Beware, lest you say in your heart, my power and the might of my hand have gotten me this wealth.
I am Rob West. That passage in Deuteronomy 8 goes on to read, you shall remember the Lord your God, for it is he who gives you the power to get wealth. First up, I'll talk about why we should always thank God for our ability to earn a living. Then it's on to your calls at 800-525-7000.
That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial journey. Well, surveys show that a majority of Americans are consistently unhappy with their jobs. Last year, we talked a lot about the great resignation and how more workers were leaving their jobs than ever before, hoping to find something better.
Now, there's nothing wrong with that. We should always try to improve our job skills and take on new challenges. That will be especially important if or when we go into a recession. And there's nothing wrong with wanting to earn more as long as the goal isn't just to have more money. But along the way, you have to remain grateful for the job you have. We often forget that God gave us our jobs in the first place.
Grasping that is the key to changing your whole attitude about the workplace. The Bible clearly shows that God ordained work even before the fall. In the very first chapter of Genesis, He commands Adam and Eve, Be fruitful and increase in number, fill the earth and subdue it, rule over the fish in the sea and the birds in the sky and over every living creature that moves on the ground. And even after the fall, God gives us instructions about work. In Exodus 20, God says, Six days you shall labor and do all your work. But the seventh day is a Sabbath to the Lord your God. When you feel yourself wanting to grumble about work, remember that God isn't some hard taskmaster ordering us to work. Rather, He's our great provider. You might think your resume or work experience got you hired, but ultimately, God provided your job.
Everything in the universe happens according to His sovereign will. So we never want to be ungrateful for what the Lord has provided. And by the way, being grateful on the job provides an excellent opportunity to point others toward Christ. When everyone else is grumbling and you're going about your duties faithfully and cheerfully, without gossiping about the boss or grousing about the workload, you're providing an excellent witness for Christ. Now, how do you rearrange your thinking if you're not happy on the job? Well, first, it's helpful to stop and think about what exactly you do on your job.
Look for the meaning in it, even if you think it's mundane. All honest work is honorable in God's eyes. It's easy to miss this, but the things you do on the job almost certainly make someone else's life better by providing a product or service. You're helping to solve someone else's problem and make their life better. That's certainly one reason why God ordained work, to make the world a better place.
So take some satisfaction in that, just not to credit. Remember Psalm 29 says, You'll sometimes hear the expression, managing expectations. It's something we should practice on the job. It means not promising others what you can't deliver. But it applies to our own thinking as well. Business by nature is competitive. Companies have to keep costs down so the final product or service is marketable. Don't expect your company to provide a Cadillac health plan, free daycare, and foosball in the break room.
If you don't expect too much, you won't be disappointed. Keep this in mind, too. If you're grumbling about problems all the time, you become one of them. So instead of complaining, look for solutions instead. Look at every problem as an opportunity to improve things. Trying to come up with a solution gives you a chance to learn something and possibly become a more productive worker.
Suggest alternative ways to do things. Management might not act on your ideas, but at least the boss knows you're trying to help. Now, what if you're already doing those things, and you know and act as though God is your true boss, and you still feel dissatisfied with your job? Well, the Bible doesn't say you have to stay in the same job forever.
It could well be that God is leading you to something else. Just remember that changing jobs or careers can be stressful. You'll have a new boss, new co-workers, and usually new duties. And make no mistake, finding a new job won't help if you carry the same negative thinking into it. So first, put into practice the things we've been talking about. And then, with much thoughtful prayer and consideration, ask the Lord for guidance. He may have a new opportunity for you, another place where you can be a grateful worker.
And with two jobs available for every worker these days, well, there's a good chance there is something waiting out there just for you. Hey, your calls are next. The number, 800-525-7000. That's 800-525-7000.
Stick around. Great to have you with us today on Faith and Finance Live. I'm Rob West, your host. All right, it's time to take your calls and questions today on anything financial. The number to call is 800-525-7000. We've got a few lines open. We'd love to hear from you. 800-525-7000. If you have a testimony today, maybe you'd like to share how God's been at work in your financial life, we'd love to hear that as well. 800-525-7000 with a few lines open. We're going to begin today in Ohio. Kim, you can go right ahead.
How can I help? Hi. I have a TSP fund and I want to retire in about four and a half years, and the lady that I talked to from one of the government surveys said I should put my money into an annuity, but she said I won't lose any money when the stocks crash and anything, but I just have not such a good feeling about it. What are your thoughts about annuities?
Yeah, that's a good question, Kim. A lot of folks ask that question when they're entering this season of life, and what I will say is that annuities are typically sold and not bought, meaning most folks don't go out looking for them. There's somebody who's talking them into buying an annuity.
It's not my favorite tool. I'm not a huge fan, primarily because there's high commissions and fees. There's surrender charges if you want to get your capital back and so you lose access to your money. There's tax penalties if you withdraw the money, and to your point, yes, there can be some downside protection on the investments, but you have to give up upside to get it. So what that means is if the market's up X percent, you're not going to get that full upside, and in exchange for that, they're going to give you downside protection to make sure you don't lose any money, which sounds good. The problem is that when we look at stock market performance in any season of life, as long as we have a long time horizon, it's those, you know, dramatically up markets that really, you know, allow the compounding to work as effectively as it can. And so when we take that away, it just minimizes the overall return. So in my view, a better strategy is to leave that money in the TSP when you retire or separate from government service, you'd roll that out to an IRA, an Individual Retirement Account.
That's not a taxable event. You would leave it there, let it continue to be invested, and then the key would just be to change the investment mix over time so that, you know, as you get closer and closer to retirement, you're reducing your allocation to stocks, you're increasing your allocation of bonds. That's going to make the account less volatile. But keep in mind, you're always going to want some stock allocation because even once you get to retirement, you still have a decades long need for that money to last. And so, you know, the way you keep access to it and grow it is to keep it invested. But, you know, I would say after you build up a pretty significant nest egg, you'd probably want an advisor making those decisions for you. But again, I wouldn't do that inside an insurance product.
I'd do that either inside the TSP or the IRA. How much have you been able to build up in that retirement plan, Kim? Last time the market dropped, I lost a lot, and I'm only back up to about $240,000.
Okay, and what was the high watermark on it? It was probably $365,000. Wow, $365,000 and you're down at $240,000?
Yeah, well, that's up. I mean, I lost a lot. There was two times that the market dropped and I lost a lot and never really regained. Yeah, so that tells me you're in a really aggressive portfolio, I mean, because you were down 40%, it sounds like, or 35%, and that's quite a bit more even than the market was down.
So, I think it's worth looking at what you've got there. I would let it recover, I'm glad to hear that it is. It probably will retest its lows before it goes to higher ground. You know, every time we get into a recession, just looking at historical patterns, we always retest our bear market lows. That would be, in this case, the lows from last October, which is probably when you saw this portfolio at the lowest point. In all likelihood, when we get into a recession later this year, which most economists are expecting, the question is how deep is it, we will probably retest those lows. We will probably retest those lows, so you could see that go back there.
So, you need to be aware of that, but the idea is that if you've still got time on your side, meaning you're not ready to retire tomorrow, you're not looking to create an income stream from this right away, and you can let it recover, I would go that direction, but I would be looking to get more conservative as the portfolio recovers because it sounds like you're fairly aggressive. How far out from retirement are you? About, I'll be 61 in July, so I'm going to retire at 65.
Okay. Yeah, so you've got four years. I mean, I would expect once the Fed's done raising rates and we see kind of how deep this recession is going to be, and we begin to see the light at the end of the tunnel, this market will take off again and move to new highs.
It always does. And I would look at that point then to be getting probably more conservative over these next four years so that if we were to get into this again and the market and the economy move in cycles, then you're not going to see the dramatic swings that you saw this time. But again, we need that money to continue to grow.
We need to get that back to the 350, 360 and let it grow from there. You're 450 or so when it retires or when you retire. What other income sources will you have besides this TSP and Social Security?
Anything? I will have a pension to a small pension. Okay, so, you know, let's say this grows to $450,000 when it's all said and done. I would look at that at, you know, you're pulling out about $18,000 a year on that.
If it was $400,000, maybe $16,000 a year, that plus Social Security plus your pension, hopefully that will do it. Otherwise, you'd need a part time job or to consider working longer. But then you still have full access to your money. I think the key is, though, when you're, you know, it's probably time to get back to the market, it's probably time to connect with an advisor to look at your current TSP mix to see when it's time to start getting more conservative. And then, of course, once you roll it to an IRA, I would have an investment advisor managing that for you so that, you know, somebody is giving active oversight and management to that portfolio. But in my opinion, the annuity is not the best option at this point. Okay, because she wanted me to take the $200,000 out and put it in an annuity. And she said, for the rest of it that I have right away, I should transfer it to the G funds, which is the safest one for under the TSP. Which it is.
That G stands for government security. So that's going to be far less volatile. The challenge is that's not going to give you the ability to see this account recover. And again, you're still four years out from retirement. And once you reach retirement, if you're in good health and the Lord tarries, you're going to need this money to last for decades. So it's not like you need this money next year or the year after, this is money that needs to be around for a long, long time and pulling it out and putting it in government securities or an insurance product to kind of shore it up. Yes, it will protect it, but it really doesn't give you very much potential to see that recovery because your upside is limited. I'd rather allow you to benefit from the market recovery as it happens over the next year or so. And at that point, then reposition it to a more conservative posture, but keep it right where it is.
That's at least my perspective. I would get an advisor to review all of this with you, Kim, and we recommend the Certified Kingdom Advisor designation. You can find someone who shares your values, who's met high standards and character and confidence and experience on our website, faithfi.com. That's faithfi.com.
Just click the button that says find a CKA and you can do a search there in Ohio. Hey, we appreciate your call today. All the best to you in the days ahead.
God bless you. Folks, we're going to take a quick break. When we come back, we'll talk to Peter in Ohio about paying down credit card debt, wondering if he should pull some money out of his 401k to do that. Steve and Mike, we're coming your way as well, plus your calls.
We've got some lines open. 800-525-7000. We'd love to hear from you today with your questions or your testimony.
Again, 800-525-7000. We'll be right back. You know, as we think about the role of money in our lives, we have to start with the idea that God owns it all and therefore we're stewards and money is a tool. But it also has to do with our surrender, our ability to surrender our lives, our whole lives to the Lord. And when we do that, we have to bring our money with us. I think it was Martin Luther that said there's three conversions, the mind, the heart and the purse or the wallet. This idea that, yeah, we can surrender our minds intellectually, but ultimately we have to place our trust in Jesus.
That's a heart decision, transferring trust to him as our Lord and Savior for the forgiveness of sins. But then we have to bring with that all of our lives and that includes our money. And we've got to surrender that aspect of our lives along with everything else, which means we recognize that money is now a tool to accomplish God's purposes. And yeah, we should enjoy it and we should provide for our families, but we should also be generous, hold it loosely, live simply and use it in a God honoring way, recognizing that the way we allocate our resources is one of the ways we most tangibly demonstrate where we placed our trust, what we value, what's most important to us. And the question is, what is the story of your money say about what's most important to you? That's a hard question we all need to ask ourselves and answer, and perhaps it will result in some changes in how you handle God's money.
I would ask you to prayerfully consider that as you think through what it looks like to be a faithful steward. That's certainly what we tackle on this show every day, our desires to be hopeful and encouraging and always take you back to God's Word as we explore the principles we see in Scripture around wise money management. Let's do that today as we talk to Peter in Ohio. Peter, thanks for your patience. Go right ahead.
Hi, Rob. Thanks for what you guys are doing. My question is, I'm thinking about taking some money out of my 401k to pay down on my credit card. All right. You just wondering if that's a good idea?
Yeah, I'm not a big fan of that, Peter, but let me ask you a few questions just to get the full context. How much do you own credit cards today? It's about 9,000.
All right. And are you adding to that on a monthly basis? No, I'm trying to bring it down a little bit every month, but it's not coming down very fast.
What change that allowed you to stop building up that credit card debt? Just cut down on the groceries was one thing that helped. Yeah, boy, that's for sure. I'll tell you, the food category, whether it's groceries or eating out, is just really challenging these days. I certainly get that. Would you characterize yourself as living on a budget monthly here, Peter? Not really. Okay.
You know, I think that's the first starting point. My first question for anybody who's looking to quickly pay off debt, whether that's, you know, they're thinking about pulling some money out of savings or out of a 401k or borrowing some money to consolidate it. You know, the first question I always ask is, what's going to prevent you from getting back in this situation in the future? So, you know, you're not calling me saying, Rob, six months down the road. Guess what? Now I've got this loan against my 401k or I took a withdrawal to pay it off.
But guess what? The credit card debt's back because so often the reason that we have the credit card debt, it's symptomatic of a consumptive lifestyle overspending beyond our means, which credit cards can allow us to do. That's not the way we should use them. In fact, when we can't pay them off in full in a given month, we should cut them up because then they just become a problem. It allows you to spend beyond your means. So I think for that reason, I'd encourage you not to pay it off with the 401k. Plus, you know, if you were to take it out of the 401k, if you're under 59 and a half, you're going to have a 10% penalty. If you're over 59 and a half, you're at the very least, it's going to be added to your taxable income.
So you're going to pay some taxes on that money. Beyond that, that money is now no longer available to compound and grow. And especially right now when that 401k balance is down because the market's down, if you're like everybody else in this country, that money no longer has the ability to recover. And so you're missing out on the recovery plus the potential for compounded growth over time.
So what do we do in the meantime? Well, what I would do is cut, you know, leave it right where it is, the 401k. I'd go back to that spending plan and I'd really do the hard work, Peter, to build a budget that balances. Take a 30 days, 60 days, and track every expense. Let's look at the things you get a bill for, the things you don't, like the eating out and the groceries. Get it all in there.
Look at non-recurring expenses, like a quarterly insurance premium or an annual HOA. Get all that in there as well. Think about those things that don't come every month, like gifts, maybe Christmas or birthday gifts throughout the year. Get it all in there.
What you're probably going to find is when everything gets in there, you're upside down. You're spending more or you should be spending more. If you were escrowing for these things that happen throughout the year, you're spending more money than you actually have, and that's when you're going to have to make some hard decisions to right size that budget, bring that spending down, because the goal is not to spend over or even right up to the edge.
The goal is to spend less than you're bringing in so that you have margin that's going to be used to fund your goals. Now, what about that credit card debt? My preferred option for paying down credit card debt that's north of, let's say, $4,000 that's usually kind of the sweet spot, is to use my friends at christiancreditcounselors.org. It's a debt management program.
The accounts would be closed. That's not factored into your credit score, but when those accounts are closed and you pay through Christian Credit Counselors, you'll get lower interest rates. And the combination of those lower rates plus a fixed monthly payment is going to allow you to pay that 80% faster, but now we've still got your 401k fully intact, and you can do it in a way that allows you to build the discipline of living within your means on that balanced budget we're going to work on. That would be my much preferred approach over pulling it out of your 401k, but give me your thoughts.
All right, that makes sense. You said they'll have a lower interest rate then, huh? You absolutely will, and the combination of that lower rate and that level payment is what's going to help you pay that off. I can't tell you the rate because it depends on the creditors you have, but I just had to christiancreditcounselors.org, schedule a virtual meeting or a phone call.
They'll go over everything with you, look at your creditors, tell you what your new rates will be, help you put that budget together, and I think that might be the plan that allows you not only to pay this off, but to really create the disciplines that's going to be lasting into the future so you don't ever call me about credit card debt again. Next time you're calling me, you're asking about how to take your investments and position them so we can grow them even faster, and that'll be a call I'll enjoy having with you. God bless you, Peter. We appreciate your call today. Folks, we're going to take a quick break.
Carla, Mike, Aaron, coming your way just around the corner. Stay with us on Faith and Finance Live. We'll be right back. Hey, great to have you with us today on Faith and Finance Live, where you apply the wisdom from God's word to your financial decisions and choices. We'll head right back to the phones in just a moment.
First, an email from Beverly. She writes, thanks for all you do to help educate and inform us on financial matters. I'm retired. I work part-time and collect social security. I file my taxes as single head of household. In 2022, I owed quite a bit of taxes, and I'd like to adjust my W-4 to avoid that again. I've read the instructions, but I'm struggling with figuring out my deductions for 2023.
Do you have any tips? What I would say, Beverly, is if your adjusted gross income is about the same as last year, there's an easy way to adjust your W-4 to come close to what you need to withhold in taxes, you would simply take the amount you owed last year and divide that by the number of pay periods you have. So if you owed $1,000 and you're paid weekly, you divide $1,000 by 52 and you'd get roughly 20, and then you can designate that you want an extra $20 withheld from each paycheck, and you should get close to what you'll owe in taxes being withheld. There is a form right there on the W-4 for additional withholding, and it is going to be an amount by pay period. That's why you'll divide the total you owed last year by the number of pay periods to get that additional withholding.
So that may be a simple way for you to avoid all of that formula that's on the form. Hopefully that helps you. Hey, if you have a question you'd like read on the air, send it along.
Ask Rob at FaithFi.com. All right, back to the phones. We go to Carla in Tampa. Hi, Carla. How can I help? Hey, Rob.
This is Beth. Hey, I have a home equity line that I owe $50,000 on, but it's an 8.5% interest, and I have a great desire to get rid of that. So I have an IRA with $300,000 in it, and I thought, well, let me take the $50,000 out of my IRA, pay off that high equity line, and then the money that I was paying towards the equity line monthly, I would just turn around and pay it back into my IRA. Does that sound like a... Yeah, the challenge is, what is your age? I'm 63, and I would like to retire in about two or three years from now, and I have a 401k also through my work.
Yeah, okay. Yeah, I mean, I don't love that HELOC, especially with that variable interest rate, which has been moving up with the Fed funds rate going up, and that's why you're up at 8.5%. The challenge is, you're going to take out that $50,000, that's all going to be added to your taxable income. So let's say you end up spending an extra $10,000 in taxes at a minimum, it's probably going to be a little more than that, even though you don't have the penalty.
That makes this very expensive money. On top of that, you are then going to not only have this tax liability, but you're not going to have that money in the portfolio when this account recovers, and we don't know when that will be. Will that be this fall? Will that be at the end of the year? Will it be early next year?
I don't know. But now that $50,000 is out, and whatever you've lost, just because the market's been pulling back, now that money's not available for that to recover, which that recovery could be pretty significant as this market takes off once the Fed's done and we're through the recession. And remember, the market looks out 6 to 12 months and anticipates where the economy's headed. So it's going to be a leading indicator to move higher well before we even fully recover on the economy. And so I think for those two reasons, as much as I don't like that 8.5%, I don't like you pulling this out of the 401, excuse me, the IRA.
So what other options do we have? Are you currently contributing to a retirement account? Yes, I contribute to a 401 and a Roth through my work. Okay, and what percent of your income are you putting in? 14%.
Okay, that's great. How much is that on a monthly basis? Do you know, roughly?
No, I don't know right off. Okay, well, I guess the other option would be you cut back on those new contributions and you take that amount because now you get a higher paycheck every month because you've got less salary deferral going into the 401k or the Roth. And you take that plus whatever you already had go into the HELOC and you really boost that, even try to cut some expenses and, you know, put even more gas on the fire, if you will. And you really just try to attack this thing, not by pulling money out that's already been contributed, but by kind of reducing what you're putting in just temporarily, not all the way to zero, but just cutting it down so that you can get this HELOC paid off a little quicker. I would be more in favor of that approach than I would you just pulling that 50k out of the IRA.
Right, okay. I was putting more money in the 401 because I just want to pay taxes. Yeah, and I get that, but you're going to be turning around and creating a pretty big tax liability with that 50k because all that's going to be added as taxable income this year. So I certainly understand that and I'd love for us to be able to find other ways to pay this back. And that's why my first choice is always for you to cut lifestyle spending so you can free up more margin to go after this HELOC.
But, you know, maybe it's a combination of that and just a little bit of the money you were putting into the 401k. Keep in mind this HELOC is variable. So as interest rates, you know, peak here, which we think that will happen with the net next Fed hike, as long as inflation cooperates, you know, we're probably going to start seeing the Fed move down hopefully later this year, certainly next year. So this is going to be temporary.
So I think I'd go that approach as opposed to the IRA. Okay. All right, I appreciate that. Thank you so much. Happy to help. Thank you for your call today. To Chicago. Hey, Mike, what can I do for you, sir? Hi, a couple questions in regards to Irma.
Well, I'm looking, I know it's, I'm trying to get my questions straight here. The 2022 amount is 182, 182,000. Anything over that, you go up into the next bracket and you're charged more.
But that doesn't, that wouldn't take effect until 2024, if I understand that. If that's the case, and I earned over that, which it looks, and which, which income line do I use from my tax return? I'm looking at my tax return. Is it the total income? No, it's the, it's the AGI.
Yeah. So for the benefit of our audience, Irma is the income related monthly adjustment for Medicare. So it's a surcharge on Medicare premiums for Medicare Part B, which is the medical insurance and Part D, the prescription drug plans. And each year it's based on the adjusted gross income amount you report on your IRS tax return two years ago. So for 2023 beneficiaries, who's 2021 AGI was greater than 97,000 for a single 194,000 for a joint will pay that Irma surcharge anywhere from $230 to $560, depending on your income.
Okay. So if the limit, if the limit before the bracket change for 2022 is 182, and if I earned 195, that the year that, that it starts, which would be two years, I mentioned January 1st, does that go by the 2022 182 or whatever the 2024 maximum is? Yeah, it's, there's a maximum for this year. So you'll have to look at the 2023 limits, but it's based on your AGI from two years ago. So that'd be your AGI from your 2021 return, whatever you reported on that tax return for that year, that's how they determine that amount. If you have further questions, though, perhaps this is the year to get with a CPA just to go over your specific situation.
But in general, that number you're looking for is adjusted gross income on your tax return two years prior based on the current year's limits. Thanks for your call today. We appreciate it. We'll be right back with much more on Faith and Finance Live. Stay with us. Hey, did you know that Faith and Finance Live is listener supported?
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We always are grateful for that. If you'd like to become a supporter of the ministry, we'd invite you to visit our website at faithfi.com. That's faithfi.com. You can just click the give button. You'll find the address to put a check in the mail. You can give over the phone or you'll find a secure form there as well. Again, faithfi.com.
Just click give. All right. Back to the phones we go. Let's head to Illinois. Hi, Aaron. Thanks for your patience. Go ahead.
Hey, Rob. You got it. It's a pleasure to be speaking with you. Thank you very much for all the counsel and wisdom you give out on a daily basis. And somehow I end up catching your show and I usually leave to go run errands early in the afternoon when the sun's hitting. And I don't know how, but you keep me awake at nap time. So thank you very much. I'll take it. That's great.
How can I help you? That's excellent. All right. So I'm just curious to know your general thoughts and input on investing in the U.S. Treasury I bonds at this time with the 6.9 rate of return. I think it's guaranteed through some date in April. It might have been expired already, but knowing that we might not see a dip yet, what do you think about that? I'm just a little bit uneasy about investing in anything U.S. securities related at this current time. Yeah. Well, in terms of the safety, I don't have any problem with it. I mean, could we have a bigger problem credit crisis, you know, down the road?
Sure. I think that's plausible, just given a lot of the challenges we have in this country, the debt levels, the demographics are working against us. We've got, we don't have pro-growth policies. I mean, we've got, we were really heading in the right direction with regards to energy.
We're not any longer. I mean, we've got the question about the dollars reserve currency status. I don't think that's changing anytime soon, but clearly we're starting to see moves in the other direction. And so you put all that together and you say, you know, could that create some real challenges for us here in the United States down the road?
Yes, but I think that's probably decades away still. So do I have any problem with you investing in I bonds? No, I think it's about the safest investment out there.
If I look at the U.S. as the largest, strongest economy in the world for all intents and purposes, the backing of the full faith and credit of the United States government, despite all of those things I just mentioned, for me is much stronger than really any other option you might put against it. So I have no problem there as to the investment merits. Yeah, that's 6.82 percent would be available to you through the end of this month. You can't wait till the last day because you got to have time to set up the account at treasurydirect.gov and then fund it, which would be an electronic transfer.
That's going to take some time. So make sure you do it sooner rather than later. But as long as you got that done in April, you'd get six months at 6.82 percent.
We would know the new rate in May, but it wouldn't apply to you until six months later, at which point the next six months you would get that new rate. So how do I view this as an investment? Well, I would say if you think of three buckets of money, the first bucket is I need this money in less than a year. I wouldn't put that money in because you've got to wait a year before you can touch it. Bucket three would be, you know, three years plus if you need that. You know, this is money that you have the ability to invest for the longer term.
I wouldn't put that in I bonds. I'd rather you invest that in stocks and take advantage of these prices that are down. But if you have money that's got to like a one to three year time horizon, I think that's where this can be pretty attractive because you're going to get 6.8 right now. You're going to get some number that's slightly lower than that in May for the next six months. And then it'll still be elevated probably for the next couple of years, even though it's going to revert back to a point in the next couple of years where you're not going to be as excited about it as the as the Fed attacks inflation.
So that would be kind of the bucket of money that I would pull from. But as to the safety, I would have high confidence in it. Excellent. Thank you for the council. And I did not realize that the current rate, even if purchase now would only be would only be applicable for the next six months until they change that. So that's good to know. But thank you very much.
Yeah, you're welcome. Yeah, you get the interest credited at the end of each six month period. You don't actually get it until you redeem the bond, but it would be credited to your account based on the rate that was prevailing for that six month period. And then you'd start a new six months at the next rate. And then at the end of that period, it would be credited.
And that's basically how it works. All right to Florida. Hi, Chris. Thanks for calling. Where are you in Florida, by the way? Lantana, Florida. Oh, Lantana.
Okay. Well, I was thinking you might be in South Florida. I've been reading about what's going on in Fort Lauderdale with the 26 inches of rain they got last night. But you're you're a bit further north.
Hey, how can I help? Here you go. I'm sorry. I couldn't hear anything. Oh, okay. How about now? Can you hear me? That's great. Oh, good.
How can I help you? Well, I'm planning to retire at the end of next month at 66 and a half years old. I have a 403 B where I work and it has probably 100,000 in it. I hear you all the time saying don't leave it at your former employer.
But I don't know what to do with it. And I don't have a big time horizon anymore. Yeah. Yeah. Okay. So are you thinking of retiring very soon? Or are you still a few years away?
No, in the next month, May. Oh, wow. Okay. Congratulations. What are you most excited about in this next chapter of your life? I'm just curious.
I like to do gardening and I also want to do a few more things around my church. Yeah. Okay, cool.
Well, that's great. Well, in terms of the investments, I would probably look at rolling this to an IRA. You're right, not leaving it there. But I would get an advisor to help you with that. Some advisors will need more than 100,000 as a minimum. Some might have a minimum of 200 or 250,000. But there'd be plenty of investment advisors that could take $100,000 401k and manage it for you. I think the key would be for you to interview two or three, find the one that's the best fit. But this is a significant sum of money.
You worked a long time and very hard to save this up. I wouldn't just put it on autopilot and then when you select that advisor, he or she will tell you which custodian they want to use. Maybe Schwab or Fidelity or one of the big wire houses like Merrill or Morgan Stanley.
It could be any of those. And then they'll open an IRA and then they'll get the surrender or you will get the surrender paperwork from your employer to roll that over to your new IRA. And then that advisor would manage it for you. And he or she will do that based on your goals and objectives. But they'll be the ones on a daily basis that are charged with putting your interests first and picking the investment selections. We recommend the Certified Kingdom Advisor designation.
It's basically an industry designation that's widely accepted where these men and women have met high standards in character and competence and integrity, also experience. They've had a regulatory review, pastor and client references. Plus they've been extensively trained in biblically wise financial advice. And so they've also signed a statement of faith personally. And you can find some Certified Kingdom Advisors there in Florida on our website faithfi.com.
Just click find a CKA. But that would be my recommended approach. How does that sound? Well, I should have said I've neglected to tell you I have an IRA. Can you have another one?
Oh yeah, absolutely. You can have as many as you want. You can also roll this money that's in the 403b into your existing IRA if you want to. So the only limit you have is on the amount you can put in each year. There's not a limit on the amount of IRAs that you can have. So then if you're rolling it over, 100,000 is over that limit.
So but since you're rolling it over, it's okay to do it that way? Oh yeah, that's only applies to new contributions. A rollover is not subject to those annual limits. Okay, on the new contributions, I know you have to be working to make a contribution. What if you're only working part-time? Well, it's based on your earned income. So not income from Social Security or anything else, passive income, but earned income. So a part-time job would qualify.
You can give up to the limit or the amount of earned income you have for the year. Okay, sounds great. Good, well thanks for calling today, Chris. God bless you.
To Georgia, quickly. Hi Angela, go right ahead. Hello, I am debt-free. I'm 55. I own my home.
I own two vehicles. I have $10,000 saved. I was temporarily disabled right before COVID. I thought I wasn't going to be able to work anymore.
I can work now. In the meantime, I took in a disabled man and he gets Social Security. So I pretty much, I have about $1,600 income, which includes his Social Security. Because he lives with me, I use it to pay my utilities. And utilities and car insurance is all I have. What do I need to do going forward? With my $10,000 cash, I'm afraid I'm going to lose it because of what the government's doing with doing away with the dollar.
So just give me some direction. Well, I'll tell you, what I'd do with it is I'd put it in a FDIC insured bank. You know, if it's under the mattress, yes, you've got access to it, but it's losing purchasing power, especially with high inflation right now. And despite the challenges that we have here in this country, I think any potential major problems are pretty far down the road.
So I would say the backing of the full faith and credit of the United States government, despite perhaps the issues you have with some of the decisions that are being made, is still far better than anything else, including it being in a coffee can in your kitchen. So I'd find an online bank like Marcus or Capital One 360 paying nearly 4% interest right now with no fees. I'd link that to your checking account. I'd deposit that $10,000, and at least you're going to get $350 over the next year on that money, and if you need it, it's only a transfer away. So ultimately, you're going to have to make that call, but that would be at least the approach that I would take. Quickly to Chicago. Amelia, I understand you have a question about the digital dollar, right?
I do. I recently found out that the U.S. has made steps toward going to digital dollar, or I don't know if it's global or the U.S. Yeah. So we're still a long way off. They've completed a research phase, and it's a multi-agency study that was done. We're moving in that direction, but here's the reality. It's a long way off.
Am I a fan? No, because I think it would give the government visibility even more into our financial lives in a way that's not healthy, but it can't happen from the central bank. It's a congressional function, so it would need the President and the Congress, and with divided government, this will be a hotly debated topic before it goes anywhere. So you can rest assured that nothing's going to happen anytime soon, and we'll keep you apprised. Thanks for calling. Faith in Finance Live is a partnership between Moody Radio and FaithFi.
Couldn't do this without Luke, Tahira, Jim, and Amy. Hope you have a great rest of your day. Come back and join us tomorrow. I'll see you then. Bye-bye.
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