July 15, 2025 • 42 mins
"The simple believe everything, but the prudent give thought to their steps." - Proverbs 14:15. In a world where scams are increasingly clever, we’re reminded in Scripture that precaution is not optional—it's a form of stewardship. On the next Faith & Finance Live, Rob West discusses something that isn't just practical—it's spiritual: protecting the resources God has entrusted to us. Then, it's on to your calls. That’s Faith & Finance Live, where biblical wisdom meets today’s finances—weekdays at 4pm Eastern/3pm Central on Moody Radio. Faith & Finance Live is a listener supported program on Moody Radio. To join our team of supporters, click here.To support the ministry of FaithFi, click here.To learn more about Rob West, click here.To learn more about Faith & Finance Live, click here.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
S1 (00:08):
The simple believe everything but the prudent give thought to
their steps. Proverbs 1415. Hi, I'm Rob West. In a
world where scams are increasingly clever, Scripture reminds us that
precaution is a form of stewardship. Today we're talking about
something that isn't just practical, it's spiritual. Protecting the resources
(00:28):
God has entrusted to us. And then it's on to
your calls at 800, 500, 25, 7000. That's 805, two, five, 7000.
This is faith in finance. Live biblical wisdom for your
financial decisions. These days, scams show up just about everywhere
(00:49):
by phone, email, text, social media, and even by impersonating
people you trust. But as followers of Christ were not
called to live in fear, we're called to walk in wisdom.
So how do we do that when it comes to
guarding our finances? Well, first, before you respond. Scammers thrive
on urgency. If someone pressures you to act immediately, whether
(01:10):
it's a phone call claiming to be your bank, or
a text message saying your account's been compromised, slow down.
Verify the source. Hang up and call the official number
on your card. Check the sender's email address and remember,
pressure is a red flag. Second, never send money via
wire transfer or certainly not gift cards. No organization will
(01:32):
request payment in this manner. Scammers use these methods because
they're nearly impossible to trace. If someone insists, just walk away.
When shopping online, use a credit card rather than a
debit card. Credit cards typically offer stronger fraud protection and
limit your liability if something goes wrong. Next, enable two
(01:53):
factor authentication on all your financial accounts. It's like adding
a Getting a second lock on your digital deals, your
password they can't access to your email them. Use a
password or nordpass to generate and store strong breach account.
Both offer free, secure options to help you stay protected. Also,
(02:14):
monitor your accounts regularly. Most banks let you set up
alerts for large transactions, logins, or unusual activity. These alerts
act like a financial alarm system. Helping you came before
real damage is done. Freeze your credit it's one of
the most effective defenses against identity theft. It's free to
(02:35):
do with all three major credit bureaus and can be
temporarily lifted when needed. Think of it as putting a
padlock on your credit file. Be especially cautious with public
Wi-Fi at coffee shops, airports or libraries. Never access financial
accounts or enter passwords while on public networks. Wait until
you're on a secure private connection. The same goes for
(02:58):
using public or borrowed devices. Only check accounts from your
own phone or computer. And don't forget about social media. Oversharing.
Personal details like birthdays, family members, or recent purchases can
give scammers clues to your passwords or security questions. Set
your profiles to friends only and think twice before posting.
(03:20):
Personal classic, but still essential tip. Shred sensitive documents, bank statements,
medical records, tax, personal financial information should be going in
the trash. Identity thieves will dig through garbage if they
think there's something valuable in there. Also, never click on
suspicious links even if they appear to come from someone else.
(03:41):
Can take over accounts and send phishing messages that look
perfectly normal. If something seems off, reach out to the
person directly before clicking it. And finally, educate those around you.
Scammers often target the most vulnerable, particularly older adults and
teenagers make this a family conversation. Talk with your kids,
(04:02):
your parents, your friends. Share what you've learned and keep
each other informed about the latest scams. If a company
offers you identity theft protection after a data breach, take
advantage of it, but verify first. Don't trust links or
numbers in the letter or email instead directly through their
official to confirm the offer is legitimate. There's no question
(04:25):
that in today's world, financial faithfulness includes digital awareness. Guarding
your data, protecting your family, and staying alert to fraud
are essential parts of stewardship. But don't let that lead
to fear or discouragement. With a few intentional steps you
can entrusted to you and live with peace. Not, by
the way, another great way to manage and grow stewardship
(04:47):
is to download and use the Faith VI app. You'll
find it at faith. That's faith. All right. Your calls
are next. 800 525 7000. We'll be right back.
S2 (05:11):
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 (05:34):
Yeah, as you think about your money journey, is it
something that trips you up, causes confusion or worse, you
live in some anxiety related to your money. What are
we going to help you alleviate that? Each day on
this program? Help you see money as a tool to
glorify God and accomplish his purposes. Ultimately, with God as
your treasure, your true treasure and money being something that's
(05:55):
a blessing for you to have and invest and use
to provide for yourself and your family. And we realize
as you navigate that journey first of God's Word and
understand God's heart as it relates to how we should
view money, how we should handle it, how we should
save it and spend it and invest it. But also
we realize you have very specific questions that come up
from time to time, and we want to tackle those
(06:17):
here on this program. We gather together each afternoon at
this time, spend an hour together to do just that.
I hope you come away feeling encouraged. I hope you
find that, uh, we meet you with biblical wisdom, with empathy,
but ultimately pointing you back to the Lord, who is
the provider of everything. Now, if you have a question today,
(06:37):
we want to tackle those questions. So just call right
now we've got lines open. That number is 800 525 7000.
The calls will come in quickly. We'll fill up those lines.
But now's your chance to get right in the news
today before we head for those phones tomorrow from becoming.
That could affect how much you can take out and
how long you'll be paying it back as a part
(06:59):
of the one big beautiful bill the federal government is
placing rent plus and loans. Those programs historically allowed families
and grad students to borrow almost unlimited amounts. Now, as
an aside, I think that's one of the reasons college
tuition inflation has been so steep. Because when there's unlimited borrowing, well,
the schools don't have much incentive to keep prices down
(07:21):
because they know that attendees, their parents will continue to
borrow to meet those sky high prices. And that's why
we're about to have, I believe, this coming year, the
very first schools that have an annual tuition over $100,000
a year. Amazing. Um, we got to be careful because
when we borrow. Well, you got to make sure that
(07:42):
you actually have a job, a career path that can
support that. First of all, if you can avoid it
all together, that would be ideal. But if you do borrow,
you want to be able to pay that back in
ten years or less. At least that's my approach now, this,
that I'm going to talk about with the one big
bill in line with that idea. Because starting this fall,
loans will be capped at $20,000 per year, with a
(08:04):
lifetime limit of $65,000 per child for the parent plus borrowers,
which again seems like an awful lot. The changes are
a part of a broader federal effort to reduce long
term debt burdens and curb Overborrowing two years, unfortunately, sometimes decades,
of repayment hardship. Several loan forgiveness pathways are also being
(08:25):
phased out, with some programs ending in July 2027. Now,
critics say the caps will limit access to education, but
supporters argue they'll help families make more sustainable choices. So
whether you think this is a drastic fix or nearly
not enough, it's at least a step to ending the
misery of paying off student loans well into your 40s
(08:47):
and 50s again if you can avoid borrowing altogether through.
You know, maybe an on campus job working in the summer.
I've got a son who, uh, is doing a paid
internship this summer, learning some valuable insights, but also making
some money. You know, I did that. I was a
resident assistant, had my room and board, paid for my
(09:07):
junior and senior year in college. Taking those AP and
dual enrollment classes can reduce the number of credit hours
you have to take. All of that can work together
to help offset the cost of attendance and hopefully limit
that borrowing. But certainly should is going to take a
strong distinction as well. All right. Let's take your phone
calls today. We've got lines open. We're ready to take
(09:29):
those questions. You can call right now 800 525 7000.
You'll get right through 800 525 7000. We're going to
head down to Miami. I was just there for a
wedding this weekend. Uh, Mary Lou, how can I help?
S3 (09:43):
Yes. Rob, how are you doing? Thank you for what
you do every, every day. I love listening to your show.
Thank you. I have a question. I was I used
to work for an organization. I'm a nurse. I used
to work for an organization where I spent about 12
years and they offered a pension. And recently I received
a package that they were asking me if I want
(10:04):
to take whatever this $88,000, um, in a lump sum,
or if I, if, um, to transfer it to like
different type of error rate or if I want to
just keep it and then in the future when I
reach retirement age to get like a monthly, a monthly stipend.
And I wanted to ask, what should I do? What
(10:26):
do you think?
S1 (10:27):
Yeah. So they've given you the lump sum amount that
you would receive, and they've also given you the monthly
amount if you were to take the pension. Do you
have both of those numbers?
S3 (10:38):
Yes I do. I think um, it says when I,
if I reach, when I reach retirement age because right
now I'm 53. It says if I if I was
at the retirement age of 62, I would have received
11 a month. And right now, if I take the
lump sum, it would be 88,025.
S1 (10:59):
Per month or 88,000 today. And what is your age
right now?
S3 (11:04):
Day? No, I'm 53, but I don't I'm not at
retirement age. I just um, so yeah, they they gave
me option to do transfer it to a Roth IRA
or a traditional IRA. Different things that I could transfer
that amount to. But I wanted to ask you, what
is the best thing?
S1 (11:23):
Sure. So both of them, the monthly amount, the 1125
or the lump sum of 88,000. Both of those would
be available to you starting at 62. Am I understanding
that correctly?
S3 (11:35):
Yes. Like whatever decision that I make, I could choose
to like to pick the one that says 1125 when
I reach retirement age, which is at 62, I guess
the earliest is 62. I know my retirement age is 67,
but the earliest I could take it is at 62,
but it would give me 1125 a month. That's what
(11:57):
the paper said 1125 a month or right now, if
I want to transfer the lump sum of 88,000 to
either A or any of those, um, traditional IRA, Roth
IRA or something like, um, any four, four, three b
anything that I want to transfer that to, then it
would be it's almost like a payoff. Then they're done
(12:18):
with me.
S1 (12:19):
Yeah. Got it. All right. Well, here's a couple of thoughts.
I mean, the first questions to ask. So I think
the questions you want to ask in making this decision,
among others, are first, do you need income now or later?
If you don't need the money immediately, the pension the
pension may lifetime income flexibility or you're looking to invest.
(12:39):
Obviously the lump sum gives you options. The second is
what is your health status and family longevity? That's obviously
no one knows the day or the hour the Lord
will call us home, but this is just a part
of the decision making process and based on your health
and your family health history. If you expect to live
into your 80s or 90s, the pension monthly could pay
(13:01):
out much more over time. If your health is uncertain,
the lump sum gives you more control, I think. Thirdly,
do you have other income sources that will be coming
in like Social Security or part time work or other savings?
And then are you comfortable managing managing the money or
working with an adviser? Because that's what would be required
if you took the lump sum. So I think those
(13:23):
are the starting point. Questions. When we come back from
this break, we'll talk about just the math comparison on
the equivalent of 125 a month, let's say, for 18
years to age 80 versus the lump sum. Stay right there.
We'll be right back on faith and finance live. Thanks
(13:47):
for joining us today on Faith in finance live here
on Moody Radio. I'm Rob West. We're taking your calls
and questions today on Anything Financial 800 525 7000. Before
the break, we were talking to Mary Lou in Miami. Uh,
she used to work for a company that offered a pension.
She's no longer with them. She recently received a package
from them asking if she'd like to essentially take a
(14:08):
lump sum now, equivalent to $88,000. She could roll it
to an IRA, or she could wait until age 62
and take an income stream for life. Uh, are you married,
Mary Lou?
S3 (14:21):
Yes, I am okay.
S1 (14:23):
And do you know if that $1,125 a month would
pay out just on your life only? Or would it
be your life plus your spouse?
S3 (14:32):
I'm thinking it's my life, plus my spouse, because there
is a section that says that my spouse needs to like,
fill out and notarize whatever decision I take.
S1 (14:44):
Okay. Yeah, you're going to want to check on that
because obviously that's a factor here. If it's just your
life only and you were to predecease your husband, then
that could be a vital part of the income he's
counting on, you know, to sustain his monthly living expenses.
That would go away if it's for both of your
lives and it lasts until the the second one passes away, well,
(15:04):
then you'd know you have that, at least for the
rest of your life. Now, if you take the 88,000 now,
let's say you were to invest it, and I'm just
going to pick a number. Let's say it grows at 7%
a year annualized for the next nine years until age 62,
which is when you would start the 125 a month
that would grow from 88,000 to 161,000 in my example.
(15:27):
And then I would be comfortable with you pulling 4%
a year, and that would preserve the 161,000. You should
be able to make that up and never tap into
the principal. The problem is on 161,000 at 4%. That's
only going to give you $6,400 a year, which would
(15:47):
give you about $530 a month, or about half of
what you were getting. So essentially, you'd be getting the
equivalent of 8% a year in income. Now you don't
have access. If you take the lump sum, you don't
have access to the larger amount that you could pull
larger sums if you needed it. But the idea that
you would get 125 a month for the rest of
(16:09):
your life, especially if it includes your spouse, which is
essentially 8% a year guaranteed of what, in my example,
that 88,000 would grow to over the next nine years. Because,
you know, you you're nine years away from age 62.
That's a pretty good deal. So I guess I would
say if you don't need the money and you're looking
(16:29):
to maximize retirement income and you've you're you're pretty healthy
and you've got longevity in your family, then I think
there's something to be said about that $1,100 a month,
which from an internal rate of return, you know, perspective
is a pretty good return on what I would expect
you to get from, you know, the investments on 161 grand.
(16:52):
Does that make sense, though?
S3 (16:54):
It makes a lot of sense because I'm currently working
for the federal government and I have a TSP. So
I was like, I don't really need the money. I'd
rather the money stay and be invested whatever they're doing. So,
you know, so I do agree. Thank you so much.
S1 (17:09):
Well, you're very welcome. Now listen, these aren't easy decisions.
And so I would say, you know, if you really
want to dig deeper into this more than just the
few minutes we have together on the radio, this is
important enough that you may want to consider reaching out
to an advisor. Certified Kingdom advisor. Just pay, you know,
he or she for an hour or two of their
time to kind of do a deeper dive or maybe
(17:32):
do a full financial plan, but hopefully that's at least
giving you a few things to think about. We appreciate
your call today. Lord bless you. Uh, let's go to Cleveland. Patricia,
I know you're driving. How can I help you?
S4 (17:43):
Hi, Ron. Thank you for taking my call. Um, I
just wanted to verify that on your introduction. You said that, uh,
in the way of protection, we could or should freeze
our credit with all three bureaus, um, and then temporarily
lift that if needed. Could you expand that concept a
(18:07):
little bit more?
S1 (18:09):
Uh, yeah, I'd be happy to. Uh, so essentially, what
happens when you freeze your credit is you're placing a
pin number on your account, which just means that any
lender who's trying to access your credit file for the
purpose of determining whether or not to extend a loan
to you, they will have to you will have to
provide that Pin number for them to access that information.
(18:32):
Now where that becomes very helpful is if somebody fraudulently
tries to impersonate you, maybe they've accessed part of your
identity and they're impersonating you, and they're taking out a
loan that they don't intend to pay back. Well, they
would be stopped in their tracks because when they get
to the step where the lender says, well, I need
to pull your credit, they wouldn't be able to provide
(18:54):
the Pin number. And that can cut off a lot
of the problems that can happen. It's free to do.
You need to freeze with each of the bureaus Experian,
Equifax and TransUnion. Now, the only potential downside, although it's
very minor, is that it adds a little bit more
of a hassle factor. An additional step if you need
to access your credit or a lender does on your
(19:15):
behalf because you're legitimately out there buying a car and
getting a car loan, or you're buying a new house
and getting a mortgage, or you're trying to qualify for
a credit card, you're going to have to, quote unquote,
thaw or temporarily lift the freeze for a period of
time so that, you know you can do business, and
you would simply do that either online, by phone or
(19:37):
through the mail, and you would let them know that
you want to temporarily lift the freeze, but that's it.
And then you could refreeze the credit. And most people,
you know, especially if you're in the kind of second
half of your life, you're probably not out there very
regularly borrowing money. And so therefore it, you know, maybe
1 or 2 times a year, maybe never, you know,
(19:58):
will you even have to do this? But it's pretty
easy to do, uh, generally either online or by phone.
S4 (20:04):
Okay. That makes a lot of sense. Um, and you
have that protection if I would do that. And then
when I see those commercials for credit protection against fraud
and things, I'm basically able to manage this myself without
accessing some kind of policy.
S1 (20:27):
Yeah, that's exactly right. Because these services is, uh, that
are available. Uh, you know, you can do most of it, uh,
by yourself. Uh, and you don't need to pay someone ten, 20,
$30 a month, uh, to be able to do this
for you. Now, they can provide some other helpful benefits,
but most of it, including this credit freeze, you can
(20:47):
absolutely do do on your own. And it costs you nothing.
And that's why I think for most people this is
the way to go. So you're exactly right there. Uh, Patricia,
we appreciate your call today. Lord bless you. A quick
break and then back with more questions after this. 800
525 7000. This is faith in finance. Live. And we'll
be right back. Great to have you with us today
(21:13):
on faith in finance live. I'm Rob West. We're taking
your calls and questions today. I've got room for you.
If you have a question, call right now. 800 525 7000.
Let's go back to the phones. Evansville, Indiana. Hi, Stacy.
Go right ahead.
S5 (21:27):
Hi. Uh, First of all, I want to just say
thank you for your service. And may God bless you
for for doing this. So I listen to you all
the time.
S1 (21:38):
That's very.
S5 (21:38):
Kind. Anyway, um, okay. My question is, is I have
about 15,000 in credit card debt. And I'm wondering the
best way to go about paying it off. Should I, uh,
either my house is paid for so I could get
(22:00):
a home equity loan to do that, or I could
take money out of my 401 K or my my IRA,
I guess, um, to pay that off.
S1 (22:17):
Yeah. Yeah. I'm not crazy about either of those options, Stacey. Um,
because with the IRA, that, first of all, is going
to create a taxable event. You won't have the penalty
at 60, but you will have to add that 15,000
to your taxable income, which I realize, you know, you're
going to have to pay tax on it at some
point unless you take it out after 70 as a
(22:38):
qualified charitable distribution. And you'd be eliminating all the interest,
which is probably high. So I realize that can make
some sense. But also now that money is no longer
available to grow and compound for the future. The second
option I really don't like the home equity loan because
we're taking something that is not secured other than just
you personally guaranteeing it, and we're attaching it to your
(23:01):
home and securing it by, you know, the place you live,
which I like to avoid if at all possible, especially
with these high interest rates right now. So I would say,
you know, my preferred option would be you just slide
this into a credit counseling program with our friends at
Christian Credit counselors.org. They'll get those interest rates down. You'll
make one monthly payment every month. Except now you'll have
(23:23):
a lot more going to principal every month. Um, then,
you know, interest and, uh, you know, you'll leave the
debt right where it is and get it paid off.
I just heard from a caller the other day, and
we've had thousands go through this program, but they were
just celebrating how quickly they've been able to pay it off. And,
you know, that way you wouldn't have the expense of
the home equity loan, which there's fees associated with it,
(23:44):
plus what I already mentioned. And you'd preserve 100% of
your retirement plan. But if you just felt a conviction like, no,
I don't want to wait a few years, and even
if I'm saving on the interest, I just want to
be out from under this once and for all. I
would say the retirement plan would probably be the next
best option. Uh, especially if you have other sources of
retirement savings that you feel confident are going to cover
(24:07):
your lifestyle spending in this season of life that's upcoming. Um,
then I would say that would be option two, especially
since you no longer have the penalty for the withdrawals.
S5 (24:18):
Right? Okay, okay. Well, I kind of thought that's what
you were going to say was the, the, uh, the
credit counseling.
S6 (24:25):
So yeah.
S5 (24:26):
I will I will look into that first.
S6 (24:29):
Okay.
S1 (24:30):
It sounds like you just affirmed your the regular listenership
and that's awesome.
S6 (24:35):
But yeah I just needed.
S5 (24:37):
I just needed your, your um your advice.
S6 (24:40):
All right.
S1 (24:41):
Well I'm happy to give it. Thanks for your kind
remarks about the program. I'd love to send you a
copy of our magazine, Faithful steward. I think you'll enjoy it.
So stay on the line. We'll get your information and
get that out to you. Stacy, thanks for your call today. Uh,
let's go to Boise. Hi, Sally. How can I help?
S7 (24:57):
Hi, there. Um, my question concerns a cabin that we
have in the mountains above Boise. We've had it for
12 years, and we've done very well as an investment
on it. But I'm 82, my husband is 85, and
we're getting ready to sell it right away. The capital
gains are huge, and I just wondered what you might
(25:19):
have to suggest.
S6 (25:21):
Um, yeah.
S7 (25:22):
My thought was if we sell it, if we give
the money to our kids right away, would that avoid
the capital gains somewhat?
S1 (25:30):
It would not. Unfortunately, when you say huge capital gain,
how much are you thinking you're going to have in gains?
S7 (25:37):
Um, what do you buy the cabin for? About 300,000.
We bought it for and we're selling it for 749.
S6 (25:47):
Okay.
S1 (25:47):
Yeah. So that is that is a big gain. Um,
so that actually may even push it up into the higher, uh,
you know, bracket, because when you add your combined income, um,
you know, on the long term capital gains rates, it
would be, uh, you know, your combined income plus the
gain itself. And for 2025, um, if you're married, filing jointly,
(26:11):
and you have over 583,000 in combined income, which again
includes all of your income sources plus the gain, um,
then you would be up at the 20% rate. If
you were under that 583,000, it'd be at 15%. So
what are your options to avoid it? Well, the only
options would be number one. You could just hang on
(26:33):
to it and let the kids inherit it. Uh, if
they inherit it based on the current law, they would
enjoy that step up in basis so that cost basis
of 300,000 would go away and it would be adjusted up.
That's where the step up comes in to the market
value as of the date of death. And then they
could turn around and sell it and they would pay
(26:54):
no capital gains on it. Um, the option you suggested,
which is where you sell it and then you give
it to them, the IRS doesn't look at what you
do with the money. All they care about is that
you're the one selling it. And if you sell it,
you are going to have to pay that capital gain.
So option one, you hang on to it. Let them
inherit it. It goes away. Option two is you could
(27:16):
give a portion of it away if you plan to
be charitable with any portion of that? The proceeds on
the 750,000 you could give. Uh, you know, a certain
percentage of that cabin to a donor advised fund on paper.
And then at the sale, that portion would fund the
donor advised fund that you and or you and the kids, um,
(27:39):
along with your husband, of course, could then start giving
that money away to to non-profit ministries or your church.
Maybe you get the family involved in the giving, but
the portion that was given to the donor advised fund
prior to the sale would not be subject to capital
gains at the sale. But if it's really more about
an inheritance than giving, then I would say, you know,
(27:59):
your two options are either just pay the 15 or 20%, um,
and then you can do with it what you want
or hang on to it and let them inherit it.
S7 (28:10):
Well, we're ready to sell it because of the maintenance.
S6 (28:13):
That's okay. Yeah, that makes sense.
S7 (28:15):
Too much.
S6 (28:15):
So. Yeah, yeah.
S1 (28:17):
Yeah. I mean, the only other option, which doesn't sound
like you're interested in it, would be a 1031 exchange
where you roll it into a new, uh, income generating,
you know, property. Um, but it sounds like at this point,
you're just going to need to go ahead and sell it.
Not a bad time to do it. Capital gains rates
are very low at that 15 or 20%. Hopefully it's 15.
(28:39):
Make sure you you know, if you're going to be
close when you put your combined income plus the capital gain,
if you're going to be close to that 583 mark.
Because based on the numbers you're telling me, you know,
you're at 450 before you start counting your income, but
you can reduce that capital gain by any improvements you
made to the property, not maintenance, normal wear and tear,
(29:02):
but improvements that improve the value. You can also subtract
things like the selling costs and some of those expenses.
So it sounds like I would imagine when you apply
those two things, um, you know, especially if you all
are in retirement, uh, you probably don't have a ton
of income, you should be able to stay in that 15% bracket,
which at that point, you know, let's say we're talking,
(29:24):
you know, 500 and 450,000. Even if you didn't have
anything like improvements or expenses at that point, it'd be
about 67 grand. So I think those are your best
options unless you want to give a portion of it away. Okay.
S7 (29:38):
Well, we'll consider that. Thank you for your help.
S1 (29:41):
We appreciate your call today. Lord bless you. Well, we're
going to take a quick break. And then when we
come back, uh, our final segment, we'll be talking to
Cynthia in Alabama about her mom's home and some property assessments.
And then Patricia in Indiana. She's wondering about a 4
or 3 B to pay off the mortgage. We'll have
room for a few more questions as well. Stay with us.
(30:01):
We'll be right back. Thanks for joining us today on
Faith and Finance Live, helping you live as a wise
and faithful steward, by the way, as a listener supported ministry,
the way we reach God's people with this message of
(30:21):
faithful financial stewardship is in part through your generous support.
We don't do this without you, and we created the
Faithful Partner Program for that purpose so you could come
alongside the ministry if you're someone who's been blessed by it,
or perhaps you love the program, you listen regularly and
your way to give back to support this work so
others can hear. This message is by coming alongside us
(30:43):
at $35 a month, or $400 or more per year.
And as a thank you to you, we make you
a partner, which means you get access to the faithful app.
You get all of our new studies and devotionals and
not only the devotionals that we've come out with, but
all of the devotionals that we will be creating in
the future. And by the way, the one we're working
on right now for the fall, I am so excited
(31:04):
about our team met on it this week. The writing
is underway. It's going to be a huge blessing to you,
but you also get four issues of Faithful Steward, our magazine,
which if you've not seen it. It's beautiful, it's thoughtful.
It has articles and interviews and Q&A, and it's just
really built for people that want to be serious about
integrating their faith into their financial journey. And it comes
(31:25):
out four times a year. We'll mail a copy to
your door if you want to learn more about all
of that and how to be a partner, just go
to our website. That's faith. All right, let's head back
to the phones. Alabama is where Cynthia's located. Cynthia, how
can I help you?
S8 (31:45):
Uh, yes. I was calling because I had a question about, uh,
a home assessment property value notice that's sent out every year.
And this particular year, we didn't get one. And that's I.
And I called to inquire about it, and he said
only if there's no change in the value, they don't
(32:06):
send it out. And I was like, well, that's unusual
because the single property we have, we had one $0.01,
but you didn't give us one on the property with
the home on it. And then when I pulled the
cops on the the property record, the value had changed.
So I'm a little confused on why we didn't get one. Yeah. And, um,
(32:30):
I didn't know if that's a policy or by law,
am I do one or is am I just overthinking this?
S1 (32:38):
Yeah, it's a great question. It really depends on the
local property tax rules. Um, most counties interestingly, interestingly, do
not reassess properties every year unless there's a sale or
a renovation or a major value change or the county
or state law mandates annual assessments. But that's less common
(32:59):
in many places. They're done on a cycle every 2
to 3 years, unless triggered by one of those changes
you mentioned. Um, so can you request an assessment? Yes.
As a property owner, you can usually request a reassessment
or file an appeal if you believe they've assessed the
value incorrectly. However, if the exemption if there is an
(33:22):
exemption that overrides the changes in value, a reassessment may
not change anything. So in some cases, you know, certain
people may have a tax exemption like seniors or if
you're disabled or a homestead, and that could freeze or
limit the taxable value even if the market value changes.
And so the assessor may say no reassessment is needed
(33:45):
because the exemption caps or locks the valuation for tax purposes.
But if you believe something's not right, I would, you know,
ask for a reassessment or file that appeal. And your
county should be able to tell you exactly how to
do that.
S8 (33:59):
Okay. That's what I needed to know.
S1 (34:02):
Excellent. Well, listen, thank you for your call today, and
we appreciate you being on the program. Let's go to Indiana. Hi, Patricia.
How can I help you?
S9 (34:11):
Well. I'm retired. I still work two days a week.
My husband's retiring in one year, and we paid our
house off all but $19,000 on purpose. And I thought
that would really drop, uh, the interest down. Well, all
I'm paying now on the principal is 18 and $19
(34:33):
per month. And all the rest of that is interest. And,
you know, home, um, taxes and stuff. I can take
my 403 out and pay that off. Would that be
a good idea?
S1 (34:47):
Well, you don't have a whole lot left here on
this mortgage. I mean, you know, certainly you could pull
that money from the 403 B. What is your age?
S9 (34:56):
I'm 67.
S6 (34:58):
Okay.
S1 (34:59):
Um. And are you all drawing from the 403B right now,
or is it just sitting there?
S9 (35:04):
It's just sitting there.
S1 (35:05):
Okay. Um, and if you were to continue right now
just kind of paying this out, um, are you all
sending extra to the mortgage every month or just the
scheduled payment?
S9 (35:16):
Well, I just now paid it down to 19,000. So
I'm just after I saw what the interest was going
to be, I thought, just pay it off and be
done with it.
S1 (35:26):
Yeah, yeah. But you obviously were able to do that
out of current cash flow or savings, or did you
pay it down to 19 by pulling from the 403?
S9 (35:36):
No, I did not. We had the money to do it.
S6 (35:39):
Okay.
S1 (35:40):
And if you said, listen, I want to try to
keep the 403 B intact and not pay the taxes
on it. Would you have a little bit extra every
month that you could put beyond the scheduled payment toward
the mortgage?
S9 (35:54):
Not a lot. Not a lot extra.
S6 (35:57):
Okay.
S1 (35:58):
Yeah. I mean, you know, with that payment that you've
got because your balance is only 19,000, the majority of
that payment, I'm now set aside the taxes and the
insurance because that is what it is. That's that's not
going to change even if the mortgage is gone. But
with the portion that's not the the taxes and the insurance,
just your scheduled payment, just given how low that mortgage is,
(36:19):
the vast majority of that should be going to to principal,
not interest. Um, so I would take another look at that. Obviously,
I'd love for you to hang on to that for
a freebie and just kind of prioritize, you know, getting
out from under this just by funding it out of
excess cash flow, you know, on a monthly basis. But
if you're saying, listen, I don't really have a whole
(36:39):
lot extra. Um, and we'd really love for this thing
to just be gone. Then I could get on board
with that. You're not going to have a penalty on
it because of your age, and you're going to have
to add that 19,000 to your taxable income. But now
your mortgage is gone, and you can take at least
the the principal and interest portion, the scheduled payment. And
now you can, you know, rebuild your savings. Um, and
(37:01):
that wouldn't be a bad thing. But my first choice
would be that you do it out of current cash
flow or savings and leave the retirement plan intact. But
if you're just really set on getting out of debt
as soon as possible, then I don't have any problem
with that.
S9 (37:17):
Well, the thing is, we don't have a lot of
debt other than the biggest debt we have is $9,000
on our vehicle. That's just about it. Okay. And I
just wanted to be debt free. And my husband's got
a 401. Is it called 401 K?
S6 (37:32):
Yes, ma'am.
S9 (37:34):
Yeah, he's got that. We're not touching that. Then we
got a small investment somewhere else. We're not touching that. So.
But no, I took that paper in when I got
that from the mortgage company. I took that in and
I said, this can't be right. And they looked at
it and they said, yeah, it is said you're playing
mostly interest. And I thought, that's not right.
S1 (37:54):
How big was the mortgage to begin with?
S9 (37:58):
8000.
S1 (37:59):
Yeah. Yeah. That something's not right there. Um.
S6 (38:03):
Because, you know, at the at.
S1 (38:04):
The end of.
S6 (38:05):
A.
S1 (38:06):
A mortgage, you should have more going to principal and interest.
But regardless, I think, you know, if you're set to
be able to pay this off, you've got the money available.
Make sure you set aside enough for the taxes. I
don't want you to be caught by surprise on that,
but you certainly could do that. Um, I love the
fact that you paid it down to 19. That's great.
That's going to save on the the interest, because there's
(38:28):
not a whole lot of interest that's owed on a
$19,000 loan, especially if you have a low interest rate.
What is your interest rate on the mortgage? Do you know?
S9 (38:36):
I think it's 6% six point something.
S6 (38:39):
Okay. All right.
S1 (38:41):
Yeah. I mean, you're probably after you know, you're not
probably making a whole lot more than 6% in that
four of three be. So again, I don't I don't
think that's a bad thing. And then you could take 100%
of that payment and put it back into savings. So
I would either do that or just stay focused on
limiting your lifestyle and sending as much extra as you
can every month. Either of those options would be good.
S9 (39:04):
Okay. So now this is going to throw me in
a higher tax bracket when I file my taxes isn't it.
S1 (39:11):
Not necessarily. No not necessarily because you're only adding 19,000.
And it's going to have to do with what other
income you would have. And keep in mind, the way
the tax brackets work is, even if a portion of
it slips up into a higher bracket, it doesn't push
everything up into the higher bracket. It's a progressive system.
So you know you're going to pay the lower tax
(39:32):
rate on the first portion. And whatever portion slips up
into the higher bracket, you'd only pay the higher tax
amount on that portion of it that goes above the threshold.
S9 (39:43):
Okay. That's wonderful. I just been listening to you, and
I thought you would tell me the truth because you
would tell me if this was a bad move. I
don't want to make a mistake. And I'll tell you
this real fast, and I'm hanging up. Um, we went
to a seminar. Okay? I said, let's go to this
free seminar about Retirement.
S1 (40:01):
Okay. Did they? Did they buy you a steak to
go to that?
S9 (40:05):
No, but.
S1 (40:06):
Okay.
S9 (40:07):
It wasn't a matter. You know what he said? If
you don't have $1 million in savings and you can't retire. Well,
I said, that's the last seminar I'm going to because
we ain't got $1 million. Yeah. And he wanted to
know our income. I said, do I have to tell
you that? He said, no, ma'am. I said, then I
ain't telling you.
S1 (40:25):
So you do not need $1 million. All you need
is enough to cover what you believe is the lifestyle
God has called you to. And that absolutely may not
require $1 million, especially if you're living modestly. So I
would agree with you, Patricia, 100%.
S9 (40:41):
Well, I appreciate it. Can we go back and listen
to this broadcast somewhere?
S1 (40:45):
Yes, ma'am. Uh, just go to Moody radio.org and you'll
be able to listen to the, uh, the recording of
this episode and any others. Uh, and usually it'll be
available by this evening.
S9 (40:59):
All right. I want my husband to hear you. All right.
I sure do appreciate it. You was wonderful. Thank you.
S1 (41:05):
Thank you. Patricia. Lord bless you. Bye bye. Thanks for calling. Uh,
let's go to Barb in Nebraska. Barb, how can I help?
S10 (41:13):
Hi. Thank you for. I love your program. Rob. I
listen very often to it. I appreciate it. You have
a PSP account? Um.
S11 (41:23):
Let's do this, Barb.
S1 (41:24):
The time got the best of me. I want to
answer your question. I'm going to do it off the air,
so I'm going to stay right here as soon as
we're done, and you and I'll talk off the air
and I'll answer your question, but I don't want to
rush it. So I'm going to have you hold for
a second. I apologize, folks, that's going to do it
for us. My team's Taylor Standridge and, uh, grateful for, uh,
everybody here, including Rihanna and Omar and all the great
(41:46):
people that make this happen every day. Faith and Finance
Live is a partnership between Moody Radio and Faith fi.
We'll see you tomorrow. Bye bye.
The simple believe everything but the prudent give thought to
their steps. Proverbs 1415. Hi, I'm Rob West. In a
world where scams are increasingly clever, Scripture reminds us that
precaution is a form of stewardship. Today we're talking about
something that isn't just practical, it's spiritual. Protecting the resources
(00:28):
God has entrusted to us. And then it's on to
your calls at 800, 500, 25, 7000. That's 805, two, five, 7000.
This is faith in finance. Live biblical wisdom for your
financial decisions. These days, scams show up just about everywhere
(00:49):
by phone, email, text, social media, and even by impersonating
people you trust. But as followers of Christ were not
called to live in fear, we're called to walk in wisdom.
So how do we do that when it comes to
guarding our finances? Well, first, before you respond. Scammers thrive
on urgency. If someone pressures you to act immediately, whether
(01:10):
it's a phone call claiming to be your bank, or
a text message saying your account's been compromised, slow down.
Verify the source. Hang up and call the official number
on your card. Check the sender's email address and remember,
pressure is a red flag. Second, never send money via
wire transfer or certainly not gift cards. No organization will
(01:32):
request payment in this manner. Scammers use these methods because
they're nearly impossible to trace. If someone insists, just walk away.
When shopping online, use a credit card rather than a
debit card. Credit cards typically offer stronger fraud protection and
limit your liability if something goes wrong. Next, enable two
(01:53):
factor authentication on all your financial accounts. It's like adding
a Getting a second lock on your digital deals, your
password they can't access to your email them. Use a
password or nordpass to generate and store strong breach account.
Both offer free, secure options to help you stay protected. Also,
(02:14):
monitor your accounts regularly. Most banks let you set up
alerts for large transactions, logins, or unusual activity. These alerts
act like a financial alarm system. Helping you came before
real damage is done. Freeze your credit it's one of
the most effective defenses against identity theft. It's free to
(02:35):
do with all three major credit bureaus and can be
temporarily lifted when needed. Think of it as putting a
padlock on your credit file. Be especially cautious with public
Wi-Fi at coffee shops, airports or libraries. Never access financial
accounts or enter passwords while on public networks. Wait until
you're on a secure private connection. The same goes for
(02:58):
using public or borrowed devices. Only check accounts from your
own phone or computer. And don't forget about social media. Oversharing.
Personal details like birthdays, family members, or recent purchases can
give scammers clues to your passwords or security questions. Set
your profiles to friends only and think twice before posting.
(03:20):
Personal classic, but still essential tip. Shred sensitive documents, bank statements,
medical records, tax, personal financial information should be going in
the trash. Identity thieves will dig through garbage if they
think there's something valuable in there. Also, never click on
suspicious links even if they appear to come from someone else.
(03:41):
Can take over accounts and send phishing messages that look
perfectly normal. If something seems off, reach out to the
person directly before clicking it. And finally, educate those around you.
Scammers often target the most vulnerable, particularly older adults and
teenagers make this a family conversation. Talk with your kids,
(04:02):
your parents, your friends. Share what you've learned and keep
each other informed about the latest scams. If a company
offers you identity theft protection after a data breach, take
advantage of it, but verify first. Don't trust links or
numbers in the letter or email instead directly through their
official to confirm the offer is legitimate. There's no question
(04:25):
that in today's world, financial faithfulness includes digital awareness. Guarding
your data, protecting your family, and staying alert to fraud
are essential parts of stewardship. But don't let that lead
to fear or discouragement. With a few intentional steps you
can entrusted to you and live with peace. Not, by
the way, another great way to manage and grow stewardship
(04:47):
is to download and use the Faith VI app. You'll
find it at faith. That's faith. All right. Your calls
are next. 800 525 7000. We'll be right back.
S2 (05:11):
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 (05:34):
Yeah, as you think about your money journey, is it
something that trips you up, causes confusion or worse, you
live in some anxiety related to your money. What are
we going to help you alleviate that? Each day on
this program? Help you see money as a tool to
glorify God and accomplish his purposes. Ultimately, with God as
your treasure, your true treasure and money being something that's
(05:55):
a blessing for you to have and invest and use
to provide for yourself and your family. And we realize
as you navigate that journey first of God's Word and
understand God's heart as it relates to how we should
view money, how we should handle it, how we should
save it and spend it and invest it. But also
we realize you have very specific questions that come up
from time to time, and we want to tackle those
(06:17):
here on this program. We gather together each afternoon at
this time, spend an hour together to do just that.
I hope you come away feeling encouraged. I hope you
find that, uh, we meet you with biblical wisdom, with empathy,
but ultimately pointing you back to the Lord, who is
the provider of everything. Now, if you have a question today,
(06:37):
we want to tackle those questions. So just call right
now we've got lines open. That number is 800 525 7000.
The calls will come in quickly. We'll fill up those lines.
But now's your chance to get right in the news
today before we head for those phones tomorrow from becoming.
That could affect how much you can take out and
how long you'll be paying it back as a part
(06:59):
of the one big beautiful bill the federal government is
placing rent plus and loans. Those programs historically allowed families
and grad students to borrow almost unlimited amounts. Now, as
an aside, I think that's one of the reasons college
tuition inflation has been so steep. Because when there's unlimited borrowing, well,
the schools don't have much incentive to keep prices down
(07:21):
because they know that attendees, their parents will continue to
borrow to meet those sky high prices. And that's why
we're about to have, I believe, this coming year, the
very first schools that have an annual tuition over $100,000
a year. Amazing. Um, we got to be careful because
when we borrow. Well, you got to make sure that
(07:42):
you actually have a job, a career path that can
support that. First of all, if you can avoid it
all together, that would be ideal. But if you do borrow,
you want to be able to pay that back in
ten years or less. At least that's my approach now, this,
that I'm going to talk about with the one big
bill in line with that idea. Because starting this fall,
loans will be capped at $20,000 per year, with a
(08:04):
lifetime limit of $65,000 per child for the parent plus borrowers,
which again seems like an awful lot. The changes are
a part of a broader federal effort to reduce long
term debt burdens and curb Overborrowing two years, unfortunately, sometimes decades,
of repayment hardship. Several loan forgiveness pathways are also being
(08:25):
phased out, with some programs ending in July 2027. Now,
critics say the caps will limit access to education, but
supporters argue they'll help families make more sustainable choices. So
whether you think this is a drastic fix or nearly
not enough, it's at least a step to ending the
misery of paying off student loans well into your 40s
(08:47):
and 50s again if you can avoid borrowing altogether through.
You know, maybe an on campus job working in the summer.
I've got a son who, uh, is doing a paid
internship this summer, learning some valuable insights, but also making
some money. You know, I did that. I was a
resident assistant, had my room and board, paid for my
(09:07):
junior and senior year in college. Taking those AP and
dual enrollment classes can reduce the number of credit hours
you have to take. All of that can work together
to help offset the cost of attendance and hopefully limit
that borrowing. But certainly should is going to take a
strong distinction as well. All right. Let's take your phone
calls today. We've got lines open. We're ready to take
(09:29):
those questions. You can call right now 800 525 7000.
You'll get right through 800 525 7000. We're going to
head down to Miami. I was just there for a
wedding this weekend. Uh, Mary Lou, how can I help?
S3 (09:43):
Yes. Rob, how are you doing? Thank you for what
you do every, every day. I love listening to your show.
Thank you. I have a question. I was I used
to work for an organization. I'm a nurse. I used
to work for an organization where I spent about 12
years and they offered a pension. And recently I received
a package that they were asking me if I want
(10:04):
to take whatever this $88,000, um, in a lump sum,
or if I, if, um, to transfer it to like
different type of error rate or if I want to
just keep it and then in the future when I
reach retirement age to get like a monthly, a monthly stipend.
And I wanted to ask, what should I do? What
(10:26):
do you think?
S1 (10:27):
Yeah. So they've given you the lump sum amount that
you would receive, and they've also given you the monthly
amount if you were to take the pension. Do you
have both of those numbers?
S3 (10:38):
Yes I do. I think um, it says when I,
if I reach, when I reach retirement age because right
now I'm 53. It says if I if I was
at the retirement age of 62, I would have received
11 a month. And right now, if I take the
lump sum, it would be 88,025.
S1 (10:59):
Per month or 88,000 today. And what is your age
right now?
S3 (11:04):
Day? No, I'm 53, but I don't I'm not at
retirement age. I just um, so yeah, they they gave
me option to do transfer it to a Roth IRA
or a traditional IRA. Different things that I could transfer
that amount to. But I wanted to ask you, what
is the best thing?
S1 (11:23):
Sure. So both of them, the monthly amount, the 1125
or the lump sum of 88,000. Both of those would
be available to you starting at 62. Am I understanding
that correctly?
S3 (11:35):
Yes. Like whatever decision that I make, I could choose
to like to pick the one that says 1125 when
I reach retirement age, which is at 62, I guess
the earliest is 62. I know my retirement age is 67,
but the earliest I could take it is at 62,
but it would give me 1125 a month. That's what
(11:57):
the paper said 1125 a month or right now, if
I want to transfer the lump sum of 88,000 to
either A or any of those, um, traditional IRA, Roth
IRA or something like, um, any four, four, three b
anything that I want to transfer that to, then it
would be it's almost like a payoff. Then they're done
(12:18):
with me.
S1 (12:19):
Yeah. Got it. All right. Well, here's a couple of thoughts.
I mean, the first questions to ask. So I think
the questions you want to ask in making this decision,
among others, are first, do you need income now or later?
If you don't need the money immediately, the pension the
pension may lifetime income flexibility or you're looking to invest.
(12:39):
Obviously the lump sum gives you options. The second is
what is your health status and family longevity? That's obviously
no one knows the day or the hour the Lord
will call us home, but this is just a part
of the decision making process and based on your health
and your family health history. If you expect to live
into your 80s or 90s, the pension monthly could pay
(13:01):
out much more over time. If your health is uncertain,
the lump sum gives you more control, I think. Thirdly,
do you have other income sources that will be coming
in like Social Security or part time work or other savings?
And then are you comfortable managing managing the money or
working with an adviser? Because that's what would be required
if you took the lump sum. So I think those
(13:23):
are the starting point. Questions. When we come back from
this break, we'll talk about just the math comparison on
the equivalent of 125 a month, let's say, for 18
years to age 80 versus the lump sum. Stay right there.
We'll be right back on faith and finance live. Thanks
(13:47):
for joining us today on Faith in finance live here
on Moody Radio. I'm Rob West. We're taking your calls
and questions today on Anything Financial 800 525 7000. Before
the break, we were talking to Mary Lou in Miami. Uh,
she used to work for a company that offered a pension.
She's no longer with them. She recently received a package
from them asking if she'd like to essentially take a
(14:08):
lump sum now, equivalent to $88,000. She could roll it
to an IRA, or she could wait until age 62
and take an income stream for life. Uh, are you married,
Mary Lou?
S3 (14:21):
Yes, I am okay.
S1 (14:23):
And do you know if that $1,125 a month would
pay out just on your life only? Or would it
be your life plus your spouse?
S3 (14:32):
I'm thinking it's my life, plus my spouse, because there
is a section that says that my spouse needs to like,
fill out and notarize whatever decision I take.
S1 (14:44):
Okay. Yeah, you're going to want to check on that
because obviously that's a factor here. If it's just your
life only and you were to predecease your husband, then
that could be a vital part of the income he's
counting on, you know, to sustain his monthly living expenses.
That would go away if it's for both of your
lives and it lasts until the the second one passes away, well,
(15:04):
then you'd know you have that, at least for the
rest of your life. Now, if you take the 88,000 now,
let's say you were to invest it, and I'm just
going to pick a number. Let's say it grows at 7%
a year annualized for the next nine years until age 62,
which is when you would start the 125 a month
that would grow from 88,000 to 161,000 in my example.
(15:27):
And then I would be comfortable with you pulling 4%
a year, and that would preserve the 161,000. You should
be able to make that up and never tap into
the principal. The problem is on 161,000 at 4%. That's
only going to give you $6,400 a year, which would
(15:47):
give you about $530 a month, or about half of
what you were getting. So essentially, you'd be getting the
equivalent of 8% a year in income. Now you don't
have access. If you take the lump sum, you don't
have access to the larger amount that you could pull
larger sums if you needed it. But the idea that
you would get 125 a month for the rest of
(16:09):
your life, especially if it includes your spouse, which is
essentially 8% a year guaranteed of what, in my example,
that 88,000 would grow to over the next nine years. Because,
you know, you you're nine years away from age 62.
That's a pretty good deal. So I guess I would
say if you don't need the money and you're looking
(16:29):
to maximize retirement income and you've you're you're pretty healthy
and you've got longevity in your family, then I think
there's something to be said about that $1,100 a month,
which from an internal rate of return, you know, perspective
is a pretty good return on what I would expect
you to get from, you know, the investments on 161 grand.
(16:52):
Does that make sense, though?
S3 (16:54):
It makes a lot of sense because I'm currently working
for the federal government and I have a TSP. So
I was like, I don't really need the money. I'd
rather the money stay and be invested whatever they're doing. So,
you know, so I do agree. Thank you so much.
S1 (17:09):
Well, you're very welcome. Now listen, these aren't easy decisions.
And so I would say, you know, if you really
want to dig deeper into this more than just the
few minutes we have together on the radio, this is
important enough that you may want to consider reaching out
to an advisor. Certified Kingdom advisor. Just pay, you know,
he or she for an hour or two of their
time to kind of do a deeper dive or maybe
(17:32):
do a full financial plan, but hopefully that's at least
giving you a few things to think about. We appreciate
your call today. Lord bless you. Uh, let's go to Cleveland. Patricia,
I know you're driving. How can I help you?
S4 (17:43):
Hi, Ron. Thank you for taking my call. Um, I
just wanted to verify that on your introduction. You said that, uh,
in the way of protection, we could or should freeze
our credit with all three bureaus, um, and then temporarily
lift that if needed. Could you expand that concept a
(18:07):
little bit more?
S1 (18:09):
Uh, yeah, I'd be happy to. Uh, so essentially, what
happens when you freeze your credit is you're placing a
pin number on your account, which just means that any
lender who's trying to access your credit file for the
purpose of determining whether or not to extend a loan
to you, they will have to you will have to
provide that Pin number for them to access that information.
(18:32):
Now where that becomes very helpful is if somebody fraudulently
tries to impersonate you, maybe they've accessed part of your
identity and they're impersonating you, and they're taking out a
loan that they don't intend to pay back. Well, they
would be stopped in their tracks because when they get
to the step where the lender says, well, I need
to pull your credit, they wouldn't be able to provide
(18:54):
the Pin number. And that can cut off a lot
of the problems that can happen. It's free to do.
You need to freeze with each of the bureaus Experian,
Equifax and TransUnion. Now, the only potential downside, although it's
very minor, is that it adds a little bit more
of a hassle factor. An additional step if you need
to access your credit or a lender does on your
(19:15):
behalf because you're legitimately out there buying a car and
getting a car loan, or you're buying a new house
and getting a mortgage, or you're trying to qualify for
a credit card, you're going to have to, quote unquote,
thaw or temporarily lift the freeze for a period of
time so that, you know you can do business, and
you would simply do that either online, by phone or
(19:37):
through the mail, and you would let them know that
you want to temporarily lift the freeze, but that's it.
And then you could refreeze the credit. And most people,
you know, especially if you're in the kind of second
half of your life, you're probably not out there very
regularly borrowing money. And so therefore it, you know, maybe
1 or 2 times a year, maybe never, you know,
(19:58):
will you even have to do this? But it's pretty
easy to do, uh, generally either online or by phone.
S4 (20:04):
Okay. That makes a lot of sense. Um, and you
have that protection if I would do that. And then
when I see those commercials for credit protection against fraud
and things, I'm basically able to manage this myself without
accessing some kind of policy.
S1 (20:27):
Yeah, that's exactly right. Because these services is, uh, that
are available. Uh, you know, you can do most of it, uh,
by yourself. Uh, and you don't need to pay someone ten, 20,
$30 a month, uh, to be able to do this
for you. Now, they can provide some other helpful benefits,
but most of it, including this credit freeze, you can
(20:47):
absolutely do do on your own. And it costs you nothing.
And that's why I think for most people this is
the way to go. So you're exactly right there. Uh, Patricia,
we appreciate your call today. Lord bless you. A quick
break and then back with more questions after this. 800
525 7000. This is faith in finance. Live. And we'll
be right back. Great to have you with us today
(21:13):
on faith in finance live. I'm Rob West. We're taking
your calls and questions today. I've got room for you.
If you have a question, call right now. 800 525 7000.
Let's go back to the phones. Evansville, Indiana. Hi, Stacy.
Go right ahead.
S5 (21:27):
Hi. Uh, First of all, I want to just say
thank you for your service. And may God bless you
for for doing this. So I listen to you all
the time.
S1 (21:38):
That's very.
S5 (21:38):
Kind. Anyway, um, okay. My question is, is I have
about 15,000 in credit card debt. And I'm wondering the
best way to go about paying it off. Should I, uh,
either my house is paid for so I could get
(22:00):
a home equity loan to do that, or I could
take money out of my 401 K or my my IRA,
I guess, um, to pay that off.
S1 (22:17):
Yeah. Yeah. I'm not crazy about either of those options, Stacey. Um,
because with the IRA, that, first of all, is going
to create a taxable event. You won't have the penalty
at 60, but you will have to add that 15,000
to your taxable income, which I realize, you know, you're
going to have to pay tax on it at some
point unless you take it out after 70 as a
(22:38):
qualified charitable distribution. And you'd be eliminating all the interest,
which is probably high. So I realize that can make
some sense. But also now that money is no longer
available to grow and compound for the future. The second
option I really don't like the home equity loan because
we're taking something that is not secured other than just
you personally guaranteeing it, and we're attaching it to your
(23:01):
home and securing it by, you know, the place you live,
which I like to avoid if at all possible, especially
with these high interest rates right now. So I would say,
you know, my preferred option would be you just slide
this into a credit counseling program with our friends at
Christian Credit counselors.org. They'll get those interest rates down. You'll
make one monthly payment every month. Except now you'll have
(23:23):
a lot more going to principal every month. Um, then,
you know, interest and, uh, you know, you'll leave the
debt right where it is and get it paid off.
I just heard from a caller the other day, and
we've had thousands go through this program, but they were
just celebrating how quickly they've been able to pay it off. And,
you know, that way you wouldn't have the expense of
the home equity loan, which there's fees associated with it,
(23:44):
plus what I already mentioned. And you'd preserve 100% of
your retirement plan. But if you just felt a conviction like, no,
I don't want to wait a few years, and even
if I'm saving on the interest, I just want to
be out from under this once and for all. I
would say the retirement plan would probably be the next
best option. Uh, especially if you have other sources of
retirement savings that you feel confident are going to cover
(24:07):
your lifestyle spending in this season of life that's upcoming. Um,
then I would say that would be option two, especially
since you no longer have the penalty for the withdrawals.
S5 (24:18):
Right? Okay, okay. Well, I kind of thought that's what
you were going to say was the, the, uh, the
credit counseling.
S6 (24:25):
So yeah.
S5 (24:26):
I will I will look into that first.
S6 (24:29):
Okay.
S1 (24:30):
It sounds like you just affirmed your the regular listenership
and that's awesome.
S6 (24:35):
But yeah I just needed.
S5 (24:37):
I just needed your, your um your advice.
S6 (24:40):
All right.
S1 (24:41):
Well I'm happy to give it. Thanks for your kind
remarks about the program. I'd love to send you a
copy of our magazine, Faithful steward. I think you'll enjoy it.
So stay on the line. We'll get your information and
get that out to you. Stacy, thanks for your call today. Uh,
let's go to Boise. Hi, Sally. How can I help?
S7 (24:57):
Hi, there. Um, my question concerns a cabin that we
have in the mountains above Boise. We've had it for
12 years, and we've done very well as an investment
on it. But I'm 82, my husband is 85, and
we're getting ready to sell it right away. The capital
gains are huge, and I just wondered what you might
(25:19):
have to suggest.
S6 (25:21):
Um, yeah.
S7 (25:22):
My thought was if we sell it, if we give
the money to our kids right away, would that avoid
the capital gains somewhat?
S1 (25:30):
It would not. Unfortunately, when you say huge capital gain,
how much are you thinking you're going to have in gains?
S7 (25:37):
Um, what do you buy the cabin for? About 300,000.
We bought it for and we're selling it for 749.
S6 (25:47):
Okay.
S1 (25:47):
Yeah. So that is that is a big gain. Um,
so that actually may even push it up into the higher, uh,
you know, bracket, because when you add your combined income, um,
you know, on the long term capital gains rates, it
would be, uh, you know, your combined income plus the
gain itself. And for 2025, um, if you're married, filing jointly,
(26:11):
and you have over 583,000 in combined income, which again
includes all of your income sources plus the gain, um,
then you would be up at the 20% rate. If
you were under that 583,000, it'd be at 15%. So
what are your options to avoid it? Well, the only
options would be number one. You could just hang on
(26:33):
to it and let the kids inherit it. Uh, if
they inherit it based on the current law, they would
enjoy that step up in basis so that cost basis
of 300,000 would go away and it would be adjusted up.
That's where the step up comes in to the market
value as of the date of death. And then they
could turn around and sell it and they would pay
(26:54):
no capital gains on it. Um, the option you suggested,
which is where you sell it and then you give
it to them, the IRS doesn't look at what you
do with the money. All they care about is that
you're the one selling it. And if you sell it,
you are going to have to pay that capital gain.
So option one, you hang on to it. Let them
inherit it. It goes away. Option two is you could
(27:16):
give a portion of it away if you plan to
be charitable with any portion of that? The proceeds on
the 750,000 you could give. Uh, you know, a certain
percentage of that cabin to a donor advised fund on paper.
And then at the sale, that portion would fund the
donor advised fund that you and or you and the kids, um,
(27:39):
along with your husband, of course, could then start giving
that money away to to non-profit ministries or your church.
Maybe you get the family involved in the giving, but
the portion that was given to the donor advised fund
prior to the sale would not be subject to capital
gains at the sale. But if it's really more about
an inheritance than giving, then I would say, you know,
(27:59):
your two options are either just pay the 15 or 20%, um,
and then you can do with it what you want
or hang on to it and let them inherit it.
S7 (28:10):
Well, we're ready to sell it because of the maintenance.
S6 (28:13):
That's okay. Yeah, that makes sense.
S7 (28:15):
Too much.
S6 (28:15):
So. Yeah, yeah.
S1 (28:17):
Yeah. I mean, the only other option, which doesn't sound
like you're interested in it, would be a 1031 exchange
where you roll it into a new, uh, income generating,
you know, property. Um, but it sounds like at this point,
you're just going to need to go ahead and sell it.
Not a bad time to do it. Capital gains rates
are very low at that 15 or 20%. Hopefully it's 15.
(28:39):
Make sure you you know, if you're going to be
close when you put your combined income plus the capital gain,
if you're going to be close to that 583 mark.
Because based on the numbers you're telling me, you know,
you're at 450 before you start counting your income, but
you can reduce that capital gain by any improvements you
made to the property, not maintenance, normal wear and tear,
(29:02):
but improvements that improve the value. You can also subtract
things like the selling costs and some of those expenses.
So it sounds like I would imagine when you apply
those two things, um, you know, especially if you all
are in retirement, uh, you probably don't have a ton
of income, you should be able to stay in that 15% bracket,
which at that point, you know, let's say we're talking,
(29:24):
you know, 500 and 450,000. Even if you didn't have
anything like improvements or expenses at that point, it'd be
about 67 grand. So I think those are your best
options unless you want to give a portion of it away. Okay.
S7 (29:38):
Well, we'll consider that. Thank you for your help.
S1 (29:41):
We appreciate your call today. Lord bless you. Well, we're
going to take a quick break. And then when we
come back, uh, our final segment, we'll be talking to
Cynthia in Alabama about her mom's home and some property assessments.
And then Patricia in Indiana. She's wondering about a 4
or 3 B to pay off the mortgage. We'll have
room for a few more questions as well. Stay with us.
(30:01):
We'll be right back. Thanks for joining us today on
Faith and Finance Live, helping you live as a wise
and faithful steward, by the way, as a listener supported ministry,
the way we reach God's people with this message of
(30:21):
faithful financial stewardship is in part through your generous support.
We don't do this without you, and we created the
Faithful Partner Program for that purpose so you could come
alongside the ministry if you're someone who's been blessed by it,
or perhaps you love the program, you listen regularly and
your way to give back to support this work so
others can hear. This message is by coming alongside us
(30:43):
at $35 a month, or $400 or more per year.
And as a thank you to you, we make you
a partner, which means you get access to the faithful app.
You get all of our new studies and devotionals and
not only the devotionals that we've come out with, but
all of the devotionals that we will be creating in
the future. And by the way, the one we're working
on right now for the fall, I am so excited
(31:04):
about our team met on it this week. The writing
is underway. It's going to be a huge blessing to you,
but you also get four issues of Faithful Steward, our magazine,
which if you've not seen it. It's beautiful, it's thoughtful.
It has articles and interviews and Q&A, and it's just
really built for people that want to be serious about
integrating their faith into their financial journey. And it comes
(31:25):
out four times a year. We'll mail a copy to
your door if you want to learn more about all
of that and how to be a partner, just go
to our website. That's faith. All right, let's head back
to the phones. Alabama is where Cynthia's located. Cynthia, how
can I help you?
S8 (31:45):
Uh, yes. I was calling because I had a question about, uh,
a home assessment property value notice that's sent out every year.
And this particular year, we didn't get one. And that's I.
And I called to inquire about it, and he said
only if there's no change in the value, they don't
(32:06):
send it out. And I was like, well, that's unusual
because the single property we have, we had one $0.01,
but you didn't give us one on the property with
the home on it. And then when I pulled the
cops on the the property record, the value had changed.
So I'm a little confused on why we didn't get one. Yeah. And, um,
(32:30):
I didn't know if that's a policy or by law,
am I do one or is am I just overthinking this?
S1 (32:38):
Yeah, it's a great question. It really depends on the
local property tax rules. Um, most counties interestingly, interestingly, do
not reassess properties every year unless there's a sale or
a renovation or a major value change or the county
or state law mandates annual assessments. But that's less common
(32:59):
in many places. They're done on a cycle every 2
to 3 years, unless triggered by one of those changes
you mentioned. Um, so can you request an assessment? Yes.
As a property owner, you can usually request a reassessment
or file an appeal if you believe they've assessed the
value incorrectly. However, if the exemption if there is an
(33:22):
exemption that overrides the changes in value, a reassessment may
not change anything. So in some cases, you know, certain
people may have a tax exemption like seniors or if
you're disabled or a homestead, and that could freeze or
limit the taxable value even if the market value changes.
And so the assessor may say no reassessment is needed
(33:45):
because the exemption caps or locks the valuation for tax purposes.
But if you believe something's not right, I would, you know,
ask for a reassessment or file that appeal. And your
county should be able to tell you exactly how to
do that.
S8 (33:59):
Okay. That's what I needed to know.
S1 (34:02):
Excellent. Well, listen, thank you for your call today, and
we appreciate you being on the program. Let's go to Indiana. Hi, Patricia.
How can I help you?
S9 (34:11):
Well. I'm retired. I still work two days a week.
My husband's retiring in one year, and we paid our
house off all but $19,000 on purpose. And I thought
that would really drop, uh, the interest down. Well, all
I'm paying now on the principal is 18 and $19
(34:33):
per month. And all the rest of that is interest. And,
you know, home, um, taxes and stuff. I can take
my 403 out and pay that off. Would that be
a good idea?
S1 (34:47):
Well, you don't have a whole lot left here on
this mortgage. I mean, you know, certainly you could pull
that money from the 403 B. What is your age?
S9 (34:56):
I'm 67.
S6 (34:58):
Okay.
S1 (34:59):
Um. And are you all drawing from the 403B right now,
or is it just sitting there?
S9 (35:04):
It's just sitting there.
S1 (35:05):
Okay. Um, and if you were to continue right now
just kind of paying this out, um, are you all
sending extra to the mortgage every month or just the
scheduled payment?
S9 (35:16):
Well, I just now paid it down to 19,000. So
I'm just after I saw what the interest was going
to be, I thought, just pay it off and be
done with it.
S1 (35:26):
Yeah, yeah. But you obviously were able to do that
out of current cash flow or savings, or did you
pay it down to 19 by pulling from the 403?
S9 (35:36):
No, I did not. We had the money to do it.
S6 (35:39):
Okay.
S1 (35:40):
And if you said, listen, I want to try to
keep the 403 B intact and not pay the taxes
on it. Would you have a little bit extra every
month that you could put beyond the scheduled payment toward
the mortgage?
S9 (35:54):
Not a lot. Not a lot extra.
S6 (35:57):
Okay.
S1 (35:58):
Yeah. I mean, you know, with that payment that you've
got because your balance is only 19,000, the majority of
that payment, I'm now set aside the taxes and the
insurance because that is what it is. That's that's not
going to change even if the mortgage is gone. But
with the portion that's not the the taxes and the insurance,
just your scheduled payment, just given how low that mortgage is,
(36:19):
the vast majority of that should be going to to principal,
not interest. Um, so I would take another look at that. Obviously,
I'd love for you to hang on to that for
a freebie and just kind of prioritize, you know, getting
out from under this just by funding it out of
excess cash flow, you know, on a monthly basis. But
if you're saying, listen, I don't really have a whole
(36:39):
lot extra. Um, and we'd really love for this thing
to just be gone. Then I could get on board
with that. You're not going to have a penalty on
it because of your age, and you're going to have
to add that 19,000 to your taxable income. But now
your mortgage is gone, and you can take at least
the the principal and interest portion, the scheduled payment. And
now you can, you know, rebuild your savings. Um, and
(37:01):
that wouldn't be a bad thing. But my first choice
would be that you do it out of current cash
flow or savings and leave the retirement plan intact. But
if you're just really set on getting out of debt
as soon as possible, then I don't have any problem
with that.
S9 (37:17):
Well, the thing is, we don't have a lot of
debt other than the biggest debt we have is $9,000
on our vehicle. That's just about it. Okay. And I
just wanted to be debt free. And my husband's got
a 401. Is it called 401 K?
S6 (37:32):
Yes, ma'am.
S9 (37:34):
Yeah, he's got that. We're not touching that. Then we
got a small investment somewhere else. We're not touching that. So.
But no, I took that paper in when I got
that from the mortgage company. I took that in and
I said, this can't be right. And they looked at
it and they said, yeah, it is said you're playing
mostly interest. And I thought, that's not right.
S1 (37:54):
How big was the mortgage to begin with?
S9 (37:58):
8000.
S1 (37:59):
Yeah. Yeah. That something's not right there. Um.
S6 (38:03):
Because, you know, at the at.
S1 (38:04):
The end of.
S6 (38:05):
A.
S1 (38:06):
A mortgage, you should have more going to principal and interest.
But regardless, I think, you know, if you're set to
be able to pay this off, you've got the money available.
Make sure you set aside enough for the taxes. I
don't want you to be caught by surprise on that,
but you certainly could do that. Um, I love the
fact that you paid it down to 19. That's great.
That's going to save on the the interest, because there's
(38:28):
not a whole lot of interest that's owed on a
$19,000 loan, especially if you have a low interest rate.
What is your interest rate on the mortgage? Do you know?
S9 (38:36):
I think it's 6% six point something.
S6 (38:39):
Okay. All right.
S1 (38:41):
Yeah. I mean, you're probably after you know, you're not
probably making a whole lot more than 6% in that
four of three be. So again, I don't I don't
think that's a bad thing. And then you could take 100%
of that payment and put it back into savings. So
I would either do that or just stay focused on
limiting your lifestyle and sending as much extra as you
can every month. Either of those options would be good.
S9 (39:04):
Okay. So now this is going to throw me in
a higher tax bracket when I file my taxes isn't it.
S1 (39:11):
Not necessarily. No not necessarily because you're only adding 19,000.
And it's going to have to do with what other
income you would have. And keep in mind, the way
the tax brackets work is, even if a portion of
it slips up into a higher bracket, it doesn't push
everything up into the higher bracket. It's a progressive system.
So you know you're going to pay the lower tax
(39:32):
rate on the first portion. And whatever portion slips up
into the higher bracket, you'd only pay the higher tax
amount on that portion of it that goes above the threshold.
S9 (39:43):
Okay. That's wonderful. I just been listening to you, and
I thought you would tell me the truth because you
would tell me if this was a bad move. I
don't want to make a mistake. And I'll tell you
this real fast, and I'm hanging up. Um, we went
to a seminar. Okay? I said, let's go to this
free seminar about Retirement.
S1 (40:01):
Okay. Did they? Did they buy you a steak to
go to that?
S9 (40:05):
No, but.
S1 (40:06):
Okay.
S9 (40:07):
It wasn't a matter. You know what he said? If
you don't have $1 million in savings and you can't retire. Well,
I said, that's the last seminar I'm going to because
we ain't got $1 million. Yeah. And he wanted to
know our income. I said, do I have to tell
you that? He said, no, ma'am. I said, then I
ain't telling you.
S1 (40:25):
So you do not need $1 million. All you need
is enough to cover what you believe is the lifestyle
God has called you to. And that absolutely may not
require $1 million, especially if you're living modestly. So I
would agree with you, Patricia, 100%.
S9 (40:41):
Well, I appreciate it. Can we go back and listen
to this broadcast somewhere?
S1 (40:45):
Yes, ma'am. Uh, just go to Moody radio.org and you'll
be able to listen to the, uh, the recording of
this episode and any others. Uh, and usually it'll be
available by this evening.
S9 (40:59):
All right. I want my husband to hear you. All right.
I sure do appreciate it. You was wonderful. Thank you.
S1 (41:05):
Thank you. Patricia. Lord bless you. Bye bye. Thanks for calling. Uh,
let's go to Barb in Nebraska. Barb, how can I help?
S10 (41:13):
Hi. Thank you for. I love your program. Rob. I
listen very often to it. I appreciate it. You have
a PSP account? Um.
S11 (41:23):
Let's do this, Barb.
S1 (41:24):
The time got the best of me. I want to
answer your question. I'm going to do it off the air,
so I'm going to stay right here as soon as
we're done, and you and I'll talk off the air
and I'll answer your question, but I don't want to
rush it. So I'm going to have you hold for
a second. I apologize, folks, that's going to do it
for us. My team's Taylor Standridge and, uh, grateful for, uh,
everybody here, including Rihanna and Omar and all the great
(41:46):
people that make this happen every day. Faith and Finance
Live is a partnership between Moody Radio and Faith fi.
We'll see you tomorrow. Bye bye.
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If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!