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AI: Boon or Bane?

MoneyWise / Rob West and Steve Moore
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February 15, 2024 5:37 pm

AI: Boon or Bane?

MoneyWise / Rob West and Steve Moore

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February 15, 2024 5:37 pm

Will artificial intelligence be a great blessing for humanity, or spell doom for mankind? You can find arguments for both sides of that debate. But one thing’s for sure, it’s coming a lot faster than we all expected. On today's Faith & Finance Live, host Rob West will welcome economist Jerry Bowyer to share his views on this topic and answer the question—Is AI a boon or a bane? Then Rob will answer your questions on different financial topics.

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Will artificial intelligence be a great blessing for humanity or spell doom for mankind? Hi, I'm Rob West.

You can find arguments for both sides of that debate. One thing's for sure, it's coming a lot faster than people think. Jerry Boyer joins us today with his views on the topic, 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, our friend Jerry Boyer is resident economist and frequent contributor here at FaithFi. He always has an opinion, and something tells me today will not be any different. Jerry, great to have you back.

Great to be with you, as always. So Jerry, it seems like proponents of artificial intelligence focus on the potential economic benefits, while opponents see it as something that could get completely out of hand and even threaten mankind along the lines of maybe Skynet in the Terminator movie franchise. So where do you come down on this? Well, I'm not worried about the Terminator.

I enjoy the movies, but that wouldn't be my concern. Those scenarios that we talk about, about artificial intelligence, that are dystopian in nature. They have some future where the AI becomes more intelligent than we are and is able to take over the world. I think those scenarios depend on a serious theological problem, which leads to a serious problem with anthropology, which is that your view of human nature. And that is that they assume that man can be a better creator than God. In other words, God created humanity. He created us as the crown of creation. He created us in his image, which means there's nothing in the material universe, which is closer to God than we are. There's nothing above us in the world.

All the things in the world are under us because we are the crown of creation. That's the glory of humanity being made in the image of God. If we could create an AI, which could surpass us in understanding and wisdom, that would mean that we would be bigger and better creators than God. If we can make something better than God's best, then that makes us better than God.

And we're not. We can never create something as powerful and as beautiful and as dignified and with the mental capacity of humanity because we can't create the image of God. We can create the image of us. God made us in his image. We can make computer programs, which are in our image. But being in God's image, we're less than God. Being in our image, AI is less than us.

Hmm. So there's a ceiling on our ability to create. And that is that we're limited to what we can come up with on our own. God is, of course, unlimited. So being God's highest creation, that is mankind, you're saying we're going to bump into that ceiling. And therefore, this idea that somehow it could be the end of mankind is taking it beyond its capacity? Because it attributes to mankind a creative ability that would have to exceed God's in order for us to create something that would exceed humanity. So in some sense, the people who are basically worshipers of AI, the people who believe in quote, the singularity, I'm sure you've heard of that idea that we're on the verge of creating something, an event that's so powerful that the computers are smarter than we are and the computers can create smarter computers than them. And those computers can create smarter computers than them. And that's the singularity where computers have infinite knowledge and it becomes a new God. We can't make gods.

There's only one, and there's only ever going to be one. So those people worship the computer that doesn't even exist yet. Isn't it interesting? They have a God that isn't here yet that they're already attributing divine powers to. They're already worshiping something that doesn't exist. But in essence, they're worshiping themselves because they're going to create that God. So they're idolaters of AI. But in some sense, Christians who cower in fear about the AI that's going to exceed human ability and exceed the human minds, in some sense we're also idolaters because we also are giving humanity more credit for more power. We're giving AI more power than it can possibly have. So the people who worship AI and the people who tremble in fear against AI both treat AI as a kind of God.

One kind thinks of it as a benevolent God, the other thinks of it as a kind of an evil God, but they all give it divine powers. Fascinating. Well, we're going to continue this conversation with Jerry Boyer just around the corner. We'll talk about the potential impact on the US and the global economy. What about jobs in the future?

We're talking AI, artificial intelligence today. Much more to come just around the corner. And then your questions at 800-525-7000. Stick around. We'll be right back. Great to have you with us today on Faith and Finance Live. We're talking with Jerry Boyer.

He serves as our resident economist. Today, a little different topic, AI. That is artificial intelligence. Is it something to be concerned about? Is it something to celebrate?

Perhaps something in the middle? And Jerry, before the break, you were sharing with us really a biblical worldview on mankind being the creator. We're the ones that programmed AI, and therefore it can never outpace our ability, our intellect, because ultimately it will never rise to the level of God who is the ultimate creator, right? Exactly. And in sort of practical terms.

I mean, that's sort of theological and it's proper to be theological. But in practical terms, I don't think people realize just how inefficient AI is compared to the human being. For example, my friend George Gilder has done some analysis on this. He's one of the top tech experts in the world, committed Christian. And he points out that the human brain has roughly the same number of connections as the entire global internet. So if you see all the connections in the global internet, that's about the same number as the number of neural connections in one single person's brain. We're not all equally complex with our brain, so maybe mine's a little less. But on average, every human being has a brain which is on average as connected and as complex as the entire global internet combined. That's how far ahead the humanity which God created is from technology. And by the way, it's not just a matter of one human brain being that much more sophisticated than any computer, it's all the computers put together. Also, we are vastly more efficient. The computer companies now, these companies that run the cloud, like Google, et cetera, they now locate these on glaciers because the processing power is so inefficient and produces so much heat that the computers melt down because they're inefficient with all that use of electricity.

So they literally put them on glaciers to absorb some of that extra heat. They take enormous amounts of energy to run. I mean, just the parts that are mining Bitcoin are now becoming major energy consumers. How much electricity does the average human brain use?

A little less than the average ceiling fan uses. A human brain is running something as complex as the internet for basically that little light in your refrigerator when you open it or that light on your stove that you just push the light on without the heat. That is so vastly complex compared to AI that technology is just nowhere near. Yeah.

Wow, that's fascinating, Jerry. Let's talk about the economic implications of all this. Of course, the predictions economically for AI are huge. Supporters say it will create a productivity leap that will grow wealth and improve living standards. It could add as much as some numbers I've seen are $20 trillion to the global economy. What do you think the economic impact will be?

I think they're considerable, but I do think they've been hyped quite a bit. With the Davos meeting, they were talking about AI. I heard people saying it's the most important technological advance of their lifetime.

I don't know. Microchips were invented in our lifetime. The internet was invented in our lifetime. No, I don't think AI is the most important in our lifetime. I can tell you, we use it a lot in Boyer Research. It's a key part of our business.

We have a saying around here. Artificial intelligence is just fine. It works terrific.

It's no problem. Just so long as the answer doesn't have to be right. If the answer has to be right, you can't depend on it, which people might ask, well, then why use it at all? Because an initial stab at an idea, an initial draft of a white paper, initial research, which then requires human oversight, you're skipping a few of the early steps. I think of an AI as an intern with no experience whatsoever, but who can basically put in about a month's work in an hour, but has less judgment than the average intern without any experience.

That's how we use it around here. It can produce a lot of text. It can produce a lot of information, but you have to double check everything. It's been a huge productivity gain for us, but I think that there is a certain exaggeration about how much productivity gain we're going to get. I think we're going to have a lot of problems where a lot of companies are going to say, oh, just have all the service reps be AI, and we're going to have a decline in service reliability because AI is not up for that yet. Like most of these technologies, it appears, it gets hyped, it gets in bubble territory and valuation. Then you spend about 10 or 15 years working out the kinks, and then it's actually really useful, but almost always later than we expect it to be.

Yeah, that was helpful. Let's take that a step further than Jerry. Where are the jobs that are most at risk? Where will this impact the labor force most significantly? I think the jobs that are most at risk in the creative class are people who are in the creative class but aren't actually very creative. AI can write a mediocre, say, short story. AI can write a mediocre business memo. Mediocre people probably are in trouble with AI coming along. Same thing with some design functions, et cetera. I think what it does is it makes very creative people more productive. Every new technology basically almost always does the same thing.

It gives more reward than it does punishment, but it disproportionately favors some over others. Yeah, there are people who are going to be put out of work by this thing, as there were people who were put out of work by the automobile. When I started in accounting, I used a 10 key.

You don't even know what that is, right? It's a calculator that sits on your desk, and I had to learn to do that really quick. Then spreadsheets came along. They didn't need as many bookkeepers when spreadsheets came along. But we all somehow found other things to do, which didn't involve us just pounding away on those 10 keys all the time.

The same thing's going to happen here, likely. That's the history of technology, but it does take some time. Let me just put out one more challenge if we have time here.

Sure. I would love for Christians, instead of cowering in fear about AI, to take dominion over it. AI has been trained on information that is often hostile to our worldview. I had an hour long argument with GPT-4 about evolution and atheism once.

It sounded like Richard Dawkins or another atheist troll on the web. The people who have trained AI don't think like we do. What does that mean? Avoid AI? No, it means train our own.

Train it yourself. Master it. It's not going away if we disengage. A little bit like investing, the more we disengage, the more we leave it to its own devices. The more we engage, the more we can steer it in the right direction. AI isn't just something we react to. AI is something that we can either move in the right direction or let it go in the wrong direction because we've decided we don't want to have anything to do with it.

That's well said. The team here at FaithFi has actually trained our own internal model with all the questions and answers that I've given over the years. They say I might not be necessary, Jerry, at some point in the near future. Well, that is not true, but it is going to allow you to come up with new answers to new questions rather than having to go over those same questions over and over again that you've already answered.

It should free you up. By the way, I take a lot of comfort in knowing that there's been an AI that's been trained by you. Well, thank you, Jerry. Hey, we've got 30 seconds left. Tie a bow on this as we look at this through a biblical lens, a biblical worldview. Where would you finish today? I would finish with new technology always brings new challenges.

It always does, but we don't have to be afraid of those challenges. There's nothing inherent in the natural order. There's nothing that can be created out of matter in terms of technology that is inherently evil. So yes, we can take things and turn them into, we can take paper and turn it into pornography, but we can also turn it into Bibles. Printing, it was not a bad technology. How you use printing is what determines its worth.

That's the same for every other technology, including this just incredibly new sophisticated form of printing, which is artificial intelligence. Well said, Jerry. We're going to have to leave it there. Thanks for stopping by. My pleasure.

That was Jerry Boyer, our resident economist. Your calls are next, 800-525-7000. We'll be right back. 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. Great to have you with us today on Faith and Finance Live. I'm Rob West.

Glad to be back live with you. I was off for a few days this week, but taking your calls and questions today on anything financial, we want to help you make God your ultimate treasure and money a tool. We do that by looking at your questions in the light of biblical principles and wisdom, and we're ready for your calls today. We've got lines open. I'm ready to go at 800-525-7000. That's 800-525-7000. You could call right now. Let's dive in today. We'll begin in Locust Grove, Georgia. Hi, Wayne. Go ahead.

Hi, sir. My question is that my wife and I, we are retired, retired military, and I'm about to retire from the workforce. She was reading in the papers today about someone coming in and taking a loan out on their home, and they were having the people that owned the home had to repay the loan because we don't have any way to protect yourself. I'm trying to find out what ways are there to protect your investment from someone just coming in and taking out loans and stuff on it and you having to pay for it.

Yeah, very good. You know, this is often referred to as a title lock. There's lots of advertisements that you will see around this idea of title lock, and it's not something you should pay for is the bottom line. If you do any kind of reviews on this idea, it's just not worth the cost.

At least that's what most experts will say, and here's why. It claims to actually protect you against title fraud, but it isn't actually a type of insurance, and at the end of the day, fraud is fraud. So if somebody compromised your identity or was successful in fraudulently retitling your property in their name and then they took out a loan against it and it was unpaid and the lender tried to foreclose on you, it would be unlawful for foreclosure because you're the rightful owner and that transfer or conveyance of your property fraudulently was in fact fraud, and so they have no legal claim to your property. Now, it would be a big hassle and you'd have to fight it and demonstrate that it was done fraudulently, but there's nothing anyone else can do to quote-unquote ensure that that won't happen. Apart from what you can do yourself, which is first of all, you could contact your county records office and just see many counties today will allow you to place an alert on your title. So it would basically notify you if there was any change with respect to the title of your property, your real property in their county, and that would provide an alert.

If they are able to offer that, they'd be able to do that free of charge. Apart from that, you probably just need to be focused on, generally speaking, wise practices to avoid any kind of identity theft, and the way you would go about that is you would, well, do the things you will hear often. Number one, protect your social security number. Don't fall for phishing attacks.

That's with a ph. That's when crooks try to acquire your sensitive data like bank account numbers and social security number through fraudulent emails pretending to be a legitimate business. Create passwords that are hard to guess. Don't use common phrases and change them often. Keep your, you know, operating system on your computer and your phone up to date.

Those types of things and more are probably the best thing you can do apart from contacting your local county just to see if there's any additional steps that could be taken to alert you if there was any changes. Does that make sense? Yes, it makes a lot of sense. I heard that one lady got taken and now she has to pay to try to get it restored and that's what I was trying to wear at me. I don't know how to do that, but I can go from there, I think.

Very good. Yeah, you can be assured that although an illegal or a false transfer of a title could happen, it's very rare and it would be where a scammer is forging your name on a deed and then filing it at the county courthouse and taking a loan against it. But, you know, the title lock claims that are out there that say they'll protect you are really not a legitimate representation of what it actually does at all. And at the end of the day, if somebody were to do this, it would be fraudulent.

And although it could take some time and even some expense, there's not a whole lot you can do other than just generally speaking, use best practices to protect your identity. So, Wayne, I hope that gives you some additional peace of mind, but we do appreciate you calling and being on the program today. Lord bless you. We've got phone lines open today taking your calls and questions on anything financial. By the end of the program, the lines will all be stacked up if today's program goes like most others. So now is a great time to call. Get in early and let's tackle your financial question today when you call 800-525-7000. That's 800-525-7000.

To Tampa, Florida. Hi, Harold. Go ahead. Yeah.

How are you doing, Rob? Thanks for taking my call. Sure. I got a question. My parents are writing their trust and I want to know the difference when you inherit an IRA or a Roth. What is the difference in that as far as inheritance? Yes. In terms of how it's distributed.

Yeah. How it's distributed or can I let it continue to grow? If I get the Roth, I choose that one or their IRA?

There are rules with regard to how you have to distribute. Typically, and there's been some changes in the law as of late and so you'd want to check with your CPA, but typically the way this works is errors have to generally empty the account within 10 years if you're a non-spouse. So you have to withdraw the money during your lifetime. Now, there is no tax. The tax has already been paid and it grows tax-free, but you do have to withdraw it out. Now, it depends on what type of beneficiary you are, but they're basically treated the same with regard to taking the money out after the inheritance. So the change really comes in whether or not you're putting the money in and getting the tax deduction and then growing tax deferred to pay on it when you pull it out in the case of the traditional or whether you put in the after-tax money and then it grows tax-free.

That's really the key decision, less about how it's handled once you inherit it. I hope that helps. We'll be right back. Thanks for joining us today on Faith In Finance Live. I'm Rob West. We're taking your calls and questions.

Three lines open at the moment, 800-525-7000. Before we head back to the phones, in the news today, higher prices and more expensive goods kept spending in January lower than in December. The Commerce Department said earlier today that they spent less on, that we spent less on cars, food, and gasoline by eight-tenths of a percent. That made January the worst month for retail sales since March of 2023. The January advance is not adjusted for inflation so consumers might have spent the same amount of money but they're not getting as much in return because inflation.

The most notable drops in sales were building materials and garden stores, motor vehicle parts, and at gas stations as well because prices at the pump fell. We also spent less shopping online, interestingly. The bad news? Well, unfortunately we're relying on credit cards to cover necessities. Credit card debt surged to a new record at the end of 2023 and delinquencies are also on the rise as well.

Something to keep an eye on as we head into a year here where we're expecting in 2024, at least a mild recession I think most economists are expecting. We'll certainly keep an eye on it. All right, back to the phones.

We go to Evansville, Indiana. Hi Joyce, go ahead. Hi, thank you for taking my call. I have a two-part question about how to protect my assets both IRA which I am retired and drawing on and my home which will be paid off in about four years. I'd like to know how to protect those assets in life and in death. And what was the second part of the question? I guess the life and the death part of that one question. And then I do want to know if since I have an IRA with over $500,000, should I take life insurance or just be able to use that money? Yeah, very good.

So a few thoughts. Number one is, you know, I think with regard to the IRA withdrawals, unless you feel really strongly that you should be debt-free, I would try to avoid taking money out of your IRA generally to pay off the mortgage. What is your age, Joyce? I am 66. All right, and what are you living on right now? With my withdrawals and my social security, it's about $5,000 a month. And what is the amount roughly in those retirement accounts altogether? Altogether is around $500,000. And what portion of that $5,000 a month is coming from the IRAs? It's almost 50-50 between my IRA and my social security. Okay, yeah, so about $25,000 or about $2,500 a month. Yeah, so you know, typically I would say out of the IRA, I'd try to limit it to 4%. That'd be $20,000, obviously a little less than you're taking now.

So you're taking a bit more than that. How is that invested? Is it largely in stocks? Is it a mix of stocks and bonds?

What do you have? It's a mix of stocks and bonds. Okay, and how has it been doing overall? Well, I'm sort of at a medium risk. And even with the market being bad, so far this year I'm up 3%. Okay, great.

Yeah, so that's excellent. So the idea would be, you know, as you're doing, that you want to try to keep that growing over time to offset what you're taking out and outpace inflation. Sounds like you're doing that. Now, what do you have left on the mortgage? I have about $45,000. And so what you'd be doing if you did pull that out is you'd drop that down to about $450,000. However, you would drop that monthly payment for your mortgage. How much would that lower your overall expenses? My mortgage is $950,000 a month. Yeah, okay, so you could take that down to about $4,000 a month.

Yeah, great. And then if you just continue on your current track here, Joyce, how quickly does that mortgage get paid off just based on what you're doing now? In about four years. Okay, about four years.

So, you know, I think you've got a couple of options. I mean, one benefit of taking it out now is as long as you didn't put yourself up in a higher tax bracket for that portion, and one way to avoid that would be to do it over two years, is we're probably at the lowest we're going to be in terms of tax rates. So, you know, the Tax Cuts and Jobs Act expires in 2025 at the end of 25. That's the Trump tax cuts. And depending on what happens in the next election, which obviously we don't know at this point, that either will likely stay the same or go higher.

We're not going to likely see lower tax rates from here. So by going ahead and pulling out maybe, you know, $22,500 this year, the same next year, or maybe by then you only need to pull out $20,000, you're at least knowing that you're going to pay, you know, the lowest tax bracket and you're not going to, you know, be pulling that out down the road when you're paying more. And then once you did that, you could drop your expenses by $1,000 a month.

So I think there's something to that. If you would prefer to be debt-free, I think that's great. Now, the other option is to say, well, I want to leave that invested because I want it to have the potential to grow because as soon as I take out that $50,000, then that money is not available for the next 20 or 30 years, however long the Lord has you here to be able to grow and compound. And so then that would say, well, maybe we should just stay on the current trajectory.

I could go either way with that. I think it's going to come down to, number one, you know, do we want to go and lock in today's tax rates? Number two, do you just have more peace of mind knowing that you're unencumbered and you're debt-free? If you look at it on paper and this continues to grow over the next few decades, you're probably going to come out better, especially if you have a low interest rate, which I imagine you do because you've had this for a while, you're probably going to come out better on paper, leaving that money invested and just letting it continue to compound.

But if you really have a, you know, a desire to be debt-free, then I would say, you know, this is probably the time to do it over the next couple of years. Does that make sense? Okay, that does make sense, it does. And then with my IRA money, how do I protect that so my kids can get someone? I read I do pass away. Yeah, well, you mean in terms of you going into a nursing home?

Correct, yes. Well, you know, with regard to an IRA, you know, your IRA is could be considered a non-exempt asset. So it could be, you know, used for those expenses if you're not already taking a distribution. So when you go into a nursing home, obviously, they're going to before you're going to get Medicaid to help offset those costs, you're going to have to spend down your assets. And so, you know, there's not necessarily you know, there's not necessarily protection against IRAs. So many states will recognize your IRA as an asset which can impact your Medicaid eligibility. So, you know, one of the best ways to really think about offsetting the, you know, being prepared for this season of life would be number one, to have long-term care insurance, which would kick in and offset those costs that you'd have. You could put your assets into what's called a Medicaid compliant annuity, which would provide an income stream but in a vehicle that's protected against being counted toward Medicaid assets. The other option is to put it into an irrevocable trust or make financial gifts to the kids, which you can do as well. So the best way to think through all of this in your situation is to visit with an estate planning attorney who can talk through all of these options with you, but do that in light of the laws of your state in Indiana and your particular financial situation, your assets and goals.

So I'd reach out to a godly estate attorney to talk about all this and as a part of your overall planning. Thanks for your call. We'll be right back. Thanks for joining us today on Faith and Finance Live.

I'm Rob West. Here in our final segment, we're taking your phone calls today on anything financial. By the way, before we head back to the phones, let me mention Faith and Finance Live is listener supported, which just simply means that we absolutely rely on your financial gifts to bring you this program each day.

Whether you want to be a one-time giver or maybe a monthly financial partner, we're going to be talking to you about a monthly financial partner, whatever it might be. We'd certainly be grateful if you would consider a gift. It's quick and easy to do when you head to our website, faithfi.com. That's faithfi.com. Just click give at the top of the page.

Thanks in advance. All right, let's head back to the phones. Chicago, Illinois is where we're going next.

Joan, go right ahead. Hey Rob, thanks for taking my call. I'm getting some mailings from banks recently that advertise CDs at five plus percent rates, anywhere from two months time period to a year or two. Are there any downsides to using a CD as an investment short term?

No, there really aren't. I mean, the only thing to consider is just that, you know, if you're locking it up, let's say for a year, you're probably going to find yourself in a situation a year from now where rates are a good bit lower than they are today. And so this would be a temporary opportunity. And so if you were looking to try to take advantage of these rates where they are now, you might want to, you know, take advantage of something that doesn't have quite as short of a time horizon on it.

So, you know, locking it up in a four or five year CD. And even though you're not going to get five and a half plus, you know, you still may get something around four, which would be great, you know, maybe three or four years from now when rates potentially are a lot lower. You can also lock into really high quality, you know, government bonds, let's say that would pay, you know, take advantage of these higher rates. So that might be the only downside to something very short term in nature.

But in terms of the merits of the investments themselves, as long as it's an FDIC insured bank, or credit union through the NCUA that's offering the CD, then absolutely, there's this is a unique window where for the last 20 years, we've not seen this as we've had near zero interest rates. And the opportunity to get, you know, five and a half with government backing is tremendous, and I would take full advantage of it. Oh, great. Thanks so much for your advice.

Absolutely. Thank you for calling, Joan. Let's go to Tampa, Florida. Hi, Kelly, how can I help? Hi, we have this savings that we had for kids to go to college, unfortunately, they don't want to go anymore. And we need to have some money. So eventually, they're going to need it. So we have 150,000 in a life insurance policy through Symetra.

And but my husband was just saying that there's the energy to take it out. Before seven years. Okay. And also, we have two multi funds for the boys, we have two sons.

And I want to know if it would be good to put in a CD since the CD is 525 for six months, I believe, and five for 12 months. Is that what I heard like last week or something? Sure. Yeah. So I think we need to take a step back, Kelly and just say, okay, so now that you've got this money saved, I heard you say I think you have 150,000. Is that right? When you put all of this together between the annuities and the mutual funds?

Is that correct? No, they, their life insurance is 150,000. And their move to fund for each kid is 45,000.

So there would be 90,000. Okay, so 90,000 in the mutual funds, and then the 150,000 that you're saying is the life insurance. Is that the death benefit on the policy? Or is that what's called cash value that's building up inside the policy that can be taken out, apart from these, you know, redemption penalties that you mentioned? Much higher. I think that benefit is much higher. Okay, got it. So it's, it's got about 150,000 in cash value.

Okay, yeah. So I think now that the the boys have decided not to go to college, we need to redefine the objective of the money. So is this money you want to turn over to them in a relatively short period of time so they can, you know, if they're not going to college, are they going to go to trade school? Are they going to start a business?

Are they going to move out on their own and try to get an apartment and, and just get a job? I mean, what is what is now the purpose of this money? Because while you were saving it for college, you had a very specific time horizon on it.

So we've got to redefine that time horizon, which then informs the, the investment strategy. Now, with the annuities that you that sounds like, as you said, there's a much higher death benefit, but maybe the cash value is worth 150. Sounds like there's still what are called surrender penalties on that annuity.

So I'd probably leave that alone until those run out. And at that point, you could look at pulling it all out and and putting it somewhere else or leaving it there if it offers an attractive rate of return. With regard to the mutual funds, this is where you have a lot more flexibility. Because if they're not inside a college savings plan or a retirement vehicle, where there's penalties by taking it out, you really have unlimited investment options here. And again, that comes down to time horizon and risk tolerance. So we back up and we say, what is the purpose of this money? Is it to give the kids, you know, something for way down the road like to have for retirement?

Is it something that the boys are going to be able to have access to in the next three years to start a business or buy a house? And both of those things are very different because one is very short term in nature. That would lead me toward moving toward the CDs and out of the mutual funds because you don't want to take a lot of risk with it. If it's more long term in nature, then you may want to just leave it right where it is in the mutual funds.

And, you know, I think an advisor could help you evaluate the merits of the mutual fund to say, are these good funds with a good track record with low expenses? And therefore, we should leave it right there. Or maybe we should leave it in mutual funds but pick different funds. I'm throwing a lot at you here, though. Does that make sense to you guys? Yeah, it does make sense. We don't want to do this right away.

One is 17, one is 20. But yes, in three years, I believe that they already have some plan in their mind. If they want to do some business, we would do, you know, take this money. Otherwise, no, just for just spend here and there.

No. So yeah, it was something like for three years, it would be our first bet. Yeah, yeah. So a three year time horizon, I would typically say, let's get it out of the mutual funds, because we want to have it available. Here's what could happen. You know, if you only have a three year time horizon, let's say, you know, we we get, we skirt a recession this year, but three years from now, we're heading into a major recession. Well, the market could be down 2030 40%. And it's right about the time the boys are looking to pull that money out and, and buy a business or buy a home. And so that's why we try to match the risk profile and the investments to the time horizon. Now, if you said, you know, this is money that they're not going to touch for 10 years, well, then I'd say leave it in the mutual funds.

But if it's, if it's money you want access to in three years or less, I'd say you probably want to begin moving out of the mutual funds, especially now with the S&P 500, hitting yet another all time high today, you'd probably want to move out of the mutual funds before a possible recession, and put that money into something more safe or secure, insecure, like a CD, so that we know that 36 months from now when they're ready to get the money for whatever you're going to allow them to use it for, it's there and you don't have to worry about what the market is doing. Apart from all of this, I'd encourage you guys to connect with an advisor. We recommend Certified Kingdom Advisors and you can find one there in your area, Kelly, at faithfi.com. But thanks to you and your husband for calling today. God bless you.

Let's go to Cleveland. Hi, Tony, how can I help? Hi, thank you for taking my call. Can you hear me okay?

I can. Okay, I have an IRA at Fidelity from a previous employer, and I'm 65 and still working. I have a new job with another 401k. Should I lump that with that new employer? Should I let Fidelity manage it with a cost? Should I put it in a CD? Should I get some annuities?

What should I do? Yeah. And you said your age is 65. Is that right? Correct. Okay. And how much do you have in that IRA at Fidelity?

100,000. Okay. All right. And what other retirement assets do you have? That's pretty much it.

Started late in life. And that's all I have. And then what I have is what I have with the new employer. Sure. And then do you plan on working, Tony, for the foreseeable future? Yes.

Okay. You know, I would, you're probably not going to be able to roll it into the 401k. You might have been able to go from 401k to 401k.

Now that it's in the IRA, I don't think you'd be able to put it into the 401k. So I think you probably want to hire an advisor to manage it for you. But here's the thing. I mean, you're continuing to work for the foreseeable future. Let's say you, you know, you don't have any end in sight. You continue to let God use you right where you're at and use your skills and abilities.

That's great. You know, we need this money to last a long time. And even if you were fully retired, I'd say potentially, you need this money to last for three decades or more, depending on how long the Lord has for you.

And of course, none of us know that. And so I think the goal is for you not to take unnecessary risk, but to keep this money working for you. And at 65, you know, you probably want to keep somewhere between 40 and 45% in stocks just to give it the ability to keep growing with maybe, you know, 55 to 60% in bonds to give it more stability. And that way, as you're continuing to work, you've got a growth component. But when you need to, you could convert it to an income stream. You know, I'd say at some point, you could take four or 5000 a year from it, just to supplement Social Security, and, you know, any part time income that you have. I think the other goal you should have other than hiring an advisor to manage this would be to delay taking Social Security until age 70, if you can, because you're continuing to work. And that way, your Social Security is going to be probably, you know, 25% or so higher than what the Social Security statement says you would get at full retirement age, because every year you wait past age 70, it's going to add 8%. And that's a permanent increase for the rest of your life. And that way, we can grow this 100,000 and maximize it while you're still working, let your Social Security keep growing. And that way, at some point, if you do need to, you know, get redirected to whatever God has for you next, and you're unable to work for pay, then, you know, you can rely on a higher Social Security check, and hopefully, you know, a retirement account that is now worth 150,000. And, you know, you can convert that into an income stream that would meet your obligations. Does that make sense? It does. Right, real quick.

Yeah, they'll manage it? I, I would find an advisor, I'd go to our website, don't just call the Fidelity Call Center, I'd go to our website, it might stay at Fidelity, but I'd hire an advisor who's skilled in that. Go to our website, faithfi.com, and click Find a CKA. Choose the investment category when you get there, or it'll say Find a Professional, and then connect with that person there, faithfi.com. Thanks for your call today. Faith in Finance Live is a partnership between Moody Radio and Faithfi, so thankful for Tahira, Amy, Lynn, and Robert, couldn't do it without them. See you tomorrow. Bye-bye.
Whisper: medium.en / 2024-02-15 19:46:56 / 2024-02-15 20:03:43 / 17

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