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7 Steps to Challenge Your Property Assessment

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
October 10, 2023 5:56 pm

7 Steps to Challenge Your Property Assessment

MoneyWise / Rob West and Steve Moore

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October 10, 2023 5:56 pm

Homeowners across America are getting notices that their property taxes are increasing. But are those assessments accurate? And if not, what can you do about it? On today's Faith & Finance Live, host Rob West will give us the 7 steps to challenging your property assessment. Then he’ll answer some questions about finances. 

See omnystudio.com/listener for privacy information.

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Well, fall share may be over, but you know, you still have time to partner with Moody Radio in our mission to create Christ-centered programs and share Jesus boldly with the world, if that's what you want. And if you've been impacted by programs like the one that you're listening to, we're guessing you have been. Hey, would you consider giving? You can actually see our impact and learn more at fallshare.org. That's fallshare.org.

See you there. It's great when the value of your home goes up, but there's also a serious downside. Hi, I'm Rob West. Homeowners all across America are getting notices that their property taxes are increasing, and in some areas, increasing a lot. But are those assessments accurate?

And if not, what can you do about it? Today, we'll give you seven steps to challenge your property assessment. Then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith & Finance Live, biblical wisdom for your financial journey. This is Faith & Finance Live, biblical wisdom for your financial journey. Now, how do you go about doing that? Now, how do you go about doing that? Well, how do you go about doing that? Well, how do you go about doing that? Well, almost all jurisdictions have some form of appeal process, usually within 90 days of receiving a new assessment.

So how do you do that? Well, step one, check when the deadline is for appealing. It should be on your assessment notice, but if it isn't, you'll have to call your local assessment office. Mark that on the calendar with a big red X.

Mark that on the calendar with a big red X. Step 2, look at your assessment notice again to see how the process was done. In most cases, it's simply a percentage of the market value. Step 3, make sure that your local assessment office has applied any reductions or credits you're entitled to. These are things like homestead exemptions and credits for veterans, the elderly and the disabled. You may have to show evidence that you're entitled to a particular benefit.

Very often, homeowners fail to take advantage of these breaks. Step 4 is to make sure that the official description of your property is accurate. Your local assessor's office should have a record card on file describing your property.

You can ask to see it. Look for discrepancies like an extra bedroom or bathroom that you don't really have. The assessor may be able to correct a mistake on the spot, so you don't have to make a formal appeal. More likely, you'll need Step 5, which is to start comparing your property to other homes in your neck of the woods.

Make sure you're doing it apples to apples. That means comparing your property only to those with similar features, roughly the same square footage and lot size, the same number of bedrooms and bathrooms. If you don't have a basement, don't compare your property to others that do.

Even an unfinished basement can add 15% to a home's value. Now, if you see that you're being assessed a higher amount than similar properties in your neighborhood, well, you have grounds for an appeal. In Step 6, then, you start building your case. The appeal process itself will vary, so you'll need to check with your local assessment office to see how it's done and to get all the necessary forms.

You'll need to gather and organize your evidence, that would be the value of comparable homes you've dug up, photographs, and even blueprints if you have them. Use them to fill out the paperwork for your appeal. And finally, Step 7, you file your appeal with the assessment office.

You may have to wait several months before you get an answer, and it may not be the answer you want, but that doesn't mean you should give up. Most jurisdictions have an appeals board where you can make your case in person. But if you end up in front of the board, stick to the facts and don't try to debate tax policy.

Save that debate for your elected representatives. You also don't have to do all of this on your own. If you're willing to shell out a few hundred dollars, you can hire an independent appraiser to get a more accurate value of your property. But first, make sure your jurisdiction allows outside appraisals, and that your appraiser is certified by the Appraisal Institute or the American Society of Appraisers. You may be wondering if this is all worth it.

Well, not if you discover fairly early in the process that your assessment is similar to comparable properties, but if it isn't, and you appeal and win your case, well, you'll enjoy a lower tax bill year after year, and that would definitely be worth it. All right, your calls are next. The number, 800-525-7000. That's 800-525-7000. By the way, you can call that number 24-7.

I'm Rob West, and this is Faith & Finance Live, biblical wisdom for your financial journey, helping you apply God's wisdom to the practical decisions you're making today. We'll be right back. Well, it's great to have you with us today.

We're so glad you're tuning in today. We'd love to take your calls and questions. The number, 800-525-7000. That's 800-525-7000. Tahira is standing by today, and we'd love to get you on the air with your calls and questions.

Again, 800-525-7000 is the number to call. You know, here on this program each day, it's our absolute privilege to be able to encourage you, to be able to direct you back to God's word and to the scriptures to help you process your financial decisions, those practical decisions and choices you're making every day through the lens of scripture, and that's what we do here at Moody Radio. Everything we do is in light of God's word. It's not a matter of just giving you practical advice and then finding a verse that fits. We want to start with a biblical worldview and really unpack the big themes and ideas in scripture so we can apply those big ideas to how we view money, because remember, it starts with our hearts. It's not a matter of the practical decisions we're making first.

It begins with the why. So it's our values and priorities as believers that should ultimately inform those decisions and choices we're making every day, realizing that really the way we allocate money is one of the most tangible expressions of how we work out what we value and ultimately where we've placed our trust. Well, let's do that together today, no matter whether you're thinking about your spending plan or whatever it might be.

Maybe it's your long-term investments, getting out of debt, or your generosity, whatever it is. Give us a call with lines open 800-525-7000. All right, let's go to Miami, Florida to begin today.

Jessica, go right ahead. Yes, I was asking that if I have a life insurance with a rider for critical illness in my 50s, do I need to keep it or change it to a non-rider? And also, I have life insurance from work, and I'm single.

All right. Do you know what the additional cost is for that critical illness rider? Well, all in all, it's $290. Okay, and so there's a life insurance component, but then there's an additional component that offers the critical illness, correct? Right, that I can withdraw 90% of it, I was told, if I have critical illness. Yeah, so that would shield you from some bills in a health emergency, but it's important to weigh the pros and the cons on that. I mean, the benefit of this coverage is that it does provide some specialized offsetting of risk here, but it's important that you take the time to research it, especially if you have a family history of the illness that would be covered. It can alleviate some of your financial concern in the event that you became too sick to work. But often, the downside is that certain illnesses may not be covered. For instance, some types of cancer may not be covered, and some chronic illnesses are frequently exempted. If you have a recurrence of a critical illness, such as a second stroke or heart attack, you may not receive a payout. The benefit is, though, that it would provide that lump sum of money when you're diagnosed with an illness under the policy.

And so it really does come back to whether this is something that you are predisposed to, you have a family history of, and what is the added cost for that particular rider. Often, they are low cost, and so that's the upside, but they do often have limited coverage. And so I think you just need to understand exactly what you're buying, what does it cover, but also, and perhaps more importantly, what does it not cover, and then once you understand that, make a decision as to whether or not it fits into your budget, and it gives you added peace of mind. I wouldn't say it's something you should automatically drop, but I think you do need to weigh the coverage, and you need to look at the cost in light of your overall budget.

If it fits in your budget and you feel like it covers the illnesses you were expecting it to, especially if you have a family history of any of those, then I think it can be a good option. Does that make sense? Yes, yes, yes. Thank you. Okay, very good, Jessica. Thanks for calling today. We appreciate it.

We've got a few lines open, 800-525-7000 is the number to call, and we'd love to tackle whatever you're thinking about financially today. You know, when it comes to thinking about insurance, often we think that perhaps having insurance is a lack of trust in God. I don't look at it that way. I think ultimately what we need to recognize is that part of being a good steward is to address the risks that exist. Now, there wasn't the modern form of insurance we see in the Bible.

That's why it wasn't mentioned. But the opportunity we have to offset those risks, such as the loss of a home when we aren't able to repair it, the loss of an income with the death of a spouse where we're depending on that income. I just believe it's good stewardship. Ultimately, our trust is in the Lord. But having insurance, I think, is a part of what a faithful steward does to be able to offset those risks in your life.

Doesn't mean we put our trust in those things, but it does mean it's a part of a well-thought-out financial plan. All right, let's head back to the phones to Tampa, Florida. Hi, Stephen, go ahead.

Hi, Rob. Yes, I'm retiring, Lord willing, in January, and I'm under the old pension, and I want to know whether it's a good idea to take my pension and to pay off my debts that I have, or is it better to put it in an IRA and pay it off little by little because I'll be hit with the taxes? Yeah, it's a great question. I mean, I think if you do take the pension, you want to roll it into the IRA and the lump sum to avoid the taxes, and then only take it as you need it. What debt would you be looking to pay off? Well, my retirement would be just under $400,000, and I wanted to pay off my mortgage, which is going to be about $180,000, and then my car payment, which is about $18,000. Okay, yeah, I certainly wouldn't do that all in one tax year. How far off is retirement for you?

Lord willing, it's January of this year coming up. Okay, yeah, and do you have enough, either through you pulling, let's say, 4% a year from that pension, if you were to roll it to an IRA, plus Social Security or other income sources, do you now have enough to cover your budget, including the debt service on those debts? Yes, my wife is still working, and she's making around $100,000. Okay, and how long do you anticipate she'll work before she changes to whatever God has next? Seven years.

Seven years, okay. Yeah, so perhaps one of the things you all might do is try to sync up the pay off of this debt with her retirement, and that way, as you're entering retirement fully, where both of you are redirected away from your current jobs to whatever, again, God has for you next, whether that includes compensation or not, then you would have all of your debts paid off so that your budget would be as low as possible. That would also allow you to not only save on the taxes because you're spreading the withdrawals out, but hopefully you could fund a good bit of that debt pay off out of current cash flow and try to preserve as much as you can in that pension, especially with the market down. I'd love for you not to have to pull that money out in, say, the next five years. Let's let it recover and try to pay down the mortgage out of cash flow, which means limiting your lifestyle and figuring out what do you need to send extra per year to have it paid off in seven years. You may need to pull some from your pension, but I try to pull as little as possible.

I think that's my best advice as you think about approaching your debt. Thanks for your call. We'll be right back.

Well, it's great to have you with us today on Faith and Finance Live. I'm Rob West. We're taking your calls and questions today, 800-525-7000. Let's head back to the phones to Naples, Florida. Hi, Dee. Go right ahead.

Hi. I was with a broker for about ten years, and when I signed up with him, I mentioned I wasn't interested in any sin stocks in a money market or anything. And so I just was thinking recently, how do we know with different companies that are picking up what a Christian does not want to have the profits go into support? How do we know if that's the type of company that it is? Because some of these things that are being supported, if they don't support them, they'll end up at possibly the Supreme Court. So I just wondered, is this going to be something we can't do anything about and just not invest?

Or where would we stand, and how do we tell the difference? Yeah, I appreciate that question. You know, the exciting thing here, Dee, is that this whole area of faith-based investing is really just exploding in a good way. More and more believers are aligning their values with their investments, and you can do that now more effectively than ever.

There's really two ways to go about this primarily, the two simplest ways. Our number one would be to find an advisor who can actually offer faith-based investments. Now, when it comes to what I call faith-based investments, usually that means either, number one, alignment, where they would either screen out companies that are misaligned with your Christian values, or they screen in companies who are promoting human flourishing and trying to really seek out companies that are creating value for their investors, but also promoting the common good. Secondly would be what are called impact investments, and those are investments that specifically have not only a bottom line in terms of financial results, but have a kingdom bottom line that they're evaluating them by. And then thirdly would be what's called corporate engagement, where no matter what company you own, you're actually voting proxies and proposing shareholder resolutions to be voted on at a shareholder meeting related to values, topics, and things that are important to you so that you can actually have influence into the company as a shareholder in alignment with your values.

Now, for most folks who want to do this, it comes down to that first category. It's around either selecting out companies that are misaligned with your values or intentionally screening them in if they are aligned with your values. And the way you would go about doing that is either to hire an advisor who has that capability where they can provide that level of screening for you.

So part of the discovery process as they onboard you as a new client would be understanding what your values are and how you want those applied to your investments. What types of investments do you want to stay away from? What types of investments do you want to look for?

And they would know that, and then they could screen the companies out or in appropriately. The second way to do that is to buy one of the faith-based investing mutual funds where the manager has a stated purpose not only to grow to buy investments that are going to perform well in terms of the financial results, but they will also apply a faith-based investing screen as they're making their buy and sell decisions. So these would be fund families like Eventide, Praxis, Guidestone, One Ascent. These are all faith-based investing fund families that offer these types of investments that you're describing.

So you could go either one of those two approaches and, you know, be very satisfied that you are not only deploying your capital in such a way that you have the potential for it to grow over time in a properly diversified portfolio, but you're also honoring your values and convictions as a believer in the companies that you own. Does that make sense? Yes, it does. It's just another thing to have to take into consideration. Thank you very much.

It is. Well, you're welcome. And so the place I would direct you, Dee, to learn more would be, number one, you could find a certified Kingdom Advisor at our website, faithfi.com. Just click Find a CKA. And I would ask the CKAs that you're interviewing during that interview process if they can offer you faith-based investments. And then the second thing you could do would be to go direct to those fund families I mentioned. And a great way to do that is just head to our website, faithfi.com, click on the show, and all of those fund families that I mentioned would be listed on that web page, and you could click onto their websites and learn more.

But I think you're on the right track here, and I'm confident you'll find some solutions that fit what you're looking for. Thanks for being on the program today. We appreciate it.

To New London, Ohio. Hi, Tim. Go ahead. Hey, Rob. Thanks for taking my call.

Sure. I have a two-acre parcel across the street from my house, and it's two single-wide trailers put together. And I have the opportunity to buy it, but it's going to have to be a cash sale because no banks are going to lend on it. And I was wondering if it would be feasible if I should take, like, a heatlock on my property to get it, because I do own the five acres next to it.

Yeah, I mean, I love the idea of you picking this up because it's contiguous property. Have you had an appraisal done on it? Do you know what the true market value is? I do. I know what the auditor assesses it at, and I know what the work it's going to take to get it up and running. But I feel like they're just pricing it way too high, and being that it's probably going to have to be a cash sale, and banks really don't lend on single-wide trailers attached together that are from the 70s, I didn't know if I should really shell out that kind of money just to pick it up because I'm trying to pick up more acreage.

Yeah. Well, I certainly don't want you to overpay, and I don't like you picking up a heatlock, especially with rates so high right now. And so that's kind of a double whammy there where you're paying above what you perceive to be the market value.

You know the work that's going to have to go into it, and it doesn't sound like you have quite the liquidity and assets to be able to buy it outright. Let's do this. I want to talk a bit more about this because the last thing I want you to do is to get overextended on this thing and overpay. But I've got to take a quick break. So, Tim, you stay right there on the other side of this break. We'll talk a little bit more about this and see if we can create a plan going forward here. We'll be right back on Faith and Finance Live. Stay with us.

Thanks for joining us today on Faith and Finance Live. I'm Rob West. Just before the break, we were talking to Tim in Ohio. He's considering buying a piece of property across from him. It's a two-acre parcel with two single-wide trailers that are from the 70s that are attached. He thinks the asking price is too high. He owns the acreage around it, so he'd certainly love to acquire this parcel. And, Tim, what I was saying was I certainly don't want you to overpay, and I want to make sure that if you were to do this, you have the financial readiness to do it. Let's talk about the asking price for a moment. What do you believe the market value to be, and how have you arrived at that number? Well, I figured at least $40,000 would be a fair price, considering the acreage size and the condition of the house. But they're asking $70,000, and we're just too far apart. Yeah. I mean, that's a pretty big gap. Is that based on comparables, your $40,000 number?

Where did you get that? Well, I valued the land about $10,000 more than the auditor had, and I just basically valued the trailers at a couple thousand bucks because there was technically no value in them. Yeah, yeah. Well, I think the key is that you have a real basis in justification. I wouldn't use necessarily the assessed value because often that's well below market. I mean, I think the best thing you could do would either be to get what's called a broker's price opinion from a real estate broker who could pull comparable sales of land, just straight land or land plus the improvement, which I know you said has very little value, and establish a cost per acre for the property, and then you could value it that way. Or you could hire for $200 or $300 an appraiser to come out and give you an appraisal, and that way what you're taking to the seller is something that has some credibility to it. And potentially, if he understands that, listen, nobody's going to pay this much over market and there's a rationale for how that market value was established, perhaps you get him to meet you at a fair price, and you may find that when you do this not based on the assessed value but based on either an appraisal or a broker's price opinion, perhaps it's worth more than $40, and you'll just have to find that out. But I think that would be step number one because I certainly wouldn't want you to pay that much over market.

I mean, you're talking 70% plus over market, which is just, that doesn't make any sense. Apart from, I understand this has added value to you specifically because you're a landholder in this area. The second thing would just be your financial readiness, and so, you know, to add all of this to your existing property at these high interest rates, I certainly wouldn't have recommended a HELOC two years ago. It's better now because at least you'll ride the interest rates down as they come down, but I don't think they're coming down anytime soon, and I certainly wouldn't want you to get overextended. Do you feel like you have the ability to service the debt?

If I did a HELOC, yes. You know, I'm steadily employed and everything's kind of going pretty well financially. But I was just, my major concern was they, their price, they did use the BPO for their price for, you know, to list the house. Yeah. Yeah.

But I just don't see if anybody really had $70,000 to pay for a cash house, that would be the one they would go for. Yeah. They'd put that down on something a little bit more live-in ready.

Sure. No, I certainly understand that. I think at the end of the day, though, you know, that's just how market values are derived. It's going to come from closed sales that are comparable. And, you know, whether it's an appraiser or a broker, that's how they're going to establish the value. Now, at the end of the day, if it's just not a desirable property, they may have to sell it at a discount.

So one thing you may want to do is just kind of wait it out. You also may want to hire an appraiser to actually get an appraisal done that may give you a little bit more footing as you approach them with a lower offer. But, you know, I think when it's all said and done, you have to decide how much it's worth to you. And, you know, you may find a reason why you're willing to overpay. But I just I wouldn't jump at that too quickly, especially if you feel like it's that far, you know, overvalued. So I'd probably go slow, perhaps consider an appraisal, let this play out over time. If you're right and it's not worth anywhere near that, it's going to still be available. And perhaps you'll find a seller who's more willing to negotiate six months or a year from now. You also may find a lot better interest rates at that point.

I expect rates will be in the fives by the end of next year. So perhaps time is on your side here, Tim, and you just wait this out. Certainly make it a matter of prayer and ask the Lord for wisdom. We appreciate your call today, sir. God bless you. To Chicago. Hi, Melissa. Go ahead.

Hi. I live in Cook County and the house that I live in was being over assessed for years. We recently voted in a new assessor. They reassessed all the values of the properties. And in the year that we had a new assessor, I wound up paying roughly half of the amount of money in property tax as I was formally paying, which was good.

But recently when they revamped the entire system, they made things more transparent. And I was able to see how my home was being assessed. It said that I had a basement and an attic and I don't. My home was built about 70 years ago.

It used to be a Dutch community. So the house was constructed with the old sheet metal concrete type of construction. And it's just on a flat slab of concrete.

There is no basement and I don't have an attic. So with the new online system, I made those corrections to my home and I put in for an appeal on the value, because now they're trying to double the value of the home. There used to be around fifty thousand consistently. And now they want to put it at 90 for tax purposes. But all that time, you know, they were assessing my home as having a basement and an attic when it didn't. And it's a much older home.

So it's unique in the area. There aren't I don't know if there is another house I can find in the area to compare it to. But online, I made the corrections. I did an appeal. And I just recently got a letter saying that the changes that I made are basically irrelevant because they're using market value assessment to determine the value of my home.

And I don't understand how not having a basement and an attic doesn't affect market value assessment, however they're doing it. So I'm wondering what steps I can take at this point. I did the appeal. They came back saying, nope, you know, they're still going to basically double the value of my home. I don't know if it would really sell for that much. And, you know, I live in Cook County, so I'm just hoping, you know, I don't know what my next steps would be at this point.

Yeah, well, you've certainly done the right things. And I guess the thing I don't understand is the market value is largely driven by the comparables. But the comparables have to be adjusted for the features of your home, the number of bedrooms, whether or not you have a basement. All of those things are factor into establishing the market value. And as they compare your property to the other comparables, they're going to have to make subtractions for the things that your house doesn't have that the other houses do.

That's just the way that works. So your next step, if you've gone through the appeal process, gotten the verdict you're not satisfied with, would be to take your case to the appeals board. And then you're going to actually go before that board who are elected officials who vote on these matters and share your justification why you think this is not right. And you're going to need to have all of your evidence and build your case.

So I would contact the county appraisers office and ask about going before the board to actually make your case for this situation. All the best to you as you do this. We'll be right back on Faith and Finance Live. Great to have you with us today on Faith and Finance Live. I've got room for maybe one or two more questions in this final segment today.

The number to call 800-525-7000. Let's head to Miami. Hi, Marlene. Go ahead. Good afternoon, Brother West.

My name, I mean, I'm sorry. I retired 35, I retired after 35 years ago working for the county, the Miami-Dade County Police Department. However, as you know, you get one check per month. That check is $2800 a month. So I have to tap into my deferred comp. Now, in my deferred comp, I have over 500,000. Part of it is dropped money. Part of it is, you know, the deferred comp that I've earned for, I mean, that I put into for so many years.

And another chunk is from, you know, part of my ex-husband. Anyways, my problem is that I wanted to just go ahead with part of that money. I owe $84,000 in my home and I thought, oh, good, I just take $84,000 out and I paid my home. And everyone is suggesting that I don't do that because of the taxes that I'd have to pay. The other question that I had, that's one question, but the other question that I had is that should I, all this money that I have, I put it all in that same bank, should I split that money and put it somewhere else? Or could I just leave that all together? Part of it is gaining interest and part of it, I have it frozen.

I don't want to lose that money as a stock, you know, goes up and down. So I was just wondering about those two questions. Okay, very good. Yeah, so let's talk about your house first. How much do you owe?

You said $80,000 is remaining on the home? Yes. Okay.

And where would you pull that from? From the drop plan? Yes. Okay.

I'm sorry, say that again? Of course I would have to pay taxes on taking out $84,000. No, of course you would.

Yeah, for sure. Do you have any surplus just on the income you're receiving every month where you could accelerate your pay off out of current cash flow? No, because since I'm only 60 years old, I have to tap into that money and take out $2,000 a month. Which converts into $1,600 a month. Okay, and you're pulling that from the half a million? Right.

Alright. So what I would typically tell you is, you know, take only about $20,000 a year from that, which would be that $1,600 a month you're taking. So that's great. If you were to pay off the house, how much would you need to pull? Instead of $1,600, how much would you be able to reduce that by? If the house is paid for, that's it.

I would just use the money that I get from the FRS. So you would be able to get rid of that entire $1,600 a month payment, is that right? Yeah, yeah. Okay. So at that point, you'd have $420 left in there, but you wouldn't have to pull anything out of it, is that right? Exactly.

Yeah. And, you know, when you think about this, I mean, what's the reason to pay it off? Is it the peace of mind? Do you have a conviction to be debt-free? Do you want to get rid of, you know, having to pull something out of this account every month, and therefore you could be more conservative with your investments? What's the primary driver behind you wanting to pay it off right away?

My thing was, you know, I'm working for the police department and seeing how my friends got, you know, so much money, and now they have nothing. I want to make sure that, you know, I don't lose this money. I'm only 60 years old. I'm a single mom. I have two grown kids that are 24 and 26, soon to be married, one of them, and I mean, money, you know, runs like water. And I just, I mean, I'm very good about, you know, my situation. The thing is that I thought if I was to pay off the house, that's one thing that I don't have to worry about. All I have to do and, you know, but I also don't want to have to spend $30,000 extra just because I'm pulling it out. Yeah.

Well, you shouldn't have to. I mean, I would imagine you're in a fairly low tax bracket right now because you're not working any longer and tax rates are low. They're going up. So, you know, down the road, I mean, for instance, unless, you know, we get a conservative administration in the next election that would extend this, President Trump's Tax Cuts and Jobs Act, which has resulted in these low tax rates that we're experiencing today, that expires in 2025 so that, you know, you could make the case that if you split it up over two tax years, that if you pull half of it this year and half of it next year, you'd be paying much less tax because you're over 59 and a half.

You won't have any penalty. So you just add $40,000 to your taxable income and your CPA could tell you exactly what you would spend in taxes, but it's certainly not going to be, you know, 30 or 40 percent. It's probably going to be more like 20 percent. But, you know, that's still a significant sum of money. I mean, that's $16,000 on 80 grand. And so that, you know, that means all of a sudden now you're spending $96,000. The other downside to pulling it out is you don't have the ability for it to recover. And so if, you know, that drop money has ridden down with the market because it's invested, now you're selling it out and you don't have the potential for it to recover.

Now, it's probably going to go down more later this year, early next year, as we get into a recession, which most economists are expecting. But that's why we take a long term view, because, you know, you need this money to last if the Lord tarries and you're in good health, you know, three decades or more. And so the idea that you could keep as much in there working for you as possible, let it recover with the market, that would be ideal. And then you just keep taking your $1600 a month.

But if you just have a real conviction that, no, I'd like to be debt free and I'd like to be debt free as soon as possible, then I'd say you go for it and I would just work with your CPA to determine the schedule on pulling this out over the next two or three years to minimize the tax impact. Does that make sense? Yes, that makes sense.

And there was something else that I would say. Well, the second part of your question was the $300,000. So where is that money? You said it's frozen, but it's not earning interest? No, it's in the same place.

I just don't want to play with it. I mean, it's over $500,000. So like $200,000, I have it invested in different stocks, you know, still with a deferred comp, as you know, the same thing that I was doing while I was working. So but you know, that fluctuates, you know, one year I made $20,000, one year I lose $23,000. You know, I think you need to try to take a rules based approach to this and say, okay, what's the right allocation for a 60 year old person who's living on their investments? Well, it's probably somewhere around 50-50 allocation, maybe 40-60 where you've got 40% in stocks and 60% in bonds, which by the way, those bonds will do well as interest rates fall, you know, which will probably start to happen sometime next year. So I think the question is, how are you positioned and what portion of this is at the risk of the market?

On a $500,000 portfolio, I bet as 60 years old and retired, I'd probably not want more than 50%, $250,000 in stocks, and possibly, you know, no more than $200,000 and then put the balance into bond type fixed income investments. Does that make sense? Oh, yes. That's where it's added some stakes. Okay, good. Yeah.

So I think that's great. And that's the idea here that, you know, you want to play out and I think that's the right approach, but you don't want to get caught up in the short term moves of the market. You want to take the long term view. So I'd go back, check your investment allocation, make sure you've got all of it working for you, but you have no more than, you know, 40-50% in stocks, the rest in bonds, and then decide how you want to approach the house either.

Let's ride this out for the next five years and, you know, try to pay it off as you can, or let's do it over the next couple of years by pulling from that, you know, retirement account and pay it off before the tax rates head up, which we certainly don't know if that's going to happen, but in all likelihood, it is likely to happen. So we appreciate your call, Marlene. I hope that helps you today. Thanks for being on the program. Let's go to Kansas City. Hi, Joe. Go ahead.

Yes, sir. My question is I'm looking at trying to consolidate or trying to get out of debt with some credit card issues, and I have contacted the Christian credit counselors, but they don't service Kansas. Trinity doesn't service Kansas, so the one I was talking to is another company, I'm not going to name it now, but they're talking about paying back less than what I owe, and I know they're going to negotiate with the companies, you know, to get that paid off, but I don't, I think they're going to let something go, they're not going to pay them off, you know, succinctly, they're going to let something go into default, you know, so I quit paying the payments and pay them instead. Yeah, I wouldn't touch that, Joe. That's called debt settlement, where they basically stop paying your debts, they get into arrears, you're going to get hounded by collection agents, you're going to trash your credit, they're going to kind of try to come in behind you and negotiate a reduced settlement or a reduced payment plan.

That's not the way to go, in my opinion. I understand Christian credit counselors and Trinity, you know, not every credit counseling agency is able to work in all 50 states, so what you may want to do, even though those would be my preference in terms of who you work with, because they're organizations that really are created to serve believers, I'd look for another debt management company or credit counseling company, you know, one of the big ones, and we don't work with them, so I can't speak to their customer service, but I can tell you consumer credit counseling services is one of the big ones, and you want a not-for-profit credit counseling agency that can get you access to those lower interest rates, so you can pay through them. I would love for you to work with one of the Christian companies, sounds like that's not an option here, but I definitely don't want you to do debt settlement, and I'd rather you not do credit consolidation.

So I would stay away from that company you're looking at and maybe search for consumer credit counselors and see if they can help you. Thanks for your call, Joe. That's going to do it for us today, folks.

Faith and Finance Live is a partnership between Moody Radio and Faith Buy. Thank you to Tahira, Robert, Amy, and Dan. Couldn't do it without them. Have a great rest of your day and come back and join us tomorrow. We'll see you then. Bye-bye.
Whisper: medium.en / 2023-10-22 15:02:07 / 2023-10-22 15:19:45 / 18

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