April 24, 2025 • 42 mins
At first glance, banks and credit unions can seem pretty similar as they both offer valuable financial services. But dig a little deeper, and you’ll find that credit unions can be a powerful partner for managing money. On today's Faith & Finance Live, Aaron Caid will join Rob West to share how banking with a credit union can help build God’s Kingdom. Then Rob will answer your questions on different financial topics.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
S1 (00:08):
What's the difference between a bank and a credit union?
More than you might think. Hi, I'm Rob West. At
first glance, banks and credit unions can seem pretty similar
as they both offer valuable financial services. But dig a
little deeper and you'll find that credit unions can be
a powerful partner for managing money. Aaron Cade joins us
to explain why. Then we'll take your calls at 800,
(00:31):
525 7000. That's 800, 500, 25, 7000. This is faith
in finance. Live biblical wisdom for your financial decisions. Well,
it's always educational. When Aaron Cade joins us. He's the
chief marketing officer at Christian Community Credit Union, a faith
based financial institution and a not for profit underwriter of
(00:54):
this program. Aaron, great to have you back.
S2 (00:57):
Thank you. Rob, it's great to be back with you.
S1 (00:59):
Aaron Banks play a key role in our economy. No doubt.
But what sets credit unions like Kccu apart and gives
them a unique place in the financial world?
S2 (01:11):
Well, first and foremost, credit unions are not for profit
cooperatives owned by their members. So the focus is on
long term member relationships and service is preeminent at Kccu.
Our mission is rooted in striving to serve and love
others like Christ.
S1 (01:26):
Yeah, and that really is a differentiator. No doubt. Uh, we,
of course, get a lot of questions from listeners who
want to do their banking with a financial institution that
aligns with their Christian values. Talk about why that's so important.
S2 (01:39):
Well, I think Jesus said it best in Matthew 621,
for where your treasure is, there your heart will be also.
So how you use your money reflects your values and
shapes your heart. Where you choose to bank should as well.
At Kccu we try to help you align your finances
with your biblical worldview. View. For example, we provide affordable
(02:00):
financing to build new churches and to help Christ centered
ministries grow. Thus, we aim to ensure that your money
doesn't just earn you a great rate, it also helps
expand God's kingdom.
S1 (02:09):
Yeah. And I love that about your work at Kcu.
You know that you're working with an institution aligned with
your values, but you also know a portion of every
dollar is going to some incredible kingdom building work. Now, Aaron.
Many people assume credit unions can't match banks when it
comes to rates. Is that actually true?
S2 (02:28):
No. Not really. In fact, the opposite is often true.
We don't exist to make profits for shareholders. The profits
we earn are returned to members in the form of
better rates and lower fees. And at Kcu, we donate
a portion of earnings to Christian ministries. So we take
biblical stewardship seriously. Thus, our products are designed to help
members honor God with their finances.
S1 (02:49):
Yeah. And in practical terms, Aaron, what are some of
the products then that Kcu offers to individuals and perhaps
you can even give us some of the rates that
you offer as well.
S2 (02:59):
Sure. I mean, rates can change with market conditions, but
I'll speak to today's rates. Our harvest checking account offers
a high yield of 4% APY on deposits up to $5,000,
and there are no maintenance fees. The Harvest High Yield
Savings Account pays 5% APY on deposits up to $5,000,
and the welcome CD, which is a great introductory vehicle
(03:20):
for new members, offers five and ten month terms that
pay between four and a half and 4.75% APY. And
we offer the only credit card I'm aware of that
not only earns you 1.5% cash back on every purchase,
but also gives to Christian causes with every swipe. In addition,
we offer vehicle loans, mortgages and helocs at competitive rates.
(03:40):
And all of this comes with full service digital banking
and 24 over seven member support. And importantly, we also
offer resources from trusted partners including Faith Fi and Compass
Financial Ministry that help members grow in their financial Discipleship.
S1 (03:55):
Mm. Yeah, I love that. And, uh, boy, a lot
of our listeners right now may be surprised to hear
how competitive those rates are, alongside the great support and
the alignment with the Christian ministry. Now, let's talk about
that support of ministries for a moment. How does that
actually work at Kcu?
S2 (04:12):
Well, we specialize in ministry lending and banking. Um, we
offer property loans, equipment loans, operating accounts and even high
yield savings for reserve funds. Um, with 68 years of
experience and over $1 billion in ministry loans funded, we
understand the financial needs of ministry. So we're not just
funding projects, we're partnering in gospel advancement. Our giving supports
(04:35):
ministries that spread the gospel, combat human trafficking, protect vulnerable children,
and provide disaster relief. In fact, we've given over $6.5
million to date back to Christian causes.
S1 (04:45):
Incredible. Just a few seconds left, Darren. How does somebody
become a member of Kcu?
S2 (04:50):
Well, membership is open to Christians and Christian ministries Nationwide.
You can join through your affiliation with your church, ministry
or school, or you can join via our partner charity,
Christian Alliance for orphans, or even via a family member.
With our new streamlined application process, it's never been easier
to become a member of the Christian Community Credit Union family.
All you have to do is visit join Christian Community.
(05:10):
Com to get started.
S1 (05:12):
Awesome. That's Aaron Kade. Aaron, we appreciate your time today.
Thanks for stopping by.
S2 (05:16):
Thank you so much Rob.
S1 (05:17):
The website folks. Join Christian community.com. We'll be right back.
S3 (05:35):
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.
S1 (06:00):
Great to have you with us today on Faith in
finance live. I'm Rob West. Well, this is the program
where we help you live as a wise and faithful steward.
How do we do that? Well, we gather together each
day during this hour to mine the scriptures, to talk
about the big themes we see on the heart of
God as it relates to money, to live out a
biblical worldview and recognize. And here's one of the big ideas,
(06:21):
is that our financial journey is one of the key
ways God shapes our spiritual journey. Think about it. It's
one of those tangible expressions every day of what you
value and where you place your trust and what your
priorities are, are spending really illuminates that. Now, that's not
meant to make you feel bad, but it's meant to
help you think about the responsibility you and I have
(06:44):
been given as money managers of the King of Kings.
And so when we start with the idea that God
owns it all, and then we recognize money as a tool.
It's not an end. It's a means to an end.
And then we live out those principles we see in
Scripture that we're to work hard with our hands, and
we're to save appropriately and give generously. Because guess what?
That breaks the grip of money over our lives. And
(07:07):
we're to use money as a powerful force for good
as we live within God's provision, and we invest, and
we give in a way that aligns with the heart
of God. All of those are key ideas. And each
day on this program, we want to help you do
just that. So the only thing we need is your questions,
because we want to tackle those very specific things going
on in your financial life today. And the good news
(07:29):
is we've got lines open for you. So if you
want to call right now we're going to dive into
those questions here in just a moment. The number 800
525 7000. That's 800 525 7000. Our team is standing by.
And whatever's on your mind today, maybe it's your spending
plan and how you live within God's provision. Maybe it's
paying off debt once and for all. Perhaps you want
(07:51):
to give generously and you're just wondering how to do that.
How much goes to my local church? What about giving
beyond my local church? Maybe it's navigating this stock market. Boy,
it's been a roller coaster as of late. Good news
today is green across the board. The market's been moving higher.
But what about longer term. And how do you think
about your retirement plan. We can deal with any of
those questions and more. Again the number to call right
(08:13):
now 800 525 7000. No waiting. You can get right
through right now. We'll begin taking those here in just
a moment. In the news today, the administration's tariff policies
have Wall Street and Main Street worrying about higher prices
affecting the economy. Now, one big budget item isn't getting
(08:34):
more expensive. In fact, it's getting cheaper. And that's gasoline.
Gas prices have steadily declined in recent weeks, going against
the usual seasonal trend of higher prices at the pump
during the spring and summer travel season. According to triple A,
the national average for a price of a gallon of
(08:55):
gas is $3.17. That's down a half dollar from $3.67.
That's what drivers were paying a year ago on this date.
And here's an interesting stat from GasBuddy. The drop in
gas prices is saving U.S. drivers a whopping $200 million
every day. I know, it's incredible. Now, why have fuel
(09:18):
prices gone down? Well, two big reasons. They both involve oil. Gasoline,
of course, is extracted from crude oil, so the price
of gas follows behind that of oil. When President Trump
announced reciprocal tariffs, oil prices came down out of concern
over a possible global economic slowdown. The price of crude
(09:39):
fell 15%, dipping below $60 a barrel for the first
time since 2021. Also oil producing nations have pledged to
raise production levels, giving investors confidence that fuel supplies will
remain plentiful. We've certainly seen that here in the US.
You know, one of the hallmarks of President Trump's campaign
(10:00):
was drill, baby drill, and he's making good on that.
So as we see production go up, prices come down.
Bottom line, gas prices are the lowest they've been in
a while. And maybe just in time for that summer
driving vacation you've been wanting to take. So a little
good news and hopefully taking some pressure off that family budget.
(10:20):
All right. We're ready to dive into your questions today. Again.
We've got still some lines open. So if you want
to get in on the conversation with any financial question,
call right now 800 525 7000. Again that's 800 525 7000.
Karen called. She couldn't hold, but she and her husband
have an annuity. And they're wondering about charitable Giving out
(10:45):
of an annuity. And you know, I love this question
because when we've got, uh, an investment asset and we're,
we're wanting to think about how we can give generously,
you know, your balance sheet is your greatest potential for
giving far more than your cash. You know, 90% of
giving is done in the form of cash, but only
(11:06):
about 10% of our wealth is held in the form
of cash, um, which allows you a great opportunity. If
you think about how to give from your balance sheet,
you're going to give far more than you ever could. Now,
with regard to an annuity, and that was, I think,
the question Karen was hitting on. It does allow you
(11:27):
through a charitable gift annuity, uh, to fund the work
of a ministry and receive lifetime income while you're living.
So here's the way it works. You would essentially make
a gift into a charitable gift annuity and a ministry,
let's say the Moody Bible Institute. In exchange for that,
they give you an income stream for life based on
(11:48):
your age and the amount of money that you put in.
And then you get a partial tax deduction as the
money goes in. Once you pass away whatever is remaining
after your death, that then is given to the ministry
or the charity. And so it's really a great opportunity
for folks in that retirement season of life looking for income,
(12:10):
also wanting to bless a ministry that's on their heart.
You can kind of do both at the same time
and get some tax advantages. So when we think about
giving and annuities, the charitable gift annuity is really that
primary vehicle. The other approach, if you just have kind
of a vanilla flavored annuity and another type of annuity,
really your your best opportunity there is just to take
(12:33):
a straight withdrawal from that annuity and then donate those
proceeds to a charity that would help offset any of
the tax bite you get by taking the withdrawal. But
if you know you want to fund a ministry and
you're looking for income, that's where that charitable gift annuity
can really shine. By the way, when it comes to
(12:54):
giving off of your balance sheet, some of the more
common opportunities that are overlooked are number one appreciated stock. Now,
I realize stocks have been under pressure lately. Maybe you
have less appreciated stock than you had six months ago.
I get that, but if you do have appreciated stock,
you have an opportunity there to give the stock away
(13:16):
before it's sold. So you'd give it to the ministry.
You get the full tax deduction for the the full
amount even before any taxes are paid. And then when
the ministry sells it, no capital gains whatsoever. And so
don't overlook that opportunity to give off of your balance
sheet in a way that could allow you to give more.
(13:36):
Bless a ministry on the heart of God. And you
know not miss, uh, the balance sheet side of the equation. Uh,
another opportunity. There would be, uh, gifts of a business interest.
Also gifts of a real estate interest. And, uh, a
lot of those will use what's called a donor advised fund.
And our friends at the National Christian Foundation can help
(13:59):
you out with that if you're interested in learning more.
All right, folks, we're just getting cranked up here today.
We're ready to take some of your calls right after
this break. Now's the time to go ahead and call.
Our team is standing by. Here's the number 800 525
7000 again. That's 800 525 7000. This is Faith in finance.
Live right here on Moody Radio. And we'll be back
(14:21):
with much more right after this break. Stay with us.
Great to have you with us today on Faith and
finance live here on Moody Radio. Well, the lines are
filling up. The questions are coming in. I've got room
(14:42):
for two more questions at 805, two five, 7000. Let's
dive right in. Hi. And thanks for calling from Chicago.
Go ahead.
S4 (14:51):
Hi. Thank you for taking my call.
S1 (14:55):
Sure.
S4 (14:55):
I, um, I just recently retired, so I have a
pension check, and I just received a check, um, of, like,
I guess the last amount that I should get of 20, like, $20,000.
And I really don't know what to do with the
$20,000 right now. Um, I have the IRA, I have
a Roth. I have, um, a little savings. I have, um,
(15:18):
annuity that I probably be able to get next year
at 59. Um, I have I think I have 2
or 3 annuities. So I, you know, the 501, what
is the k 401 K? Um, those 401 k. I'm sorry. Yeah, sure. And, um,
I haven't really talked, you know, to a financial planner
to even know what my status is on that right now,
(15:40):
being hearing things about the market. But I don't know
what to do with my 20,000.
S1 (15:44):
All right, well, it's a good problem to have, uh,
better to have 20,000. You don't know what to do
with than a bunch of bills you don't know how
to pay for. So I think you're in a good
spot there. I would agree, I think a financial advisor is, uh,
really a key next step for you, uh, because you're
recently retired, you've got it sounds like a number of
retirement assets. And, you know, you've spent your lifetime amassing
(16:07):
this wealth. The last thing we want to do is
just put it on autopilot. So I think connecting with
a certified Kingdom advisor there in Chicago could be a
really great next step. You can do that on at
our website, Philly.com, Philly.com. Click Find a professional. And I'd
interview 2 or 3 to find the one that's the
best fit. But let's get back to your original question.
(16:28):
So what do we do with this 20,000? Is it taxable?
I'm assuming it is.
S4 (16:34):
Yes. They took money out of it already okay.
S1 (16:36):
Got it. So what you have left over is around 2021.
Exactly 21. Okay, great. And do you have what I
call an emergency fund? 3 to 6 months expenses and savings?
S4 (16:49):
Not really. No. Okay I don't.
S1 (16:51):
So I think you do now. Go ahead. Yeah.
S4 (16:57):
I think I have a Roth, and I have a
little Annette. Okay. I and I think I can get
to that.
S1 (17:04):
Yeah. Yeah. I think the key is though, with with
retirement accounts like a Roth or a 401 K, you
really want to keep them invested. I mean, you should
have a, you know, a nice mix of stocks and
bonds and, you know, you want to let that continue
to grow for you. If at some point you needed
to draw an income from any of those to supplement
whatever other income sources you have, I think that's great.
(17:25):
But in terms of you having a liquid account in
a high yield savings, um, that's ready and available for
the unexpected, I would say you'd want at least six
months worth of expenses. So if you're spending, you know,
4000 a month, I'm just throwing out a number. I
have no idea. You know, you'd want 24,000. Well, that's
just about, you know, what you have with this 21,000.
(17:47):
So I would say if you don't have that emergency fund, um,
I would say this is the beginning of that. So
what I would do is either connect with our friends
at Christian Community Credit Union. You could go to join
Christian Comm. Uh, we talked to Erin Kate earlier about this.
Or if you want to just look for that online
bank that has the very best interest rate across all
(18:10):
the banks, secular and Christian. You could go to Bankrate.com,
but I think the key there would be if it's
not in your checking account. So it's removed from your
kind of typical monthly operating account. So it's not as
easy to get to to spend, but it's still liquid
and secure. But it's also earning some interest, you know,
so if you have, uh, $21,000 and let's say you
(18:33):
get 4%, which is pretty typical right now. I mean,
you'd have nearly $1,000 a year from now on top
of the 21,000. But the key is it's there and
it's available if the unexpected comes. So you're not having
to sell stocks in a Roth or a 401 K,
and you're certainly not having to take on any debt
to cover unexpected expenses. Does that make sense?
S4 (18:56):
That makes really good sense because I just thought of something.
Thank you. Yes. Okay.
S1 (19:02):
Very good. Well, listen, all the best to you and, hey,
stay on the line. I want to send you a book.
It's called An Uncommon Retirement. It's written by my friend
Jeff Hanan, and it unpacks kind of how we should
think as Christ followers about this next season of life
as we head in to retirement. So you stay on
the line, we'll get your information. We'll send that out
as our gift to you. We appreciate you calling today.
(19:23):
Let's go south to Florida and we go from Ann
to Anna. Anna, how can I help?
S5 (19:29):
Hi. Yes I have I currently have a Roth IRA
for National Life Group. It was opened in 2013. It's
past the surrender fee date, but it's not earning me
hardly anything. I don't know what to do. I'll be
66 in July and I'm single. I have no one
(19:50):
to depend on, so I don't know what to do
with this.
S1 (19:53):
Yeah. Do you have other investable assets, Anna, besides this
Roth IRA annuity?
S5 (19:59):
I have an F and g annuity that's also not up.
I'm not happy with. I just don't know what.
S1 (20:07):
Yeah. How much is in that?
S5 (20:10):
Um, roughly 41,000.
S1 (20:14):
Okay. And then, I mean.
S5 (20:15):
So I have I also have I think that one
is 54. Okay. They've all. I'm not I think one
of them has an income rider.
S1 (20:25):
Yeah.
S5 (20:25):
It's just that I'm losing money every year and. Yeah.
I was, you know, well. And my parents are gone,
and now I'm trying to deal with this.
S1 (20:33):
Yeah, well, and the nice thing is, if you put
all those together, you've got a nice little nest egg there.
I think the key is how do you manage it
moving forward so that it's actually growing and it can
continue to grow so that when you need it for
your expenses, whether that's long term care or something else,
it's there and you can begin to draw on it.
I'll tell you, you know, we could talk about how
(20:55):
you would invest it yourself, and you certainly can do that.
I think connecting with an advisor there in Florida, somebody
who could look at all of these accounts and talk
to you about how they could be repositioned, perhaps taken
out of those those insurance companies, especially now that you're
beyond the surrender charge period and rolling those out, if
(21:15):
that's qualified money, maybe to an IRA, consolidating them and
then investing them at 66, you know, you might want
to think about having a 60 over 40 portfolio where 60%
is in bonds, 40% in In stocks. You could even
be a little more aggressive than that if you wanted to.
But the idea would be you'd take a long term perspective.
(21:35):
Even once you hit retirement, you still need to have
this money last for decades, potentially. And so we still
have the ability to have a long time horizon, get
it invested. So it's growing for you, but it's still liquid.
So if you ever need it you can pull it out.
I'd connect with an advisor there in Florida. Just go
to.com and click Find a Professional. Thanks for your call.
(21:56):
We'll be right back. Great to have you with us
today on Faith in finance live here on Moody Radio.
I'm Rob West. We're taking your calls and questions. Got
just a couple of lines open 800 525 7000. Again.
That's 800 525 7000. Let's go back to Chicago. Hi, Bob.
(22:20):
Go ahead.
S6 (22:22):
Hey, Rob. Thanks for taking my call. Can you hear me? Okay.
S1 (22:25):
I sure can, yeah.
S7 (22:27):
Okay, I just have a quick.
S6 (22:29):
Question in regard. My daughter wanted me to call in
and she's got two, uh, loans that equal roughly about 15,000. Um,
and I apologize, I don't, uh, the, the loan, um, uh,
server or servicer I think is called Mohela.
S1 (22:48):
I don't know. Yes. Right. That's one of the federal
loan servicers.
S7 (22:52):
Okay.
S6 (22:53):
And that's who you know. So she's got two separate loans.
And my question, or I should say her question is,
is I think it's September. The you know, the interest
that's been deferred, I think is going to start back in. And, um,
you know, they're wondering and I, I know they've heard
quite a few times like if you have a loan,
(23:15):
this may not apply to federal loans, but if let's
just say they have 13,000, you know, ready to go,
are you able to call up and negotiate and say, hey, look,
I've got this. If I pay it off right now,
do you know what a federal loan will they be
willing to work with you or. Um, yeah, I was
(23:37):
going to say. Or the other option is I don't
know what the interest rate would be, you know, would
they would you recommend just paying it off if you
got the money or, you know, do you half or what?
S1 (23:49):
Yeah. Good question. Uh, for to the first part of
your question, no, uh, federal loans are not able to
be negotiated and only when and there's strict rules around
this when they enter default, which is about nine months
of missed payments at that loan, they're assigned to the
Department of Education's default resolution group, uh, or a private
(24:10):
collection agency. But even then, settlements typically require paying a
significant portion of the balance, often 90% or more. So
that's just, you know, a pretty risky approach. I wouldn't
take that at all with this being a federal loan. Um,
you know, option with that federal loan servicer. They're not
(24:31):
going to negotiate. So I would I would be focused
on getting this paid off now. The only reason why
you wouldn't pay it off immediately would be if you
don't have the money to, or you or she may
qualify for one of the loan forgiveness options, you know,
which would basically be the most common is the public
service loan forgiveness, where she works for a qualifying employer
(24:54):
or government or a nonprofit. And she has to make
those ten years of, you know, qualifying payments, 120 payments or,
you know, she qualifies for one of the income driven
repayment options. But do you know if she qualifies for
public service loan forgiveness?
S7 (25:12):
You know, that's.
S6 (25:13):
A I'll have to, you know, I'll, you know, relisten
to it and write down, uh, you know, I'll have
to have her look into it. Um, I know she
works for, uh, a hospital right now, but I don't know.
You know what I mean? Uh, yeah. To what extent? Um,
but you would look into that.
S1 (25:29):
Uh, I would, yeah, I mean, that that could be
an option. And so I would say if she qualifies
for public service loan forgiveness, I would say, then just
start making the payments until she reached the 100, reaches
the 125 or excuse me, 120 qualifying payment mark. So
ten years and then the rest would be forgiven. And
that's just a that's a program that's been in place
(25:51):
for a long time. There is some specific requirements around it.
So not all you know options would exist there just
depending on who she works for and and what you know,
what locale. But I would explore that. Apart from that,
I would say tell her that the settlement option, she
should just take off the table. And if she's not
going to qualify for loan forgiveness, then I would say,
(26:12):
let's just balance this against other priorities, namely, you know,
other consumer debt with a higher interest rate or, you know,
starting to save for retirement, not to mention, you know,
her emergency fund. But assuming she's making progress on all
of those, then I think her getting this paid off
just as soon as she can is a key idea.
S6 (26:32):
Okay. Sounds great. Okay. Like I said, I'll get her
the info and we may call you back then. Okay.
Thank you so much for your time, Rob.
S1 (26:39):
Thank you. Absolutely. God bless you, Bob. Thanks for calling today.
We appreciate it. 800 525 7000. Ada is in Tennessee. Hi, Ada.
Go ahead.
S8 (26:48):
Hello. Thank you for taking my call. I have a
question about charitable giving from a required minimum distribution.
S1 (26:58):
Okay.
S8 (27:00):
I am executor for my father's estate, and I'm not
73 yet, but he obviously was older. And last December,
I was surprised by the estate planner calling me and saying,
we have to take an order. Please come in and
sign the paperwork. But this year I want it to
(27:21):
go to a charitable organization. Um, how do we set
that up?
S1 (27:27):
Okay, so, uh, what is your age?
S8 (27:31):
I'm 67.
S1 (27:32):
Okay. Got it. Yeah. So if you are, in order
to do a qualified charitable distribution, you have to be 70.5. Um,
so as a non-spouse inherited IRA, if he was already
taking the RMDs before he passed, and it sounds like
he was correct.
S8 (27:52):
Yes.
S1 (27:52):
Okay. Then you would typically and I would check with
your CPA on this, but typically you would have to
at a minimum, continue to take required minimums. And then
you'd have to fully deplete the IRA, you know, within
ten years. Um, and until you're 70.5, you can't do
a qualified charitable distribution.
S8 (28:14):
All right. When I reached 70.5, then we can begin
to use Is his IRA until it's depleted.
S1 (28:24):
Uh, yes. Exactly right. Uh, so you would be able to, um,
send directly to a charity, uh, out of the inherited
IRA once you are 70.5 or older, provided that inherited
account is a traditional IRA. But if it is, then
you could go right out of, uh, the IRA to
(28:45):
a qualified charity that would ensure that you're meeting those
required minimums and depleting the account, and it doesn't get
added to your taxable income for the year.
S8 (28:56):
All right. So at the time that I'm 70.5, I
will also be eligible to use my RMDs from my
own IRA. Correct.
S1 (29:07):
That's. Yes. Exactly right. Mhm. So you would be.
S8 (29:12):
Able to designate which whichever churches or charities that I
give them to.
S1 (29:19):
Yeah, that's exactly right. So long as you're 70.5, you're
able to put, uh, to do up to $105,000 for 2025.
And that number will likely continue to grow each year.
Last year it was 100,000. This year it's 105. But
that's the amount you're able to take out of, uh,
you know, per individual across all of your IRAs.
S8 (29:43):
Thank you. Thank you.
S1 (29:45):
Okay. You're very welcome.
S8 (29:46):
Just need to wait three years and then I'll be
eligible to do that.
S1 (29:50):
That's exactly right. Just make sure you're taking out at
least enough to satisfy that required minimum from that inherited IRA.
Since he had started taking RMDs before he passed away.
And your CPA can make sure that you're you're taking
enough out each year that will be taxable. But it
is a requirement from the IRS. We appreciate your call. Ada,
thanks for being on the program today. Well, folks, we're
(30:12):
going to take another break. When we come back, we'll
have one more segment. We'll get to as many calls
as we can. We have some good ones coming up.
You know, if you've found benefit in this program, maybe
you listen regularly. It's been a blessing to you. Maybe
you've been able to apply something you've heard. Well, we'd
like to invite you to become a faithful partner as
a listener supported ministry. Faithful partners are a key part
(30:34):
of helping us fund this work and reach more people
with this message of biblical stewardship. Faith five partners give
$35 a month or more, and as a way of
saying thanks, we send some resources to encourage you in
your stewardship journey for issues of our magazine, Faithful Steward
and studies and devotionals two per year, both of them
coming out brand new next month. Faithfully. We'll be right back.
(31:03):
Great to have you with us today on Faith in finance.
Live here on our final segment today. Let's get to
a few more questions. Uh, back to Chicago, talking to
a lot of, uh, folks from Chicagoland today. Hi, May.
How can I help you?
S9 (31:17):
Yes. Um, I'm calling regarding a Roth IRA. Yes, ma'am. Um,
I purchased a Roth, uh, with the. Because I do
not have to make withdrawals. Right. Um, required minimum withdrawals. Now,
(31:37):
my question is, do my children, when they, um, um,
inherit the Roth, do they have to make withdrawals?
S1 (31:49):
Yeah. It all comes down to who or to the
relationship of the inheritor of that Roth IRA. So if
it's a spouse, they can just roll it to their
own Roth IRA and treat it as if it was
their own from the beginning. If it's a non-spouse beneficiary
and they're not, uh, you know, eligible for any exceptions because,
(32:11):
you know, they have, uh, maybe a disability or something
like that, but a typical non-spouse beneficiary, um, they would
be subject to the ten year rule. So this coming
came into place through the Secure act 2.0 in 2022.
And so typically adult children would then have to empty
(32:31):
the entire Roth IRA by December 31st of the 10th
year after your death. Now, there's no required minimums because
unlike traditional IRAs, uh, Roth IRAs are not required to
take annual RMDs. So they would just need to make
sure they take the money out completely by the 10th
year following your death. And when they take it out,
(32:53):
there's no tax on it, so long as that account
had been, you know, open for at least five years.
S9 (33:00):
I see. Okay. So your children cannot inherit this just
like a cash, um, inheritance.
S1 (33:10):
Well, they can in the sense that they can get
the money out tax free, but they can't just leave
it there and let it go forever. They would be
subject to that ten year rule.
S9 (33:21):
Ten year rule. All right. Well, thank you very much.
All right. Very helpful.
S1 (33:25):
Well, I'm so glad. May, thank you for calling today.
To Kansas City. Hi, Ralph. How can we help?
S10 (33:30):
Hi, Ralph. Um, my question goes back to the $8,000, um, maximum, uh,
that you can put in a Roth IRA if you're
over 50. And I was wondering if if that 150,000
is combined income with your wife or if it's just
your income.
S1 (33:50):
Yeah, it goes down to your filing status. And so
if you're filing married, filing jointly, which I assume you are,
is that right?
S10 (33:59):
Yeah.
S1 (34:00):
Yeah. Then it would be your modified adjusted gross income
from both of you. Because if you're married filing jointly,
both of your incomes are being combined and it's no
longer 150. Then if you're married filing jointly, you can
put in the full contribution. Uh, as long as you're modified.
Adjusted gross income is under 230,000 as married filing jointly,
(34:25):
you can do partial contributions between 230 and 240,000. And
then you eliminate the option over 240,000 a year.
S10 (34:35):
Okay. Well, that answers my question I appreciate it.
S1 (34:38):
All right. Happy to help. Thanks for your call. Let's
go to, uh, Michigan. Hi, Craig. How can I help?
S11 (34:44):
Hey, Rob. Um, well, talking about life insurance. Um, I
have about 130 K, uh, between two IRAs. I owe
about 125,000 on my mortgage. And, uh, which I have
a very good interest rate on. Likewise, I have about
15,000 on an auto loan. Very good rate on that.
(35:07):
I have a Hundred and $50,000 term life policy that ends,
I believe, in 2027. So I'm I'm shopping. I guess
the question is, how much should are you in favor
of life? Uh, life insurance. Um, you know, how much
(35:28):
should I buy? That kind of thing?
S1 (35:30):
Yeah. You know, it really comes down to what are
we trying to insure against and with life insurance, the
purpose of it is to offset the risk that if
you were to pass away before your wife, assuming she's
the only one, depending upon your income, uh, then that
would create a hardship. Because if your income goes away,
then she may not be able to maintain her lifestyle,
(35:53):
you know, with just those two IRAs and and whatever
else you have in the, in the savings account. Um,
so the life insurance is there to provide a lump
sum payment that could be invested, that she could use
to offset that loss of income. So that's really the
primary thing. And so the idea would be especially with
term life insurance which I like, pure insurance the most
(36:16):
cost effective. The idea would be that we're saving outside
of that in IRAs and 401 S and other assets
such that when you transition away from paid work to
whatever God has for you in that fourth quarter, that
you no longer have a need for that life insurance,
you drop it because there's no longer that risk. If
you were to pass away, she still has all the
(36:38):
marital assets that you all have accumulated, and she's not
depending on your income. She's no longer depending upon your income. Um,
does that make sense?
S11 (36:47):
Yeah, that's absolutely 100% on board with all of that.
S1 (36:50):
Yeah. So then the question would be when is how
long is that? Is that now, is that five years
from now? Is it longer?
S11 (36:57):
Well, um, I'm on track to have my mortgage paid
off in ten years. Um, I'm 61. I would like
to retire at 67, but I, you know, I just
I don't know. I don't know if I'll financially be
in the, in that spot by then. I am saving, um, uh,
(37:19):
aggressively as much as I can. I think I'll like 13%
or something like that in my IRAs. Um.
S1 (37:26):
So so then I think the opportunity for you right now, Craig,
is even while you've got this existing policy that's going
to run through 2027, perhaps while you're still relatively young
and and hopefully in good health, this might be the
time to see if you can qualify for a new
ten year term policy that gives you enough coverage so
that if you were to predecease her, she has a
(37:49):
payout that would essentially allow her to, you know, pay
off the house and also have whatever else she needs
beyond Social Security and whatever other income sources she'll have
to maintain her lifestyle. And that would probably be better
to do today because something could happen where you become
uninsurable five years from now. And if you were able
(38:11):
to get that policy that fits your budget and gives
you enough death benefit for a for a ten year period,
with the expectation that when those ten years are up,
you no longer need life insurance. Once that's enforced, then
you could drop the existing policy.
S11 (38:25):
Right. Okay. That's great. Then is there do you have
a idea on, uh, on an amount that I should
try and purchase?
S1 (38:34):
Yeah. So I think it really depends upon what we're
trying to solve for. I mean, if it's income, typically
we would say 10 to 12 times the income you're
trying to replace. So, you know, if you're trying to replace, well,
tell me, what would that number be. You'd be wanting
to replace that. She would lose.
S11 (38:53):
That's um, I think last year I made close to 80.
S1 (38:58):
Yeah. Okay. So, I mean, we're probably talking somewhere between,
you know, 750,000 and $1 million in term life insurance.
S11 (39:06):
Wow. Okay.
S1 (39:08):
Yeah. And the idea there. Well, and the idea is,
if we were to then take that 750,000, um, you know,
and invest that. And she pulled 4% a year, you know,
she could pull 30,000 a year and never deplete the 750.
If if she wanted to pull more than that, she's
probably going to be slowly depleting it, like, let's say,
(39:29):
you know, if you if you want to get up
to 80,000, um, you know, she'd probably, you know, need
$1 million and she'd have to, you know, pull 8%
a year. Well, you know, that money's not going to
last forever. So, you know, I think when we're when
we're looking at how to replace income. Now, one thing
you could do would be factor in what retirement assets
(39:49):
already exist. And so if your ultimate goal is, you know,
to have, uh, you know, I don't know, whatever that
number is $1 million in the bank plus Social Security. Um,
and you, you know, you already have 250,000. Well, you know,
now you're not solving for that full million. So I
think it really comes down to what assets do you
(40:10):
have now. And every year you're building more um, and
then what are you trying to replace? And, you know,
we can back into what that number is that could
generate that kind of income per year without depleting that
account too quickly. Ideally, it would last, you know, well
into her 90s.
S11 (40:29):
Right. Okay. Yeah. Fantastic.
S1 (40:31):
All right. Thanks, Greg. We appreciate your call today. Uh,
let's see. We're going to go to, uh, Illinois. Diane.
Go right ahead.
S12 (40:39):
Hi. Um, okay. I used to be poor. It was like,
25 years ago. I was extremely poor. Okay. I went
I filed bankruptcy for $3,500. Now I get my my
dead husband ex-husband's social security, and I would like to
(40:59):
see about. possibly paying that back. Okay, on my visa
card because of a family member, I owe 4000, and
I don't know if I can go back to a
credit union because I heard you say on the phone,
that's better than a bank.
S1 (41:19):
Yeah. And who are you trying to pay back? Is
it the creditors that were discharged under the bankruptcy or
somebody else?
S12 (41:26):
Well, I filed bankruptcy with the credit union. I mean,
that's what it went through, I believe. It's been a while.
I'm sorry.
S1 (41:35):
That's okay. Yeah. And so I appreciate that you are
now in a much stronger position. I'm just trying to
understand exactly who is it that you're trying to make whole.
What were the debts that you that were not paid
that you're trying to pay?
S12 (41:52):
Okay. The ones from, like, like 25 years ago. I'd
have to go back and look at my papers. Exactly.
I believe it was just a credit card with the
credit union, but I have to go back and double
check that.
S1 (42:05):
Yeah, the challenge is I. Boy, I so appreciate your
desire to, uh, to steward this money. Well, and and
to honor your obligations. What's going to happen is they're
going to tell you. Listen, number one, it was charged off.
You know, number two, you know, we probably can't even
accept that payment against that account because it's so long gone.
In fact, they probably collected a little bit of insurance
(42:28):
on it anyway because they insure these accounts. Um, so
you could reach out to them and say, listen, I
just feel convicted that I want to honor this obligation
from a bankruptcy 20 years ago. I suspect they're not
going to be able to take it, but you could
at least try, Diane. And maybe what you find is
you just end up giving that money to the Lord as, uh,
(42:49):
because you're not able to to pay it. Otherwise. I'm
out of time today. Thanks for calling. Faith and finance
is a partnership between Moody Radio and Faith by.
What's the difference between a bank and a credit union?
More than you might think. Hi, I'm Rob West. At
first glance, banks and credit unions can seem pretty similar
as they both offer valuable financial services. But dig a
little deeper and you'll find that credit unions can be
a powerful partner for managing money. Aaron Cade joins us
to explain why. Then we'll take your calls at 800,
(00:31):
525 7000. That's 800, 500, 25, 7000. This is faith
in finance. Live biblical wisdom for your financial decisions. Well,
it's always educational. When Aaron Cade joins us. He's the
chief marketing officer at Christian Community Credit Union, a faith
based financial institution and a not for profit underwriter of
(00:54):
this program. Aaron, great to have you back.
S2 (00:57):
Thank you. Rob, it's great to be back with you.
S1 (00:59):
Aaron Banks play a key role in our economy. No doubt.
But what sets credit unions like Kccu apart and gives
them a unique place in the financial world?
S2 (01:11):
Well, first and foremost, credit unions are not for profit
cooperatives owned by their members. So the focus is on
long term member relationships and service is preeminent at Kccu.
Our mission is rooted in striving to serve and love
others like Christ.
S1 (01:26):
Yeah, and that really is a differentiator. No doubt. Uh, we,
of course, get a lot of questions from listeners who
want to do their banking with a financial institution that
aligns with their Christian values. Talk about why that's so important.
S2 (01:39):
Well, I think Jesus said it best in Matthew 621,
for where your treasure is, there your heart will be also.
So how you use your money reflects your values and
shapes your heart. Where you choose to bank should as well.
At Kccu we try to help you align your finances
with your biblical worldview. View. For example, we provide affordable
(02:00):
financing to build new churches and to help Christ centered
ministries grow. Thus, we aim to ensure that your money
doesn't just earn you a great rate, it also helps
expand God's kingdom.
S1 (02:09):
Yeah. And I love that about your work at Kcu.
You know that you're working with an institution aligned with
your values, but you also know a portion of every
dollar is going to some incredible kingdom building work. Now, Aaron.
Many people assume credit unions can't match banks when it
comes to rates. Is that actually true?
S2 (02:28):
No. Not really. In fact, the opposite is often true.
We don't exist to make profits for shareholders. The profits
we earn are returned to members in the form of
better rates and lower fees. And at Kcu, we donate
a portion of earnings to Christian ministries. So we take
biblical stewardship seriously. Thus, our products are designed to help
members honor God with their finances.
S1 (02:49):
Yeah. And in practical terms, Aaron, what are some of
the products then that Kcu offers to individuals and perhaps
you can even give us some of the rates that
you offer as well.
S2 (02:59):
Sure. I mean, rates can change with market conditions, but
I'll speak to today's rates. Our harvest checking account offers
a high yield of 4% APY on deposits up to $5,000,
and there are no maintenance fees. The Harvest High Yield
Savings Account pays 5% APY on deposits up to $5,000,
and the welcome CD, which is a great introductory vehicle
(03:20):
for new members, offers five and ten month terms that
pay between four and a half and 4.75% APY. And
we offer the only credit card I'm aware of that
not only earns you 1.5% cash back on every purchase,
but also gives to Christian causes with every swipe. In addition,
we offer vehicle loans, mortgages and helocs at competitive rates.
(03:40):
And all of this comes with full service digital banking
and 24 over seven member support. And importantly, we also
offer resources from trusted partners including Faith Fi and Compass
Financial Ministry that help members grow in their financial Discipleship.
S1 (03:55):
Mm. Yeah, I love that. And, uh, boy, a lot
of our listeners right now may be surprised to hear
how competitive those rates are, alongside the great support and
the alignment with the Christian ministry. Now, let's talk about
that support of ministries for a moment. How does that
actually work at Kcu?
S2 (04:12):
Well, we specialize in ministry lending and banking. Um, we
offer property loans, equipment loans, operating accounts and even high
yield savings for reserve funds. Um, with 68 years of
experience and over $1 billion in ministry loans funded, we
understand the financial needs of ministry. So we're not just
funding projects, we're partnering in gospel advancement. Our giving supports
(04:35):
ministries that spread the gospel, combat human trafficking, protect vulnerable children,
and provide disaster relief. In fact, we've given over $6.5
million to date back to Christian causes.
S1 (04:45):
Incredible. Just a few seconds left, Darren. How does somebody
become a member of Kcu?
S2 (04:50):
Well, membership is open to Christians and Christian ministries Nationwide.
You can join through your affiliation with your church, ministry
or school, or you can join via our partner charity,
Christian Alliance for orphans, or even via a family member.
With our new streamlined application process, it's never been easier
to become a member of the Christian Community Credit Union family.
All you have to do is visit join Christian Community.
(05:10):
Com to get started.
S1 (05:12):
Awesome. That's Aaron Kade. Aaron, we appreciate your time today.
Thanks for stopping by.
S2 (05:16):
Thank you so much Rob.
S1 (05:17):
The website folks. Join Christian community.com. We'll be right back.
S3 (05:35):
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.
S1 (06:00):
Great to have you with us today on Faith in
finance live. I'm Rob West. Well, this is the program
where we help you live as a wise and faithful steward.
How do we do that? Well, we gather together each
day during this hour to mine the scriptures, to talk
about the big themes we see on the heart of
God as it relates to money, to live out a
biblical worldview and recognize. And here's one of the big ideas,
(06:21):
is that our financial journey is one of the key
ways God shapes our spiritual journey. Think about it. It's
one of those tangible expressions every day of what you
value and where you place your trust and what your
priorities are, are spending really illuminates that. Now, that's not
meant to make you feel bad, but it's meant to
help you think about the responsibility you and I have
(06:44):
been given as money managers of the King of Kings.
And so when we start with the idea that God
owns it all, and then we recognize money as a tool.
It's not an end. It's a means to an end.
And then we live out those principles we see in
Scripture that we're to work hard with our hands, and
we're to save appropriately and give generously. Because guess what?
That breaks the grip of money over our lives. And
(07:07):
we're to use money as a powerful force for good
as we live within God's provision, and we invest, and
we give in a way that aligns with the heart
of God. All of those are key ideas. And each
day on this program, we want to help you do
just that. So the only thing we need is your questions,
because we want to tackle those very specific things going
on in your financial life today. And the good news
(07:29):
is we've got lines open for you. So if you
want to call right now we're going to dive into
those questions here in just a moment. The number 800
525 7000. That's 800 525 7000. Our team is standing by.
And whatever's on your mind today, maybe it's your spending
plan and how you live within God's provision. Maybe it's
paying off debt once and for all. Perhaps you want
(07:51):
to give generously and you're just wondering how to do that.
How much goes to my local church? What about giving
beyond my local church? Maybe it's navigating this stock market. Boy,
it's been a roller coaster as of late. Good news
today is green across the board. The market's been moving higher.
But what about longer term. And how do you think
about your retirement plan. We can deal with any of
those questions and more. Again the number to call right
(08:13):
now 800 525 7000. No waiting. You can get right
through right now. We'll begin taking those here in just
a moment. In the news today, the administration's tariff policies
have Wall Street and Main Street worrying about higher prices
affecting the economy. Now, one big budget item isn't getting
(08:34):
more expensive. In fact, it's getting cheaper. And that's gasoline.
Gas prices have steadily declined in recent weeks, going against
the usual seasonal trend of higher prices at the pump
during the spring and summer travel season. According to triple A,
the national average for a price of a gallon of
(08:55):
gas is $3.17. That's down a half dollar from $3.67.
That's what drivers were paying a year ago on this date.
And here's an interesting stat from GasBuddy. The drop in
gas prices is saving U.S. drivers a whopping $200 million
every day. I know, it's incredible. Now, why have fuel
(09:18):
prices gone down? Well, two big reasons. They both involve oil. Gasoline,
of course, is extracted from crude oil, so the price
of gas follows behind that of oil. When President Trump
announced reciprocal tariffs, oil prices came down out of concern
over a possible global economic slowdown. The price of crude
(09:39):
fell 15%, dipping below $60 a barrel for the first
time since 2021. Also oil producing nations have pledged to
raise production levels, giving investors confidence that fuel supplies will
remain plentiful. We've certainly seen that here in the US.
You know, one of the hallmarks of President Trump's campaign
(10:00):
was drill, baby drill, and he's making good on that.
So as we see production go up, prices come down.
Bottom line, gas prices are the lowest they've been in
a while. And maybe just in time for that summer
driving vacation you've been wanting to take. So a little
good news and hopefully taking some pressure off that family budget.
(10:20):
All right. We're ready to dive into your questions today. Again.
We've got still some lines open. So if you want
to get in on the conversation with any financial question,
call right now 800 525 7000. Again that's 800 525 7000.
Karen called. She couldn't hold, but she and her husband
have an annuity. And they're wondering about charitable Giving out
(10:45):
of an annuity. And you know, I love this question
because when we've got, uh, an investment asset and we're,
we're wanting to think about how we can give generously,
you know, your balance sheet is your greatest potential for
giving far more than your cash. You know, 90% of
giving is done in the form of cash, but only
(11:06):
about 10% of our wealth is held in the form
of cash, um, which allows you a great opportunity. If
you think about how to give from your balance sheet,
you're going to give far more than you ever could. Now,
with regard to an annuity, and that was, I think,
the question Karen was hitting on. It does allow you
(11:27):
through a charitable gift annuity, uh, to fund the work
of a ministry and receive lifetime income while you're living.
So here's the way it works. You would essentially make
a gift into a charitable gift annuity and a ministry,
let's say the Moody Bible Institute. In exchange for that,
they give you an income stream for life based on
(11:48):
your age and the amount of money that you put in.
And then you get a partial tax deduction as the
money goes in. Once you pass away whatever is remaining
after your death, that then is given to the ministry
or the charity. And so it's really a great opportunity
for folks in that retirement season of life looking for income,
(12:10):
also wanting to bless a ministry that's on their heart.
You can kind of do both at the same time
and get some tax advantages. So when we think about
giving and annuities, the charitable gift annuity is really that
primary vehicle. The other approach, if you just have kind
of a vanilla flavored annuity and another type of annuity,
really your your best opportunity there is just to take
(12:33):
a straight withdrawal from that annuity and then donate those
proceeds to a charity that would help offset any of
the tax bite you get by taking the withdrawal. But
if you know you want to fund a ministry and
you're looking for income, that's where that charitable gift annuity
can really shine. By the way, when it comes to
(12:54):
giving off of your balance sheet, some of the more
common opportunities that are overlooked are number one appreciated stock. Now,
I realize stocks have been under pressure lately. Maybe you
have less appreciated stock than you had six months ago.
I get that, but if you do have appreciated stock,
you have an opportunity there to give the stock away
(13:16):
before it's sold. So you'd give it to the ministry.
You get the full tax deduction for the the full
amount even before any taxes are paid. And then when
the ministry sells it, no capital gains whatsoever. And so
don't overlook that opportunity to give off of your balance
sheet in a way that could allow you to give more.
(13:36):
Bless a ministry on the heart of God. And you
know not miss, uh, the balance sheet side of the equation. Uh,
another opportunity. There would be, uh, gifts of a business interest.
Also gifts of a real estate interest. And, uh, a
lot of those will use what's called a donor advised fund.
And our friends at the National Christian Foundation can help
(13:59):
you out with that if you're interested in learning more.
All right, folks, we're just getting cranked up here today.
We're ready to take some of your calls right after
this break. Now's the time to go ahead and call.
Our team is standing by. Here's the number 800 525
7000 again. That's 800 525 7000. This is Faith in finance.
Live right here on Moody Radio. And we'll be back
(14:21):
with much more right after this break. Stay with us.
Great to have you with us today on Faith and
finance live here on Moody Radio. Well, the lines are
filling up. The questions are coming in. I've got room
(14:42):
for two more questions at 805, two five, 7000. Let's
dive right in. Hi. And thanks for calling from Chicago.
Go ahead.
S4 (14:51):
Hi. Thank you for taking my call.
S1 (14:55):
Sure.
S4 (14:55):
I, um, I just recently retired, so I have a
pension check, and I just received a check, um, of, like,
I guess the last amount that I should get of 20, like, $20,000.
And I really don't know what to do with the
$20,000 right now. Um, I have the IRA, I have
a Roth. I have, um, a little savings. I have, um,
(15:18):
annuity that I probably be able to get next year
at 59. Um, I have I think I have 2
or 3 annuities. So I, you know, the 501, what
is the k 401 K? Um, those 401 k. I'm sorry. Yeah, sure. And, um,
I haven't really talked, you know, to a financial planner
to even know what my status is on that right now,
(15:40):
being hearing things about the market. But I don't know
what to do with my 20,000.
S1 (15:44):
All right, well, it's a good problem to have, uh,
better to have 20,000. You don't know what to do
with than a bunch of bills you don't know how
to pay for. So I think you're in a good
spot there. I would agree, I think a financial advisor is, uh,
really a key next step for you, uh, because you're
recently retired, you've got it sounds like a number of
retirement assets. And, you know, you've spent your lifetime amassing
(16:07):
this wealth. The last thing we want to do is
just put it on autopilot. So I think connecting with
a certified Kingdom advisor there in Chicago could be a
really great next step. You can do that on at
our website, Philly.com, Philly.com. Click Find a professional. And I'd
interview 2 or 3 to find the one that's the
best fit. But let's get back to your original question.
(16:28):
So what do we do with this 20,000? Is it taxable?
I'm assuming it is.
S4 (16:34):
Yes. They took money out of it already okay.
S1 (16:36):
Got it. So what you have left over is around 2021.
Exactly 21. Okay, great. And do you have what I
call an emergency fund? 3 to 6 months expenses and savings?
S4 (16:49):
Not really. No. Okay I don't.
S1 (16:51):
So I think you do now. Go ahead. Yeah.
S4 (16:57):
I think I have a Roth, and I have a
little Annette. Okay. I and I think I can get
to that.
S1 (17:04):
Yeah. Yeah. I think the key is though, with with
retirement accounts like a Roth or a 401 K, you
really want to keep them invested. I mean, you should
have a, you know, a nice mix of stocks and
bonds and, you know, you want to let that continue
to grow for you. If at some point you needed
to draw an income from any of those to supplement
whatever other income sources you have, I think that's great.
(17:25):
But in terms of you having a liquid account in
a high yield savings, um, that's ready and available for
the unexpected, I would say you'd want at least six
months worth of expenses. So if you're spending, you know,
4000 a month, I'm just throwing out a number. I
have no idea. You know, you'd want 24,000. Well, that's
just about, you know, what you have with this 21,000.
(17:47):
So I would say if you don't have that emergency fund, um,
I would say this is the beginning of that. So
what I would do is either connect with our friends
at Christian Community Credit Union. You could go to join
Christian Comm. Uh, we talked to Erin Kate earlier about this.
Or if you want to just look for that online
bank that has the very best interest rate across all
(18:10):
the banks, secular and Christian. You could go to Bankrate.com,
but I think the key there would be if it's
not in your checking account. So it's removed from your
kind of typical monthly operating account. So it's not as
easy to get to to spend, but it's still liquid
and secure. But it's also earning some interest, you know,
so if you have, uh, $21,000 and let's say you
(18:33):
get 4%, which is pretty typical right now. I mean,
you'd have nearly $1,000 a year from now on top
of the 21,000. But the key is it's there and
it's available if the unexpected comes. So you're not having
to sell stocks in a Roth or a 401 K,
and you're certainly not having to take on any debt
to cover unexpected expenses. Does that make sense?
S4 (18:56):
That makes really good sense because I just thought of something.
Thank you. Yes. Okay.
S1 (19:02):
Very good. Well, listen, all the best to you and, hey,
stay on the line. I want to send you a book.
It's called An Uncommon Retirement. It's written by my friend
Jeff Hanan, and it unpacks kind of how we should
think as Christ followers about this next season of life
as we head in to retirement. So you stay on
the line, we'll get your information. We'll send that out
as our gift to you. We appreciate you calling today.
(19:23):
Let's go south to Florida and we go from Ann
to Anna. Anna, how can I help?
S5 (19:29):
Hi. Yes I have I currently have a Roth IRA
for National Life Group. It was opened in 2013. It's
past the surrender fee date, but it's not earning me
hardly anything. I don't know what to do. I'll be
66 in July and I'm single. I have no one
(19:50):
to depend on, so I don't know what to do
with this.
S1 (19:53):
Yeah. Do you have other investable assets, Anna, besides this
Roth IRA annuity?
S5 (19:59):
I have an F and g annuity that's also not up.
I'm not happy with. I just don't know what.
S1 (20:07):
Yeah. How much is in that?
S5 (20:10):
Um, roughly 41,000.
S1 (20:14):
Okay. And then, I mean.
S5 (20:15):
So I have I also have I think that one
is 54. Okay. They've all. I'm not I think one
of them has an income rider.
S1 (20:25):
Yeah.
S5 (20:25):
It's just that I'm losing money every year and. Yeah.
I was, you know, well. And my parents are gone,
and now I'm trying to deal with this.
S1 (20:33):
Yeah, well, and the nice thing is, if you put
all those together, you've got a nice little nest egg there.
I think the key is how do you manage it
moving forward so that it's actually growing and it can
continue to grow so that when you need it for
your expenses, whether that's long term care or something else,
it's there and you can begin to draw on it.
I'll tell you, you know, we could talk about how
(20:55):
you would invest it yourself, and you certainly can do that.
I think connecting with an advisor there in Florida, somebody
who could look at all of these accounts and talk
to you about how they could be repositioned, perhaps taken
out of those those insurance companies, especially now that you're
beyond the surrender charge period and rolling those out, if
(21:15):
that's qualified money, maybe to an IRA, consolidating them and
then investing them at 66, you know, you might want
to think about having a 60 over 40 portfolio where 60%
is in bonds, 40% in In stocks. You could even
be a little more aggressive than that if you wanted to.
But the idea would be you'd take a long term perspective.
(21:35):
Even once you hit retirement, you still need to have
this money last for decades, potentially. And so we still
have the ability to have a long time horizon, get
it invested. So it's growing for you, but it's still liquid.
So if you ever need it you can pull it out.
I'd connect with an advisor there in Florida. Just go
to.com and click Find a Professional. Thanks for your call.
(21:56):
We'll be right back. Great to have you with us
today on Faith in finance live here on Moody Radio.
I'm Rob West. We're taking your calls and questions. Got
just a couple of lines open 800 525 7000. Again.
That's 800 525 7000. Let's go back to Chicago. Hi, Bob.
(22:20):
Go ahead.
S6 (22:22):
Hey, Rob. Thanks for taking my call. Can you hear me? Okay.
S1 (22:25):
I sure can, yeah.
S7 (22:27):
Okay, I just have a quick.
S6 (22:29):
Question in regard. My daughter wanted me to call in
and she's got two, uh, loans that equal roughly about 15,000. Um,
and I apologize, I don't, uh, the, the loan, um, uh,
server or servicer I think is called Mohela.
S1 (22:48):
I don't know. Yes. Right. That's one of the federal
loan servicers.
S7 (22:52):
Okay.
S6 (22:53):
And that's who you know. So she's got two separate loans.
And my question, or I should say her question is,
is I think it's September. The you know, the interest
that's been deferred, I think is going to start back in. And, um,
you know, they're wondering and I, I know they've heard
quite a few times like if you have a loan,
(23:15):
this may not apply to federal loans, but if let's
just say they have 13,000, you know, ready to go,
are you able to call up and negotiate and say, hey, look,
I've got this. If I pay it off right now,
do you know what a federal loan will they be
willing to work with you or. Um, yeah, I was
(23:37):
going to say. Or the other option is I don't
know what the interest rate would be, you know, would
they would you recommend just paying it off if you
got the money or, you know, do you half or what?
S1 (23:49):
Yeah. Good question. Uh, for to the first part of
your question, no, uh, federal loans are not able to
be negotiated and only when and there's strict rules around
this when they enter default, which is about nine months
of missed payments at that loan, they're assigned to the
Department of Education's default resolution group, uh, or a private
(24:10):
collection agency. But even then, settlements typically require paying a
significant portion of the balance, often 90% or more. So
that's just, you know, a pretty risky approach. I wouldn't
take that at all with this being a federal loan. Um,
you know, option with that federal loan servicer. They're not
(24:31):
going to negotiate. So I would I would be focused
on getting this paid off now. The only reason why
you wouldn't pay it off immediately would be if you
don't have the money to, or you or she may
qualify for one of the loan forgiveness options, you know,
which would basically be the most common is the public
service loan forgiveness, where she works for a qualifying employer
(24:54):
or government or a nonprofit. And she has to make
those ten years of, you know, qualifying payments, 120 payments or,
you know, she qualifies for one of the income driven
repayment options. But do you know if she qualifies for
public service loan forgiveness?
S7 (25:12):
You know, that's.
S6 (25:13):
A I'll have to, you know, I'll, you know, relisten
to it and write down, uh, you know, I'll have
to have her look into it. Um, I know she
works for, uh, a hospital right now, but I don't know.
You know what I mean? Uh, yeah. To what extent? Um,
but you would look into that.
S1 (25:29):
Uh, I would, yeah, I mean, that that could be
an option. And so I would say if she qualifies
for public service loan forgiveness, I would say, then just
start making the payments until she reached the 100, reaches
the 125 or excuse me, 120 qualifying payment mark. So
ten years and then the rest would be forgiven. And
that's just a that's a program that's been in place
(25:51):
for a long time. There is some specific requirements around it.
So not all you know options would exist there just
depending on who she works for and and what you know,
what locale. But I would explore that. Apart from that,
I would say tell her that the settlement option, she
should just take off the table. And if she's not
going to qualify for loan forgiveness, then I would say,
(26:12):
let's just balance this against other priorities, namely, you know,
other consumer debt with a higher interest rate or, you know,
starting to save for retirement, not to mention, you know,
her emergency fund. But assuming she's making progress on all
of those, then I think her getting this paid off
just as soon as she can is a key idea.
S6 (26:32):
Okay. Sounds great. Okay. Like I said, I'll get her
the info and we may call you back then. Okay.
Thank you so much for your time, Rob.
S1 (26:39):
Thank you. Absolutely. God bless you, Bob. Thanks for calling today.
We appreciate it. 800 525 7000. Ada is in Tennessee. Hi, Ada.
Go ahead.
S8 (26:48):
Hello. Thank you for taking my call. I have a
question about charitable giving from a required minimum distribution.
S1 (26:58):
Okay.
S8 (27:00):
I am executor for my father's estate, and I'm not
73 yet, but he obviously was older. And last December,
I was surprised by the estate planner calling me and saying,
we have to take an order. Please come in and
sign the paperwork. But this year I want it to
(27:21):
go to a charitable organization. Um, how do we set
that up?
S1 (27:27):
Okay, so, uh, what is your age?
S8 (27:31):
I'm 67.
S1 (27:32):
Okay. Got it. Yeah. So if you are, in order
to do a qualified charitable distribution, you have to be 70.5. Um,
so as a non-spouse inherited IRA, if he was already
taking the RMDs before he passed, and it sounds like
he was correct.
S8 (27:52):
Yes.
S1 (27:52):
Okay. Then you would typically and I would check with
your CPA on this, but typically you would have to
at a minimum, continue to take required minimums. And then
you'd have to fully deplete the IRA, you know, within
ten years. Um, and until you're 70.5, you can't do
a qualified charitable distribution.
S8 (28:14):
All right. When I reached 70.5, then we can begin
to use Is his IRA until it's depleted.
S1 (28:24):
Uh, yes. Exactly right. Uh, so you would be able to, um,
send directly to a charity, uh, out of the inherited
IRA once you are 70.5 or older, provided that inherited
account is a traditional IRA. But if it is, then
you could go right out of, uh, the IRA to
(28:45):
a qualified charity that would ensure that you're meeting those
required minimums and depleting the account, and it doesn't get
added to your taxable income for the year.
S8 (28:56):
All right. So at the time that I'm 70.5, I
will also be eligible to use my RMDs from my
own IRA. Correct.
S1 (29:07):
That's. Yes. Exactly right. Mhm. So you would be.
S8 (29:12):
Able to designate which whichever churches or charities that I
give them to.
S1 (29:19):
Yeah, that's exactly right. So long as you're 70.5, you're
able to put, uh, to do up to $105,000 for 2025.
And that number will likely continue to grow each year.
Last year it was 100,000. This year it's 105. But
that's the amount you're able to take out of, uh,
you know, per individual across all of your IRAs.
S8 (29:43):
Thank you. Thank you.
S1 (29:45):
Okay. You're very welcome.
S8 (29:46):
Just need to wait three years and then I'll be
eligible to do that.
S1 (29:50):
That's exactly right. Just make sure you're taking out at
least enough to satisfy that required minimum from that inherited IRA.
Since he had started taking RMDs before he passed away.
And your CPA can make sure that you're you're taking
enough out each year that will be taxable. But it
is a requirement from the IRS. We appreciate your call. Ada,
thanks for being on the program today. Well, folks, we're
(30:12):
going to take another break. When we come back, we'll
have one more segment. We'll get to as many calls
as we can. We have some good ones coming up.
You know, if you've found benefit in this program, maybe
you listen regularly. It's been a blessing to you. Maybe
you've been able to apply something you've heard. Well, we'd
like to invite you to become a faithful partner as
a listener supported ministry. Faithful partners are a key part
(30:34):
of helping us fund this work and reach more people
with this message of biblical stewardship. Faith five partners give
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saying thanks, we send some resources to encourage you in
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and studies and devotionals two per year, both of them
coming out brand new next month. Faithfully. We'll be right back.
(31:03):
Great to have you with us today on Faith in finance.
Live here on our final segment today. Let's get to
a few more questions. Uh, back to Chicago, talking to
a lot of, uh, folks from Chicagoland today. Hi, May.
How can I help you?
S9 (31:17):
Yes. Um, I'm calling regarding a Roth IRA. Yes, ma'am. Um,
I purchased a Roth, uh, with the. Because I do
not have to make withdrawals. Right. Um, required minimum withdrawals. Now,
(31:37):
my question is, do my children, when they, um, um,
inherit the Roth, do they have to make withdrawals?
S1 (31:49):
Yeah. It all comes down to who or to the
relationship of the inheritor of that Roth IRA. So if
it's a spouse, they can just roll it to their
own Roth IRA and treat it as if it was
their own from the beginning. If it's a non-spouse beneficiary
and they're not, uh, you know, eligible for any exceptions because,
(32:11):
you know, they have, uh, maybe a disability or something
like that, but a typical non-spouse beneficiary, um, they would
be subject to the ten year rule. So this coming
came into place through the Secure act 2.0 in 2022.
And so typically adult children would then have to empty
(32:31):
the entire Roth IRA by December 31st of the 10th
year after your death. Now, there's no required minimums because
unlike traditional IRAs, uh, Roth IRAs are not required to
take annual RMDs. So they would just need to make
sure they take the money out completely by the 10th
year following your death. And when they take it out,
(32:53):
there's no tax on it, so long as that account
had been, you know, open for at least five years.
S9 (33:00):
I see. Okay. So your children cannot inherit this just
like a cash, um, inheritance.
S1 (33:10):
Well, they can in the sense that they can get
the money out tax free, but they can't just leave
it there and let it go forever. They would be
subject to that ten year rule.
S9 (33:21):
Ten year rule. All right. Well, thank you very much.
All right. Very helpful.
S1 (33:25):
Well, I'm so glad. May, thank you for calling today.
To Kansas City. Hi, Ralph. How can we help?
S10 (33:30):
Hi, Ralph. Um, my question goes back to the $8,000, um, maximum, uh,
that you can put in a Roth IRA if you're
over 50. And I was wondering if if that 150,000
is combined income with your wife or if it's just
your income.
S1 (33:50):
Yeah, it goes down to your filing status. And so
if you're filing married, filing jointly, which I assume you are,
is that right?
S10 (33:59):
Yeah.
S1 (34:00):
Yeah. Then it would be your modified adjusted gross income
from both of you. Because if you're married filing jointly,
both of your incomes are being combined and it's no
longer 150. Then if you're married filing jointly, you can
put in the full contribution. Uh, as long as you're modified.
Adjusted gross income is under 230,000 as married filing jointly,
(34:25):
you can do partial contributions between 230 and 240,000. And
then you eliminate the option over 240,000 a year.
S10 (34:35):
Okay. Well, that answers my question I appreciate it.
S1 (34:38):
All right. Happy to help. Thanks for your call. Let's
go to, uh, Michigan. Hi, Craig. How can I help?
S11 (34:44):
Hey, Rob. Um, well, talking about life insurance. Um, I
have about 130 K, uh, between two IRAs. I owe
about 125,000 on my mortgage. And, uh, which I have
a very good interest rate on. Likewise, I have about
15,000 on an auto loan. Very good rate on that.
(35:07):
I have a Hundred and $50,000 term life policy that ends,
I believe, in 2027. So I'm I'm shopping. I guess
the question is, how much should are you in favor
of life? Uh, life insurance. Um, you know, how much
(35:28):
should I buy? That kind of thing?
S1 (35:30):
Yeah. You know, it really comes down to what are
we trying to insure against and with life insurance, the
purpose of it is to offset the risk that if
you were to pass away before your wife, assuming she's
the only one, depending upon your income, uh, then that
would create a hardship. Because if your income goes away,
then she may not be able to maintain her lifestyle,
(35:53):
you know, with just those two IRAs and and whatever
else you have in the, in the savings account. Um,
so the life insurance is there to provide a lump
sum payment that could be invested, that she could use
to offset that loss of income. So that's really the
primary thing. And so the idea would be especially with
term life insurance which I like, pure insurance the most
(36:16):
cost effective. The idea would be that we're saving outside
of that in IRAs and 401 S and other assets
such that when you transition away from paid work to
whatever God has for you in that fourth quarter, that
you no longer have a need for that life insurance,
you drop it because there's no longer that risk. If
you were to pass away, she still has all the
(36:38):
marital assets that you all have accumulated, and she's not
depending on your income. She's no longer depending upon your income. Um,
does that make sense?
S11 (36:47):
Yeah, that's absolutely 100% on board with all of that.
S1 (36:50):
Yeah. So then the question would be when is how
long is that? Is that now, is that five years
from now? Is it longer?
S11 (36:57):
Well, um, I'm on track to have my mortgage paid
off in ten years. Um, I'm 61. I would like
to retire at 67, but I, you know, I just
I don't know. I don't know if I'll financially be
in the, in that spot by then. I am saving, um, uh,
(37:19):
aggressively as much as I can. I think I'll like 13%
or something like that in my IRAs. Um.
S1 (37:26):
So so then I think the opportunity for you right now, Craig,
is even while you've got this existing policy that's going
to run through 2027, perhaps while you're still relatively young
and and hopefully in good health, this might be the
time to see if you can qualify for a new
ten year term policy that gives you enough coverage so
that if you were to predecease her, she has a
(37:49):
payout that would essentially allow her to, you know, pay
off the house and also have whatever else she needs
beyond Social Security and whatever other income sources she'll have
to maintain her lifestyle. And that would probably be better
to do today because something could happen where you become
uninsurable five years from now. And if you were able
(38:11):
to get that policy that fits your budget and gives
you enough death benefit for a for a ten year period,
with the expectation that when those ten years are up,
you no longer need life insurance. Once that's enforced, then
you could drop the existing policy.
S11 (38:25):
Right. Okay. That's great. Then is there do you have
a idea on, uh, on an amount that I should
try and purchase?
S1 (38:34):
Yeah. So I think it really depends upon what we're
trying to solve for. I mean, if it's income, typically
we would say 10 to 12 times the income you're
trying to replace. So, you know, if you're trying to replace, well,
tell me, what would that number be. You'd be wanting
to replace that. She would lose.
S11 (38:53):
That's um, I think last year I made close to 80.
S1 (38:58):
Yeah. Okay. So, I mean, we're probably talking somewhere between,
you know, 750,000 and $1 million in term life insurance.
S11 (39:06):
Wow. Okay.
S1 (39:08):
Yeah. And the idea there. Well, and the idea is,
if we were to then take that 750,000, um, you know,
and invest that. And she pulled 4% a year, you know,
she could pull 30,000 a year and never deplete the 750.
If if she wanted to pull more than that, she's
probably going to be slowly depleting it, like, let's say,
(39:29):
you know, if you if you want to get up
to 80,000, um, you know, she'd probably, you know, need
$1 million and she'd have to, you know, pull 8%
a year. Well, you know, that money's not going to
last forever. So, you know, I think when we're when
we're looking at how to replace income. Now, one thing
you could do would be factor in what retirement assets
(39:49):
already exist. And so if your ultimate goal is, you know,
to have, uh, you know, I don't know, whatever that
number is $1 million in the bank plus Social Security. Um,
and you, you know, you already have 250,000. Well, you know,
now you're not solving for that full million. So I
think it really comes down to what assets do you
(40:10):
have now. And every year you're building more um, and
then what are you trying to replace? And, you know,
we can back into what that number is that could
generate that kind of income per year without depleting that
account too quickly. Ideally, it would last, you know, well
into her 90s.
S11 (40:29):
Right. Okay. Yeah. Fantastic.
S1 (40:31):
All right. Thanks, Greg. We appreciate your call today. Uh,
let's see. We're going to go to, uh, Illinois. Diane.
Go right ahead.
S12 (40:39):
Hi. Um, okay. I used to be poor. It was like,
25 years ago. I was extremely poor. Okay. I went
I filed bankruptcy for $3,500. Now I get my my
dead husband ex-husband's social security, and I would like to
(40:59):
see about. possibly paying that back. Okay, on my visa
card because of a family member, I owe 4000, and
I don't know if I can go back to a
credit union because I heard you say on the phone,
that's better than a bank.
S1 (41:19):
Yeah. And who are you trying to pay back? Is
it the creditors that were discharged under the bankruptcy or
somebody else?
S12 (41:26):
Well, I filed bankruptcy with the credit union. I mean,
that's what it went through, I believe. It's been a while.
I'm sorry.
S1 (41:35):
That's okay. Yeah. And so I appreciate that you are
now in a much stronger position. I'm just trying to
understand exactly who is it that you're trying to make whole.
What were the debts that you that were not paid
that you're trying to pay?
S12 (41:52):
Okay. The ones from, like, like 25 years ago. I'd
have to go back and look at my papers. Exactly.
I believe it was just a credit card with the
credit union, but I have to go back and double
check that.
S1 (42:05):
Yeah, the challenge is I. Boy, I so appreciate your
desire to, uh, to steward this money. Well, and and
to honor your obligations. What's going to happen is they're
going to tell you. Listen, number one, it was charged off.
You know, number two, you know, we probably can't even
accept that payment against that account because it's so long gone.
In fact, they probably collected a little bit of insurance
(42:28):
on it anyway because they insure these accounts. Um, so
you could reach out to them and say, listen, I
just feel convicted that I want to honor this obligation
from a bankruptcy 20 years ago. I suspect they're not
going to be able to take it, but you could
at least try, Diane. And maybe what you find is
you just end up giving that money to the Lord as, uh,
(42:49):
because you're not able to to pay it. Otherwise. I'm
out of time today. Thanks for calling. Faith and finance
is a partnership between Moody Radio and Faith by.
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