June 30, 2025 • 43 mins
On Faith & Finance Live, it’s the kickoff of a new series on temperaments. Discover how our God-given wiring shapes the way we communicate, relate to others, and make financial decisions. Kathleen Edelman and Traci Shepherd join Rob West to explore the Red temperament. Learn how having this nature influences financial decisions. Then, Rob addresses our calls and financial questions. That’s Faith & Finance Live—where biblical wisdom meets today’s finances, weekdays at 4pm Eastern/3pm Central on Moody Radio.
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Episode Transcript
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S1 (00:02):
Today's version of Faith and Finance Live is pre-recorded so
our phone lines are not open. The purposes of a
person's heart are deep waters, but one who has insight
draws them out. Proverbs 20, verse five. Hi, I'm Rob West.
Today we're kicking off a new series on temperaments. How
our God given wiring shapes the way we communicate, relate
to others and make financial decisions. Kathleen Edelman and Tracy
(00:27):
Shepherd join us to explore the red temperament and how
it influences our financial decisions. And then we have some
great calls lined up. But please don't call in today
because this program is prerecorded. This is faith and finance.
Live biblical wisdom for your financial journey. Well, today we're
(00:50):
kicking off our four part series with Kathleen Edelman exploring
the four temperaments featured in her book. And course I
said this. You heard that how your wiring colours your communication.
It's a powerful resource that unpacks how our God given
wiring shapes every part of our lives, including our finances.
And Kathleen. Delighted to have you back as we begin
(01:12):
this journey.
S2 (01:13):
I love talking about this topic with you.
S1 (01:15):
Well, it's so much fun. I'm so looking forward to
every part of this. And I know you've brought a
friend with you, Tracy Shepherd, who helped you teach on
this temperament in your core. She's here to give us
an inside look at the first temperament we're exploring in
this series. And that is the red temperament. Tracy, great
to have you as well.
S3 (01:35):
Oh, I'm excited to be here. Thank you.
S1 (01:37):
Kathleen, I'd love for you to begin by just providing
a brief overview of the four temperaments for those who
may not be familiar.
S2 (01:44):
So the temperaments date back to Hippocrates, 600 years before
Jesus walked the earth, and they fell into four categories,
and each one speaks their own language. So we have
the yellow sanguine speaks the language of people and fun.
An extrovert that's people oriented. Okay, we have a red choleric.
That speaks the language of power and control. An extrovert
(02:05):
that's on the task side of the chart, a blue
melancholic that speaks the language of perfection and order. An
introvert that's on the task side of the chart, and
a green phlegmatic that speaks the language of calm and harmony.
An introvert that's people oriented. So these temperaments play into
how you speak, how you hear, how you talk, what
(02:29):
your behavior is and how you deal with money.
S1 (02:33):
Yeah, absolutely. And as we mentioned, Tracy's temperament is red,
which is typically a take charge kind of person. So, Tracy,
I'd love to know when you first took Kathleen's assessment
and it identified you that way, what went through your mind?
S3 (02:47):
When I read the definition of a red temperament, I thought, yep,
that's me. Um, I love tasks, give me all the tasks,
I'll get them done. So it was definitely an aha
moment to learn, um, the why behind how I communicate
and the relationships I have and, um, the behaviors, the
good and the bad and the ugly of a red temperament.
S2 (03:07):
Yeah. So most reds aren't shocked, and they feel like
the fix it person in the room. And they've probably
felt this way since childhood. But many tell me that
it's really simple. If you say you're going to do it,
then do it. Um, if you don't do it, then
they feel like they have to step up, step in,
take charge, fix it. You know, the temperament framework helps
(03:30):
them to see the strength behind that drive, and it
helps them become more aware that of that dynamic leader
that they can be instead of the bully on the playground. Yeah.
So it gives them the tools to balance that strength
with empathy and connection.
S1 (03:46):
Well, let's get right into it. So, Tracy, how does
that red wiring then show up in the way you
approach money?
S3 (03:53):
Huh. Well, um, I love budgets. I love a plan. Um,
my desire to know a plan definitely comes from my
red temperament wiring. Um, and I'm goal oriented, so give
me a budget or a goal to have in savings,
and I'll make it happen. Just tell me what it is.
I'll figure it out. Sure. Um, my husband is a
yellow temperament who is, um, has different interests in opinions
(04:17):
on how we spend money. But I've learned that that
it's not necessarily wrong what he enjoys and how he
spends money on food and entertainment, vacations and concerts. It's
just not how I would use money. And that's okay.
I value having an efficient budget that with a large
savings account to feel safe. So I just think that
(04:39):
learning how other people are using money isn't a bad thing.
It just helps you understand the why behind it. So
we have a lot of conversations about budgets and finances.
We own a business together and um, which is interesting
as a husband and wife, but we oftentimes will bring
in a third party to help us when we can't
be on the same page about making a plan or
(05:00):
a savings. How we spend, save and give for sure.
S1 (05:03):
So helpful. And it makes so much sense. We're talking
temperaments today, specifically the Red temperament with Kathleen Edelman, temperament expert,
along with Tracy Shepherd, our representative Red temperament today. And
we're talking about how all of this affects money and
money decisions. Also how you communicate back with much more
(05:24):
after this. Stay with us. Thanks for joining us today
on Faith and Finance Live. I'm Rob West with me today,
Kathleen Edelman. We're kicking off a four part series on
your temperament and how it affects your money decisions. Kathleen
(05:48):
is our good friend. She's the author of the book
and the course. I said this. You heard that how
your wiring colors your communication. We're also joined by Tracy Sheppard,
who is here to talk about specifically the red temperament.
She has taken the assessment. She is clearly a red,
and she's representing all of you red temperament folks out
(06:10):
there in our audience today as we talk about money
and money decisions. And Kathleen, before the break, Tracy was
sharing that as a red. She loves budgets. She wants
to know the plan. She loves a goal. She will
make it happen. And that has real implications.
S2 (06:25):
Oh yeah, Reds are doers. They see money as a
tool to accomplish a goal, and what they're uniquely wired
for is visionaries. They can see that goal so clearly,
but that same drive can lead them to control conversation
or dismiss other's inputs and not seeing the obstacles in
the path. Just a means to the end. Yes. So
(06:47):
in family or business settings that can cause tension unless
they slow down and invite collaboration using the important communication
skill of showing interest and curiosity.
S1 (07:00):
Tracy, let's talk about that for a moment. Would you
say that kind of confidence is an advantage when it
comes to managing money?
S3 (07:07):
Yes, that confidence is definitely helpful. Um, someone that's like
she said, the doer, I have no doubt that I
can get the job done. I can stretch a budget,
and I don't even care what the budget is, big
or small. I can make it work. Um, I will say, though,
that I do find that showing that interest in other
people's temperament when discussing the budget in the workplace and
(07:27):
at home is asking, hey, tell me why you think
that way. Tell me the why behind. Um. I'm curious.
You know why you would spend money or save money
that way. So definitely have to throw in a third
party to help make that connection sometimes.
S2 (07:40):
Yeah, Red's their bullet point. Bottom line, thinkers. But what
we have to understand is they do think things through,
even if others don't see it.
S3 (07:48):
Oh, so far ahead. Yeah.
S2 (07:49):
Oh, yeah. So they don't always pause to hear another's perspective? Yeah.
A read would benefit greatly by another important communication skill
which is listening to understand instead of listening to reply.
But when a read steps back and listens, they can
make the good and hard decisions and they can help
(08:12):
everybody through the process.
S1 (08:15):
Hmm. Yeah, that's really helpful. And they want to make
sure that we're following the plan as well. Uh, Kathleen,
you've shared before that each temperament has specific emotional needs.
So what are the innate needs for someone with a
read temperament?
S2 (08:30):
So Reds loyalty right off the bat, being prioritized and
knowing you have their back sense of control, everybody pulling
their weight and following the plan. Appreciation being valued for
their unique strengths and credit for work being valued for
their contributions. So if these needs are not being met.
The red may start to control with anger or tone.
(08:53):
Tone is what we really struggle with with that red temperament.
But when they are met, they are dynamic leaders worth following,
and they inspire others to move forward in their own strengths.
S1 (09:06):
Yeah, that makes sense, Tracy. How do those core needs
resonate with you?
S3 (09:11):
Oh. Big time. I mean, sense of control is huge
for me. Um, I don't necessarily want to be the
one in control. I just need to know that somebody
is in control. Um, so. And loyalty really resonates with me.
I value authentic relationships and friendships that are honest and open.
I mean, friends that are supportive and show up and
I show up for them is definitely a value. Um,
(09:34):
and for credit for work, when I have a vision
in any area of life, I enjoy gathering information, collecting
the facts, thinking and working through until I see it
come to fruition. So I definitely get a sense of
accomplishment from that. So when Kathleen says that Reds are
always thinking, we're thinking ten steps ahead all the time.
S2 (09:52):
I love that so many reds do have that aha
moment around these needs. And you heard Tracy. She doesn't
want to be in charge. She wants everybody pulling their
weight and following the plan, so they realize that that's
when they can get angry is when somebody doesn't say
what they're going to say they're going to do, or
especially if somebody else takes credit for their work. Um,
(10:15):
it's not ego. It's about innate needs. And once they
can name those innate needs, they're far more likely to
express them in a healthy way.
S1 (10:26):
Yeah, that's really encouraging. And Tracy, what about when you're
having conversations about money? Do you feel like your red
temperament comes through in those moments?
S3 (10:36):
Yeah. Um, like, especially working with a budget, like, somebody
give me the budget. I can make it if you
want me to. You can be in charge of the budget.
Just tell me what the budget is, big or small,
and I'll make it work. I'll take charge and follow
the plan. I like everybody else to follow the plan also. Sure. Um.
But I'll be loyal and stand behind you if you
make the budget. Um. And I'm not easily overwhelmed with finances.
(10:59):
So if you give me a project to work on,
I'm happy to do that.
S2 (11:03):
So reds can go into. I'll decide or let's move
on mode. Yeah. If somebody else doesn't step up, they're efficient. Um,
but they can be come off as impatient or even
harsh if people aren't stepping up to the plate. So
it's important reds to slow down. Um, this will make
a huge difference, especially when they learn to ask the
(11:26):
other temperaments. If you just ask them, hey, what do
you think about this? What do you feel about this? Yes. Um,
there's more than one way to be right. So that
communication skill of the power of the pause. Yes. This
can change the whole tone of the conversation for the
red boy.
S4 (11:43):
That is so helpful.
S1 (11:44):
Uh, Tracy, what's then the key takeaway for someone who
is a red or for someone in a relationship with
a red?
S3 (11:51):
Well, I have so much I could say about this. Um,
since learning so much about the temperaments, mine and others,
I am so much more self-aware of how my words
come across how they affect other people. I'm constantly reminding myself, Tracy, pause.
Don't be so blunt. Don't talk over other people. Um, because,
like I said, my mind's moving faster than than what
(12:12):
it comes across. And I sometimes can speak before. Before thinking, um,
for other reds, I would just say, hey, slow down.
Try to remind yourself to be present. We quickly get
ahead of ourselves and not stay in the moment. Um,
and for those in a relationship with Red, I asked
my husband this too, and he agreed that, you know,
to remind others that we're not Reds are not trying
(12:33):
to be controlling or strict. We just want to know
the plan and we know someone is in control. Then
we can feel safe and are better mentally prepared.
S2 (12:41):
Yeah, being a red is a strength uniquely wired to
be a visionary and see goals clearly. It's important that
the Reds out there, um, you know, it's important to
them that the other temperaments understand that you have thought
things through. You heard Tracy. She's ten steps ahead of,
(13:02):
you know, everybody else, um, thinking it through. So trusting
in other's strengths and connection will definitely take you further
than any force could ever take you. So, Reg, your
big picture thought process brings value to any financial decision. Yes.
And when you lead with both confidence and compassion, that's
(13:23):
where the transformation and communication and relationships and financial discussions
are going to happen.
S1 (13:29):
Um, and I think we're going to continue to see
this theme throughout this series, Kathleen. And that is when
we really lean into this, we're going to make better
decisions in the long run. When we bring everybody to
the table and they're heard and they're understood. This has
been such a great conversation. Unfortunately, we're out of time.
But thank you both for joining us today.
S2 (13:48):
Thank you.
S3 (13:48):
Thank you.
S1 (13:49):
If you found today's conversation helpful, there's more to come.
Kathleen Edelman will be back next week to cover the
green temperament as well as other colors, in future episodes.
Read Kathleen's insightful article on the four temperaments and how
they affect money and faithful steward. Get to copy each
quarter when you become a partner at faithfully. All right,
(14:10):
we're going to head to a break, so don't go anywhere.
Still a lot more to come, even though we're not
here to take your calls live today. But we have
plenty of calls that we lined up in advance. And
we'll get to those just around the corner. Delighted to
(14:34):
have you with us today on Faith and Finance Live.
We're not here today. Our team is away from the studio.
This is pre-recorded, so don't call in. But we've got
some great questions we lined up in advance. Before we
go to the phones, let me remind you, Faith, Fi
and Faith in Finance Live is listener supported. If you'd
like to be a financial partner, you can do that
at Faith. Com. Just click give thanks in advance. All
(14:56):
right let's head to the phones. Let's go to Mississippi. Hi, John.
How can we help?
S5 (15:00):
Hey. How are you doing now? Thanks. Thanks for what
you guys do.
S4 (15:04):
Thank you.
S5 (15:04):
I just wanted to, uh, a couple of quick questions
about early Social Security. I've worked and paid in all
of my life. My wife is has, uh, paid in
very little. I think it's, uh. I mean, I've went
online to see what we're eligible for, and I think
she's got her what they call 40 points or whatever,
but she's in only entitled to a very trivial amount. Yeah. Uh,
(15:28):
I'm 62. She's 63. Mine. Uh, the way I've understood
it is a spouse is normally eligible for roughly about 50% of,
uh of of of of the working spouse. Yes. Uh,
if we draw early, uh, would she still be entitled
to that? Uh, 50% if I'm 62 and she's 63,
(15:51):
if we started it early.
S1 (15:53):
She would not know. So here's the way that it works. Um,
so assuming you all were born around 1962 or 63,
is that right?
S5 (16:03):
That's correct. Yes, 62, 62 for her, 63 for me.
S4 (16:06):
All right.
S1 (16:06):
So your full retirement age is going to be 67.
So claiming benefits before full retirement age is going to
reduce the monthly amount permanently. And that would be for
both of you. So if you claimed it at 62
your benefits going to be reduced by about 30% compared
to what's called your primary insurance amount at full retirement age. Um,
(16:29):
and so, you know, you'd take what your Fra, your
full retirement age benefit is. You can find that at
my ssa.gov. And then you'd reduce that by about 30%
and that would be a permanent reduction. If she claimed
her own benefit at 63, it's reduced by about 25%
because she'd be a year closer to that full retirement age.
(16:50):
But for spousal benefits, it would come down to about 37%
of your benefit rather than the max 50%. So a
spouse can get up to 50% of their working spouse's benefit.
But that's only if the spouse waits until full retirement age.
(17:11):
So at 63, instead of getting the max 50, she'd
get about 37.5%. Now, if she has those 40 credits
or ten years of paying into Social Security, she would
be able to get either her own benefit, which would
be reduced as well at 63 or, you know, the
the up to 50% of yours or at or 37%
(17:34):
if she's taking it at at age 63, she can't
receive both, and Social Security would automatically pay the higher amount.
So if her own benefit is lower because you said she,
you know, doesn't, uh, although she met the 40 credits,
she didn't pay in a whole lot. Um, and the and,
you know, her portion of your benefit as a spouse
(17:55):
is higher than they would pay her her benefit, and
then they'd add an additional amount to match, basically the
spousal benefit, essentially. Um, so I think, you know, that's
the decision is do you all want to take it early,
recognizing you're going to lock in that reduced benefit for
both of you? Um, or do you want to try
to solve for your income needs in another way and
(18:18):
then hold off and get closer to that full retirement
age to get that checkup?
S5 (18:23):
Okay. Yeah. Yeah. So that that answers my main question
was what her reduction would be because, uh, her percentage
of mine would be greater than her, uh, credits, According
to the SSA website. And then so I guess my
only other question regarding that is, I think the the
calculations that we've worked would be okay for us to
(18:44):
do it early. Uh, but, uh, if I continue to
make some, uh, earned income during this, um, can I
do it? I've got my own, uh, little contracting business,
but it don't. It's not a lot of money, so
my income from that would be less than the 24,000.
Some odd, uh, allowed. Is that okay to have your
(19:08):
own business and still draw?
S4 (19:10):
Oh, yeah.
S1 (19:10):
Absolutely. I think the key is, you know, what you
pointed out there, and and that is that before full
retirement age, because at full retirement age and beyond, you
can earn as much as you want. Uh, but until
you reach full retirement age, you're under you've got to
be under that limit of $1,950 a month or 23,400
for the year. Um, and so for every $2 you
(19:34):
earn above that limit, 23 for your benefit is reduced
by $1. And then in the year that you turn
full retirement age, your limit increases from 23,400 up to 62,160. Well,
that's that's at least the 2025 number. It will probably
be higher by the time you get there. And then
(19:55):
at that point, for every $3 you go over that
higher limit in that final year, your benefits are reduced
by a dollar. And then once you reach full retirement age,
there's no limit. Now keep in mind if you did
have a reduction because you earned over the limit in
any of the years leading up to full retirement age,
you will eventually get that back. That's not permanent once
(20:16):
you hit full retirement age. Um, the Social Security Administration
recalculates your benefit, and they give you credit for the
months where your benefits were withheld until you've been fully
paid back. Uh, so that's, you know, pretty much the
only situation where you actually will recoup that over time.
It's going to take some time. You know, I think
(20:37):
it I don't know the exact number, but I think
it might take 10 or 12 years for you to
ultimately get all that paid back. But you will get
it back eventually.
S5 (20:45):
Okay. Yeah, yeah, just just working the numbers. The difference
between what I would receive at age 62 versus age 67,
if I waited till 67, it would take me 118
months to earn that amount of money that I would
earn in between age 62 and 67.
S1 (21:05):
I c yeah. So you'd have ten years before you've.
S5 (21:08):
Been, you know.
S1 (21:09):
Yeah. Well, so then I mean, the way you look
at that is you say, okay, if I've got ten
years to be repaid back, but then from that point
forward I've got, you know, a check that's 30% higher
for the rest of my life. Uh, you know, that
may be the difference between you being able to cover
your lifestyle expenses and not, uh, especially if, you know,
(21:31):
as things increase over time, like medical expenses and that
type of thing, once you reach age 65, your life
expectancy is like 82 as a male. Um, and so the,
you know, depending on your health and your longevity and
your family, you may say, you know, let's try to
get that check up, give up that money from 62
(21:51):
to 67 billion. We're going to live ten more years
and then enjoy that higher check. Hope that helps. John,
thanks for your call, my friend. We'll be right back.
So thankful to have you with us today on Faith
and Finance live. I'm Rob West, by the way. Our
team is not here today. We're away from the studio,
so don't call in. But we've got some great questions
(22:13):
that we lined up in advance. We'll get to those
in just a bit. You know, I'm reminded as we
think about the role of money in our lives that
we need to counteract the messages of this world. We
need to operate from a biblical worldview. And when we
look to Scripture, I think we really see three big
ideas around the role of money. The first is money
(22:33):
is a tool. Yeah, we use it to buy things
for ourselves and others, and we use it to accomplish
God's purposes. But it's also a tool in the sense
that God uses money in my life to teach me
to rely on him. It's a daily demonstration of my faith.
It reveals where I've placed my trust and what I value.
So it's a tool. It's also a test. You know,
(22:55):
having too much or not enough can be a test.
Are we going to live with contentment? Will we choose contentment?
Are we going to rely on money in place of God?
It's a test in our lives, but it's also a testimony,
especially our willingness to trust God when we have little
or perhaps to share generously when we have much that
(23:15):
provides witness to an unbelieving world, even our faith to
handle money. God's way in the midst of uncertain times,
that itself can be a great testimony to the world.
So money is a tool. It's also a test, and
it's a testimony that God uses to both provide for
my needs, as well as to grow me up in
(23:36):
my faith and rely more heavily on him. I hope
that's an encouragement to you today. All right, let's head
back to the phones. Uh, you know, one of our
callers mentioned just a moment ago that he and his
wife kind of have different money personalities. You know, she's
more of. Let's enjoy what we have right now. He's
wanting to stay disciplined, reach their goals and save for
(23:56):
the future. And we can often think, well, one way
is right. The other way isn't. And yet we need to,
I think, come to a place where we understand and
appreciate kind of what each other's bringing to the table,
which is largely informed by certainly our upbringing, our money, personalities,
if you will, are shaped by our environment. What did
we grow up in? Was money scarce or abundant? Did
(24:18):
mom and dad model a spending plan, or did they
kind of spend spend frivolously? And maybe they they had
a bunch of debt, uh, You know, all of that
shapes how we handle money. But one of the keys
that shapes how we handle money is our temperament. And
we have an incredible article. Our temperament expert, Kathleen Edelman,
here on faith and finance, uh, wrote uh, for our
(24:42):
most recent edition of Faithful Steward, issue two, uh, an
article called How Your Temperament Affects your Money mindset and
your temperament, essentially is the wiring that drives your natural thoughts, behaviors,
and responses. And that certainly includes how we handle money.
And the key to wise financial decisions isn't just a
(25:04):
better budget. In many ways, it's a better self-awareness. You see,
understanding your temperament can help you recognize why you make
certain money decisions, how to manage finances in a way
that aligns with your strengths. But I think there's something
even more important to this. And this is what Kathleen
hits on in this great article in in the most
(25:24):
recent issue of Faithful Steward, is that each temperament speaks
a unique language, has certain strengths and weaknesses, and is
motivated by what Kathleen calls innate needs. And when it
comes to money, I think knowing your temperament and understanding
other's temperaments can help you not only make better financial
decisions and reduce stress, but communicate more effectively. So I'm
(25:50):
of the four. I'm what you call the the yellow temperament. Um,
and you would understand this if you read the article.
She breaks them down, uh, to yellow, red, green and blue.
So my temperament is one that, you know, ultimately, at
its core is about, uh, the language of people and fun.
I'm extroverted, I'm people oriented. And for money. My mindset,
(26:13):
as she describes in the article, is that money is
meant to be enjoyed. So I love giving generously. I'm
optimistic about our ability to reach our goals I love experiences,
so if I'm going to spend money, I want to
do it on an experience with my kids or with Julie,
my wife, that we're going to use to create memories.
And I'm always willing to to spend money to do that.
(26:35):
The challenge is, is are that yellow? What I am
temperaments can be impulsive in their spending, and we tend
to dislike budgeting. And I know that probably sounds funny
coming from a money guy, but I think understanding how
that plays into your decision making and being able to
bring that into your communication is really key, because there
(26:59):
are some, some challenges that come with this. And ultimately,
I know that I have to be careful making sure
that I honor Julie's desires with regard to our budget
and ultimately what we're driving toward and what we're saving for.
And so, I think, you know, perhaps understanding your temperament
could be a game changer not only in how you
(27:20):
make decisions, but how you communicate with your spouse. By
the way, if you'd like to pick up a copy
of Faithful Steward, we'll make sure that you get every issue.
It comes out four times a year when you become
a faithful partner. It's a great way to support our
ministry and receive great resources that will encourage you in
your stewardship journey. Just head to our website and click
(27:40):
give at the top of the page. That's faith Philly.com.
All right, let's head back to the phones. We do
have still a couple of lines open. So if you
have a financial question today you can give us a call.
Let's go to Texas. Hi Tina. How can I help?
S6 (27:54):
Hi. Um, my mama, um, bought an annuity several years ago,
and now we need it for her care. It's about 179,000,
and it just seems like we're running into roadblocks with
trying to get money out. I was thinking if we.
I don't know if you cash it in. I just
(28:14):
need knowledge on what to do. Do you cash in
an annuity or how do you get the money out
so you can use it. Um, we want to use
it for her care.
S1 (28:24):
Yeah. Very good. Uh, yeah. And so I can certainly
understand that as you, um, engage with the company, I think,
you know, you first of all need to understand the
options that you have. So, uh, there, you know, tend
to be long term investments, and they are designed to
lock up the funds to ultimately provide, uh, steady access
(28:47):
to the money through kind of an income stream, which
is what's called annuitized. Um, but getting access to the
money early can be tricky. Now, how long have you
had this particular annuity, or has your mom had it?
S6 (29:00):
I would say at least 20 years.
S1 (29:02):
Oh, okay. Yeah. So we would be beyond the surrender
period here. That typically lasts 6 to 8 years. Um,
and so, you know, you should be able to, uh,
you know, cash it in without any kind of surrender charge. Um,
it really ultimately depends on the type of annuity that
it's in. Um, and that would ultimately come down to
(29:24):
contacting the company and getting some of the details or
finding the initial, um, you know, contract agreement that she signed. Um,
there can be taxes that would be triggered as a
result of this if it's, um, you know, a qualified
annuity where the money went in pre-tax. Um, so are
(29:45):
you looking for kind of a regular monthly income stream
where you can pay ongoing bills, or do you need
access to more of a lump sum?
S6 (29:55):
No, I think just to, um, pay for her care
like caretakers. Right now, she only gets about 200 a
month from it. It's through fidelity. I don't know what
kind of annuity it is.
S1 (30:08):
Okay.
S7 (30:08):
Got it. Whether it's qualified.
S6 (30:10):
I think you mentioned qualified where she paid, whether she
paid the taxes up front. I need to find that out.
S1 (30:17):
Gotcha. Yeah. So I think that would be important to know.
Just because you don't want to get caught off guard
with the, uh, the tax implications of that. But what
you may want to look at is what's called an annuitization,
where essentially you would tell them, uh, we want to
go ahead and annuitize this, which takes it out of
the accumulation phase and puts it into a distribution phase.
(30:37):
And then she could get a monthly check, uh, you know,
paid out to her out from the annuity. Um, that
could be the difference between you all being able to
cover those bills and not. Let's do this. Stay on
the line. We'll finish up off the air. We'll be
right back. Great to have you with us today on
(31:06):
faith and finance live. By the way, we're not live today.
We're away from the studio, so don't call in. But
we have some great questions that we lined up in advance,
by the way, this ministry is entirely listener supported. That
means we rely on your financial gifts and support to
do what we do on the air every day. If
you consider a gift, we'd certainly be grateful. Just head
(31:27):
to our website, Philly.com. That's faith. Dot com and click
the give button. Thanks in advance. Let's head back to
the phones. Cody is in Texas. Go ahead sir.
S8 (31:37):
Hey, how's it going, sir? Um, yeah. So I just
wanted to call, um, to see if you had any advice. Basically, um,
I went through a pretty, um, unfortunate and ugly divorce
a few years ago, which racked up, um, a substantial
amount of credit card debt. And I also have an
RV that I kind of went upside down on immediately. Um,
(31:59):
because they just lose value so fast. Yeah. And over
the last few years, the Lord has been really just
calling me. He said, just you. You're enslaved to these
people who are not me, basically. And so I've been
really trying to hammer the debt down. Um, but it just,
I mean, it feels like I can't get ahead. You
know what I mean? And, um, so I just kind
(32:19):
of wanted to call in and see if you had
any advice on that.
S1 (32:22):
Yeah. Happy to. Um, so what is the status of
that RV? Um, what do you owe on it? What
do you think it's worth today?
S8 (32:30):
So I owe I've been paying just minimum payments for
the last two years. Uh, I owe about 30,000 on it,
and I think its cash value would probably be no
more than, like, 16,000.
S1 (32:43):
Okay. Got it. Yeah. And so you'd have about a
$14,000 difference, assuming you could get 16 for it. Um,
the what is the rest of your kind of financial situation?
Do you have, uh, assets, you know, like an emergency fund?
Do you have any savings? Uh, what do you have
access to?
S8 (33:05):
Yeah. So I just did just recently, I secured an
emergency fund. It's about $1,500. Um, I started a business
last October coming out of the military. Um, and so
I've been kind of just building on that. Um, I
owe less on my current truck, um, than it's worth.
(33:25):
So that's kind of an asset, I guess. I have
a little bit of liquidity there. And then, um, if
I needed to, like, bail out of my business, for
whatever reason, I have a trucking business. I, you know,
I'm positive. Almost ten grand there.
S1 (33:40):
Okay. Got it. Yeah. But obviously that's your source of
income right now. So you would.
S8 (33:45):
Exactly.
S1 (33:45):
Yeah. Um. All right. Yeah. I think the key is, um,
you know, let's just keep paying on that RV. What
is that, uh, interest rate on the RV.
S8 (33:56):
So, you know, I got a really great interest rate
on that. It's, like 6.3%. I did live in it
for several months, my daughter and I. So, you know,
we really did need it. Um, we bought it in
a season where we thought we were going to be
transitioning to live in, and then it ended up being
parked and then we lived in it again. Okay. Um, yeah.
So now we're not in it. It's just kind of parked.
(34:17):
I've been looking into different avenues to maybe generate some
income with it, like Airbnbs and things like that. Um,
there's obviously some financial implications and needs for that as
well though. So.
S1 (34:27):
Yeah. Sure. And then what is the the payback schedule
on that if you just continue paying monthly what you
have been, how long will it take for you to
pay it off?
S8 (34:37):
If it was a ten year loan, um, is what
they are. They're like ten year. I forget what they're
called luxury loans or something like that. Um, so I
wouldn't be fully paid off until like, 20, 33.
S1 (34:50):
Okay. Got it. Yeah. Uh, and then are you in
a situation now where your business is providing you some
pretty stable and predictable income where, you know, you've got
a budget that includes the RV payment and everything else?
Or are you seeing some some fluctuation in the income
you're you're bringing in?
S8 (35:09):
And so there's definitely fluctuation. It always tends to make
my budget. Um, so I have a pretty strict budget
and I can make my minimum payments. However, you know,
I was really hoping for and planning on this excess, uh,
in order to start really tackling debt. But the industry
right now that I'm in, it's an aggregate hauling for trucking.
(35:31):
It kind of ebbs and flows, especially with it being
the rainy season here in Texas.
S1 (35:37):
Yeah. Got it. Okay. Yeah. I mean, I think the
key with a small business is especially where you have
some seasonality would be to do the best you can to,
you know, perhaps even get your, uh, you know, your
whatever you're pulling out of the business, um, into a
savings account and then try to pay yourself a consistent,
(35:57):
predictable amount that's based on your budget. So when you
have those kind of lean months, you've built up some
surplus and you know, you can still pay yourself that
consistent amount. So you smooth out some of those ebbs
and flows. But that means that, you know, in those
months where you're doing a little bit better, you know,
you're really careful not to spend, you know, more than
(36:18):
your plan so that you can cover those leaner months.
I think at this point, you know, just given that
interest rate, it's probably best for you just to continue
paying out on that RV. Uh, you know, as you
can just given that the fact that you you are
upside down so significantly and you'd have to get a loan,
you know, to cover the difference, and it'd probably be
quite a bit higher, um, because it'd just be a
(36:40):
personal loan without any collateral or anything. So I would
just kind of stay the course on the RV with
the credit card debt. I would reach out to our
friends at Christian Credit Counselors. Uh, what will happen is
the cards will be closed. They'll stay right where they are.
But through Christian credit counselors, you're going to be able
to access some significantly lower interest rates. And with probably
(37:03):
the same monthly payment you're sending now, somewhere between 2
and 3% of the balance. So, you know, if we're
talking 26,000, you know, that's somewhere between 500 and 20 and,
you know, $780 a month with that one level monthly payment,
and they would tell you what it would be. The
combination of that level payment plus the dramatic reduction in
(37:25):
the interest rates is going to help you pay that
off 80% faster. So that would be the way that
I would go there, rather than trying to take out
a new loan to consolidate it or or something else.
And at least now your monthly payment, a larger portion
of it is going to principal reduction every month, which
is obviously the name of the game. So I think
I'd stay the course on the RV, try to smooth
(37:46):
out some of the ebbs and flows of your small
business by using a savings account to build up in
the bigger months and and draw from it in the leaner, um,
you know, keep really clear books that are separate personal
and business so you can take full advantage of the
deductions that are available to you for business related expenses
that are legitimate and then, you know, use Christian credit counselors.
(38:09):
On the credit cards.
S8 (38:10):
All right. Hey, thank you so much.
S1 (38:12):
All right, listen, Cody, if we can help further in
any way, don't hesitate to reach out. All the best
to you, my friend. We appreciate your call. Uh, let's
go to, uh. Well, we'll stay in Texas. Robert, how
can I help you?
S9 (38:23):
Well, yeah, uh, I got 75% of my matching, uh,
employer deposit into my 401 K going into the S&P
500 index fund, and the other 2,525% is going into
the blue chip Rowe or T Rowe, and I'm 57.
So I'm going to probably only I'm probably only going
(38:43):
to have less than ten years to keep going with
this 401 K. And I was wondering if, uh, those
kinds of deposits are aggressive enough.
S1 (38:54):
Yeah. So where are you? What is your age? 57 okay. So.
And and how long?
S9 (39:02):
5000. In a year. In one year I hit 5000.
So that's an average of 5000 a year. Even though
it's kind of slowed down this year because of the
shock that, you know, happened in this country the last
2 or 3 months. So. But I didn't move it.
I left it the way it was.
S1 (39:22):
Yeah. Yeah. The challenge is that, you know what, what
you have is a fairly, um, highly concentrated portfolio because
you know, that S&P 500 is, of course, the 500
large US companies. So think Apple, Microsoft, Amazon, it's a
broad market index, mostly mostly growth oriented. Um and then
(39:43):
so that's 100% stocks. And then you've got the rest
of it in an a blue chip allocation which you
know with a blue chip stock. Think Coca-Cola Johnson and
Johnson Walmart. So these are stable companies typically, uh, you
know with reliable dividends, somewhat lower volatility, but still, you know,
(40:04):
large cap or mega cap stocks. So you know, at
age 57 we would typically say just as a starting point,
you'd want closer to a 50 over 50 portfolio 50%
stocks 50% bonds. Just because you'd want to not have
quite as much volatility. I mean yeah, you've done well.
(40:24):
But if we were to get into a full blown recession,
which we're overdue for one, you know, you could see
a pretty significant pullback. I mean, you should be prepared
for a a 20 or 30% pullback. Now you still
do have some time on your side. I mean if
you're a decade away from retirement you would be able
to let that recover. And even once you reach retirement
(40:47):
Robert you're not going to pull it out on day one.
I mean, we still need a a 30 year time
horizon for you to hopefully allow this money to last
to age 90 or beyond. Um, but I think, you know,
just at a from an asset allocation Standpoint, 100% in
stocks for your investable assets at age 57 would be considered.
(41:09):
A very aggressive, um, versus, you know, what would be
more conventional, which would be, you know, somewhere between a
6040 and a 50 over 50 portfolio of stocks to bonds.
Does that make sense?
S9 (41:23):
Sure does. The thing is, I don't know which one
is considered stocks and which one's considered bonds. Is the
index fund the stocks and the blue chip?
S1 (41:31):
No, the S&P 500 and the blue chip are all stocks.
So you're 100% stock, 0% bonds. Whereas typically at age
57 we'd want you more like 50 over 50. So
you don't it doesn't sound like to me you have
any bond allocation in this portfolio at this point.
S9 (41:49):
I got to look into the bonds. Well, thank you
so much.
S1 (41:52):
All right. Thanks for your call today. Hey, folks. Thanks
for being along with us today. We covered a lot
of ground. It's been a joy to be walking alongside you. Hey,
let me mention our friends at Hartford, Lebanon. We've partnered
with them this quarter to shine a light on the
incredible work that they're doing. Uh, so that as you
think about your own giving dollars, you can come alongside
(42:12):
a great need there. Boy, there's critical challenges they're facing
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They're at a heightened risk for exploitation, including early child marriage,
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(42:33):
gospel of Jesus. Every $114 reaches three girls. Just go
to faith. To help us sponsor them. Hey, faith and
finance is a ministry of faith, fi and Moody Radio.
Thanks to my team today and we'll see you tomorrow.
Come back and join us then. Bye bye.
Today's version of Faith and Finance Live is pre-recorded so
our phone lines are not open. The purposes of a
person's heart are deep waters, but one who has insight
draws them out. Proverbs 20, verse five. Hi, I'm Rob West.
Today we're kicking off a new series on temperaments. How
our God given wiring shapes the way we communicate, relate
to others and make financial decisions. Kathleen Edelman and Tracy
(00:27):
Shepherd join us to explore the red temperament and how
it influences our financial decisions. And then we have some
great calls lined up. But please don't call in today
because this program is prerecorded. This is faith and finance.
Live biblical wisdom for your financial journey. Well, today we're
(00:50):
kicking off our four part series with Kathleen Edelman exploring
the four temperaments featured in her book. And course I
said this. You heard that how your wiring colours your communication.
It's a powerful resource that unpacks how our God given
wiring shapes every part of our lives, including our finances.
And Kathleen. Delighted to have you back as we begin
(01:12):
this journey.
S2 (01:13):
I love talking about this topic with you.
S1 (01:15):
Well, it's so much fun. I'm so looking forward to
every part of this. And I know you've brought a
friend with you, Tracy Shepherd, who helped you teach on
this temperament in your core. She's here to give us
an inside look at the first temperament we're exploring in
this series. And that is the red temperament. Tracy, great
to have you as well.
S3 (01:35):
Oh, I'm excited to be here. Thank you.
S1 (01:37):
Kathleen, I'd love for you to begin by just providing
a brief overview of the four temperaments for those who
may not be familiar.
S2 (01:44):
So the temperaments date back to Hippocrates, 600 years before
Jesus walked the earth, and they fell into four categories,
and each one speaks their own language. So we have
the yellow sanguine speaks the language of people and fun.
An extrovert that's people oriented. Okay, we have a red choleric.
That speaks the language of power and control. An extrovert
(02:05):
that's on the task side of the chart, a blue
melancholic that speaks the language of perfection and order. An
introvert that's on the task side of the chart, and
a green phlegmatic that speaks the language of calm and harmony.
An introvert that's people oriented. So these temperaments play into
how you speak, how you hear, how you talk, what
(02:29):
your behavior is and how you deal with money.
S1 (02:33):
Yeah, absolutely. And as we mentioned, Tracy's temperament is red,
which is typically a take charge kind of person. So, Tracy,
I'd love to know when you first took Kathleen's assessment
and it identified you that way, what went through your mind?
S3 (02:47):
When I read the definition of a red temperament, I thought, yep,
that's me. Um, I love tasks, give me all the tasks,
I'll get them done. So it was definitely an aha
moment to learn, um, the why behind how I communicate
and the relationships I have and, um, the behaviors, the
good and the bad and the ugly of a red temperament.
S2 (03:07):
Yeah. So most reds aren't shocked, and they feel like
the fix it person in the room. And they've probably
felt this way since childhood. But many tell me that
it's really simple. If you say you're going to do it,
then do it. Um, if you don't do it, then
they feel like they have to step up, step in,
take charge, fix it. You know, the temperament framework helps
(03:30):
them to see the strength behind that drive, and it
helps them become more aware that of that dynamic leader
that they can be instead of the bully on the playground. Yeah.
So it gives them the tools to balance that strength
with empathy and connection.
S1 (03:46):
Well, let's get right into it. So, Tracy, how does
that red wiring then show up in the way you
approach money?
S3 (03:53):
Huh. Well, um, I love budgets. I love a plan. Um,
my desire to know a plan definitely comes from my
red temperament wiring. Um, and I'm goal oriented, so give
me a budget or a goal to have in savings,
and I'll make it happen. Just tell me what it is.
I'll figure it out. Sure. Um, my husband is a
yellow temperament who is, um, has different interests in opinions
(04:17):
on how we spend money. But I've learned that that
it's not necessarily wrong what he enjoys and how he
spends money on food and entertainment, vacations and concerts. It's
just not how I would use money. And that's okay.
I value having an efficient budget that with a large
savings account to feel safe. So I just think that
(04:39):
learning how other people are using money isn't a bad thing.
It just helps you understand the why behind it. So
we have a lot of conversations about budgets and finances.
We own a business together and um, which is interesting
as a husband and wife, but we oftentimes will bring
in a third party to help us when we can't
be on the same page about making a plan or
(05:00):
a savings. How we spend, save and give for sure.
S1 (05:03):
So helpful. And it makes so much sense. We're talking
temperaments today, specifically the Red temperament with Kathleen Edelman, temperament expert,
along with Tracy Shepherd, our representative Red temperament today. And
we're talking about how all of this affects money and
money decisions. Also how you communicate back with much more
(05:24):
after this. Stay with us. Thanks for joining us today
on Faith and Finance Live. I'm Rob West with me today,
Kathleen Edelman. We're kicking off a four part series on
your temperament and how it affects your money decisions. Kathleen
(05:48):
is our good friend. She's the author of the book
and the course. I said this. You heard that how
your wiring colors your communication. We're also joined by Tracy Sheppard,
who is here to talk about specifically the red temperament.
She has taken the assessment. She is clearly a red,
and she's representing all of you red temperament folks out
(06:10):
there in our audience today as we talk about money
and money decisions. And Kathleen, before the break, Tracy was
sharing that as a red. She loves budgets. She wants
to know the plan. She loves a goal. She will
make it happen. And that has real implications.
S2 (06:25):
Oh yeah, Reds are doers. They see money as a
tool to accomplish a goal, and what they're uniquely wired
for is visionaries. They can see that goal so clearly,
but that same drive can lead them to control conversation
or dismiss other's inputs and not seeing the obstacles in
the path. Just a means to the end. Yes. So
(06:47):
in family or business settings that can cause tension unless
they slow down and invite collaboration using the important communication
skill of showing interest and curiosity.
S1 (07:00):
Tracy, let's talk about that for a moment. Would you
say that kind of confidence is an advantage when it
comes to managing money?
S3 (07:07):
Yes, that confidence is definitely helpful. Um, someone that's like
she said, the doer, I have no doubt that I
can get the job done. I can stretch a budget,
and I don't even care what the budget is, big
or small. I can make it work. Um, I will say, though,
that I do find that showing that interest in other
people's temperament when discussing the budget in the workplace and
(07:27):
at home is asking, hey, tell me why you think
that way. Tell me the why behind. Um. I'm curious.
You know why you would spend money or save money
that way. So definitely have to throw in a third
party to help make that connection sometimes.
S2 (07:40):
Yeah, Red's their bullet point. Bottom line, thinkers. But what
we have to understand is they do think things through,
even if others don't see it.
S3 (07:48):
Oh, so far ahead. Yeah.
S2 (07:49):
Oh, yeah. So they don't always pause to hear another's perspective? Yeah.
A read would benefit greatly by another important communication skill
which is listening to understand instead of listening to reply.
But when a read steps back and listens, they can
make the good and hard decisions and they can help
(08:12):
everybody through the process.
S1 (08:15):
Hmm. Yeah, that's really helpful. And they want to make
sure that we're following the plan as well. Uh, Kathleen,
you've shared before that each temperament has specific emotional needs.
So what are the innate needs for someone with a
read temperament?
S2 (08:30):
So Reds loyalty right off the bat, being prioritized and
knowing you have their back sense of control, everybody pulling
their weight and following the plan. Appreciation being valued for
their unique strengths and credit for work being valued for
their contributions. So if these needs are not being met.
The red may start to control with anger or tone.
(08:53):
Tone is what we really struggle with with that red temperament.
But when they are met, they are dynamic leaders worth following,
and they inspire others to move forward in their own strengths.
S1 (09:06):
Yeah, that makes sense, Tracy. How do those core needs
resonate with you?
S3 (09:11):
Oh. Big time. I mean, sense of control is huge
for me. Um, I don't necessarily want to be the
one in control. I just need to know that somebody
is in control. Um, so. And loyalty really resonates with me.
I value authentic relationships and friendships that are honest and open.
I mean, friends that are supportive and show up and
I show up for them is definitely a value. Um,
(09:34):
and for credit for work, when I have a vision
in any area of life, I enjoy gathering information, collecting
the facts, thinking and working through until I see it
come to fruition. So I definitely get a sense of
accomplishment from that. So when Kathleen says that Reds are
always thinking, we're thinking ten steps ahead all the time.
S2 (09:52):
I love that so many reds do have that aha
moment around these needs. And you heard Tracy. She doesn't
want to be in charge. She wants everybody pulling their
weight and following the plan, so they realize that that's
when they can get angry is when somebody doesn't say
what they're going to say they're going to do, or
especially if somebody else takes credit for their work. Um,
(10:15):
it's not ego. It's about innate needs. And once they
can name those innate needs, they're far more likely to
express them in a healthy way.
S1 (10:26):
Yeah, that's really encouraging. And Tracy, what about when you're
having conversations about money? Do you feel like your red
temperament comes through in those moments?
S3 (10:36):
Yeah. Um, like, especially working with a budget, like, somebody
give me the budget. I can make it if you
want me to. You can be in charge of the budget.
Just tell me what the budget is, big or small,
and I'll make it work. I'll take charge and follow
the plan. I like everybody else to follow the plan also. Sure. Um.
But I'll be loyal and stand behind you if you
make the budget. Um. And I'm not easily overwhelmed with finances.
(10:59):
So if you give me a project to work on,
I'm happy to do that.
S2 (11:03):
So reds can go into. I'll decide or let's move
on mode. Yeah. If somebody else doesn't step up, they're efficient. Um,
but they can be come off as impatient or even
harsh if people aren't stepping up to the plate. So
it's important reds to slow down. Um, this will make
a huge difference, especially when they learn to ask the
(11:26):
other temperaments. If you just ask them, hey, what do
you think about this? What do you feel about this? Yes. Um,
there's more than one way to be right. So that
communication skill of the power of the pause. Yes. This
can change the whole tone of the conversation for the
red boy.
S4 (11:43):
That is so helpful.
S1 (11:44):
Uh, Tracy, what's then the key takeaway for someone who
is a red or for someone in a relationship with
a red?
S3 (11:51):
Well, I have so much I could say about this. Um,
since learning so much about the temperaments, mine and others,
I am so much more self-aware of how my words
come across how they affect other people. I'm constantly reminding myself, Tracy, pause.
Don't be so blunt. Don't talk over other people. Um, because,
like I said, my mind's moving faster than than what
(12:12):
it comes across. And I sometimes can speak before. Before thinking, um,
for other reds, I would just say, hey, slow down.
Try to remind yourself to be present. We quickly get
ahead of ourselves and not stay in the moment. Um,
and for those in a relationship with Red, I asked
my husband this too, and he agreed that, you know,
to remind others that we're not Reds are not trying
(12:33):
to be controlling or strict. We just want to know
the plan and we know someone is in control. Then
we can feel safe and are better mentally prepared.
S2 (12:41):
Yeah, being a red is a strength uniquely wired to
be a visionary and see goals clearly. It's important that
the Reds out there, um, you know, it's important to
them that the other temperaments understand that you have thought
things through. You heard Tracy. She's ten steps ahead of,
(13:02):
you know, everybody else, um, thinking it through. So trusting
in other's strengths and connection will definitely take you further
than any force could ever take you. So, Reg, your
big picture thought process brings value to any financial decision. Yes.
And when you lead with both confidence and compassion, that's
(13:23):
where the transformation and communication and relationships and financial discussions
are going to happen.
S1 (13:29):
Um, and I think we're going to continue to see
this theme throughout this series, Kathleen. And that is when
we really lean into this, we're going to make better
decisions in the long run. When we bring everybody to
the table and they're heard and they're understood. This has
been such a great conversation. Unfortunately, we're out of time.
But thank you both for joining us today.
S2 (13:48):
Thank you.
S3 (13:48):
Thank you.
S1 (13:49):
If you found today's conversation helpful, there's more to come.
Kathleen Edelman will be back next week to cover the
green temperament as well as other colors, in future episodes.
Read Kathleen's insightful article on the four temperaments and how
they affect money and faithful steward. Get to copy each
quarter when you become a partner at faithfully. All right,
(14:10):
we're going to head to a break, so don't go anywhere.
Still a lot more to come, even though we're not
here to take your calls live today. But we have
plenty of calls that we lined up in advance. And
we'll get to those just around the corner. Delighted to
(14:34):
have you with us today on Faith and Finance Live.
We're not here today. Our team is away from the studio.
This is pre-recorded, so don't call in. But we've got
some great questions we lined up in advance. Before we
go to the phones, let me remind you, Faith, Fi
and Faith in Finance Live is listener supported. If you'd
like to be a financial partner, you can do that
at Faith. Com. Just click give thanks in advance. All
(14:56):
right let's head to the phones. Let's go to Mississippi. Hi, John.
How can we help?
S5 (15:00):
Hey. How are you doing now? Thanks. Thanks for what
you guys do.
S4 (15:04):
Thank you.
S5 (15:04):
I just wanted to, uh, a couple of quick questions
about early Social Security. I've worked and paid in all
of my life. My wife is has, uh, paid in
very little. I think it's, uh. I mean, I've went
online to see what we're eligible for, and I think
she's got her what they call 40 points or whatever,
but she's in only entitled to a very trivial amount. Yeah. Uh,
(15:28):
I'm 62. She's 63. Mine. Uh, the way I've understood
it is a spouse is normally eligible for roughly about 50% of,
uh of of of of the working spouse. Yes. Uh,
if we draw early, uh, would she still be entitled
to that? Uh, 50% if I'm 62 and she's 63,
(15:51):
if we started it early.
S1 (15:53):
She would not know. So here's the way that it works. Um,
so assuming you all were born around 1962 or 63,
is that right?
S5 (16:03):
That's correct. Yes, 62, 62 for her, 63 for me.
S4 (16:06):
All right.
S1 (16:06):
So your full retirement age is going to be 67.
So claiming benefits before full retirement age is going to
reduce the monthly amount permanently. And that would be for
both of you. So if you claimed it at 62
your benefits going to be reduced by about 30% compared
to what's called your primary insurance amount at full retirement age. Um,
(16:29):
and so, you know, you'd take what your Fra, your
full retirement age benefit is. You can find that at
my ssa.gov. And then you'd reduce that by about 30%
and that would be a permanent reduction. If she claimed
her own benefit at 63, it's reduced by about 25%
because she'd be a year closer to that full retirement age.
(16:50):
But for spousal benefits, it would come down to about 37%
of your benefit rather than the max 50%. So a
spouse can get up to 50% of their working spouse's benefit.
But that's only if the spouse waits until full retirement age.
(17:11):
So at 63, instead of getting the max 50, she'd
get about 37.5%. Now, if she has those 40 credits
or ten years of paying into Social Security, she would
be able to get either her own benefit, which would
be reduced as well at 63 or, you know, the
the up to 50% of yours or at or 37%
(17:34):
if she's taking it at at age 63, she can't
receive both, and Social Security would automatically pay the higher amount.
So if her own benefit is lower because you said she,
you know, doesn't, uh, although she met the 40 credits,
she didn't pay in a whole lot. Um, and the and,
you know, her portion of your benefit as a spouse
(17:55):
is higher than they would pay her her benefit, and
then they'd add an additional amount to match, basically the
spousal benefit, essentially. Um, so I think, you know, that's
the decision is do you all want to take it early,
recognizing you're going to lock in that reduced benefit for
both of you? Um, or do you want to try
to solve for your income needs in another way and
(18:18):
then hold off and get closer to that full retirement
age to get that checkup?
S5 (18:23):
Okay. Yeah. Yeah. So that that answers my main question
was what her reduction would be because, uh, her percentage
of mine would be greater than her, uh, credits, According
to the SSA website. And then so I guess my
only other question regarding that is, I think the the
calculations that we've worked would be okay for us to
(18:44):
do it early. Uh, but, uh, if I continue to
make some, uh, earned income during this, um, can I
do it? I've got my own, uh, little contracting business,
but it don't. It's not a lot of money, so
my income from that would be less than the 24,000.
Some odd, uh, allowed. Is that okay to have your
(19:08):
own business and still draw?
S4 (19:10):
Oh, yeah.
S1 (19:10):
Absolutely. I think the key is, you know, what you
pointed out there, and and that is that before full
retirement age, because at full retirement age and beyond, you
can earn as much as you want. Uh, but until
you reach full retirement age, you're under you've got to
be under that limit of $1,950 a month or 23,400
for the year. Um, and so for every $2 you
(19:34):
earn above that limit, 23 for your benefit is reduced
by $1. And then in the year that you turn
full retirement age, your limit increases from 23,400 up to 62,160. Well,
that's that's at least the 2025 number. It will probably
be higher by the time you get there. And then
(19:55):
at that point, for every $3 you go over that
higher limit in that final year, your benefits are reduced
by a dollar. And then once you reach full retirement age,
there's no limit. Now keep in mind if you did
have a reduction because you earned over the limit in
any of the years leading up to full retirement age,
you will eventually get that back. That's not permanent once
(20:16):
you hit full retirement age. Um, the Social Security Administration
recalculates your benefit, and they give you credit for the
months where your benefits were withheld until you've been fully
paid back. Uh, so that's, you know, pretty much the
only situation where you actually will recoup that over time.
It's going to take some time. You know, I think
(20:37):
it I don't know the exact number, but I think
it might take 10 or 12 years for you to
ultimately get all that paid back. But you will get
it back eventually.
S5 (20:45):
Okay. Yeah, yeah, just just working the numbers. The difference
between what I would receive at age 62 versus age 67,
if I waited till 67, it would take me 118
months to earn that amount of money that I would
earn in between age 62 and 67.
S1 (21:05):
I c yeah. So you'd have ten years before you've.
S5 (21:08):
Been, you know.
S1 (21:09):
Yeah. Well, so then I mean, the way you look
at that is you say, okay, if I've got ten
years to be repaid back, but then from that point
forward I've got, you know, a check that's 30% higher
for the rest of my life. Uh, you know, that
may be the difference between you being able to cover
your lifestyle expenses and not, uh, especially if, you know,
(21:31):
as things increase over time, like medical expenses and that
type of thing, once you reach age 65, your life
expectancy is like 82 as a male. Um, and so the,
you know, depending on your health and your longevity and
your family, you may say, you know, let's try to
get that check up, give up that money from 62
(21:51):
to 67 billion. We're going to live ten more years
and then enjoy that higher check. Hope that helps. John,
thanks for your call, my friend. We'll be right back.
So thankful to have you with us today on Faith
and Finance live. I'm Rob West, by the way. Our
team is not here today. We're away from the studio,
so don't call in. But we've got some great questions
(22:13):
that we lined up in advance. We'll get to those
in just a bit. You know, I'm reminded as we
think about the role of money in our lives that
we need to counteract the messages of this world. We
need to operate from a biblical worldview. And when we
look to Scripture, I think we really see three big
ideas around the role of money. The first is money
(22:33):
is a tool. Yeah, we use it to buy things
for ourselves and others, and we use it to accomplish
God's purposes. But it's also a tool in the sense
that God uses money in my life to teach me
to rely on him. It's a daily demonstration of my faith.
It reveals where I've placed my trust and what I value.
So it's a tool. It's also a test. You know,
(22:55):
having too much or not enough can be a test.
Are we going to live with contentment? Will we choose contentment?
Are we going to rely on money in place of God?
It's a test in our lives, but it's also a testimony,
especially our willingness to trust God when we have little
or perhaps to share generously when we have much that
(23:15):
provides witness to an unbelieving world, even our faith to
handle money. God's way in the midst of uncertain times,
that itself can be a great testimony to the world.
So money is a tool. It's also a test, and
it's a testimony that God uses to both provide for
my needs, as well as to grow me up in
(23:36):
my faith and rely more heavily on him. I hope
that's an encouragement to you today. All right, let's head
back to the phones. Uh, you know, one of our
callers mentioned just a moment ago that he and his
wife kind of have different money personalities. You know, she's
more of. Let's enjoy what we have right now. He's
wanting to stay disciplined, reach their goals and save for
(23:56):
the future. And we can often think, well, one way
is right. The other way isn't. And yet we need to,
I think, come to a place where we understand and
appreciate kind of what each other's bringing to the table,
which is largely informed by certainly our upbringing, our money, personalities,
if you will, are shaped by our environment. What did
we grow up in? Was money scarce or abundant? Did
(24:18):
mom and dad model a spending plan, or did they
kind of spend spend frivolously? And maybe they they had
a bunch of debt, uh, You know, all of that
shapes how we handle money. But one of the keys
that shapes how we handle money is our temperament. And
we have an incredible article. Our temperament expert, Kathleen Edelman,
here on faith and finance, uh, wrote uh, for our
(24:42):
most recent edition of Faithful Steward, issue two, uh, an
article called How Your Temperament Affects your Money mindset and
your temperament, essentially is the wiring that drives your natural thoughts, behaviors,
and responses. And that certainly includes how we handle money.
And the key to wise financial decisions isn't just a
(25:04):
better budget. In many ways, it's a better self-awareness. You see,
understanding your temperament can help you recognize why you make
certain money decisions, how to manage finances in a way
that aligns with your strengths. But I think there's something
even more important to this. And this is what Kathleen
hits on in this great article in in the most
(25:24):
recent issue of Faithful Steward, is that each temperament speaks
a unique language, has certain strengths and weaknesses, and is
motivated by what Kathleen calls innate needs. And when it
comes to money, I think knowing your temperament and understanding
other's temperaments can help you not only make better financial
decisions and reduce stress, but communicate more effectively. So I'm
(25:50):
of the four. I'm what you call the the yellow temperament. Um,
and you would understand this if you read the article.
She breaks them down, uh, to yellow, red, green and blue.
So my temperament is one that, you know, ultimately, at
its core is about, uh, the language of people and fun.
I'm extroverted, I'm people oriented. And for money. My mindset,
(26:13):
as she describes in the article, is that money is
meant to be enjoyed. So I love giving generously. I'm
optimistic about our ability to reach our goals I love experiences,
so if I'm going to spend money, I want to
do it on an experience with my kids or with Julie,
my wife, that we're going to use to create memories.
And I'm always willing to to spend money to do that.
(26:35):
The challenge is, is are that yellow? What I am
temperaments can be impulsive in their spending, and we tend
to dislike budgeting. And I know that probably sounds funny
coming from a money guy, but I think understanding how
that plays into your decision making and being able to
bring that into your communication is really key, because there
(26:59):
are some, some challenges that come with this. And ultimately,
I know that I have to be careful making sure
that I honor Julie's desires with regard to our budget
and ultimately what we're driving toward and what we're saving for.
And so, I think, you know, perhaps understanding your temperament
could be a game changer not only in how you
(27:20):
make decisions, but how you communicate with your spouse. By
the way, if you'd like to pick up a copy
of Faithful Steward, we'll make sure that you get every issue.
It comes out four times a year when you become
a faithful partner. It's a great way to support our
ministry and receive great resources that will encourage you in
your stewardship journey. Just head to our website and click
(27:40):
give at the top of the page. That's faith Philly.com.
All right, let's head back to the phones. We do
have still a couple of lines open. So if you
have a financial question today you can give us a call.
Let's go to Texas. Hi Tina. How can I help?
S6 (27:54):
Hi. Um, my mama, um, bought an annuity several years ago,
and now we need it for her care. It's about 179,000,
and it just seems like we're running into roadblocks with
trying to get money out. I was thinking if we.
I don't know if you cash it in. I just
(28:14):
need knowledge on what to do. Do you cash in
an annuity or how do you get the money out
so you can use it. Um, we want to use
it for her care.
S1 (28:24):
Yeah. Very good. Uh, yeah. And so I can certainly
understand that as you, um, engage with the company, I think,
you know, you first of all need to understand the
options that you have. So, uh, there, you know, tend
to be long term investments, and they are designed to
lock up the funds to ultimately provide, uh, steady access
(28:47):
to the money through kind of an income stream, which
is what's called annuitized. Um, but getting access to the
money early can be tricky. Now, how long have you
had this particular annuity, or has your mom had it?
S6 (29:00):
I would say at least 20 years.
S1 (29:02):
Oh, okay. Yeah. So we would be beyond the surrender
period here. That typically lasts 6 to 8 years. Um,
and so, you know, you should be able to, uh,
you know, cash it in without any kind of surrender charge. Um,
it really ultimately depends on the type of annuity that
it's in. Um, and that would ultimately come down to
(29:24):
contacting the company and getting some of the details or
finding the initial, um, you know, contract agreement that she signed. Um,
there can be taxes that would be triggered as a
result of this if it's, um, you know, a qualified
annuity where the money went in pre-tax. Um, so are
(29:45):
you looking for kind of a regular monthly income stream
where you can pay ongoing bills, or do you need
access to more of a lump sum?
S6 (29:55):
No, I think just to, um, pay for her care
like caretakers. Right now, she only gets about 200 a
month from it. It's through fidelity. I don't know what
kind of annuity it is.
S1 (30:08):
Okay.
S7 (30:08):
Got it. Whether it's qualified.
S6 (30:10):
I think you mentioned qualified where she paid, whether she
paid the taxes up front. I need to find that out.
S1 (30:17):
Gotcha. Yeah. So I think that would be important to know.
Just because you don't want to get caught off guard
with the, uh, the tax implications of that. But what
you may want to look at is what's called an annuitization,
where essentially you would tell them, uh, we want to
go ahead and annuitize this, which takes it out of
the accumulation phase and puts it into a distribution phase.
(30:37):
And then she could get a monthly check, uh, you know,
paid out to her out from the annuity. Um, that
could be the difference between you all being able to
cover those bills and not. Let's do this. Stay on
the line. We'll finish up off the air. We'll be
right back. Great to have you with us today on
(31:06):
faith and finance live. By the way, we're not live today.
We're away from the studio, so don't call in. But
we have some great questions that we lined up in advance,
by the way, this ministry is entirely listener supported. That
means we rely on your financial gifts and support to
do what we do on the air every day. If
you consider a gift, we'd certainly be grateful. Just head
(31:27):
to our website, Philly.com. That's faith. Dot com and click
the give button. Thanks in advance. Let's head back to
the phones. Cody is in Texas. Go ahead sir.
S8 (31:37):
Hey, how's it going, sir? Um, yeah. So I just
wanted to call, um, to see if you had any advice. Basically, um,
I went through a pretty, um, unfortunate and ugly divorce
a few years ago, which racked up, um, a substantial
amount of credit card debt. And I also have an
RV that I kind of went upside down on immediately. Um,
(31:59):
because they just lose value so fast. Yeah. And over
the last few years, the Lord has been really just
calling me. He said, just you. You're enslaved to these
people who are not me, basically. And so I've been
really trying to hammer the debt down. Um, but it just,
I mean, it feels like I can't get ahead. You
know what I mean? And, um, so I just kind
(32:19):
of wanted to call in and see if you had
any advice on that.
S1 (32:22):
Yeah. Happy to. Um, so what is the status of
that RV? Um, what do you owe on it? What
do you think it's worth today?
S8 (32:30):
So I owe I've been paying just minimum payments for
the last two years. Uh, I owe about 30,000 on it,
and I think its cash value would probably be no
more than, like, 16,000.
S1 (32:43):
Okay. Got it. Yeah. And so you'd have about a
$14,000 difference, assuming you could get 16 for it. Um,
the what is the rest of your kind of financial situation?
Do you have, uh, assets, you know, like an emergency fund?
Do you have any savings? Uh, what do you have
access to?
S8 (33:05):
Yeah. So I just did just recently, I secured an
emergency fund. It's about $1,500. Um, I started a business
last October coming out of the military. Um, and so
I've been kind of just building on that. Um, I
owe less on my current truck, um, than it's worth.
(33:25):
So that's kind of an asset, I guess. I have
a little bit of liquidity there. And then, um, if
I needed to, like, bail out of my business, for
whatever reason, I have a trucking business. I, you know,
I'm positive. Almost ten grand there.
S1 (33:40):
Okay. Got it. Yeah. But obviously that's your source of
income right now. So you would.
S8 (33:45):
Exactly.
S1 (33:45):
Yeah. Um. All right. Yeah. I think the key is, um,
you know, let's just keep paying on that RV. What
is that, uh, interest rate on the RV.
S8 (33:56):
So, you know, I got a really great interest rate
on that. It's, like 6.3%. I did live in it
for several months, my daughter and I. So, you know,
we really did need it. Um, we bought it in
a season where we thought we were going to be
transitioning to live in, and then it ended up being
parked and then we lived in it again. Okay. Um, yeah.
So now we're not in it. It's just kind of parked.
(34:17):
I've been looking into different avenues to maybe generate some
income with it, like Airbnbs and things like that. Um,
there's obviously some financial implications and needs for that as
well though. So.
S1 (34:27):
Yeah. Sure. And then what is the the payback schedule
on that if you just continue paying monthly what you
have been, how long will it take for you to
pay it off?
S8 (34:37):
If it was a ten year loan, um, is what
they are. They're like ten year. I forget what they're
called luxury loans or something like that. Um, so I
wouldn't be fully paid off until like, 20, 33.
S1 (34:50):
Okay. Got it. Yeah. Uh, and then are you in
a situation now where your business is providing you some
pretty stable and predictable income where, you know, you've got
a budget that includes the RV payment and everything else?
Or are you seeing some some fluctuation in the income
you're you're bringing in?
S8 (35:09):
And so there's definitely fluctuation. It always tends to make
my budget. Um, so I have a pretty strict budget
and I can make my minimum payments. However, you know,
I was really hoping for and planning on this excess, uh,
in order to start really tackling debt. But the industry
right now that I'm in, it's an aggregate hauling for trucking.
(35:31):
It kind of ebbs and flows, especially with it being
the rainy season here in Texas.
S1 (35:37):
Yeah. Got it. Okay. Yeah. I mean, I think the
key with a small business is especially where you have
some seasonality would be to do the best you can to,
you know, perhaps even get your, uh, you know, your
whatever you're pulling out of the business, um, into a
savings account and then try to pay yourself a consistent,
(35:57):
predictable amount that's based on your budget. So when you
have those kind of lean months, you've built up some
surplus and you know, you can still pay yourself that
consistent amount. So you smooth out some of those ebbs
and flows. But that means that, you know, in those
months where you're doing a little bit better, you know,
you're really careful not to spend, you know, more than
(36:18):
your plan so that you can cover those leaner months.
I think at this point, you know, just given that
interest rate, it's probably best for you just to continue
paying out on that RV. Uh, you know, as you
can just given that the fact that you you are
upside down so significantly and you'd have to get a loan,
you know, to cover the difference, and it'd probably be
quite a bit higher, um, because it'd just be a
(36:40):
personal loan without any collateral or anything. So I would
just kind of stay the course on the RV with
the credit card debt. I would reach out to our
friends at Christian Credit Counselors. Uh, what will happen is
the cards will be closed. They'll stay right where they are.
But through Christian credit counselors, you're going to be able
to access some significantly lower interest rates. And with probably
(37:03):
the same monthly payment you're sending now, somewhere between 2
and 3% of the balance. So, you know, if we're
talking 26,000, you know, that's somewhere between 500 and 20 and,
you know, $780 a month with that one level monthly payment,
and they would tell you what it would be. The
combination of that level payment plus the dramatic reduction in
(37:25):
the interest rates is going to help you pay that
off 80% faster. So that would be the way that
I would go there, rather than trying to take out
a new loan to consolidate it or or something else.
And at least now your monthly payment, a larger portion
of it is going to principal reduction every month, which
is obviously the name of the game. So I think
I'd stay the course on the RV, try to smooth
(37:46):
out some of the ebbs and flows of your small
business by using a savings account to build up in
the bigger months and and draw from it in the leaner, um,
you know, keep really clear books that are separate personal
and business so you can take full advantage of the
deductions that are available to you for business related expenses
that are legitimate and then, you know, use Christian credit counselors.
(38:09):
On the credit cards.
S8 (38:10):
All right. Hey, thank you so much.
S1 (38:12):
All right, listen, Cody, if we can help further in
any way, don't hesitate to reach out. All the best
to you, my friend. We appreciate your call. Uh, let's
go to, uh. Well, we'll stay in Texas. Robert, how
can I help you?
S9 (38:23):
Well, yeah, uh, I got 75% of my matching, uh,
employer deposit into my 401 K going into the S&P
500 index fund, and the other 2,525% is going into
the blue chip Rowe or T Rowe, and I'm 57.
So I'm going to probably only I'm probably only going
(38:43):
to have less than ten years to keep going with
this 401 K. And I was wondering if, uh, those
kinds of deposits are aggressive enough.
S1 (38:54):
Yeah. So where are you? What is your age? 57 okay. So.
And and how long?
S9 (39:02):
5000. In a year. In one year I hit 5000.
So that's an average of 5000 a year. Even though
it's kind of slowed down this year because of the
shock that, you know, happened in this country the last
2 or 3 months. So. But I didn't move it.
I left it the way it was.
S1 (39:22):
Yeah. Yeah. The challenge is that, you know what, what
you have is a fairly, um, highly concentrated portfolio because
you know, that S&P 500 is, of course, the 500
large US companies. So think Apple, Microsoft, Amazon, it's a
broad market index, mostly mostly growth oriented. Um and then
(39:43):
so that's 100% stocks. And then you've got the rest
of it in an a blue chip allocation which you
know with a blue chip stock. Think Coca-Cola Johnson and
Johnson Walmart. So these are stable companies typically, uh, you
know with reliable dividends, somewhat lower volatility, but still, you know,
(40:04):
large cap or mega cap stocks. So you know, at
age 57 we would typically say just as a starting point,
you'd want closer to a 50 over 50 portfolio 50%
stocks 50% bonds. Just because you'd want to not have
quite as much volatility. I mean yeah, you've done well.
(40:24):
But if we were to get into a full blown recession,
which we're overdue for one, you know, you could see
a pretty significant pullback. I mean, you should be prepared
for a a 20 or 30% pullback. Now you still
do have some time on your side. I mean if
you're a decade away from retirement you would be able
to let that recover. And even once you reach retirement
(40:47):
Robert you're not going to pull it out on day one.
I mean, we still need a a 30 year time
horizon for you to hopefully allow this money to last
to age 90 or beyond. Um, but I think, you know,
just at a from an asset allocation Standpoint, 100% in
stocks for your investable assets at age 57 would be considered.
(41:09):
A very aggressive, um, versus, you know, what would be
more conventional, which would be, you know, somewhere between a
6040 and a 50 over 50 portfolio of stocks to bonds.
Does that make sense?
S9 (41:23):
Sure does. The thing is, I don't know which one
is considered stocks and which one's considered bonds. Is the
index fund the stocks and the blue chip?
S1 (41:31):
No, the S&P 500 and the blue chip are all stocks.
So you're 100% stock, 0% bonds. Whereas typically at age
57 we'd want you more like 50 over 50. So
you don't it doesn't sound like to me you have
any bond allocation in this portfolio at this point.
S9 (41:49):
I got to look into the bonds. Well, thank you
so much.
S1 (41:52):
All right. Thanks for your call today. Hey, folks. Thanks
for being along with us today. We covered a lot
of ground. It's been a joy to be walking alongside you. Hey,
let me mention our friends at Hartford, Lebanon. We've partnered
with them this quarter to shine a light on the
incredible work that they're doing. Uh, so that as you
think about your own giving dollars, you can come alongside
(42:12):
a great need there. Boy, there's critical challenges they're facing
by these vulnerable young women aged 13 to 21, in Lebanon.
They're at a heightened risk for exploitation, including early child marriage,
child labor, forced prostitution, forced street begging. By partnering with us,
you have the opportunity to provide them safety and the
(42:33):
gospel of Jesus. Every $114 reaches three girls. Just go
to faith. To help us sponsor them. Hey, faith and
finance is a ministry of faith, fi and Moody Radio.
Thanks to my team today and we'll see you tomorrow.
Come back and join us then. Bye bye.
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