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Finding Peace in Uncertainty

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
August 9, 2023 2:20 pm

Finding Peace in Uncertainty

MoneyWise / Rob West and Steve Moore

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August 9, 2023 2:20 pm

Finding peace in uncertain times is a true blessing.  But we all know that it’s easier said than done. On today's MoneyWise Live, host Rob West will share several positive and practical steps you can take to find peace and increase your faith in God’s promise to provide. Then he’ll answer your calls and questions on any financial topic.  

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Finding peace in uncertain times that's on to your calls at 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. Well, we've all experienced uncertainty in our lives and the anxiety and worry it causes.

In those times, it's important to keep a clear head and avoid making some common mistakes with your money. So the first thing you can do to find peace is open God's Word. It's the antidote for the fear that arises during times of uncertainty. That fear can lead to irrational thinking and irrational behavior, but the Bible says to fear not over 300 times. The most effective way to overcome fear is to have God's perspective.

He's never surprised and He's in total control of all circumstances. He's going to use it for His purposes and Kingdom growth. If you have a long-term financial plan, consider whether your plan will stand the test of time. This is a battle best fought on your knees in prayer to God that He'll show you the right path. The next practical step is to focus on only what you can control. You can't control the Federal Reserve, the stock market or the GDP, but you can control what God provides you to steward and manage. When you look at what Scripture says about money, you'll see that God plays a role and you play a role. He's ultimately the owner and controls everything.

He's also responsible for your provision. Your part is confirming that you have a solid spending plan that includes giving and debt reduction. Well, the free MoneyWise app will help you set up that spending plan and manage it so you know where every dollar is going.

Just look for MoneyWise Biblical Finance at your app store. Now, here's a very practical step you can take to overcome fear. Stop looking at your investment accounts every day or several times a day. Forget the daily headlines. Fixating on the financial news is actually harmful to your decision-making process. Instead, stick to your long-term financial and investment plans and focus on your daily study of God's Word. Refocus on having an awe of God and all of your short-term concerns will come into proper focus. Your next step is to keep up your giving. Sadly, one of the first things many people cut during times of uncertainty is their giving.

So I challenge you not to do that. Instead, trust God as an act of obedience and worship, even in difficult times. Giving breaks the power that money can have over our lives. Giving shows where you're ultimately placing your trust as you hold on loosely to everything. And as a follower of Christ, you should give more if you're doing okay, because many people aren't. God's given you resources, financial and otherwise, to use for His honor and glory.

So look around for someone who might need your help. It demonstrates your faith and will give you peace. Now, I mentioned your spending plan earlier. Let me add that it should be long-term as well.

You need to stick to it. One of the fundamentals of planning is that it helps you make better short-term decisions. A long-term perspective of your finances is really an eternal perspective. Your spending plan shouldn't have to change in times of uncertainty, because it anticipates uncertainty. How does a budget do that?

Well, by having a category for emergencies. If you don't have one, start now. Put away something every payday until you have three to six months living expenses and liquid savings. That's how you plan for uncertainty, and doing it will give you great peace of mind. If you have debt and you're struggling to keep up with it, let your creditors know.

Run toward them, not away. They may be willing to reconfigure your monthly payments. You can also contact Christian credit counselors.

They can help you pay off your debt up to 80% faster. Last, but certainly not least on your list to find peace in uncertain times is, pay attention to what God may be telling you. Spend time with Him and listen for His guidance and wisdom, and trust Him in your daily actions and decisions. You can, with certainty, place your faith in the eternal God who created everything and has all wisdom and knowledge. He has your best interests at heart, so study His word and spend time with it. All right, those are some practical ways you can take to find peace in uncertain times.

Here's the reality. Uncertainty is certain, so let's expect it, but let's lean into God and see what He may be teaching us in this season. I hope that's a comfort to you. Your calls are next, 800-525-7000. That's 800-525-7000. We'll be right back. Delighted to have you with us today on MoneyWise Live.

I'm Rob West, your host. Hey, we're taking your calls and questions today on anything financial. The number to call is 800-525-7000. We've got some lines open. We'd love to hear from you on any financial topic. Again, the number 800-525-7000. Before we head to the phones, our scripture verse of the week is James 1-5.

It probably won't be unfamiliar to you. It says, James here is writing about wisdom for a particular moment, a time when we just don't know what to do. What's the best choice between two different paths? How do we make a good financial decision? Well, if we truly trust God, we pray and ask for His wisdom, and then we should be ready to follow His leading. And that's good news from God's Word today. So we would encourage you to go back to God's Word to renew your mind, especially when it comes to making financial decisions. God's Word is full of financial wisdom that we unpack on this program each day. By the way, you'll find our weekly verse in our MoneyWise Weekly Wisdom email. And if you're not a recipient, more than 60,000 people receive our weekly wisdom email every week. It comes out on Thursday, and we'd love for you to get a copy.

It has a note of encouragement from me. It has our recommended reads, our trending podcasts, of course our verse of the week. You can sign up at no cost at our website, MoneyWise.org. Just click Create a Free Account, and that will allow you to be on the distribution list. Again, MoneyWise.org.

Click Create a Free Account. All right, let's head to the phones. We're going to begin today in New York. Ann, you're first up on the broadcast. Go right ahead.

Hi. Yes, I'm 62 years old. I am a registered nurse. I work full-time, and I have no savings. I have about $50,000 in debt. I live paycheck to paycheck, and I have probably about $8,000 saved for retirement. And I need wisdom.

Yeah, yeah. Well, so tell me about your work status right now, Ann. I don't do clinical work anymore. I left a clinical setting about four years ago to take a career path in more of an administrative role. And I do work Monday through Friday 40 hours a week.

It's more of a technical role in nursing. Okay. And will you have a retirement plan at work or some sort of pension available to you or no? I do. I have. And I have never put anything into it. I just take whatever. I just have in there whatever the company has put into it. Okay. Yes.

And that's what has grown to what amount is in there right now? Well, I have in the one I'm in right now at work has probably $4,000 in it. Okay. All right. And do you have another retirement plan from a previous employer, or would that be the extent of your retirement savings?

No, I have two others, and there's about $2,000 or $3,000 in each of those. I see. Okay.

Very good. And you said your employer is contributing. Do you have the ability, Ann, to significantly increase the amount you're putting in, or are you kind of living paycheck to paycheck at this point? Well, because I've ran up so much of my credit card debt and I have personal loan debt, I am now strapped in that sense. Okay. And what do you have in the way of credit card debt? Credit card debt is about $23,000.

Okay. And is that in a debt management program, or are you just paying that yourself? No, I'm just paying it. I pay everything, and I don't have any collectors.

I pay monthly the minimum. Okay. Yeah. And then the personal loan, how much do you owe there?

That's another about $20,000. Okay. All right. Yeah.

Obviously, we want to get that coming down as quickly as we can. Are you in good health, and do you plan on working for the foreseeable future? I am in good health, and I did take this job that I have now so that I can work. I would love to continue working into my 70s only because I'm healthy and I enjoy working. Yeah.

Yeah. And obviously, once we get this debt paid off, that will bring down your lifestyle quite a bit, but you're earning a great salary at $92,000 a year. And we're not going to be able to offset that with Social Security, which was intended really only to cover about 40% of pre-retirement income.

And if you need 70 to 80% of your pre-retirement income, there's going to be a shortfall there, and we really need to try to work as long as you can so you can save as much as you can. But right now, the pressing need is to get out from under these loans. I'm going to recommend, Ann, that you connect with our friends at ChristianCreditCounselors.org as a first step. A debt management program would essentially cancel the cards. It would move it into debt management with the existing creditors so it doesn't get paid off with a new loan. But through debt management, they offer reduced interest rates as long as you pay through a credit counseling agency. Our friends at Christian Credit Counselors have helped hundreds and hundreds of our listeners.

The power comes in the reduced interest rates with a level monthly payment, so it doesn't decline as the balances decline like a minimum payment would, and the power of those two together will allow you to pay this off 80% faster. And this is more important now than ever, Ann, just because of interest rates rising, which means those variable interest rates on those credit cards are rising with the Federal Reserve as they raise rates. So I think it's really important that you start there, and once we get that, they'll help you work on a budget, perhaps taking another look at your spending plan to identify potentially any areas you can cut back, make sure that the monthly payment to all your creditors through debt management fits into your budget, and then get you enrolled in the program if that makes sense to you. I think that as a first step is really going to be key because it's going to be hard to deal with anything else, including increasing your long-term retirement savings until we get this taken care of. I agree with that, actually, and I see so many things coming in my mail and advertisements about credit counseling and debt consolidation, and they scare me because I don't know who to trust.

Yeah, yeah. Well, these are folks that are all believers. We've been working with them a long, long time. They're a nonprofit credit counseling agency. They've literally worked with well over 100,000 folks over the years, and they have a great track record. So I think this will give you a trusted source to get this debt going finally in the right direction, and that's going to give you a lot of peace of mind to know that you're actually making some progress. So I would start there. Again, ChristianCreditCounselors.org, tell them we sent you their way, and let us know how that turns out down the road. And I know this is weighing on you, and I think you'll feel a lot better once you get this moving in the right direction. We appreciate your call, though, very much. God bless you. 800-525-7000 is the number to call.

It's 800-525-7000. Before we take our first break and then back to your phone calls, a quick email. This one comes from Charles. He says, how much life insurance do you recommend I have? And I would just say, Charles, number one, I'd use term insurance. That's going to be pure insurance.

Keep the cost down as low as possible, which is going to allow you to get the proper amount of coverage. Typically, you want 10 to 15 times your income to provide enough so that your dependent, your loved one who's counting on your salary, can convert that to an income stream to make up for the loss of that income. If you wanted to go beyond that, you could add to it your debt. So let's think paying off the house and also education, plus any other debt you have, whether you have credit cards or personal loans. But education, meaning college education if you have young ones at home.

At the very minimum, though, we need 10 to 15 times your income to offset the income loss. That's the most important thing. We appreciate you writing to us. We'll be right back on Money Wise Live.

Stay with us. Yes, I've kind of got a three part question and comment in today's market. I'm quite concerned about all of the printing of money. You know, it's just like you've got a home office and running copies that's not backed by any finances. So in thinking about that, I've wondered what your thoughts was regarding precious metals and jewels and then bringing in the bank with our dollars decreasing.

I've been through the deal where you had we had three neighbor banks in a small community go under and it was not good. And so if you if you was to invest in metals and jewels, what about safe deposit boxes? You know, I've never invested in the markets or anything like that.

This little kid had some silver and it's it's pretty. But I'm a very conservative individual. I have no debt. Well, I have a little unfinished paying off my car and a couple of credit cards that think I owe them, but they can't come up with anything showing that other than they're right and I'm wrong.

And I've had a lot of fraud. So I'll shut up and listen for a bit. No problem, Bonnie.

Well, thanks for that background. And listen, I certainly can understand what you're saying about your concerns related to both our fiat money, which is government issued currency that's not backed by a physical commodity, but the government itself that issued it. And that's what our system is. And we certainly have been printing a lot of it. We've run up a lot of debt and it's a cause for concern, I think, down the road.

I don't think that it's an immediate cause for concern. I think the potential for a debt crisis, which I think is is real, perhaps for the first time, is still a good ways down the road. And I think we have an opportunity through a variety of means to make some changes. But in the meantime, either pulling out of the banks or over weighting toward the precious metals or I think you even said precious jewels, I don't think is the right approach.

And here's why. Even though I would agree with you, backed by the full faith and credit of the U.S. government only goes so far, but we have to grade ourselves either on our own merits or against the rest of the world. And when we grade ourselves against the rest of the world, we're doing a whole lot better than everyone else. The recession will looks like be far deeper in other parts of the world. They have challenges beyond ours that are even more significant and in both Europe and China, kind of the other two legs of the economic engine of the globe.

And we're in a much stronger position here in the U.S. with our economy, the size of our economy, the strength of our economy. And that's why the U.S. dollar has been surging even in the midst of these inflationary times with the prospect of recession. So I think because of that and because of the inflation we're experiencing right now, I don't like you kind of pulling this money out of the bank, putting it under your mattress, so to speak. And, you know, overweighting in the precious metals is just long term, at least based on history.

It doesn't prove to be as effective as a properly diversified stock and bond portfolio that's appropriate for your age and risk tolerance. The precious metals tend to be more volatile and they just don't have the long term performance. It's also if you're taking physical possession, you've got to store it securely, you've got to the dealer buying, you know, markups on the buying and the selling.

If you're trying to use it as a means of exchange, how do you, you know, take gold coins or gold bars and convert that easily into, you know, a means of exchange depending on what it is you need, a loaf of bread or something like that. So it just becomes problematic. And as much as I can certainly appreciate your concerns, I think just based on what we know today, I would count on the strength and the size of the U.S. economy. The backing of the U.S. government, I think, is still worth a lot. And I think having your reserves in the bank earning interest and having your long term assets, you know, even in this season of life, if you're in good health and the Lord tarries, you might need this money to last still a couple of decades or more. And if that's the case, I think putting it to work in a conservative approach with a trusted professional is probably the very best way to overcome the loss of purchasing power you're experiencing right now through inflation and actually see this grow over time or convert it to an income stream. So I would keep your precious metals allocation to no more than five percent. I'd stay in the banks and I would look to invest if you need to generate income. Okay. You said trusted professionals.

Who do you talk to? And I know putting your money in the bank, you just will have it in Santa Claus stocking because the interest rate is pathetic. Yeah, well, it's better now than it certainly has been as rates have been rising. I mean, you can easily get two percent now on your money with no fees, no minimums and FDIC insurance. Yeah. And a few months ago, you could borrow money at two percent. That's true. Oh, things have changed.

How things change quickly. No, I certainly understand that and understand your concern. But given our present situation, savers are being rewarded in this environment.

Those that are in debt are in a more difficult spot. But I still think that's your very best opportunity moving forward. But at the end of the day, Bonnie, here's the thing.

You're the steward. And I think you need to make this a matter of prayer. Ask the Lord to give you some wisdom. And if he leads you in the direction that you're describing here to put more toward the precious metals, then I think you certainly could make a case for that. I just think for me, looking at where we find ourselves in the U.S. versus the historical performance of the precious metals against the stock and bond portfolio and using the bank interest rates for our reserve account, our liquid reserves that we need for emergencies. That's just what I think is the best option right now. And if something changes, I think we're going to see that change coming sooner than later.

I think we'll see it before it happens and we'd be able to react accordingly. I hope that helps you today. At least gives you some things to think about. We appreciate you calling. God bless you very much. This is MoneyWise Live. We're going to take a quick break, but we'll be right back.

Delighted to have you with us today on MoneyWise Live, where we apply God's wisdom from the Bible to your financial decisions and choices. All the lines are full, so let's head right back to the phones. We've got some great questions coming up.

To Chicago we go. Hey, Frank, thanks for calling, sir. Go right ahead. How are you doing, sir? Thank you for taking my call.

Yes, I wanted to know the truth. You know, I'm trying to figure out to do something the right way. Okay, I'm on Medicaid and Medicare. I have a certain amount of money that I had saved up for a while, but somebody told me that if you're on Medicaid that you cannot have any CDs, any kind of savings or online savings or overseas savings. And I don't know if that's true because I don't want to get kicked off of Medicaid because that's the only thing that I have that can help me with paying certain medical issues that I deal with.

I'm trying to find out the correct way of doing things. Well, the asset limit for Medicaid benefits in the state of Illinois is, I believe, $2,000 for an individual, $3,000 for a married couple. So normally you would have been required to spend down any savings you had to that threshold before Medicaid would step in. And then obviously we don't want to try to hide any assets. It wouldn't be ethical to hide anything to qualify for government benefits.

I'm not saying you were intending to do that, but I'm just kind of putting that out there. You can do a few things with assets to still qualify for Medicaid legitimately. You can pay down your mortgage, you could replace a vehicle or household appliances, but there's not a whole lot of options there. And again, that threshold, the asset limit is $2,000 for an individual.

So you're saying you can't have like any kind of savings account or nothing like that, correct? That's correct. All right.

Well, thank you very much for your help. God bless you. Okay, Frank, thanks for calling, sir.

Let's stay in Chicago. Hey, Stephanie, you're next on the program. Go ahead. Hello. How's it going?

Good. So my question is about like how to fund my kids' education or how to get started, which I haven't done. My daughter is 15. She's in ninth grade. And then my youngest is 11.

She's in sixth grade. So I work. I'm a single parent. I opened them savings accounts recently, but I'm like, I don't think that's as good as maybe like a 529 or something like that.

So I wanted to know what you thought. Yeah, I would agree. I think starting early and saving as much as you can systematically for both of them is going to be really key. Obviously, whatever they can do to get good grades through high school, being really involved in clubs and community service and extracurricular activities, you know, being well planned ahead of time to take advantage of any financial aid you'll have coming to you. Making sure they apply for as many grants and scholarships as possible would obviously be key. And then deciding how much is going to be available so that they know clearly how much they're going to be responsible for. So they can plan for that either with, you know, working in the summer, work study on campus and hopefully not a lot, but possibly some student loans.

I mean, I think all of that is key. But what the best thing you can do right now, Stephanie, is just to save. And I would use a 529 college savings. I'd head to savingforcollege.com.

They will recommend the best 529s for you based on the benefit of staying in state with any state tax deduction versus the investment performance in Illinois against other states and recommend, you know, three 529s for you to consider. But that's going to be a great way for you to just, again, systematically, hopefully every month with some margin, if you have it, just get some money going in so you can take advantage of the years between now and retirement. The 15-year-old will be in college before you know it. You've got a little more time with the 11-year-old, but that one's just around the corner as well.

That's what I'm thinking. What was that website again? It's savingforcollege.com, and they have a great tool there for you to put in your state and the age of your kids and all the details. And then it'll evaluate the in-state performance of the Illinois 529 against other states.

But it'll also factor in the tax benefits you'll receive by staying in state and then give you some recommendations. Oh, perfect. Thank you.

Okay. Thanks for calling, Stephanie. I appreciate it. 800-525-7000, two lines open.

Let's see, to Arkansas. Hey, Jane, thanks for calling. Go ahead. Yeah, I have a question about tithing.

Okay. I am a tither. Yeah, I am a tither, but I'm 84. I live in assisted living.

And I got COVID last month, and I had a very bad case. And I think I'm using that as an excuse to get out of the habit of tithing because I haven't tithed now for three or four months. And I know I should do that.

It honors God and it blesses me. Yes. So I was wondering whether I should take some money out of my savings account to get caught up.

Yeah. Well, here's what I would say, Jane. The Lord knows your heart, and that's what He's interested in, not your money. God's not an accountant. But I think at the end of the day, it's between you and Him.

And if you feel like He's leading you to, quote, catch up, then you go for it. But I think, you know, from here, what I would say the most important thing is just begin giving as the Lord leads. I think giving a tenth, a tithe on your increase on whatever provision He's providing for you is a great starting place for our giving. But remember, at the end of the day, God loves a cheerful giver. This is not about being legalistic about our giving. And it's an opportunity for you to partner with God where He's at work, starting with your local church. So I would say just pick up where you left off.

I think you're right. I think you will be blessed by that. I think you'll be delighted that you are being faithful and showing that dependence and trust on the Lord through your giving. I wouldn't be as compelled necessarily to go back and kind of have a proper accounting unless, as you pray about it, you feel like the Lord is leading you to kind of, you know, go back and look at these past four months.

But apart from that, I would say just start where you are right now, Jane, and just trust the Lord again for His provision and use the giving that you're doing as a way to celebrate that. Okay. Alrighty.

Alright, thanks. Yeah, I was kind of thinking that way, and I thought I just needed someone to tell me it was okay. Okay. Hey, how are you feeling, Jane? Are you feeling better? Oh, yeah, much better.

I was very sick when I had COVID. Yeah, I'm so glad you are. Well, hey, I appreciate you calling today, and thanks for being a part of the program. I know you want to honor the Lord with what He's entrusted to you. I can hear that in your voice, and I know what you've shared today has been an encouragement to the people listening.

So thanks for calling today, and if we can do anything else for you along the way, let us know. You know, folks, as we think about the opportunity to be generous with what God has entrusted to us, what a privilege it is to be able to take a portion of what God has given us and return it to Him. Remember, it's all His.

We're His money managers. So therefore, as a steward, we want to reflect the heart of the Master when it comes to however we handle His money. And one of the ways we can do that is through our giving. Remember, He's the ultimate giver. For God so loved the world, He gave. So I like to say we're most like Him when we're giving because we're reflecting His heart, Creator God, who is a giver in and of Himself. So perhaps think differently about the resources God has entrusted to you, and maybe be more intentional and planned in your giving, starting with a systematic gift, but then maybe increasing that over time and looking for opportunities to give to the people on your path along the way. As the Lord leads, there's many in need right now.

So let's live within our means so we can give generously. We're going to take a quick break, but much more to come on MoneyWise Live. Stay with us. Great to have you with us today on MoneyWise Live. I'm Rob West, your host. Taking your calls and questions today. Let's head right back to the phones. Back to Chicago we go. Hey, Stephen, thanks for calling.

Go ahead, sir. Thank you, Rob, for taking my call. Rob, my wife and I are parents of young children. We have three children, six, four, and one. And we, you know, very, disciple them as much as we can, spiritual matters. But I realized the other day that I have basically nothing to pass on to them in terms of discipling them in regards to financial matters because, well, I wasn't really, you know, trained up very much in that myself.

So I was wondering if you had a recommendation for any curricula, educational materials, family friendly, you know, biblically based that we could use both my wife and I to educate ourselves and then, you know, to train our children in that. Yeah, yeah. So you said the oldest is age six, is that right? Yes. OK. Yeah.

So obviously they're still a bit young. A couple of things come to mind. One is I'd love to send you a copy of Howard Dayton's book called The ABCs of Handling Money God's Way. We'll send that out as our gift to you when we're done here. Just stay on the line and I think that'll get you started.

There is a resource we're offering right now as our gift for a gift of twenty five dollars or more to MoneyWise at our website MoneyWise.org. It's a three book series. It's a young reader series.

So it's targeted for ages eight to twelve, although you could read it to the six year old. And I think he'd, you know, have some fun with it. But the big idea here, I think, Steve, is, you know, first of all, to model the behavior you want. So I think, you know, living on a spending plan, just passing along the character trade of hard work, instilling that in your kids, starting them on the the give, save, live concept.

And, you know, you could start them with clear, you know, jars. And whether that's, you know, you're giving them an allowance or whether that's just birthday and Christmas money, whatever it is. But get them in the habit of, you know, give, save, live and, you know, distinguishing between the three.

And that instills the idea that we give right off the top. And then that money goes with them to church, save. And perhaps you print out a picture of what they're saving for. So you instill the idea of delayed gratification, put that right on the jar. And then they live is the amount that they have available. If they want to take it with them when, you know, one of you is headed to the store and buy a pack of gum or something like that. But starting this idea that we give and we save first and then we live on the rest is just a huge concept.

If you did nothing more than that, that would be really significant. And then as they get older, obviously you begin to talk about things like what does it mean that God owns it all. And that we're money managers for him and that money is limited. And that we live on a spending plan or a budget because we don't have unlimited resources. And we have to allocate our money to various things. And, you know, beginning to talk about that and kind of the world's perspective of money that says our self-worth is equal to our net worth. And counteracting that and really helping them understand a biblical worldview of money being a tool to accomplish God's purposes. And that we find our identity in Christ. And that, you know, money is one of the things that can derail us if we make it our aim as opposed to seeing it as a tool to accomplish other things.

So all of that will come later. But I would say right now, if you could use this book, The ABCs of Handling Money God's Way, to get some ideas. And then second, if you could teach Give, Save, Live. And then thirdly, if you could begin to model that and really with intentionality have some conversations with them over time. I think you'll be well on your way to making sure that they leave the house someday with financial literacy. You know, understanding debt and credit and spending and long-term savings and compound interest, all those things. But also with a healthy understanding of a biblical worldview of money.

But you've got time for that with Kids 6 and Under. Okay, sure. This book, ABCs of... I'm sorry, what was the title again?

Yeah, The ABCs of Handling Money God's Way. We'll send it out to you. So if you just stay on the line, we'll get your information and get that in the mail. Okay, very good. Thank you so much, Ryan. All right, Steve. Thanks for calling. Appreciate it.

Let's see, south to Florida. Hey, Ryan, go right ahead. Hi, I just had a question about Roth IRAs. I'm sure you've gotten this question a million times. But there's just so many out there. I'm 30 years old and I haven't started a retirement plan yet.

I know that. But I'm just wondering when I research it, there's just so many different companies that offer them. And then I know that some of them are federally insured and some of them aren't. And so I was just kind of curious what you would recommend or what company you might recommend to start one with.

Because I don't know. Yeah. Well, are you talking about the SIPC insurance, the protection available for a brokerage account or something else when you talk about insurance? As I was reading about them, it looked like you are insured up to $250,000 unless I'm mistaken.

But yeah, they're federally insured. But maybe I read that wrong. Yes. Well, here's the thing. I mean, that's really only against the failure of the brokerage firm.

You realize that's not against principal loss with market volatility or anything like that, correct? OK. OK. Yeah, I gotcha. My thing is this. There's so many out there. I don't I really don't know which one would even be one to go with.

It's like it doesn't even matter. Yeah. No, I think it does.

But there's a lot of great ones out there. I'd probably. Are you just getting started with the Roth IRA, Ryan? Yeah.

Yeah, unfortunately. Yeah, I'd probably use unless you want to make all the decisions yourself, I'd probably use one of the robo advisors. So this is where you're going to, you know, fill out a lot of answer a lot of questions about your age, risk tolerance, your goals and objectives. And then it will build essentially a portfolio for you using exchange traded funds that are indexes. So it's going to capture the broad moves of the market.

You sound like a young guy, 30 years old, I think is what my notes say. So, you know, at 30 years old, it's going to be largely a stock portfolio, but it's going to have large cap and small cap, international and domestic. You know, it'll be a good cross section of the market. It'll have a very small allocation of bonds.

But in the bond allocation, again, it'll take an indexed approach where you'd have corporate and government short duration, medium term, you know, that type of thing. And the nice thing is it's very low cost. So you'd probably spend about 20 basis points a year.

So one fifth of one percent. And then there's no transaction costs. So if you're going to make a systematic contribution to that Roth, you know, you can put in six thousand a year. So you could put in five hundred a month if you have the ability to do that. And then every time you make a new contribution of five hundred dollars, it automatically reinvested, rebalances the portfolio without any transaction costs. That'd be just a really simple way for you to begin investing and get this money working for you without you having to do a lot of research on the investments themselves.

And you're not trying to pick the winners and losers. Plus, it's a low cost option as well. I'd probably look at the Schwab Intelligent Portfolios or Betterment.

Either one of those two, I think, would be a great option for you. Can you say that one more time? Betterment, you said? Yep.

B-E-T-T-E-R-M-E-N-T. Betterment. That would be, you know, they're more of an online option and they have a great smartphone app. Or the Schwab Intelligent Portfolios. That's Charles Schwab.

But the Intelligent Portfolios is this robo advisor that I was describing. All right. All right. Well, thank you so much for the time. OK, Ryan. Thanks for your call. I appreciate it.

Let's see. Back to Chicago. Hey, Tracy, I understand you're driving, so you be safe. And how can I help you? No, I made it to my destination.

I drove. OK, good. Glad to hear. Yeah, thank you. Thank you so much for all the wisdom you shared. Thanks for taking my call.

I'll try to make this quick. My husband is almost fifty-five. He has about five years to retire. We already have money allocated and we've been placing in our deferred comp at work, this state program. And I know we were looking into doing a Roth aside from that.

You just answered some questions for me, though, at the last call, so I don't need to ask that. We did talk to a financial advisor. I know they wanted to do the Roth for us, but I wasn't sure if that was necessary. It says something I can do on my own.

But again, I see now that I thought I could, so we can. But I want to know, I guess, any other way, anything else you can kind of advise us on, like where we should be allocating money to prepare for retirement. We do have about fifty thousand that we wanted to place somewhere.

And we're not sure, you know, all the different areas to place it in. Someone mentioned something about some type of fund where you gain like eight percent and you don't like lose. I don't know if it's a fund or not, but somehow it's a protection against losing any money.

But I can't recall what the name of it was. So just want to know what your thoughts were on that. Okay.

Yeah. Well, first of all, I think, you know, it's great that you have the deferred compensation. You know, there you know, that's obviously an opportunity for you to have money going into your retirement.

So I take full advantage of that. I love the idea that you'd start a Roth IRA alongside that, which would be a great option for you to get between you and your husband. If you're over fifty, another seven thousand per person a year into an account. Keep in mind with the deferred comp, that's going to be a pretax.

So that comes out as taxable income. The nice thing about doing the Roth alongside that is that would give you a tax free money where you've already paid the tax on it and it's growing tax free. And then when you get to retirement, depending on the tax code and how much income you have and, you know, a number of other considerations, you can decide which bucket, if you will, to pull from. So I think just, you know, taking advantage of the deferred comp and then, you know, also fully funding to Roth IRAs every year, which you absolutely can do on your own. I think that's really key. And then just be focused on paying down debt over time, including your home, so that when you guys enter retirement, your expenses are as low as possible.

And if you do that, Tracy, you guys will be well on your way to having what you need for retirement. Okay. Great. Thank you so much. You're welcome. Thanks for calling today. We appreciate it. Well, folks, Rick and Cindy, thank you for your patience.

My apologies. I wasn't able to get to you. We'd love to get you in line first tomorrow.

If you can call us back then. Folks, thanks for being along with us. Let me say thank you to my team today. Grateful for Ryan Hansen, Luke Castaldo, Gabby T., Amy Rios, and Jim Henry.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Come back and join us tomorrow. We'll look for you then. Bye-bye.
Whisper: medium.en / 2023-08-09 21:31:58 / 2023-08-09 21:48:41 / 17

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