What You’ll Need to Retire

Folks always ask us, how much will I need to retire? And the answer is, it depends. It depends on your needs, lifestyle, and one important factor.

Hi, I'm Rob West. That other important piece of the retirement puzzle is, how much are you willing and able to cut from your budget? I'll talk about that first today, and then it's on to your calls and questions on any financial topic at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Okay, I think we can assume that just about everybody will have less income during retirement. So it's really helpful that many of the expenses associated with work, especially work outside the home, go away when you retire. Because of this, many experts say you'll only need 75-80% of your working income when you retire.

Now, why is that, you ask? Well, because your transportation, clothing, and dining out expenses, mostly for lunch, drop considerably when you're no longer working. That's all good, but the problem is, studies show the average retirement budget is only about 60% of working income. So if you're working and making, let's say $75,000 a year, you'll need at least 75% of that, or a little over $56,000 in retirement. But if you're on track to generate only 60% of your working budget from Social Security benefits and income from your investments, you'll be short $11,250 a year, or about $940 a month. That means you'll have to work longer to build more savings that generate more retirement income, or continue to work part-time to make up that $940 monthly shortfall, unless, unless you're able to cut your retirement expenses enough to close that $940 gap, or at least make it smaller. Now, how do you do that?

Well, let's start with the one that's probably the most obvious. It's the big house you raised your family in, but which is now largely empty because they've all moved on and have their own houses. Do you really need all that room?

Probably not. So now's a great time to downsize into something smaller. Besides lowering your maintenance costs, utility bills, and taxes, downsizing should leave you with cash left over that you can convert into an income stream, getting you closer to your retirement needs.

As long as you've lived in the home for two out of the last five years, you can exempt the first $250,000 in capital gains on the sale of your home, or $500,000 for married couples. And if you're worried about having enough room when the grandkids visit, take some of that savings and get bunk beds or air mattresses. They have really nice ones now with built-in air pumps. Now, the next biggest way to cut your retirement budget is with transportation. If neither you or your spouse is working, do you really need two vehicles? Probably not, and you can sell one and pocket more cash, plus cutting repair costs, registration fees, and insurance premiums. And if you and your spouse sometimes have to be away from home in two different places at the same time, consider using a ride-sharing service and leave the driving to someone else.

It might cost you three or four dollars a mile, but you can afford that occasional expense with all of the money you're saving. Now, let's look at insurance next, and specifically disability and life. First off, disability insurance is designed to replace lost income when you're recovering from an injury and illness and not able to work. Obviously, if you're retired and not working, you have no working income to replace, and therefore, you have no need for disability insurance.

Yet, some people still carry it. Drop it the day you retire. Now, what about life insurance in retirement? Well, if your children are now grown up and out of the house, providing for themselves and their families, they're no longer dependent on your income, so you can cut back on life insurance, which, by the way, gets increasingly expensive as we grow older. Also, look at interest on credit card balances and other consumer debt.

It's never good, but downright terrible when you're retired and trying to adjust to a smaller income. Take some of that cash you've freed up with the previous suggestions and pay off the credit cards just as soon as you can. Oh, and one final thought. You'll probably have plenty of time in retirement, so consider giving more of it to your church or favorite ministry. Christians shouldn't retire from something but to something.

Folks, this can be one of the most incredible seasons of your life if you lean into it and ask God what He has as you leverage your wisdom and experience for His glory. All right, your calls are next. The number, 800-525-7000.

By the way, you can call that 24-7, 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. We'll be right back. So thankful to have you with us today on Faith and Finance Live.

I'm Rob West. All right, it's time to take your calls and questions today. The number is 800-525-7000. Perhaps there's something you've been thinking about financially.

You want some help in really applying the Council of Scripture to your financial decisions and choices today. We'll help you move forward with confidence. We just need your phone call first. The number is 800-525-7000, and we have several lines open today. Let's head to Georgetown, Texas to begin today. Shae, thank you for calling. Go right ahead.

And also has a piggyback ride over long-term care in the event of an hour to need. My concern is that it's been two years, and it has not grown at all. And as you know, nowadays, you can see the rate average about 4-5%. And my thought has been, well, it's not growing. Chances are it may not grow. And so I'm thinking about taking out and putting to IRA, since it came out from IRA, IRA CD.

And I brushed through some of the website. I know that there's some CD that I could give 5% within the IRA. However, there will be surrender charging involved. At least it's going to go up around 12,000. And so I'm thinking it's a calculation where if I were to get 5%, maybe I could make it up for within two, three years, what I lose.

I don't know. I'm just agonizing. I'm facing this kind of decision by myself because I'm a widow. And I used to, I just don't know what to do, what would be the right thing for me. I just want to hear what you, I've been listening to you and anyway, I'd like to give you a call. Sure.

Well, I appreciate that background, Shae. That was really helpful. Let me just clarify a couple of things. So you said you put a hundred thousand from your IRA into this annuity. Is it a fixed annuity with a guaranteed rate of return or is it what they call an indexed annuity where the performance is tied to a market index? Right. It is an indexed annuity.

But the thing is, it hasn't grown at all within the last two years. Sure. Okay.

And you said the penalty would be as much as 12,000 if you pull it out at this point? Yes. Yeah.

All right. You know, I think it'd probably be better to stay right where you're at. I mean, if it's an indexed annuity, it's pegged to a market index. The market hasn't done great the last couple of years. That's why. I mean, we've seen somewhat of a rise in the somewhat of a recovery this year, but it's been fairly narrow in terms of the total number of stocks participating in the rally.

And largely, many stocks are still down from where they were a couple of years ago. So I think that's why you're experiencing that. And given that high penalty that you would be facing, I don't think it makes sense, especially if you're going to pull it out into CDs. You'd really just be kind of making a lateral move. And what's likely the case is every year you hang on to this annuity, you have the ability for the surrender charges to come down. So if you wanted to roll it out later, you'd be able to do that with less penalty. And hopefully, the indexes that are inside the annuity begin to perform as the market recovers, perhaps next year more broadly.

So I think my first preference would be for you to leave it right there. The only other thing I might do is for you to visit with an advisor who could just look at your overall financial picture. Do you have a trusted advisor that you would want to engage to do some planning and evaluate what you have and really suggest how you move forward? Is that the person that puts you into this? Or do you feel like you'd need somebody else to come to the table? Well, basically, when I retired, yeah, I started the CFAP, financial planner, right.

And so you were just one time there, and that was done within the North Carolina line up before I moved here. So answer to your question, I don't have an ongoing advisor other than that this was the recommendation I was given that is the considering in the event of that if I were to need a long-term care. Right now, I am 65, I am healthy, and I'm just thinking, well, maybe I should give a chance for this money to grow rather than just stagnant. Well, I certainly wouldn't make a decision right away to pull it out. I think apart from somebody to look at what you've got and advise you on your overall financial picture, I'd probably stay right where you're at.

But I think this does make sense. You know, at 65, you could still get a separate long-term care insurance policy, which if you can afford it makes a lot of sense because 70% of Americans 65 and older will need long-term care at some level, and it's very expensive. So I like the idea that you would offset this risk. You're doing it as a rider to an insurance product.

You could buy it as a separate policy if you decided at some point down the road to, you know, pull out of this annuity. But I think your next step, Shay, is to have an advisor locally that you could have evaluate the annuity, look at your other investable assets, help you evaluate how to cover the cost of long-term care, and come up with a holistic plan as opposed to just, you know, making the decision purely on do I stay or leave this annuity. We recommend if you listen to this program, you've heard me talk about the Certified Kingdom Advisor designation. These are men and women who have met high standards and character and competence and experience.

They've had a regulatory review, pastor and client references, but also they've been trained to bring a biblical worldview of financial decision-making. I would connect with a couple of CKAs there in Texas and interview them, find the one that's the best fit. You would do that at our website, faithfi.com. Just click Find a CKA.

I think that's your best next step to have somebody evaluate this, but I wouldn't be quick to move out of that without somebody analyzing it. Also, I'd like to send you a gift. So you stay on the line. Tahira is going to pick up the phone and get your contact information. We're going to send you a book called Wise Women Managing Money, and I think it'll be a great blessing to you. It is written by a wonderful lady who was a widow. She and her daughter put this together for women who are widows to help them just understand all of the opportunities they have with God's money, and to the extent you're uncomfortable with financial matters, she can give you some, I think, just really helpful insight into how you should view your finances and how you can have more confidence in making decisions in the future. It's Miriam Neff and Valerie Neff-Hogan that put it together.

Again, it's called Wise Women Managing Money. It's our gift to you. We'd be delighted to send it to you, Shay.

So you stay on the line. We'll get your information and get that right out to you. We appreciate you being on the program today. Well, folks, we've got some lines open. We're going to take a quick break and we come back more of your questions. We'll be headed to Arkansas to talk to Lisa, but we've got room for you. 800-525-7000 is the number to call.

That's 800-525-7000. By the way, we did get news from the Federal Reserve today. We were expecting a quarter percent rate hike, and that's exactly what we got. The Federal Reserve approved the much-anticipated interest rate hike. That's number 11 consecutive apart from the pause last month.

That brings the benchmark borrowing costs to their highest level in more than 22 years. Chairman Jerome Powell said the central bank will make data-driven decisions on a meeting-by-beating basis moving forward. More to come on that. We'll be right back. Thrilled to have you with us today on Faith and Finance Live. I'm Rob West. We've got some lines open today. 800-525-7000. Give us a call.

Let's head right back to the phones to Arkansas. Hi, Lisa. How can I help you?

Hello. I've heard you in the past talk about CKAs, and I know you just mentioned it to the former caller. Are these people professionals that are taking extra training, or are they volunteers who are taking extra training? They are professionals. Basically, in the financial services industry, there's a number of what are called industry designations, where advisors who have an existing base of competency can get specialized training. Ones you may be familiar with, one of the more popular ones is CPA. That would be an industry designation, Certified Public Accountant.

Another one that a lot of folks are familiar with in our space of the financial advice is what's called CFP, Certified Financial Planner. CKA is just another industry designation, but it's the only one that's widely accepted across the industry for biblically-wise professional financial advice. So it takes an advisor who's got at least 10 years of experience and has a pastor or client reference, and as long as they have another industry designation and pass a regulatory review and sign a statement of faith and take a 60-hour training course and pass a proctored exam and biblical advice, then they can add CKA, the designation.

And it's really the way we help to connect the public to those professionals who can bring a biblical worldview of money management. But they're not employed by faith and finance, they're in their own firms, large or small, they've just sought out the industry designation CKA and met the high standards. So what I would recommend, Lisa, if you're looking for an advisor who shares your values as a believer, is that you go to our website, faithfi.com, click find a CKA, you can put in your zip code, city or state, and then you set the search criteria, whether you want to look out 25 miles, 50, 100, or more, you'll get a listing of those that have CKA. There's more than 1,400 in the U.S. and Canada, and then you can interview them and decide on the one that's the best fit. Well, like I said, I heard you mention this in the past and had actually been online and looking for CKAs and, you know, the nearest one to me, but never really found anything. So that led me to want to ask you, how do I choose someone, you know, if I don't have someone who doesn't have that designation in my area, how do I choose someone?

Well, you've got a couple of options. Right there at the top of the page, if you go to faithfi.com and click find a CKA, just above the search box is a button that says questions to ask a CKA. You could certainly use that list of questions to interview any advisor and hopefully that would be a free helpful tool for you. I will also mention that if you're willing to expand the search, perhaps you're in a smaller city there in Arkansas and you'd want to switch your search to maybe the next closest larger city, what you may find is there may not be one in your backyard, but maybe 125 miles away there's somebody and more and more advisors are willing to work virtually. So maybe you go visit once a year, but the rest of the meetings are done, you know, through Zoom or, you know, Google Meet or one of those, you know, video connection services and you would just need to talk about that. Now, obviously, if you want somebody right down the street where you can pop into the office, then that doesn't work. But if you're willing to work remotely and virtually with your advisor, many financial advisors are doing that these days on the heels of COVID, more and more offer that service. So I think you've got two options.

You could use our questions to interview somebody locally, but if you really wanted somebody who shares your values, I would just expand your search or move it to the next largest city there in Arkansas and perhaps find somebody that you would not always visit face to face but could still become your advisor. Okay. Well, thank you. I'm glad you brought up the questions to ask. Absolutely. Thanks for your call, Lisa. We appreciate it.

We've got, let's see, four lines open, 800-525-7000 to St. Petersburg, Florida. Hey, Mark, go right ahead. Hey, I have a now 17-year term policy to protect my mortgage. And I was wondering if that was a good use of my $132 a month or whether it'd be better to use that to build up my emergency fund and start maybe making an investment and add to my IRA or something.

Yeah, it's a great question, Mark. I mean, the purpose of insurance is to offset a risk that exists where your loss of income at your death would create a hardship for somebody else in your life. Most often a spouse, but it could be a dependent child or both.

Is that the case? Would your, you know, if the Lord were to call you home tomorrow, would there be a loss of income that would create a hardship for a dependent? No, I'm a widower and my kids are all grown and my disabled son is taken care of in a group home. So I really, you know, so I'm just trying to, I was just trying to offset at the, you know, that the house pay off. But now with the growth in the market, my house is worth twice what my mortgage is.

Yeah. So you really don't need that. I mean, unless you just wanted to keep the house in the family. And the only way to do that was to have a policy that would cover the payoff of the mortgage so that, let's say, a family member could inherit it debt free. Then there wouldn't really be any need for the insurance because at your death, your will would dictate who gets your assets. And part of that would include the sale of the home, which would pay off the mortgage. And then the 50% of the equity that's available would then pass according to your wishes. So there's really not a need for life insurance here at this point, which means you could recapture that $130 a month and continue to build up your emergency fund, as you said.

And then beyond that, maybe a fund, you know, another retirement account that you could, you know, access down the road or leave as an inheritance or perhaps pass on to a ministry or charity. So I think in this case, just based on what I'm hearing, the term life is unnecessary. Okay. All right.

Okay. Thank you very much. I appreciate it. You're welcome, Mark. We appreciate your call today. God bless you, my friend.

Hey, we're going to head to another quick break. By the way, if you'd like to support the work of Faith and Finance Live, we're listener supported. You can do that on our website at faithfi.com. Just click the Give button. We'd certainly be grateful for a gift of any amount.

Much more to come just around the corner. Stay there. We'll be right back.

Grateful to have you with us today on Faith and Finance Live as we talk about applying God's wisdom to your financial decisions and choices. We've got a few lines open today. The number to call is 800-525-7000. You can call right now. Let's head to Florida. Izzy, thank you for calling. Go right ahead. Well, thank you for taking my call.

This is the first time calling. The question is about trying to get some home improvement as well as trying to catch up with some bills. We want to be debt-free. One of the questions is would it be better to do a home equity line? We have a lot of equity in the home, probably closer to 200,000 or refinance, except the question is we have a 2% on our home right now, on our mortgage. I don't know if it would be a good idea to touch that because what I'm getting back if I refinance would be around 46%. Yeah, and it's going to be on the upper end of that range for sure.

Let me ask you a couple of questions, Izzy. First of all, what is your home worth today, do you think? Yeah, it's close to 580,000. Okay, and what do you owe on it? It's about 280,000. About 280,000. So you have 300,000 in equity and you've got an interest rate down in the low twos, which is phenomenal.

You don't want to touch that. So we definitely don't want to refinance because you would dramatically increase that, perhaps triple it. So let's talk about what you're trying to accomplish with the equity in the home. You mentioned renovation, is that right? Or repairs to your home? Yes, I have a few repairs and as well as property really, the goal is really to get that to be debt free about 10,000 hours in credit card. Okay, 10,000 in credit card debt. And then how much are you looking to spend on the house?

Probably around 30 to 40. Okay, and what type of projects are you doing? You got to get from garage door to kitchen and just other renovation, carpeting, and so on and so forth.

Got it. And do you plan to stay in this house for quite a while just based on everything you know today? Yeah, we've already done a couple of things, such as the windows and the roof and that kind of things. So my wife and I thought about, I guess, reducing or relocating. But here's my question, do you think there's a good chance you could move in the next five years? Maybe, possibility. My wife and I, we talked about that here. Yeah, okay. Here's the thing, I definitely wouldn't refinance the house.

I'd leave that alone. You've got a great interest rate. Secondly, I would definitely not pull money out of the house to pay off your credit cards. That's not a good idea because you're taking unsecured debt and you're securing it to your home.

Not to mention the fact that even though those interest rates are high, you'd be probably having a much longer payback period and it doesn't solve the problem that got you to the point that and it doesn't solve the problem that got you that most likely led to the credit card debt in the first place, which is usually overspending, lifestyle spending. And so we've got to correct that, which means you've got to start with the budget. Do you all typically on a monthly basis have anything left over at the end of the month after all the bills are paid, including the minimums on the credit cards? Yeah, we do. How much do you usually have left over?

A good thousand. All right, so have you been putting that thousand a month toward the credit cards or where's that been going? Yeah, we're saving and emergency. We want to make sure we finish building that up. We have at least three months.

We want to build up up to six months. Okay, well now that you've got three months, I would stop right there and I would focus on paying off that credit card debt. What I would do is not attach that to the house. I would get into the house. I would get into a debt management program.

It sounds more complex than it is. Basically, you'd contact our forensic Christian credit counselors. They would get you to pay through them and when you did that, they'd drop the interest rates to whatever the credit counseling rate is for your creditors and then you could still prepay it. So you could send that extra thousand a month and get that paid off quicker, but you'd have less going to debt reduction or excuse me less toward interest because you'd have lower interest rates. I wouldn't continue to fund that emergency fund now that you've got the three months expenses until the credit cards were at zero, but I wouldn't think about taking out a new loan for that your house or otherwise.

I'd either do it on your own and just stay laser focused on taking a hundred percent of what's left at the end of the month and maybe even take another look at the budget and see if you can trim your expenses and send that directly to the credit cards or contact christiancreditcounselors.org and pay through them with a lower interest rate. So that would take care of the credit cards and then once you're done then I agree let's get that emergency fund up to six months expenses. Then I might look at not doing the home renovations now. I'd get some more clarity on when you're moving because if you guys are moving let's say in the next three years you really want to approach the renovations much differently than you would if you're planning to stay in this home indefinitely because you'd want to talk to a realtor and say which renovations make sense where I can get at least what I put into it back out at sale and they'll likely say to you well there's certain things on your list I would do and there's other things that I wouldn't do and therefore I would would not you know certainly not borrow money to do renovations that you may or may not you know get the full value out when you sell it. So I would focus on getting the credit cards pay off build up the emergency fund delay the renovations make the decision on whether you're going or staying if you're staying or if you're if you're moving in the next three years or so I'd hire I'd get a realtor to come in and look at your list of projects and help you decide what makes the most sense to do and not do. If you decide you want to stay indefinitely then I might wait try to fund as much of it as out of current cash flow as you can and then go to get a home equity loan sometime next year maybe in the second half of next year when rates are lower. If you really wanted to do some things right away then you could get a home equity line of credit and that would allow the interest rate to come down as rates fall which again I would expect to happen sometime next year. Does that all make sense? Oh yeah so in other words you're saying it's better that I can wait if I could write it write it on and one of the things that really sounded attractive is if I if we were to get a hundred thousand for home equity I would be able to pay off our car which is about twenty something thousand. Yeah I wouldn't do that I wouldn't do that here's why the end the cost of the home equity loan there's going to be expenses related to that the interest rate is probably not going to be any lower because that home equity loan interest rate is probably going to be six and a half percent it might even be seven percent which is a high rate and now in instead of just being collateralized by the car itself which would be bad enough it was if it was repossessed now if something happens in your financial life and you refinance that car with your home now you're putting your home at risk so let's not see that equity in your home as something to use let's see it as something to grow because we eventually want you to be debt free IZ so that as you and your wife head into retirement you don't have a mortgage payment you own your home free and clear and if at that point you guys want to sell it and downsize great you buy it with cash the next place and you take what you have left over and you put it into investments that can generate an income but let's try to get you out of debt with your cash flow which the good news is it sounds like you guys are controlling your expenses because you have a thousand dollars a month or more left over so let's leave that home equity alone contact christian credit counselors and focus on paying down debt out of current cash flow god bless you my friend we'll be right back great to have you with us today on faith and finance live we're taking your calls and questions we have a few lines open here in our final segment 800-525-7000 to jamestown indiana hi darlene thanks for calling go ahead hi rob just sterling um i have a question about my 401k at work right now i have 100 of it in the money market at kentucky and i have a lot of money of it in the money market account now i was wondering if now was a good time to change the allocation of it i have a personal um ira account and my advisor for that account suggested splitting it up and putting it like 70 in one account and 30 another and i didn't know if now was a good time to do that or if i should wait yeah i definitely would love for this to be invested and the data says that when you're out of the market regardless of why you ended up getting out of the market and we can talk about that if you want i wouldn't i'd try to avoid doing that in the future where even if the market looks rocky trying to time the market just doesn't work in your favor because often like we've seen this year we miss the recovery by the time we get in and it just doesn't work out you know in terms of the long-term return but regardless of how we got here the data says that when you're ready to go back into the market doing it all at once is you know makes the most sense as opposed to trying to stagger it so i would say yes let's go back into the market but do it with an allocation that makes sense based on your goals your age your risk tolerance your proximity to retirement those kinds of things tell me though the second part of that question i'm not sure i totally understood about the 70 30 what were you speaking about there uh i have a um a personal um ira account and my advisor for that account is the one that suggested that i she told me two different funds to put them that i have a bit with a 401k and she suggested putting 70 in one account and 30 in another one okay and i can't find my paper right now which those are yeah uh very good so it was uh maybe 70 in in one particular mutual fund and 30 in another or something like that okay yeah and what is do you mind me asking your age 61 okay and how long do you plan to continue to work darlene as long as possible i'd like to work at least until 70 okay great physically able yeah yeah so at 61 i mean you know what we would typically say is that you would probably want your investments to be 50 50 between bonds and stocks because even though maybe you're okay less than 10 years out of retirement you still have once you retire if the lord tarries and you're in good health you need this money to last decades so we want it to continue to grow although we do want to get more conservative as you get closer and closer to that period where you would need to start converting this to an income stream so you move from capital appreciation to capital preservation and income and we do that by getting more and more out of stocks and into fixed income but even at this point um you know at 61 i would say you probably want to be about 50 50 if you want to be a little more conservative you could be let's say 40 stocks 60 bonds fixed income type investments and you're going to have those kinds of options available to you in your 401k so i would say yeah let's get this back into the market with an allocation that makes sense somewhere between 40 and 50 percent in stocks the rest in bonds and uh if you need some help you could maybe contact your plan administrator see if they have somebody that can help you pick those investments inside the 401k you could use one of the target date or lifecycle funds where you'd you know pick the target date to when you think you might retire so you know let's say that's 10 years from now so you might pick a 2033 target date fund that's automatically going to get more and more conservative as you get closer to retirement or you could hire an advisor to look over the menu of the investment options you have and help you select those but bottom line is yeah i would definitely move back into the market okay all right i appreciate it but that's what i wanted to know i thought well i'm gonna call him now i'm so glad you did i'm glad we could well thank you that means a lot if we can give her help in the future don't hesitate to reach out thanks for calling darlene uh let's head to miami hi g go right ahead yes right yes sir yes just out of quick question real quick um is there any kind of formula you may use in terms of like say you have to repair a car and you know it's maybe worth more than what the car is worth or anything like that to kind of decipher whether you move into a new one or not yeah so tell me what's going on with your situation well it's just something i was just i came across and i just figured i'd call you guys to see what you guys how you guys normally handle that so it's like you know they need to repair the car um it's gonna be about three thousand but the car might be worth maybe four um so so it's kind of like you know right there i mean i mean i know if you say that the cheapest car we'll ever own is the one we currently have yeah so yeah yeah generally i mean so this is a rule of thumb and that's all it is um it generally if the cost of the vehicle repairs exceeds 50 of its current market value or more than one year's worth of payments it may make sense to pass on it and just go ahead and you know think about getting your next automobile just because you know you're going to be putting a lot of money into it a car that doesn't have a whole lot of value and that means it's probably already up in age and so forth and therefore you know you're beyond the benefits of replacing those parts and you know may end up spending more over time so i think just given your situation you're well beyond you know 50 when you get up a three thousand dollar you know repair job on a four thousand dollar car i think that's certainly into the range where you'd say i'm not sure that it's worth me putting this kind of money in gotcha makes sense makes sense okay or a year's worth of payments i think is what you said that's exactly right that would be kind of the other piece of that um more you know or more than a year's worth of monthly payments it may be time for replacement that's just a rule of thumb obviously there can be outliers to that but you know that at least gives you a starting point as you think about it gotcha okay sounds good thanks all right god bless you my friend thanks for calling today uh to tampa hi judy thanks for calling go right ahead hi rob thanks for taking my call my question is quick um we are looking to pay off our home so what we did we paid half in february which is over a hundred thousand dollars and we used our um where myself on 68 and my husband 71 so whatever money we took out we didn't pay any taxes on because i believe it was the roth ria and the um okay so then so what we did we only paid that amount and then come september we're looking to pay sixty five thousand dollars to pay it off but for that we actually took fifty thousand dollars from savings put it into a cd which will earn us twelve hundred dollars by september and then we'll get we have money in savings we have at least sixty thousand dollars more so we'll we will complete the money that we owe so my question is i mean is that a great idea we don't have any bills we own our cars we will own our home thank god um but now we will have all this extra money so i'm just wondering is it a good idea to um invest um long term we have a long-term care and i heard you before telling someone to get a second one i'm like oh that's a great idea i never thought of that so is that something that you would recommend because it's no sense putting it in a savings account yeah but we do have six months savings if we need money yeah very good well let me just clarify on the long-term care i don't think you need two policies what i was saying is she was looking to get out of her annuity and uh and potentially replace that and it had a long-term care rider and what i was saying is if that makes the most sense after the advisor evaluates that then uh that caller could actually just go ahead and get a straight long-term care insurance policy because the other one would be going away but you'd want to try to do that between age 55 and 65 so you don't you know have that premium to be too cost prohibitive so i'm glad to hear i mean you guys are this is you're in great shape i mean you're you're going to be completely debt-free including your home you know you you'll have plenty of surplus on a monthly basis you've got long-term care insurance covered you got six months of emergency funds what about your cash flow i mean where what are your income sources in this season of life we have social security and pensions okay and that's more than enough to cover your bills especially once the house is paid it's eight to ten thousand dollars a month wow yeah so you guys are in great shape so here here's where you get to so you remember we talk about there's only four things you can do with money live give owe and grow well you're eliminating those four along the way so you're eliminating the lifestyle budget because once you define enough for your lifestyle meaning your monthly expenses and you say you know what we're not going to buy a bigger house we're not going to buy them fancier cars we're not going to spend more eating out so you've capped your lifestyle spending so that bucket in a sense as long as you're happy with it and your spending plan that one goes away because we don't want to add more to it and then we let's skip give for a second oh goes away because you know you don't owe anything in fact you're going to be out of your out of your mortgage and you'll still continue to pay taxes but as you give more your taxes will actually decrease and then you're left ultimately would just give or grow i mean those are really the only two decisions you have to make so with this you know surplus you have on a monthly basis you're in a really exciting place to say okay do we really want to continue to save or perhaps have we already accumulated enough and therefore we're just going to do some have some fun giving it away and really take some time to think about the passions that you have and how that aligns with the the things that are on the heart of god the ministry of god's mercy and the god's justice and the ministry of god's word preaching teaching and discipleship i mean and really thinking about how do we accelerate our giving to be a blessing to those around us or you may decide we want to do that plus we've got some other giving goals we i mean savings goals we'd like to you know continue to accrue wealth to pass it on to a particular heir or something like that but essentially you're in a great spot just to really think deeply about how to use this surplus but apart from that i would say you guys are making all the right decisions trying by the grace of god well you're doing it and i appreciate you calling maybe you need to host this program tomorrow judy hey great work tell your husband congratulations and hey really give some careful thought and prayer to what giving he might have for you in the days ahead god bless you faith and finance live is a partnership between moody radio and faith five thank you to hira courtney lynn and jim couldn't do it without it we'll see you tomorrow bye-bye