Whys and Wherefores of Custodial Accounts

If anyone does not provide for his relatives, and especially for members of his household, he is denied the faith and is worse than an unbeliever. 1 Timothy 5.8.

Hi, I'm Rob West. Christian parents take that verse quite seriously, wanting to give their kids everything they need and even a life better than they had. I'll talk about a tool that can help you do that and then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. Okay, I mentioned parents wanting to provide for their children, but we shouldn't leave grandparents out of the mix. After all, Proverbs 13, 22 reads, a good man leaves an inheritance to his children's children. And we've been getting a lot of calls lately about one of the ways that parents and grandparents can do that, with a custodial account.

It's a great way to start building that inheritance for kids while you're still on this side of the sod, so to speak. Now, what exactly is a custodial account? Well, much as the name suggests, it's a savings or investment account set up in a minor child's name where you are the custodian. Technically, the child is the owner of the account, but you remain in control to act in the child's best interest. Whether for saving or investing, a custodial account comes with few strings attached as to how the contributions and earnings can be used. That's quite different from other types of accounts set up in a child's name, such as a 529 education savings account, where withdrawals must be used for eligible expenses or you incur taxes and penalties. Federal law provides for two types of custodial accounts, but since the version set up under the Uniform Gift to Minors Act, or UGMA, allows for most kinds of investments, we'll concentrate on that one. And it's good to know that UGMA accounts are allowed in all 50 states. And while conventional custodial accounts are inexpensive and a breeze to set up, they're not perfect, so let's get into the pros and cons.

First, the pros. I mentioned that custodial accounts are easy and inexpensive to set up. This is especially true when compared to a trust that could cost around $1,500 to establish and comes with certain legal requirements. Next, a custodial account provides a tax benefit to the person setting it up. Once assets go into the account, they become part of the child's estate.

They can never go back into your estate and are no longer counted against you for tax purposes. You can fund a custodial account with up to $16,000 in 2022 without having to fill out the IRS Gift Tax Form 709. Contributions above that limit will count against your lifetime exemption of $12.06 million, so that shouldn't be a problem. There's also a tax benefit for the minor, sort of, because his or her income is taxed at a lower rate. But it's important to know the rules for the so-called kiddie tax enacted to prevent parents from transferring large sums to their minor children to escape higher tax rates. Under the kiddie tax, the first $1,150 of investment income, meaning money earned by the investment, is covered by the kiddie tax's standard deduction, so it is not taxed. The next $1,150 is taxed at the child's marginal tax rate.

Anything above $2,300 is taxed at the parent's marginal tax rate. And one final advantage to a custodial account? You can invest the funds in anything offered by the financial institution administering the account, although many institutions prohibit putting assets into high-risk investments like futures or derivatives. Okay, we've gone over the pros.

Now, here are the cons. First, you can't change your mind. Once your funds go into the child's custodial account, the child legally owns them, and only the child can withdraw funds from the account upon reaching the age of majority, which is 18 in most states. And at that age, the child can use the funds however they want. You have no control over the money. There are certain limited circumstances where you can withdraw funds, but you need to show they were used for the child's benefit and not yours, or you'll open yourself up to legal problems.

Buying a car or taking a family vacation with the money won't qualify. And since the child legally owns the assets in the account, they'll be counted against that child when it comes to federal financial aid for education. If there are substantial assets in the account, the child may not be eligible for grants and some student loans. Also, you can't take a deduction for funds going into a custodial account, and when the child comes of age and withdraws funds, the child will have to pay capital gains taxes on the earnings.

Well, those are the whys and wherefores of custodial accounts. I hope you found it helpful, and make sure you know that this money can be used for any purpose by the child, so just consider that as you're going into it. Your calls are next, 800-525-7000. This is MoneyWise Live. We'll be right back. Great to have you with us today on MoneyWise Live.

I'm Rob Last year host. We'll be taking your calls and questions here in just a moment on anything financial. The number to call with lines open is 800-525-7000.

That's 800-525-7000. But before we do, no doubt you're well acquainted with the effects of the hurricane, Hurricane Ian, last week. There is incredible devastation that has been left in the wake of this storm and so many folks really hurting right now. We wanted to take an opportunity to connect with our friends at the National Christian Foundation to give you an outlet, perhaps, to be able to give. In addition to praying for these folks that have been affected by this massive storm, if you want to give to those really on the front lines connecting with great ministry opportunities, NCF is a trusted source.

In fact, they put together a fund specifically for that purpose. We're joined today by Stefan Cevidzian. Stefan is with the National Christian Foundation, specifically the president of NCF South Florida, based in Fort Lauderdale, but they work really throughout South Florida, even on the West Coast. Stefan's made a lot of great decisions over the years. One of his best, though, was marrying my sister. Stefan is actually a family member. He's my brother-in-law. Stefan, it's great to talk to you. Hey, it's great to be with you.

Yeah, I think it was one of my best decisions marrying your sister. So thank you for allowing that. Of course. Well, Stefan, I know you are doing some great work down there in South Florida and really, I'm sure, are just overwhelmed at the devastation of what's occurring there. I know you haven't yet had the opportunity to visit the West Coast, but you've got team members that are there. So why don't you begin by just giving us a quick report from the ground there as to what you all are seeing? Yeah, obviously what you're seeing, this devastation is broad. It's probably going to be the largest storm to hit the United States. I was speaking with a friend earlier today, and they are a part of the insurance business and there's all kinds of conversations, but right now they're estimating, the latest estimate was $88 billion worth of damage. They believe that will go up. And so you think, let's call it $100 billion in a matter of hours. Obviously you see the death toll going up. I've not gone over there, not because I don't want to, but just because you don't want to put more strain on the system. So this is the time that the large organizations like Samaritan's Purse and Convoy of Hope and the National Guard and all those large organizations are in there doing search and rescue and major cleanup.

Well, obviously this is going to be something that's with us for a long, long time. And Stephon, I know that one of the reasons the team at NCF put this together, along with your team there specifically in South Florida, this fund to help those that are really hurting is because God's people are seeing this, they're watching the news, they're seeing the pictures and the videos and they want to help. And yet so often when a situation like this occurs, we just don't know how to help. You mentioned some of the great organizations on the ground, but give us a sense of some of the giving opportunities that this fund will be directed to that we'll tell folks about in just a moment. Well, thank you.

Yes. Unfortunately, we've had quite a bit of experience in dealing with the disasters and you learn a few things over the years. And some of those things is who you are and who you're not. And in this initial phase, what you're seeing is tremendous relief work done, as I mentioned, with major organizations. And so we will typically encourage people to do several things. One is the constant prayer. Let us not underestimate the power of prayer and how encouraging prayer can be. So I would encourage anybody and everywhere to be praying.

The concern we have is that in another couple of weeks, it'll become yesterday's story. And so we want to continue to encourage people that your brothers and sisters in Christ are going to continue to suffer for what we believe are going to be years as they rebuild. The second thing is we try to encourage people to say, if your church is engaged in some activity in the relief work and you are compelled to want to support that your church is doing, then we certainly encourage you to support your local church. But many times, especially when you get outside of the area in the region, your church may not be doing anything. So again, you've got major organizations like Samaritan's Purse, Convoy of Hope and others that are doing fabulous work and they continue to need your support as they bring in tarps and water and needed supplies. And both those organizations have a tendency to be there long term. I was speaking with Edward Graham who also happens to be related to me.

So apparently I'm related to a lot of people in this space. But Edward, who's Franklin Graham's son, who's leading the initiative, was saying, you know, again, we've been committed to go into these places and stay multiple years. But lastly, we've gone ahead and opened up a fund to say, look, if you're saying, look, I want to help and rather than just going to one of these other organizations that plaster your television with ads to be able to say, I want to be able to help. We've created a fund at the National Christian Foundation called the Hurricane Ian Disaster and Release Crisis Fund. And typically this is what happens is your dollar or five dollars or ten dollars or a million dollars goes into that fund.

We will waive the fees on that so that literally dollar for dollar goes to the needy. And then we particularly look for specific needs that are related to churches and ministry leaders. We feel very compelled to come alongside the leadership of the pastoral leadership, ministry leaders, because what ends up happening and we've seen this over and over and over again, that these incredible men and women, they are serving on adrenaline right now and they're doing everything. Not only have they been impacted, but now they're trying to also minister to the community and they will easily get burnt out. And their families are distraught. They've lost their home. Their kids are not in school. They're dealing with everything.

And so often they get burnt out to a point that they can't, you know, they might leave the area or just say, I can't do this anymore. So we want to come alongside and encourage them, support them. And there's an unbelievably a number of practical ways we can do that. But that's where we're earmarking a significant amount of those funds and then others looking for key organizations that are doing effective work that are Christian based and that have a long term view. Yeah. And the key here is that now you have a trusted source that's really going to oversee the disbursement of these funds. I know Governor DeSantis was out even before the storm saying, be on your guard about scams and GoFundMe and other things where you just don't know where these funds are going to end up. And that's not the case here, right?

Exactly. That's why we feel compelled that as Christians we can come alongside. And frankly, we believe these are the times when Christians shine the brightest and you will see scams and you'll see the looters and you'll see that. But you look back at Christian history and it is apparent that when churches and communities have grown, when Christians have shined the greatest, it's during disasters, when everybody's either scamming someone or running from the disaster, Christians are going there with integrity and truth and running towards the disaster and doing their finest work. And so we feel like this is a time to come alongside the local church and the Christian leaders and to be able to encourage them, equip them so that they can be there three, four, five years, because that's what it's going to take.

We have just 30 seconds left for somebody who's listening right now and saying, Stefan, this is exactly what I'm looking for. I want to go through NCF to make sure my giving dollars go right to the most pressing needs in the name of Jesus. What do they do? Where do they go?

They just go to their NCF, go on the internet, go to the NCF giving account, I mean website, and then they'll have the instructions there. Excellent. ncfgiving.com. Or if you missed all of that, you can head to our website at moneywise.org and look for our featured article, five ways to help victims of hurricane Ian. Stefan, thanks for being with us. We'll be right back on MoneyWise Live. Grateful to have you with us today on MoneyWise Live. I'm Rob West, your host.

We've got a few lines open, 800-525-7000. It was great to have Stefan Cevidzian with us from NCF South Florida. That is the National Christian Foundation, a partner of ours here at MoneyWise Media. And again, if you'd like to be of help to the people left in the wake of Hurricane Ian that swept through South and Central Florida, leaving a staggering amount of damage in its wake, NCF is a trusted place where you can go with your giving dollars, where they will make sure that that money is directed in full, there's no fees applied to this, in full to some of the most compelling ministry opportunities and needs-based opportunities there in that part of the country. You can give directly at ncfgiving.com or you can read the article from our friends at NCF that's featured on our website at moneywise.org. That's moneywise.org.

And that article has been posted for you to enjoy. It's entitled five ways to help victims of hurricane Ian. All right, we're going to be taking your calls and questions today on anything financial.

Let's begin in Georgia. Bonnie, you'll be our first caller. Go right ahead. Hello. Can you hear me okay? Yes, ma'am.

Okay, good. My question, I had two questions, but my first most important pressing question is this. So I am a nurse practitioner and I am 66 and a half years old. My goal is to work till I'm 70 so I can pay off all my debt. But I went ahead and applied for my social security because they said you can make as much money as you make and they won't take any of your social security away from you. But what I'm understanding is that I'm going to have to pay a lot of taxes on those social security checks when they come because I'm going to be in a pretty high tax bracket because of my salary as a nurse practitioner. So my question is, should I take my social security check and put it right into something like a Roth IRA or something so I won't have to pay taxes on that money? Is that possible? Not quite.

So a couple of things. You are correct that once you reach full retirement age, you can earn as much as you want. Your benefits won't be reduced. If you begin collecting before full retirement age, your benefits could be reduced depending on how much you earn. But you would get that back eventually once you reach full retirement age over time. So it's not a permanent reduction. But in your case, once you reach that full retirement age, you don't even have to think about it.

Now, you're right. Depending on whether you file as an individual or joint for your tax return, up to 85% of your benefits may be taxable if you're over $34,000 in adjusted gross income as an individual and over $44,000 when you're filing a joint return. So you would pay taxes on that. And depending on what tax bracket you're in, of course, you're going to pay the tax rate that's appropriate but only up to that percentage, just like you would pay taxes on earned income. Now, putting that into the Roth is not going to help you in the sense that it won't reduce your tax liability because that would be an after tax contribution. If you wanted to get a deduction, you could put it into a traditional IRA and then you'd be able to deduct the amount that you put in up to, in this case, now that you're over age 50, $7,000 for 2022. And if you're married, you could put in 14,000, 7,000 each in two traditional IRAs, and then you'd be able to deduct that amount from your taxable income. So that certainly could be a strategy to reduce it. I wouldn't be terribly focused on the taxes. I mean, taxes are symptomatic of provision and income, and there's not 100% tax.

Clearly, you don't want to pay any more than you have to. And so by looking for ways to be able to deduct that either through a retirement contribution or if you itemize through charitable giving or other strategies, that could certainly be a great way to reduce your overall tax liability because you certainly don't want to pay any more than you have to. But it would be specifically, Bonnie, a traditional IRA, not a Roth.

Okay. What about could I just put it in my 401k? I'm 60, almost 67. So I'm allowed to put a lot of my income into a 401k, right?

You are, yeah. So you got a pretty high contribution limit with a 401k. Over age 50, you can actually put in a bit more, up to $27,000 for 2022. Now that would need to happen through salary deferral. You can't make a contribution directly to your 401k like you can with an IRA. So you'd have to go through your employer and tell them that you want to withhold a certain amount from each paycheck and try to get as much as you can in for this calendar year to try to get close to that 27,000.

That might work. But the other question real quick, I know I only asked for one, but I went back to school when I was 55 because I only had an associate degree in nursing and I got a master's degree at 62. I have a huge student loan of $123,000. And so I still have it in the government thing, but that new thing where they try to get you to consolidate it to make it like a lot less, you know what I'm talking about? And I almost bought into it because I paid them money and they won't give me my money back for it, but I haven't signed any paperwork or gone into a private sector loan because I know they're going to do forgiveness. I might even make too much money to qualify for the loan forgiveness thing. I can volunteer after I'm 70 in a clinic after I retire with my license.

What would you do? My goal is to be just debt-free and my thing is I know I'm going to have to pay on this student loan until I die. And I'm hoping if I do retire, they'll make it a price it's based on income that I can get something I can afford with my social security payment and whatever. I'll have to live from check to check.

Yes. Yeah, I would not try to consolidate that into a new private loan. I'd keep it in the government program. There is a government loan consolidation, but that doesn't reduce the payment or the interest rate it gives you. It just simplifies things by putting it into one payment, but with the same interest rate that you had before. So that's not really going to help you, but keeping it in the federal loan program is going to ensure that you have that income-based repayment option available to you. To be eligible for the forgiveness, you have to have earned less than $125,000 annually or $250,000 for a household, and then you can get up to $10,000 in debt cancellation.

So I would leave that right where it is in the federal loan program and just pay on it as much as you can each month to get that balance coming down. We'll be right back on MoneyWise Live. Stay with us. Thanks for joining us today on MoneyWise Live.

I'm Rob West, your host. This is where we apply the wisdom from the Bible to your financial decisions and choices. So we recognize our role as stewards and God as the owner.

Well, then we're charged with being found faithful in managing the resources of the Lord, and we look to Scripture to find those principles, that timeless wisdom that we can apply to every decision we make financially, and recognize that as we hold God's money loosely and try to live within His provision, that's when we can experience God's best. Let's head back to the phones. We do have a few lines open—800-525-7000 is the number to call.

Cleveland, Ohio. Next up is Jared. Go right ahead. Yeah, so I'm about five years away from being able to retire under a 30 and out clause, and I'm trying to figure out whether or not I should, because I still have a traditional pension, but I'm the very end of it. And so I'm guessing the company is working really hard to shift everybody over into a 401k. So with that, they're offering a lump sum buyout, and at this point, now interest rates are going to change it, but at this point, it's like $750,000, because I'll be pretty young when I hit that. And so I'm trying to figure out whether to go ahead and retire at that point, and take that and move on.

And if I do, how long it's going to be before I can touch that money if I roll it into some other sort of retirement vehicle. Yeah. So, you know, you have the option, I assume, to either take a lump sum or to take kind of a monthly payout, is that right? Yeah, yeah. It's somewhere in the neighborhood of $2,200 to $2,500 a month. Yeah.

Okay. So on $750,000, you know, we would typically look at a 4% withdrawal rate, which would be about $30,000 a year. Now, either case, it's going to be taxable either as it comes to you in a monthly check or as you take it out of that IRA, if you were to roll the pension over to the IRA. So they think the taxes will be a wash. So that $30,000 a year is that $2,500 a month, and it sounds like they would give you. Now, the benefit to taking the monthly check is you've transferred the risk to them. So you can get that guaranteed $2,500 a month, no matter what happens in the market. The nice thing, though, about taking the lump sum, in my opinion, and you're going to have to look at all of the issues surrounding this, I would probably recommend you doing some more in-depth financial planning with a financial planner on this. But just kind of at a high level, the nice thing about taking the lump sum is 4% a year is a very reasonable withdrawal rate where if it's managed on a conservative basis with an eye toward preserving the capital and growing it modestly, you should be able to pull out that $2,500 a year and never impact the principal. The benefit there is twofold.

Number one is if you ever needed to go into the principal because you had a major event or you needed access to those funds, you needed the major medical expense, something that might come up, well, you'd have access to it whereas with the monthly check, you wouldn't. The other thing is if you were to just simply pull that $2,500 a month and through a conservative income-based investment strategy to replenish that every year, that $30,000, by growing it at least 4% a year after fees and expenses, then you would have something at the end of your life after you took this $2,500 a month for as long as the Lord has you here, you'd have something to give away to ministry or charity or pass on as an inheritance. So I think for that reason, Jared, as long as you're willing to take the risk of hiring somebody to manage that for you and realizing there's always the potential for loss whenever you're invested in marketable securities, as long as you're okay with that, I think the strategy of taking that lump sum and rolling that into a tax-deferred environment like an IRA probably makes the most sense. Okay. So would I be allowed to start withdrawing on that immediately or would I have to wait because I'll only be $49,000? Yeah. So you'd have to leave it there until you're $59,500. Otherwise, you'd be paying a 10% penalty on that money. Okay. Yeah. So it would be taxable to you as it comes out and then you'd have the penalty on top of it. So probably the best option is for you to roll that over and then just continue to work and defer that as long as you can. Yeah. That was the plan. I was just trying to figure out whether to work and draw the monthly so that I didn't have to work full-time or I could just work someplace not quite as intensively or something like that.

Yeah. I just think, obviously, that's bigger than a financial decision. So there's the financial side of that. Then there's the non-financial side which is just your quality of life and how you want to spend your time and where God is directing you and those are things you're going to have to work through. But just purely from a financial standpoint, I think there's a lot of upside if you're willing to work at least until $59,500 for you to just let this money continue to grow, especially now with the market down the way it is.

Then you have this to fall back on later with quite a bit there in your retirement portfolio that you could then convert to an income stream at that point. Okay. Thank you very much. Okay, Jared. Thanks for calling.

A lot to think and pray about but hopefully that's giving you some additional thoughts to consider. Let's head to Ohio, WCRF Ed. Thanks for calling. Go right ahead. Well, hey, Rob.

This is Ed. I'm a retired Fed, happily retired, couple of years and I'm working on my certified lay minister credentials and I listen to your show all the time and I've phoned in in the past with a few questions now and again but on Thursday, you really perked my interest. I was driving and you happened to make a comment that when we gamble and things like that, even playing lottery, we're not being good stewards of God's money and I agree completely. And unfortunately or not, maybe that's a bad choice of words, I've got some friends that belong to a specific denomination where their churches are famous for bingos, okay, and they have all these bingo festivals and they claim it's not gambling because you buy tickets and then at the end of the night, you cash your tickets and things like that but it's gambling. You see what I'm saying? And my point is, how could I talk to these folks?

I don't want to say preach to them right now but basically, how could I talk to these folks and say, listen, dudes, don't do that. This is gambling. You know what I mean?

I don't care what you call it, I mean things like that. The scripture says don't do it, so why are you doing it? Yeah, yeah. Well, I completely concur. Now, unfortunately, you may end up with somebody saying let's agree to disagree because the Bible doesn't directly call gambling a sin but clearly, you and I agree that we don't feel like it's a wise use of God's resources. If we're money managers of the King of Kings, the question is how should we handle God's money and get rich quick is something that the Bible talks very negatively about. You know, if you play bingo for money where you buy a ticket and then they have the potential of winning cash or a prize with monetary value, then it is, in fact, gambling. In fact, most states recognize bingo played in that way as gambling.

So I think, you know, perhaps instead of organizing a bingo event, if the idea here is to raise revenue through, you know, the members, then that should be done through just straight giving. So I think ultimately it's a conviction matter that each person needs to pray and think through, but it starts with the idea and the recognition that God owns it all and that we're his stewards. And the question is what is the best use of God's money?

And I think gambling and anything that falls into that category would certainly not be something that I think would be considered faithful in the use of handling God's money. I'm not sure you're going to win that one, but I think if the Lord gives you the opportunity to have the conversation, as long as you do it in love, it's probably worth doing. And thanks for listening and for your kind remarks today, sir. God bless you. We're going to take a quick break. We'll be right back on Money Wise Live. Great to have you with us today on Money Wise Live. I'm Rob West, your host.

This is where we apply the wisdom from God's word to your financial decisions and choices. Before we head back to the phone today, it's Monday, which means our good friend Bob Doll stops by. Bob is chief investment officer at Crossmark Global Investments. He's a Wall Street veteran, frequent contributor on Fox Business and his Doll's deliberations. That is, his weekly commentary, which you can find at CrossmarkGlobal.com is something a lot of folks, including myself, rely on each week for their market analysis. Bob joins us to share his insights on the market. And Bob, I know not a day does a market make, and yet today was a green day.

We'll take it right after the last quarter? Absolutely right. Not to spoil the party, but remember, last week had a big up day only to be followed by, well, you know what came next. So these moves that so far have had little follow through in either direction cause us all to scratch our head. There's a lot of uncertainty out there, Rob, and uncertainty breeds volatility and it gets going in a direction and you can't stop it till four o'clock Eastern when it closes and then we see what the next day brings. Yeah, exactly right. Well, you were out in your weekly investment commentary, Bob, with really two potential paths forward. Give us a sense of what those might be.

Yeah, the one is probably the consensus. The Fed raises rates to fight inflation and we end up in a recession. That is the most likely scenario. The other is that we have more of a soft landing. For that to happen, the Fed will have to see progress on inflation, which we will get under either scenario, but then the Fed will blink in that second scenario. In other words, if we get to four to 5% inflation by the end of the year, the Fed could say, let's just pause for a bit and see what all the work we have done leads to.

That could get us through with, you know, threading the needle and the soft landing that so many hope for. I put, you know, a 20% probability on that one only. Interesting. So the probability of a recession clearly has been increasing. It is probably going to continue to increase. And this idea of a significant Fed pivot is probably not the base case. I think that's right.

I'll throw another, for example, in there. We've been worried about the Fed raising rates to fight inflation. We've begun to worry a lot about earnings.

Last week we began to see a third worry. That is, will financial conditions lead to a break in the system somewhere? Liquidity problem, a credit problem. Early last week we saw that in the UK, in the bond market, et cetera. Could we have, with higher rates, something that can't handle it? That would cause the Fed to pause as well.

And that crept into the market with that 500 point down drop you saw last Friday. Yeah. Now, I know you were talking about just the fact that the U.S. economic foundation is solid. So do you feel like that we could see something like that? And if we were to see it, where do you think we're most susceptible to a challenge here in the U.S.?

Yeah. So, yeah, the backbone is a consumer with a lot of cash, corporations in pretty good shape, especially the banking system, and the job market's still reasonably robust. This is the reason we have not said we are in a recession yet. You don't get a recession with those three parts of the economy doing well. The Fed is going to raise rates until one of them falls on their face or we get a break in the system. My guess, it's likely to be the earnings gap to the downside that would cause corporations to retrench, retool, not only stop hiring workers, begin to lay people off. And we're seeing that in a company here and a company there, but it's not yet widespread, Rob.

All right. Now, Bob, if we continue on this path and the Fed continues to raise rates and we do see ourselves in a full blown recession, how long does it take typically to work its way through the system? What would it look like for, say, 2023? Well, if we have a recession in our view all along, it's 2023. I don't think we're going to see a recession in 2022 because the Fed hasn't been at it long enough. They only started raising rates, as you recall, in March. And there's usually a six to 12, sometimes 18 month lag. So if we have a recession and it's the kind of shallow one we see, it'll last a few quarters. Rob, let's call it three quarters. And then then we'll climb back out again.

Yeah. Well, that's encouraging, because, again, if we have a long time horizon, we can somehow stomach the quarterly statements that are going to be abysmal once again, given what happened in the third quarter of this year. And we can keep that long view.

We know that, well, we've been here before. This time is not different and the market will recover, right? Absolutely right. I mean, how many people were bullish on January 1st at S&P forty eight hundred?

And those same people are bearish now. S&P thirty seven hundred doesn't make sense. You and I have talked about it before. The only thing in the United States when it goes on sale, people want less of it rather than more of it is the stock market. Yeah, that's exactly right. All right.

Last question. I know there was some talk about this globally with some pressure even on the on the Fed from some of our international counterparts. The dollar has just been on a rage on the upside. What are the implications of that? So the dollar, when it goes up like it has, is good news for inflation in our country. It exports inflation other places. That's part of why those countries are upset. It makes our goods cheaper outside the U.S., of course, but it makes stuff coming to the U.S. more expensive. So there are all kinds of crosscurrents, some positive, some negative and depends on which side of the coin you're on.

You like it or you don't. Yeah, exactly right. All right, Bob. Well, we're grateful for your insights, my friend.

We'll continue to watch this each week and we appreciate you stopping by. Have a great week. God bless. All right. Bob Doll, chief investment officer at Crossmark Global Investments.

You can learn more or sign up for his dolls deliberations at Crossmark Global dot com. All right. Back to the phones we go here in our final segment today to northern Illinois. Hey, Susie, thanks for calling. Go right ahead.

Hi. I have a twenty five thousand dollar life insurance policy on myself. We took out several years ago when before our children were all grown.

They're all adults. I'm sixty two years old in good health. I reasonably expect to live 20 or 30 more years.

The annual premium for this policy is three hundred fifty dollars. Do I actually need it for any reason or should I cash it in and find a different way to finance my eventual funeral, which right now is really the only thing that I can think of as a reason to keep it. Yeah. And do you have other assets, Susie, that are available for that expense? I do. And of course, you know, borrowing eventual nursing homes for my husband and myself eating that up. I think I'm OK in that regard.

Yeah. OK. Well, if you don't have anyone, depending upon your income, that would go away at your death, then you really don't have a need for life insurance. You can no doubt make better use of that money by surrendering the policy and just being systematic in your investment of that same premium each year to continue to add to and bolster your savings, which could be used for any purpose, including your eventual funeral expenses. There could be some costs involved if you've had this a while. Probably not any surrender fees, but it'd be worth asking. Could be a portion of it could be taxable. You'd want to understand that before you do it. But I think just continuing to pay on this policy that has very little death benefit and that premium is going to continue to increase as you age. I think taking that money and redirecting that into savings or investments is probably a better use of those funds. That's going to continue to get more and more expensive for a death benefit that really you don't need because you have other assets to really accommodate that.

Okay. Does that make sense? Yes, it does. I'm not really sure how mine is set up, except that I know that the premium does not change. It does not increase, but I also don't remember without looking up the paperwork what the other terms of it are. Yeah, and it could be that there's a cash value that's built up in there that's helping to offset some of those increases for that premium, which you could get back if you were to surrender that. There is probably a lump sum that could come back to you if this is a whole life policy. So you'd want to know that first, but remember the reason for life insurance is to take care of our loved ones if we pass away. If that's going to place a hardship on them, which could result in the loss of an income that we're generating that they're depending upon or additional expense that they may incur.

But in this case, because you have the assets to cover your funeral expenses in other places, there really is no need to continue to lay out this cash each year, even if it doesn't change. So that would be my best advice to you. I appreciate your call and thanks for thinking of us today.

Quickly to Danville, Illinois. Susie, unfortunately, I just have a minute left. Go ahead. Yes. Let me turn the speaker off.

I have a question. I want to move to Texas. I live in Illinois, live by myself, but my son wants me, well, I want to move to Texas because I retired and it's too cold over here. So I want to move to Texas because that's where my sons are. My son found a mobile home in the mobile home court that he lives in for $29,000 and he really wants me to move. I've never lived in a trailer court or in a trailer home. And I don't know if it's a smart thing because they charge close to $700 a month to rent the property where the mobile home is. Yeah. Well, here's where I would start, Susie, if you've never experienced that, perhaps go for a visit and stay for maybe even a couple of weeks just to look around the area, experience what it's like to be in that mobile home park and make sure that that's going to be a good fit for you.

That's a pretty significant move without you having experienced that. So I might start there and just see if you can take it in, pray through it and see if that's the direction the Lord leads. We appreciate your call today.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Thank you to my team today, Dan, Amy, and Jim. We appreciate you being here as well. Come back and join us next time. We'll see you then. Bye-bye.