your host.

Yeah, that's right. It's a new year and a new name for the ministry and the broadcast, a more accurate representation of what we believe is the big opportunity as it relates to our money and our view of God and His word. You know, if our primary goal as believers is to be used by God as faithful, selfless stewards to advance His kingdom, well, our legacy becomes more than simply being wise with money. And so we believe that the new name of the show, Faith and Finance Live, is a way to strengthen the way we express the Christian worldview of faith and finances. So we're excited, along with some really exciting new things we'll be able to roll out to you in the days and the weeks ahead. But today you can check out our brand new website that just launched yesterday at faithfi.com. That's faithfi.com and the new Faithfi app in your app store. You can read all the great content, jump into our community, download the Faithfi app.

It's all right there, plus all of our broadcast archives. Again, faithfi.com. Check it out today.

All right, our phone lines are open because nothing's changed about the content of the program. We'd still love to hear from you with whatever is on your mind financially speaking so we can bring the wisdom from God's word to bear through the principles we see in Scripture and apply them to the things you're thinking about in your financial life today. Our team is standing by and here in a new year, we'd love to know what you're considering today financially speaking. Give us a call at 800-525-7000. Again, that's 800-525-7000. We'd love to hear from you.

We're going to begin today in Wisconsin. Hi, Jolene. Thanks for calling. How can I help you?

Hi, thank you for taking my call. My husband and I have a business but it's under my husband's name as a sole proprietor. Years ago he started giving me a minimum wage so that we could at that time deduct our health insurance from our taxes. We now are getting our health insurance through the marketplace so once we start doing that, that reason for paying me became obsolete. So we are wondering should he continue to give me a paycheck because now with our workman's comp it hires that I'm counted as an additional employee. We pay unemployment insurance on my wage.

I'm 58 years old so I'm looking at retiring in a few years. Would it be beneficial to keep him paying me a wage for the sake of retirement or would we be better off eliminating? I'm obviously going to be doing the work either way. Sure. Yeah.

Makes sense. I think you might want to check with your tax preparer just to see there are reasons beyond just the tax benefits you were describing that have gone away that could make this worthwhile. For instance, Social Security would be one of them.

You would likely be eligible as a non-working spouse who doesn't qualify on your own record for 50% of your husband's benefits but you may be able to qualify on your own record if you reach a certain number, at least 10 years worth of work paying in with Social Security, the taxes, the FICA taxes. So that would be one consideration if your Social Security benefit could be increased as opposed to you taking it solely as a spouse if you could take it based on your own work record. Often health insurance and health reimbursement account benefits are another reason folks will do it. If they want to jump in on group disability insurance, that would be another reason. If there's a 401k which in your case probably not but that would give you more potential to contribute. Business travel expenses, additional health care breaks, vehicles, group life insurance. There are a host of reasons why you'd want to do it. Many of these are limited in a sole proprietorship as an S corp and so that's where you may be exactly right.

It may just not make sense for you to be paid as an employee for the reasons you mentioned but if any of those apply, either Social Security or health care related or retirement benefit opportunities, those would probably be the reasons for you to continue to do it. But I would probably check with a tax preparer. Do you all use a CPA? Yes, we do. Okay, so I think this would be a great question for that person just to say, here's what we're considering. Here's why we think this may not make sense. Can you help us look at all of the potential benefits that we might derive from me being an employee? And just help us evaluate whether this makes sense or at the end of the day, are we just spending more by doing so?

And if that's the case, then as you said, you could no longer be an employee and just continue to help out as a spouse. Okay, that sounds good. Well, thank you very much. All right, Jolene, God bless you and thanks for calling today. 800-525-7000 is the number to call to Akron, Ohio, WCRF. Hey, David, thank you for calling, sir.

Go right ahead. Thank you, Rob. Hi, I have a question about hedge funds, Rob. They appear to be extremely lucrative. Is it like you put down money and you just leave it and forget about it? And when the product takes off in the market, then that's when the explosive hit happens. That's what it seems.

Is that what it is? Well, you know, there's huge massive profit all in that one day. I mean, if I put it down like $100, Rob, it's almost like penny stocks or something.

But there's like liquid gas, there's Uniflex and all this stuff that's going to be coming out and coming to market. It's like you're hedging a bet. You put the money down and then when it takes off, that's it. You've made a massive amount that day plus the entire week.

Yeah, yeah. Well, they're certainly not for the faint of heart and you need to understand what you're getting into even if you qualify and not everyone does. Essentially, David, it's a limited partnership of private investors where their money is managed by a professional fund manager, but the range of strategies that are deployed inside a hedge fund are very wide. It could include leverage, it could include trading non-traditional assets, which you described a few of those, and the goal is to earn above average investment returns. Now, although they tend to be more speculative just by the nature of these hedge funds, it doesn't mean you're throwing caution to the wind. A lot of these are managed by very sophisticated strategies with expertly trained money managers. They're generally considered a more risky alternative investment choice and that's why they usually require either a higher minimum investment or a certain net worth for you to be what's called accredited as an investor.

And so they are typically for those folks who have a bit more sophistication and through their higher net worth requirements have the ability to take a little bit more risk. They're actively managed and it really depends on the fund manager because these can include equity or fixed income or even event-driven goals. And you also have to understand kind of the liquidity options as well.

It really has to do with the ability of the fund to be able to satisfy investor redemptions and so they will tell you the schedule at which you can actually do that based on the fund's duration and liquidity. So I think the key is first, is it something that even applies to your situation just based on are you an accredited investor? And then does it fit into your overall investment plan where you can take a bit more of a speculative higher risk approach with a portion of your assets because you've got more of a sure and steady approach with the bulk of it. And so for the average investor, I'd say stay far away.

If you're more sophisticated and have the ability to do so, there certainly can be a lot of money to be made in hedge funds as long as you understand what you're getting into. David, I hope that helps. We'll be right back. Stay with us. Delighted to have you with us today on Faith and Finance Live.

I'm Rob West. That's right, a new year and a new name for the broadcast, Faith and Finance Live. The same content, though, and I'm still here each day taking your calls and questions on anything financial. In fact, we've got some lines open now and we'd love to hear from you.

Eight hundred, five, two, five, seven thousand is the number to call. Hey, before we head back to the phones, let me mention as a part of the rebrand of this broadcast, we've also rebranded the ministry to Faithfi. That's right, Faithfi, which is a one word integration of these two words, faith and finance. And you'll find our new website up as of yesterday at faithfi.com. That's faithfi.com and the new Faithfi app in your app store. Now, this is a great time to download the Faithfi app.

Why is that? Well, here at a new year, it's a great time to reset so many things, including our finances. And as we head into a new year, perhaps this is the year where you need to get on a spending plan. Go ahead and plan out your monthly spending and then track your spending against it using the tried and true envelope system. Well, inside the Faithfi app, there's actually three different approaches to money management.

You'll find one that fits your style and temperament, whether it's hands off or hands on or more detailed, or perhaps you want to be more directional in nature, whatever it might be. You'll find a solution for you right there in the Faithfi app. So here at the start of the year, I might encourage you to consider getting your budget set up and begin tracking your spending so you can give every dollar a name and make sure you're controlling your money as opposed to it controlling you. To learn more, just go to faithfi.com and click app or head to your app store and download the app today. All right, back to the phones we go with a few lines open, 800-525-7000, Indianapolis. Eric, thanks for calling. Go ahead. Hello, Rob. Thanks for taking my call. Yes, sir. I have a question. I'm saving to buy a new car and I'm saving $1,700 every month and my goal is to save until I get the full cost of the car and the car that I want to get costs at $1,000. And I was just wondering if this is a good idea or should I just go and contract some debt so I can get a car? I just don't know.

I was wondering what is the best option? Yes, sir. Well, I appreciate that question.

I have a few follow-up questions for you. You said you're saving how much per month? $1,700. Great.

Way to go. And what do you ultimately think you'd like to spend on the car? Have you done some of that research? When I've done any research, the car that I want to get costs at $1,000. Okay.

I'm losing you there. How much do you think the car will cost that you'd like to buy? $31,000. Oh, $31,000.

Okay, I've got you there. And how long have you been saving and how much have you built up already? I've built up $5,000 so far. Okay, $5,000 so far. And you're putting away another $1,700 a month. So if we want to save $26,000 more and you're saving at $1,700 a month, that's going to take you about a year and three months. So perhaps next April you'd be ready to buy this car. I might split the difference here, Eric.

But before I give you my final answer, let me ask one more follow-up. What are you driving now and do you have the ability to wait or are you really in need of a car sooner than 15 months? I'm driving an Audi Airport Quattro. It is a North Car from 2006.

And then the width of that car is somewhere between $5,000 to $7,000. Okay. And it's running okay? You're not having to put a lot of money into it to maintain it? I'm spending about $50 every month to maintain it. Okay.

So only about $600 a year. Is that right? Yeah.

Okay. You know, I'm going to recommend, Eric, that you wait. Perhaps not until the full 15 months is up. You may want to borrow a little bit for it. But if you've got a car that's in good shape, it's obviously a nice automobile, an Audi.

It's worth $5,000 to $7,000. It's older, but you're not having to put a lot of money into it. If you can continue on this track without having to put a lot of money into it, which that could get expensive if you start having problems, just given that's a high-end vehicle and they're not cheap to repair.

But if you could continue on this track, the reason I might wait is two things. Number one, you're continuing to save $1,700 a month, which is going to allow you to put more down when you're ready to buy it. If you don't buy it for cash, at least you'll have quite a bit more going into it. But number two, used cars are expected to fall in price this year by as much as 10% to 20% because they've been so elevated given the lack of inventory on the new cars. As that situation resolves itself and the inventories are replenished on the new car lots, we're going to see used car prices begin to fall. You could end up buying that $31,000 automobile for perhaps $25,000 if we see prices fall 20%. If they only fall 10%, you might be able to get it for $28,000 later in the year.

I might target next fall. The only thing that would change that is if you started having some major repairs for your Audi that would require you to speed that up. But if not, I think you'll get a better deal later in the year and you'll have more to put down. And then at the end of the day, Eric, if you just decide you don't want to have a loan, well then just wait it out and buy it with cash maybe next spring, a year from April. But I don't have any problem with you doing it sooner than that.

I would just probably wait until we see some of this contraction that we're expecting with used cars. Does all that make sense? Yes, sir. Okay, very good. Hey, listen, congratulations on limiting your lifestyle and being able to put that much aside for saving for this new automobile.

That's great. Once you buy it, let's keep taking that $1,700 a month until it's paid off if you don't buy it with cash. And then you can start looking for other opportunities. Maybe you're saving for retirement.

Maybe you up your giving. You could look at a whole host of things. But the key is you're keeping your lifestyle in check so that you have the ability to fund your goals.

And that's really great financial management. God bless you, Eric. Thanks for calling today. Folks, we're going to take a quick break. When we come back, more of your questions. Jeanette, Jessica, Charles, coming your way.

Perhaps your question as well. I'm Rob West, and we'll be right back. Great to have you with us today on Faith and Finance Live. I'm Rob West. Hey, check out our new website, faithfi.com.

That's faithfi.com and download the brand new FaithFi app in your app store. All right, back to the phones we go. St.

Cloud, Minnesota. Jeanette, thank you for calling. Go right ahead. Yes, I just turned 55 in October and I plan on working until about 67 or 70. And I've never owned a house.

I've always had the wanderlust. But recently I've been thinking of settling down. And I guess I'm just wondering at this age.

I mean, I'm hoping to be around for a while. Is it you know, is it smart to think about purchasing a house or should I continue to rent? I don't really feel like I'm throwing money away at rent. But yeah, I just wasn't sure what.

Yeah, it's a great question, Jeanette. And it's one you need to think very carefully about and pray through. You know, the benefit of homeownership is as long as you buy the right home that fits your budget and doesn't stretch you financially. Obviously, as you make those payments every month, a portion of that would be building equity in that property such that you could either at some point pay it off. And you'd have an asset that could be sold or could be passed on at your death.

But at the same time, you don't want to buy a home you can't afford because if there's something that is going to cause you financial strain, a lot of times a home is just that, trying to buy too much house, especially given what's happened with housing prices over the last decade. Let me ask you this. If you were to buy a house, do you have something saved that you could use for a down payment that would not include your emergency fund?

Not at this time. And I'm not sure. I mean, I'm looking more at a five-year timeline.

I'm not necessarily talking, you know, within the next year. It's just that I've heard a lot of your calls and at this age, a lot of people are, you know, oh, I want to pay off my mortgage. I'm like, I haven't even had a mortgage. Should I even get to that point this late?

Yeah. And there's nothing wrong with having a mortgage this late. I think you just need to recognize that, again, it's going to come down to what is the cost that you're incurring, you know, the amount you're spending every month in your budget. Can you keep that to something reasonable? And we would typically use, you know, 25% of your take-home pay as a rule of thumb for that, whether that's rent or a mortgage. So, as long as that number fits within your plan and you can cover that every month, then beyond that, the question is just really about the additional cost that you're incurring by being a homeowner. You know, you've obviously got the property taxes and the homeowner's insurance.

You've got to maintain it. Some of that, you know, is now going to be your burden as opposed to your landlord. So, you've got to just compare all of these factors. Now, one of the things that's made renting more challenging as of late is that rental prices have been really very high compared to home prices. I mean, as home prices have risen, the rental prices have risen alongside them and a lot of folks are growing frustrated at the amount they're spending every month in rent without getting anything to show for it in terms of equity. So, you know, the fact that you would have a mortgage as you head into this next season of life in retirement isn't concerning to me as long as it fits within the overall picture. And that picture needs to not only include the principal interest, taxes and insurance payment, but the other costs as well that might be a bit higher than, you know, what you're spending right now for rent. If you do the math and kind of work your way through it and decide, you know what, I'm comfortable continuing to rent and it fits within my budget. It gives me a little bit more peace of mind that I'm not carrying this massive debt and I can rely on the homeowner to, you know, the landlord to do repairs and that kind of thing or the apartment complex, whatever it might be. Then, you know, there's nothing wrong and it gives you a bit more flexibility in that season of life as opposed to, you know, having a major asset that would have to be sold if you wanted to, let's say, move into a nursing home at some point or assisted living or something like that.

So I don't think, you know, just because you're 55, you know, it should be an automatic no. I think the big question is what would it take for you to get to a place financially where you're ready to make that purchase and I would use kind of as a starting point 20% down. So on a $200,000 home to, you know, $40,000 in savings that you could put down and then what would the the resulting, you know, if you bought that $200,000 home or condo, what would the mortgage be principal interest, taxes and insurance on that $160,000? And how does that compare to the rent that you're paying? And then what about those added costs that you don't currently have as a renter that you would have as a homeowner?

Does all that make sense? It does and I just wonder and kind of from the opposite point of view then, does it feel like I'm because I wouldn't own a house if I chose not to, would I be throwing money away for the next 25 years because I'm choosing not to? Yes, I mean there is some absolutely some truth to that because you're not building equity in this asset, you're helping somebody else pay their mortgage which is ultimately going to give them an asset that they can sell and liquidate at some point.

And you don't have that opportunity as a renter. What do you gain though by giving that up? Well, you gain flexibility because you don't have all of your money tied up in this big asset. You gain the ability not to have a big mortgage over your head. You gain the ability for somebody else to be responsible to maintain the property.

But what you're giving up is having more control over how things are repaired and how quickly they're repaired and how well maintained it is. And the fact, and this is a big one, that you're not building equity in an asset that you could be building if you were to buy a home. So I think there is a good case for, even at 55, buying a home. I just would want to make sure you do it in the right way, meaning you're able to save for that down payment and you don't get yourself overextended with regard to buying too much house. And therefore, when you look at the mortgage payment plus the taxes and insurance plus the maintenance, that you are stretching yourself financially such that now you're going to have added stress in this season of life that you don't currently have.

That would not be what I would want for you. Right, right. Alright, well that helps a lot. Thank you so much for your info.

You're welcome. Perhaps as a next step, Jeanette, given that this is several years off, maybe just start doing some research. You know, I think we're going to enter a period where the housing market is going to be flat to down. So I don't think we're going to see the big increases over the next few years. In fact, for 2023, a lot of folks are expecting declines of somewhere between 4 and 6 percent in housing prices.

So, you know, this is a good season for you to be thinking about it. Perhaps it's a time for you to go out and look and say, okay, if I were going to buy, where would I buy? And what am I looking for? And how much does that cost? And how much would I need to save?

And how long would that take me? And then, you know, what would my mortgage payment be? And how does that compare to what I'm currently spending in rent? And if I were to set aside, you know, 1 percent a year of the property value for home maintenance, so that's $2,500 a year, $200 a month for a $250,000 home.

If I add that in, how does that fit into my budget? And you could run some of these hypothetical scenarios just to see whether it would put you in a place that you're comfortable with, or whether it would get you beyond that to the point where you say, you know what, I just don't think that's something I want to add right now. And if that's the case, then you could just continue on the way you have been. The other option is start saving like you're going to make the purchase and just see how it goes.

And, you know, perhaps 2 or 3 years down the road, you've got $20,000 or $30,000 or $40,000 saved, and you have the ability to either make that decision to proceed or not. So we'll ask the Lord to give you some wisdom on that, Jeanette, as you think and pray through that. We appreciate your call today.

Jessica, Charles, Luanne, we're going to come your way right after this break. This is Faith and Finance Live, where we apply the wisdom of God's Word to your financial decisions and choices. I'm Rob West. Stay with us. Our final segment just around the corner.

Great to have you with us today on Faith and Finance Live. I'm Rob West, your host, taking your calls and questions. Let's go back to the phones quickly.

WMBI in Illinois. Jessica, you're next on the program. Go ahead. Hi. I just wanted to say I'm a big fan. I always wanted your financial advice. Oh, thank you. That's very sweet of you.

How can I help? Yes. So I'm 36 years old, and I wanted to, well, tomorrow, I'm just really overwhelmed, because tomorrow I'm going to meet with my company's financial advisor, and I'm going to roll over three other accounts that I had from previous jobs into this company, my company. So I want all my retirement money in one spot. I think that's a great idea.

Yes. And so I'm just really overwhelmed, because I pay $1,000 in student loan debt. And then when the COVID federal loans get listed, I'm going to pay more.

And so I'm just really overwhelmed right now, and I don't know which. It's right now I chose every payment, I mean, every paycheck I get. I put money aside into a folder, not a folder, but it's just like they put it in one. It's like stocks, and it's a combination of different things. When I asked him, my financial advisor for work, the work company, I wanted to do a Roth IRA.

So what is your advice for my age, and I could get the best interest rate for my retirement money, and how much money should I put every pay period? Yeah. Okay.

Well, you've got a lot going on here, Jessica. Let's try to get you some clarity around where you go from here. What type of retirement account do you have available at your new employer? Is it a 401k? No, because it's a not-for-profit, so it's a one, I think it's called 103B.

403B. Okay. Yeah. So that's the non-profit equivalent. And you're going to roll your old retirement accounts into this new 403B, is that right?

Yes. I'm already, every pay period, I put like 150. I know that's a little bit, I don't know how much I should put, but I just want to put...

Okay. Well, I'm glad you have the 403B, and I'm glad that you're going to combine everything into one place, because we love simplicity, and that's going to help to simplify things so you're not getting statements and tax documents from multiple brokerage firms. So having it all in one place is a good thing. To your question about how much to put into retirement, it's ultimately going to be a function of your budget. How much can you actually afford? So after you really examine your lifestyle spending and make the hard decisions on what stays and what goes, you're going to ultimately be able to determine after your givings in there what you have the ability to put away for retirement, plus any other short-term savings needs, a car replacement fund, things like that. If you're saving to buy a house, how much you're putting aside there. In terms of the retirement goal, ultimately you want to try to get that up to 10% to 15% of your take-home pay. The question is whether or not you have the ability to do that today. You may not. And so you may say, listen, all I can do today is 3% of my paycheck.

Well, that's fine. Let's start there, and maybe next year it's four, and then five after that, and then maybe you get a raise and you don't change your spending, and you can bump it up to eight in one year. But ultimately we want to get it to 10% to 15%.

So that would give you a target. In terms of the Roth IRA versus the 403b, I like you contributing to that 403b, especially if there's matching. Do you know if your new employer is going to match any of your retirement contributions? No, it's just only what I put. Okay. All right. A separate one that when you're fully invested, I think they give you, it's not called pension, but it's similar to that. If you save the company for seven years.

Okay. Yeah, well, I would get more information on that, but I think you contributing to that 403b makes some sense because then you don't have to pick the investments. You could have this representative help you choose the right investments inside the 403b, and there's going to be a menu of options.

And based on your age and your goals and objectives, they can help you pick the right ones. And then just try to put as much as you can in there, ultimately getting up to a goal of 10% to 15%. With regard to the student loans, don't stress about that.

You'll get that done. I think the key is let's create a plan. Again, let's limit your lifestyle spending, your expenses, and let's try to free up as much as you can every month to put toward that payment. And maybe set a goal to have that paid off in 10 years by the time you're 46. And you could call them and say, hey, how much would I need to send every month to get this paid off in 10 years? And then you would know at least you're working toward a goal of ultimately getting your retirement savings up to 10% to 15%, getting your student loans paid off in full. And once you do that, you're going to feel a lot better because now that's off your back, and you're going to have more every month that you can put toward your other goals.

But here's the reality, Jessica. The fact that you're thinking about these things, you're already contributing to retirement, you're trying to get these student loans paid off at 36, you're way ahead of everybody else in this situation. So be encouraged. You're doing the right things, and I think as long as you try not to be overwhelmed, and get wise counsel, and let's try to simplify things and live well within your means, you're making the right steps that are ultimately going to put you in a really good position down the road.

Okay? So don't get an IRA Roth because that is one of the options in the 403b. There's so many you could buy. Yeah, so if you have a Roth option inside the 403b, I would absolutely go with that, yes. There's like different types of Roths, so what type? Yeah, there's only going to be one Roth.

The question is just what investments to put inside of it. So I would just tell the person that you're meeting with that you'd like the Roth option with the 403b, and I'd try to get as much going in as you can up to 10% of your pay. I'm going to have to scoot, but I appreciate your call, and if you have other questions down the road, you let us know, Jessica. God bless you.

To Hope Sound, quickly, Charles, how can I help you, sir? Yes, sir, I got a question on Social Security for a sister of mine that has been divorced and not remarried, about claiming part of her ex-husband's Social Security. How does that work? Yeah, as long as the marriage lasted at least 10 years and she hasn't remarried and she's at least 62, she's entitled to collect Social Security retirement benefit based on her ex-spouse's work record. Your former spouse or her former spouse doesn't have to be collecting his retirement benefits for her to claim that ex-spouse will benefit. In the case of divorce, the divorce has to be at least two years old if they're not claiming benefits. If he's already claiming benefits, then that two-year rule doesn't even apply, and the most she would be able to collect is 50% of her former spouse's primary insurance amount, the monthly payment that he is entitled to at full retirement age, which would probably be 66 in four months. Does that make sense? Yeah, the only question I would have is, does he lose his if she takes it?

Oh no, no, no. A spousal benefit is in addition. It has no bearing on his benefit that he's collecting. So if he's drawing $29,000, then she gets, I mean $2900 a month, she would get half of that, but his wouldn't decrease. Up to half, and it could be in fact half, and it would have no bearing on what he's earning as a benefit.

It would not reduce it in any way. That answers that question. All right. Very good, Charles. Thank you for calling, sir. God bless you. Luanne in Indianapolis, you're next up. How can I help you? Hi, thanks for taking my call.

I have a two-part question, if I can remember both questions. I have a small IRA, it's $80,000, and I have a very small 401k, which is $10,000, but I'm continuing to contribute to it every payday at 9%. I am pretty much debt-free except for my mortgage, which is $69,000. Would I be smart to take out the money out of my IRA and pay off my mortgage, or would it be better to leave it in? And the second part of my question is, at retirement age of 67, could I still work full-time and take my Social Security benefits and pay on my mortgage to pay it off?

Okay, let's deal with the first part first. Should you pay off that mortgage, how long do you plan to continue to work? I am 63. I can take full retirement at 67. I'll probably work until I'm 70.

Okay. As long as you don't have a real conviction to be debt-free, and if you do, then go for it, but if you don't, I'd probably not pay that off right now. If it's fitting into your budget, I think the goal would be to try to get it paid off by the time you retire, but I would rather you let the IRA and the 401k, which are no doubt down with the market, I'd let those recover before you look at taking it out. Plus, I don't want to add $69,000 to your taxable income in one tax year. So I'd probably just continue to pay on this as you are. If you're sending extra every month or every year, great, that's going to help you get it paid off sooner. And let's set a goal to pay it off at least by the time you retire or within the first couple of years after you retire. So throwing a couple hundred dollars here and there on the principal, I get bonuses like probably three times a year of $1,500.

Throwing that on the principal, would that knock it down pretty quickly? Absolutely, especially since it's down to $69,000. Every $1,000 helps. So yeah, when you can, go ahead out of current cash flow and pay it down, and that will help you get to the place where by the time you retire in let's say four years, maybe you get this thing paid off. Okay, so what about, can I work after I start taking full retirement?

Absolutely. Once you reach full retirement age, you can work and earn as much as you want. It'll have no bearing on your benefits. If you take, start taking retirement early, that's where you get penalized. They'll hold back a portion.

They'll eventually make that up to you. But once you reach full retirement age, you can work as much as you want, make as much as you want. And in fact, if you're making more than any of your 35 highest years of earnings, it'll actually improve your benefit. It could actually raise your monthly benefit by you replacing some of those lower income years.

So yeah, that's absolutely something you can do. Louanne, thanks for your call today. God bless you. That's going to do it for us today, folks. We're so grateful to have you with us today.

MoneyWise and, well, Faith in Finance Live is a partnership between Moody Radio and Faith5. We're so glad you were along. Want to say thank you to my team, Dan, Amy, and Robert. Couldn't do it without them. We'll see you tomorrow. Bye bye.