Is Your Budget Due for an Overhaul?

Has your lifestyle changed in the last two years? Have you run up higher balances on your credit cards?

You wouldn't be alone. Hi, I'm Rob West. Inflation reared its ugly head two years ago, causing many to dip into savings or slide into debt, both of which are unsustainable. So what's the answer? Well, maybe it's time for a budget overhaul. I'll talk about that today, and then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial journey. Well, there's something you need to understand about the inflation numbers you hear in the news, such as inflation fell to 3.2% last month on an annualized basis. Some folks think that means prices went down, but it really only means that the rate of price increases has gone down. So if prices increased 3.2% for the period, you must also understand that they will stay that way month after month, even if the rate of inflation continues to fall. You rarely, if ever, see prices ratchet backwards. In a nutshell, it means that if inflation were suddenly 0%, the harsh effects of the last two years would still be with us.

It's important to understand that. Coupled with that disturbing trend is that wages have not kept pace with inflation. According to Bankrate, 60% of workers say their paychecks have fallen behind inflation over the past 12 months. That's up from 55% who said they were losing ground to inflation last year.

So if prices continue to rise and your paycheck doesn't keep pace, what do you do? Well, it seems some people have been tapping into their savings to make up the difference. Some 40% of Americans have depleted savings they built up during the pandemic. Others decided to use their credit cards. The Federal Reserve reports that credit card debt rose sharply in 2023 despite soaring interest rates.

Credit card balances increased nearly $50 billion in 2023 alone to reach an all-time high of just over $1 trillion. Now, savings will run out. Credit cards will be maxed out. So if you can't increase your income, you have to scale back your lifestyle. That means trimming your budget or maybe giving it a complete overhaul. Some things that would have the biggest impact on your budget take a lot of time to implement, like downsizing to a smaller house or getting rid of a car payment.

So for now, we'll just look at a few things that you can do right away. First, freeze your impulse spending. And you do that by freezing your credit cards. I don't mean freeze your credit with the three credit bureaus, which, by the way, is another good idea. I'm talking about actually freezing your credit card or cards in a big chunk of ice in the freezer. That way you won't carry them around and be tempted to use them. Ah, but what about online impulse spending, you ask?

A fair question. Your online accounts probably save your credit card information. So you'll have to log in and delete them from your accounts. That way, you'll have to thaw the cards out of the ice before you can use them online. Maybe the urge to spend will be gone by the time the ice melts.

Now, all of that may sound silly, but it works. And we know that because studies show you save from 10 to 30 percent by using cash only. So take out a budgeted amount of cash to get you through the week for various spending categories. Leave your debit card at home.

When the money's gone, well, you have to stop spending. Next, double up on meal prep. When you're preparing a meal, double or even triple the recipe and put the extra meals in the freezer. And now you're asking, well, that's nice, but how does that save money?

Well, I'll tell you. The next time you've had a rough day, you're on the way home and you feel too tired to make a meal, you want to hit the drive-through to get fast food for the family. For a family of four, that could be $50 or more. But wait, you don't have to stop because those frozen dinners are waiting for you in the freezer, maybe next to your frozen credit cards. Just pop a meal in the micro and save some serious cash. Okay, here's one more way to fight inflation and get your budget back in the black. Have your spouse or a friend cut your hair. You can start watching YouTube videos showing how to do it.

There are plenty of them. Buy the necessary equipment such as barber scissors and combs, maybe even an electric razor. It's worth the expense and it'll pay for itself soon enough. Many shops are now charging close to $20 for a haircut.

You may want to add a tip, but if you cut your own hair, you can save almost $250 a year. So there you have it, some ways to cut back on spending today to counteract inflation. All right, your calls are next. We'll be right back. Thanks for joining us today on Faith and Finance Live. I'm Rob West. All right, it's time to take your calls and questions today.

The number to call, 800-525-7000. We know you have financial decisions. We have some answers. Well, God's word has the answers.

We look to scripture to pull out the principles to apply those to the practical decisions you're making every day as you manage God's money and seek to be found faithful as a wise steward. So let's talk about it. What are you thinking about in your financial life? You can call right now with lines open. 800-525-7000 is the number to call. All right, we're going to begin today in New York. Cheryl, you'll be our first caller.

Go ahead. Hi. So my husband is 100% disabled veteran. He gets Social Security disability because of his disability through the VA and a VA pension that comes out to around $65,000 a year. His previous wife before she died, they had a whole lot of debt. And I added up the debt that he registered with the National Debt Relief Agency.

He pays $409 and some change a month to this company. And all the debts that they have registered I added up only come to 20 something thousand. But they're saying his debt is just over 30,000. And I'm wondering if it's if it's costing him more than it should, to try to get rid of the debt through the National Debt Relief Agency.

Yeah. Well, the challenge with National Debt Relief is it's a debt settlement company that essentially tries to negotiate with creditors to lower their clients debt balances. They're a legitimate company, but I don't prefer or recommend that approach, debt settlement. It essentially requires you to get into arrears, get into a past due status. And then the company in this case, National Debt Relief is coming in and trying to negotiate a reduced payoff. And then they're collecting that payment in the meantime to try to build up a cash reserve. It can really harm your credit.

And it's just not, you know, my preferred approach. What I would prefer instead, Cheryl, is what's called debt management. It's different than debt settlement. Essentially, what happens is, through a credit counseling agency, and we recommend Christian Credit Counselors, you'll find them at christiancreditcounselors.org. Basically, each of the creditors that your husband has accounts with, they have what's called a credit counseling rate. And as long as you go through a nonprofit credit counseling agency like Christian Credit Counselors, they will drop the rate to the non to the credit counseling rate, usually bringing it down from 22 to 30 percent, down to, you know, generally 8 to 12 percent, could be even lower than that. And then you make one monthly payment to Christian Credit Counselors, they then distribute it out to each of your creditors. It keeps you in good standing, nothing gets behind or in collections. You get the lower interest rate and the combination of that lower interest rate plus that consistent monthly payment, even as the balances are declining, allow you to pay it off on average 80 percent faster.

So that would be my preferred approach. Now the payment will often be, you know, could be as high as 3 percent. So if he owes 25,000, you know, that could be 700 plus a month.

So it may be a bit more, but at least it'll keep it current and it'll have a lot more going to principal reduction with those lower interest rates. Does that make sense? Yeah, it does. It makes a lot of sense. However, he was already behind one of these payments.

Yeah. Well, when you go into credit counseling, it re-ages the accounts. So it essentially draws a line in the sand that says, okay, if you're entering credit counseling, you're current as of today, and then as long as you make the scheduled monthly payment, then you'll stay current. And they'll work, the very first step, which doesn't cost him or you anything, is to create a budget just to make sure that that payment fits within his monthly budget, you know, inside his monthly pension coming from the VA. But if it fits, again, those accounts would be re-aged and then he could pick up and move forward from there. So it's not too late then to do something like that? It's not because of the re-aging that happens once you enter credit counseling.

So what I would recommend that you advise him to do is just reach out to our friends. Again, it's christiancreditcounselors.org on the web. They've worked with hundreds if not thousands of our listeners over the years and, you know, they're all believers and we've just gotten wonderful reports back about the work that they do.

Oh, well, awesome. Thank you so much, Mr. West. All right, Cheryl, thanks for your call and tell your husband we're grateful for his service to our country. We appreciate your call today.

To Bradenton, Florida. Hi Conrad, go right ahead. Hey, man, I was just wondering about retirement. I'm 25 so I haven't really started anything.

I just want to start something and if you have any information about it. I do. Yeah, you know, I'm delighted to hear you're thinking about this now, Conrad. As you probably know, investing in compounded growth is most powerful over a long period of time. If you just live within your means and give generously and on a disciplined basis set something aside and invest it over, you know, the next 40 years between now and whenever you transition to what God has for you in the retirement season of life, you'll have a whole bunch of money put aside. Einstein called compound interest the eighth wonder of the world and it's because it's such a powerful force.

So I love this. Let me ask you, do you have a retirement plan like a 401k available at work? I do and they do a 5% match.

Oh wow. Yeah, that's phenomenal because that means, you know, that first 5% is going to be doubled and so now you got 10% going into your 401k every month and that's what we generally recommend. I mean, if you, at your age, if you just put away 10% of your income and you just get used to that and as your income grows, you continue to put 10% away, you'll be right on track, you know, for retirement. Now at some point you're going to want to do some retirement planning, but just by you starting now and maximizing that dollar for dollar match, that's free money.

So you don't want to pass that up. So I would say start right there and let's try to get up to that full 5%. If you can do that right away, great. If you can't, now you've got a goal that you're working up to and the idea would be that money's going in out of salary deferral, it's going in tax deferred, which means that amount that you contribute is going to be excluded from your taxable income so you get a deduction and then it's going to grow on a tax deferred basis as you invest it and there'll be a menu of investments inside the 401k and now as it grows and you buy and sell things or the mutual fund you select buy and sell stocks, there's no impact of the taxes.

So it's not going to put a drag on the returns, which means it's going to continue to compound until you pull it out in retirement and then you'll pay tax on it as income at that point. So if I were you, I would just try to get to that 5% as quickly as you can. Gotcha. Is that helpful? I think that's all I got, man. All right, very good.

Let me do this. I want to send you a copy of Ron Blue's book, Master Your Money. It was really influential in my life, Conrad, when I was 25. It'll give you a good overview of God's way of handling money. It'll also dive into a lot of these key areas of spending less on your earn and avoiding the use of debt, the importance of investing wisely, giving generously and how giving breaks the grip of money over your life. So I think it'll be a really key primer, if you will, to biblical money management as you're just getting started here.

So you stay on the line, Conrad. Our team will get your information and we'll put Master Your Money in the mail as our gift to you, my friend, and you enjoy that. Hey, thanks for being on the program today.

The Lord bless you. Well, folks, we're just getting started here. Your question is just around the corner and we've got lines open. You can call right now, 800-525-7000. We'll talk to Robin and Bob and Frank just around the corner. Stay with us. The opinions offered during this program represent the personal or professional opinions of the participants given for informational purposes only.

Any information provided is not intended to replace advice from a financial, medical, legal or other professional who understands your specific situation. Thanks for joining us today on Faith and Finance live here on Moody Radio. I'm Rob West. All the lines are full, so let's dive right back in.

We're going to go to Wellington, Ohio. Hi, Robin. How can I help? Hi, Rob.

Thank you so much for taking my phone call. I am trying to get some assistance or some information on my mother's home. My mom still owes on her house quite a bit for 81 years old and I wanted to know if I can do a transfer on deed or on death, some type of paperwork. She's willed the home to me when she passes and what I'd like to do is just continue to make the house payment with who she already has her credits with. So I'm a little confused on what I need to do with that besides trying to refinance and put myself on the home itself.

Yeah, yeah, very good. So yes, you can do a TOD deed in Ohio, so not every state will allow them, but Ohio does. And basically that allows the owner of real property, in this case your mom, to designate you or multiple individuals, but in this case you, as the TOD recipient so that it will pass directly to you outside of probate. And then essentially if you bequeath your home to someone, then that person will decide what to do with the home in the mortgage. Generally speaking, the person who inherits would either assume the mortgage and start making payments or arrange to sell the property. You know, that's generally the way that it happens. So would you want to just continue on with the mortgage? Is that right?

Correct. I want to just continue on with the payments that she's currently making, and I was a little worried about how to go about that. I had contacted the courthouse, and they suggested for me to do an estate planner or get a lawyer that they did not do that. So I think I'm confused on, well, where do I go? I thought that I would go through the county. So am I assuming that I have to prove she's the resident, prove the resident, and then from there is, that's where I'm getting a little stumbled on how to get help to do this.

Yeah. Well, you would want an attorney involved with the TOD deed anyway, so I would go to a real estate attorney and they can explain to you how this is done. But essentially, just generally speaking, and I'm not an attorney, so it's always good to get legal advice, federal law requires lenders to allow family members to assume a mortgage if they inherit a property. So basically, after the death, you would, based on the transfer on death deed, it would automatically transfer into your name, where you would, by providing the death certificate, be able to then move the deed into your name only and then assume the mortgage. You'd let the mortgage company know. They would generally be contacted anyway as a part of, you know, the estate.

Does she have a valid will and who is the executor? Is that you? Yes.

Yes. So she has a will and when she rearranged and changed her will within the last year, this is when she has designated the home to go to me. I do have other siblings. The siblings do not want the home, so we've discussed it in that detail. So my mother felt the best way was, okay, well, I'll leave you the home in my will. And I was like, okay, well, you still have this mortgage on it and I'm a little nervous on how that goes. I'm afraid that I would have to go refinance, do closing costs and things like that.

And that's where I was thinking, I've heard your program before and you had mentioned this TOD and I'm just trying to get help on how to do that. So let me, well, so essentially with the TODD, the current owner designates you and then you as the beneficiary would automatically become the owner of the property when your mom passes away. And then, you know, you would, the, uh, you would re the deed would be then recorded in your name based on you, you know, providing a copy of the death certificate. And then you as the executor would follow the steps to, uh, as the executor of the will.

So you would, uh, you know, you'd petition the probate court, uh, and you know, you would be responsible then for settling any outstanding debts, uh, and then, you know, distributing the assets. Okay. Okay. Well, thank you so much for your help. Um, it's very, very helpful to me and I'm thankful for that.

Well, you're welcome. And I think your next step is to, you know, contact a real estate attorney, uh, to, you know, put that TODD in place. The only other consideration is just how this affects your mom's estate plan. So for instance, if she's wanting to distribute her estate equally to you and your, uh, siblings and she's leaving the home exclusively to you, does that change the distribution of the rest of the assets based on the will to the other children? Or, you know, if she leaves the, everything else, because this is outside of the will because it's a TODD, then if she leaves it equally, you're going to end up with more. So I think she would just want to visit with an estate attorney, perhaps the person that drafted the will, explain her desire for the entire plan, including the home, and make sure that the will and the TODD and the beneficiary designations on any other accounts reflect what she's ultimately trying to accomplish. And then that person can also explain to you the process that you would be undertaking as the executor.

So getting some wise counsel here I think would make a lot of sense, but the bottom line is yes, a TODD can accomplish what you're looking for there in the state of Ohio. Robin, thanks for your call today. We appreciate it. We're going to take a quick break and back with much more on Faith and Finance Live.

Stick around. Coming up in the next segment of the broadcast, in our final segment, Bob Doll stops by. Bob will weigh in with his weekly market commentary. The markets are off today.

The Dow Jones leading the way at over a half a percent down, 231 points. We'll find out what Bob's looking at, thinking about this week as we look at the latest economic and market data. That's Bob Doll coming up in the next segment of the broadcast. All right, back to the phones as we go to Florida. Hi Bob, how can I help? Thank you, Rob, for taking my call.

I really appreciate your program. A friend has been told that she has only about three to five months yet to live due to medical problems. She also told me that she was planning, because of that, to put her son on the deed to her mobile home in order to make things easier for him to sell it after she dies. And that way I wouldn't have to go through probate.

But I remember a previous program where you had said that it might not be the best thing to do, but I don't recall the details for your reasons. I think it had to do with taxes and the increase in value of the property. Yeah, that's right. Bob, it has to do with what's called a step up in basis that occurs when you inherit the property. The challenge with her just transferring it to her son, which would be a gift, whether it's half or all of the property, let's say she does a quitclaim deed to her son, she'd then make a gift to him. That's not taxable because you can do up to $13 million this year over your lifetime.

So let's take that off the table. But the real issue is that he now inherits her cost basis. So what determines whether or not there's a capital gain at the sale is the cost basis, which through the quitclaim deed, if she gifts it to him, he'll have to go back to what she originally paid for it to determine capital gains. Although if he inherits this, then he would get that step up in basis. So the cost basis is not what she bought it for, but it's the market value as of the date of death. And then he essentially would have no cost base or no capital gain if he turned around and sold it. So there's a real benefit there from a tax standpoint, especially if she's owned it for a long time.

So what's the way around that? Well, there is no TOD deed, which we were talking about with the previous caller in Florida, but they do have something called a ladybird deed, which functions similar in a similar way that would allow it to be transferred outside of probate. So does she have a valid will? And if so, I'd reach, have her reach out to that attorney to talk about, you know, if she doesn't want it to pass through a probate, why? And if that's the case, what could be done? And they may want to consider this ladybird deed.

Okay. And what, what would be the ladybird deed? That's just a, I'm not sure if I followed it. It's a life estate deed that allows her to maintain control of the property. But when the, when her, she dies, the property automatically transfers to the beneficiary without going through probate. And you still get the, the step up in, in basis. So you get the, the benefit of the step up in basis, but you don't have to wait for the, you know, probate process for the home to transfer.

Okay. Yeah, that sounds maybe better. I just remember that it wasn't what seemed logical to be part of the deed and it would be deeded over. She thought she'd put both names on the deed, have both names on the deed. But if you put or on there and she died, it wouldn't be a problem.

But I don't know if that really makes sense or not, you know. Yeah, I would get legal counsel on that. But anything he receives by way of gift, which if she owns a hundred percent of the property, any portion that's transferred to him prior to his, her death would be a gift. He's not going to get the step up in basis on that. So that's why it's best.

And again, this is all best discussed with an attorney, but just in general, it's best if he inherits this property and there are ways for him to inherit it in a more efficient manner if she's concerned about the probate process. Okay. Well, thank you.

That clears it up and reminds me of what you said before. I appreciate it. And thanks for your call today. To Lorraine, Ohio. Hi, Frank.

How can I help? Oh, great. Thanks for taking my call. I inherited $72,000. I'm trying to figure out what I should do with that. I owe like $25,000 on my house. All my cars are old. I have to probably replace one.

And then I have a daughter, Scott, probably another three years of college that I have to pay for. Yeah. Very good. So you said $72,000 is the inheritance? Yes.

Okay. And what is the interest rate on the mortgage? It sounds like it's probably pretty low, huh? Yeah, it is. It's like four. I think it's about 4%.

Yeah. So, I mean, I would start with those things that would result in, if you had to borrow for them, a higher interest rate. So obviously if you went out and bought a car and you couldn't pay with cash apart from using some of the inheritance money, that interest rate is going to be at least probably close to double what your home interest rate is. The same would be true obviously with the college if you had to borrow. Now, the nice thing about you being so close on the house is it's one thing to put money against a house and you don't quite pay it off so you still have the same mortgage payment. The benefit you have here is, if you knock out that $25,000, now whatever that payment was, you free that up every month so you're now putting more in savings every month. But I would probably start by just kind of praying through what are our values and our priorities?

Do we have any giving goals out of this? And then beyond that, I would look at what would result in the highest interest rates, probably going to be making sure you get the college paid for. So you could look for maybe we go ahead and set aside a year's worth and then we set aside a portion to buy the next car and then the rest, if we can pay off the mortgage, that's great because then we could take that and begin using that to fund college. If not, we may want to hold off on the house because it's the lowest interest rate and maybe we're setting aside a couple of years of the college or even the whole thing and then the car on top of it and then just keep paying the mortgage out of current cash flow. When you have surplus, maybe you're making an extra payment or something just to accelerate it.

But I think if you're going to have to borrow for either of those two other goals, college and the car, then those are probably priority. Does that make sense? Yeah, that makes perfect sense. Yeah. So I think that's the direction to go. As much as you'd like to have the house paid off as long as you just don't have a conviction to be debt-free as soon as possible, I'd probably let that ride. You're getting close. It's a low interest rate. Let's make sure these other things are shored up and then let's just try to limit lifestyle and send at the very least an extra payment a year.

If you can do better than that, that's even better. Thanks for your call today. We appreciate it. To Alabama, Anniston. Hi, Penny.

Go ahead. My sister and I jointly own a Florida Times share. She wants to buy my half.

Will I owe tax and how much? Yeah. So she wants to buy it. So it is a personal capital asset. And so the sale is reported on Schedule D with your capital gains and losses. And then the gain would be income. So you'd want to look at what is the gain that you would have on that when you sell it. And then that would be reported on Schedule D. So what I would do is connect with a CPA there in Anniston, Penny. Anytime you have something out of the ordinary like this, you just want to make sure you get good professional counsel. And we certainly wouldn't want a tax liability to catch you by surprise.

So I'd reach out to a CPA there in Anniston and go over the details. Thanks for your call. Back with much more just around the corner. Great to have you with us today on Faith and Finance Live. Before we take our final calls for the day, joining us each week is our good friend, Bob Dole. Normally, I introduce him as a Chief Investment Officer at Crossmark Global Investments. But I'm excited to say that Bob was named CEO of Crossmark Global Investments.

That out today, he will continue to serve in his role and duties as the firm's Chief Investment Officer and Strategist. So if you thought you had a lot to do, well, Bob might be giving you a run for your money. Hello, sir. How are you, my friend? Congratulations on your new post. Thank you. Most appreciated. Pray for me as you think of me.

I will. You know, what is a guy thinking about when you wake up managing $6 billion of people's hard-earned money? We better do well for them today because if we don't, tomorrow they're going to come after us. Yeah, that's right. Bob, let's talk about the market. Yeah, go ahead. In all seriousness, of course, as a faith-based firm, it's God's money. And so we do have, I think, a higher privilege in calling to do well for our clients. Yeah, you'll give an account for that. We all will someday. Bob, obviously, I'm looking at a lot of red on the screen today.

I'm sure you are as well. Tell us where the market's at this week and what's weighing on the markets. So interest rates moved up, tenured treasury, USSO was up eight ticks. And the reason was one of the Fed governors said, well, we don't know if rates are going to be lowered this year or not.

Maybe they will, maybe they won't. And the market said, oh, we assume they're going to be cut six times this year. We better reassess. And that started a bit of a sell off.

And that's the red that you're looking at. Yeah. Is there a particular piece of economic data that's driving that? No, every Fed governor has a slightly different opinion and they talk a lot. Frankly, I think they talk too much and confuse us. And so I think this governor is basically saying, hey, we don't have enough evidence to know when we're going to cut, how much we're going to cut.

So don't get carried away with it. Yeah. Obviously, you know, the Fed is is really going to be in a dilemma later this year as they start to think about actually cutting rates. And you made some remarks about that in your deliberations this week, right?

Yeah. Look, the Fed has said three times in their dot plot. Our guess is it's probably three or four times. But as I repeat, the market is saying, no, it's six times. Therein lies the potential for disappointment. We'll only get six cuts in our view is if the economy is really struggling, in which case we'll have earnings disappointments all over the place and the market won't like that either.

So it's back to you can't have your cake and eat it, too. Yeah. Bob, we're seeing the news out just, you know, from whether it's credit cards reaching an all time high to savings rates down, we've got delinquencies up on rent as well as cars. I mean, it seems like there's an erosion of the consumer's overall financial health as we head into this new year. Is that right?

Yes. Sad but true. The consumer, as you know, Rob, along with the labor market, has been the source of strength for the economy through 2023, causing a better economy than almost any of us thought. And of course, no recession. But as you point out with those statistics and there are a few others underneath the surface, we're starting to see some weakening. It's not horrible, but the cracks are showing up. And I think we have to watch them very, very carefully. Business cycles come and business cycles go.

And you know, our view that all that was done to fight inflation still has some negative economic consequences in front of it. We're starting to see some of those. Yeah, no question about it. All right, Bob. Well, we appreciate your insights, my friend. Again, congrats on the new post CEO of Crossmark Global Investments. And we look forward to having you back next week. Thanks.

Talk soon. Bye bye. All right. That's Bob Doll, CEO of Crossmark Global Investments.

You can learn more at Crossmarkglobal.com. All right. Let's head back to the phones. We'll round out the broadcast today. We've got a bit more time.

We'll get to hopefully a couple more questions at a minimum to Miami, Florida. Hi, Eddie. Go ahead, sir. Hi.

Thank you for taking my call. So over the years, I've had about three retirement accounts. One is a Roth IRA and two 403Bs.

I have about $100,000 between the three of them. And but I wanted to get better investment options. And I can do that by rolling them all into a Roth IRA. I know that there would be a tax penalty, but since it's kind of a relatively low amount, maybe I can just go ahead and do that. And, you know, compared to the possible gains of having a better investment option in the having all the accounts in the in a one Roth IRA. So I wanted to get your opinion on that.

Yeah. So what do you have in the 401K and 403Bs? If you were to put it all together, how much do you have?

About $100,000. All right. And what is your age, Eddie? Fifty. Sixty years old. All right.

And you're planning to continue to work for some time? Yeah, I'm sorry. Fifty five zero. Oh, 50. My apologies. And so you're you're planning to continue to work for the foreseeable future, right? Correct.

All right. And are you actively saving in in 401Ks? Right.

With my current employer, I have a retirement account. Yes. OK.

But the $100,000 is all from previous employers? Correct. OK.

Very good. You certainly can. So essentially what you would do is you'd roll those old 401K or 403Bs out to a traditional IRA and then you could convert a portion of that into a Roth IRA. You'd, of course, have to have the money to pay the tax when you do it.

But you could do that. And then from that point forward, it's now growing tax free for the next 15 or 20 years. And that's just until retirement. And then obviously, if you don't need the money, it's going to continue to grow, even though maybe you get a little bit more conservative.

You're right. You'd have complete control over the investments outside of those 401Ks, which would be a good thing. So the only question is, does it make sense to pay the tax now or later? I would say we're probably in the lowest taxed environment we will likely have. If anything, taxes in the future are heading higher.

So that would make the case why this is a good idea. There is a great study that was done by some researchers that looked at this idea of of given the opportunity to have pre-tax money in the traditional versus the Roth, the after tax, tax free growth, what is the best mix? And based on their analysis of thousands of scenarios using actual people, what they came up with is a rule of thumb that said, okay, if you have the opportunity to do both, you should probably look at taking 50 or taking your age, adding 20 to it. So in your case, 50 plus 20 and the, uh, you know, the total of that is how much you'd want in traditional and then the balance in the tax free growth, the Roth. So in your case, what that would mean is, okay, let's say we roll a hundred thousand out. You could take a, you know, leave 70% of it right there, take 30% of it and roll it out to the Roth, pay taxes on that 30 and now you've got both buckets growing and then you could decide in retirement where you wanted to pull from based on what made the most sense from a tax standpoint. That would be one option.

Now, if you wanted to, you could convert the whole thing as long as you have the money to pay the tax. But I just throw that out as an idea. Does that make sense? Yeah, great. That's great insight. Appreciate it.

Okay. Um, there's a great article on this, which is what references that study. If you'd like to read up on it. Uh, if you just search Roth or traditional IRA, it'll probably come up.

Sound Mind Investing, uh, is where you'd want to go soundmindinvesting.org or I think we have it on our website at faithfi.com. You may want to give that a read before you make the final decision. Very insightful. And Eddie, thanks for your call today. Uh, let's go to Aurora, Illinois. Hi Mary. You'll be our final caller.

Go ahead. Hi, good afternoon. Thank you for taking my call. First, the reason I'm calling is to let you know what an important service you give. I hope you can understand me.

I'm not speaking as clearly as I used to, but you sound just fine. Oh, thank you. I remember years ago you made a comment or said something to the effect that even if you may charge a million dollars, you have to pay it back. I mean, that's what you owe. It wasn't that amount, but if you charged it, you owed it. So when I was planning a move, I knew I couldn't pay off my credit card to the credit union.

So I called them and told them I wanted to do something with it. Anyway, long story short, the gal in the collections department spoke to her boss and the facility I was living at, they took all your money and never again. Anyway, they said something about it would affect if I paid that loan and it would affect my public aid. And I thought, I don't care. I owe that money. Anyway, they said, well, what anyway? They said in effect, what do you care about your credit for?

It's not like you're going to buy a car or a house. And her boss got so mad. He gave me, uh, he didn't give me a soul amount, which would have negatively affected my credit. She arranged for me to make payments, but it was mainly because of what I heard on your show.

Wow. Well, Mary, what an encouragement. I'll tell you, you took responsibility.

Uh, you had made a commitment, you wanted to honor that. And obviously, uh, God blessed you in the midst of that. I think he was blessing your faithfulness there. Uh, but, uh, really appreciate you sharing that. Of course, grateful for your kind remarks and your encouragement, but delighted about the, uh, the message that you just shared with our listeners. Cause I'm confident there's somebody out there that needed to hear that today. So Mary, thank you for being on the program today and for sharing that away from what you can't walk away from what you, Oh, I mean, you just, you just can't people do.

They tell you, Oh, you don't have to pay that back. And I thought, yes I do. But it's, it's only because of what I heard on your program. And I want you to know that. Well, thank you. That's a wonderful place for us to finish today, Mary. It's a biblical truth and you reminded it of us today and we appreciate you being on the program. I'm so delighted you got on. May the Lord bless you, Mary. Call back anytime. Well folks, that's going to do it for us. Faith and finance live is a partnership between Moody radio and faith by on behalf of my team, Robert Sutherland to here at Dan and Gabby T I'm Rob West. We hope you'll come back and join us tomorrow. We'll do it all over again in the meantime. Hey, God bless you. Bye bye.