Rob West: Sometimes the simplest gifts can carry the deepest meaning. For one mother in Mexico, seeing her children receive new shoes brought tears of joy and gratitude to God. I am Rob West. All month long, we've been partnering with Buckner Shoes for Orphan Souls to provide new shoes for children around the world. Today, Shawn Spurrier joins us to show us why a simple pair of shoes can mean far more than we might imagine. And we have lots of great listener questions ahead, but we won't be taking your live calls today because this program is pre-recorded. This is Faith & Finance on American Family Radio. Biblical wisdom for your financial decisions.
Well, Shawn Spurrier is the director of Buckner Shoes for Orphan Souls, a ministry of Buckner International that serves vulnerable children and families here in the US and around the world. Through Shoes for Orphan Souls, a new pair of shoes can protect a child, remove barriers to education, and remind them they are seen and valued. This month, we're partnering with Buckner to provide shoes for 1,000 children worldwide, and you can be a part of it when you go to giveshoestoday.org. Shawn, great to have you back.
Shawn Spurrier: Rob, it's great to be with you today.
Rob West: Shawn, we've talked this month about how something as simple as a new pair of shoes can make a really big difference in a child's life. For those just joining us, and maybe this is a new idea to them, remind us what that gift can mean for a vulnerable child in really a difficult part of the world.
Shawn Spurrier: Absolutely. You know, for you and I, a pair of shoes was a was a choice that we made this morning, a maybe a fashion choice or um had something to do with what we were going to be doing today. But for tens of millions of children around the world, a pair of shoes is a primary need for attending school. Um shoes prevent injury um and disease. Uh and beyond that, having a pair of shoes can restore dignity and confidence for children who lack access to them. Um and they and they let them know that they're loved and they're cared for and not forgotten when provided for them.
Rob West: Mmm, it's such an opportunity. And I love that we do this in September. We did it last September; we're doing it again this September because so many of us, and this includes my household, you know, we're just automatically, "Well, it's back-to-school month, and so let's just run out and get a new pair of shoes for the kids. It's a great fresh start." And that's just not a reality for children around the world in so many cases. And so what an opportunity, $15 at a time, to put a new pair of shoes, socks, and the cost to transport them on the feet of a young child, and this can make all the difference.
Now, Shawn, we often focus on what a new pair of shoes means to the child receiving them, but Buckner is also coming alongside the parents who may be struggling to provide basic necessities. So, what do you see in those moms and dads when they watch their child receive a new pair of shoes?
Shawn Spurrier: Goodness, that's that's often as as special as the moment the child receives the shoes. For moms and dads, even here in the United States, uh it is difficult sometimes to provide what we what we need to for our kids. We talk to moms and dads regularly who are struggling and deciding whether or not they can provide shoes and clothing or food for their kids. Yeah. Um and so we have an opportunity to come alongside families and carry a practical burden for them. Um and we often see just an an immense amount of gratitude in the in the eyes of moms and dads who who see that their families are being cared for and loved and and that somebody's coming alongside them to to help provide in that way.
Rob West: Mmm, it's incredible, and you're plugging them in to local ministries, whether it's one of your Hope Centers or a local church on the ground in these communities, right?
Shawn Spurrier: Absolutely. So, our family Hope Center is our our present to help provide resources and services, um after-school programs, economic empowerment, spiritual discipleship, but also we are working with other ministries, organizations, and churches in these communities. Um and we just want to ensure that we're providing holistic care. So, um and often shoes are the way that we get to to connect families to those programs.
Rob West: Mmm, and these children, as they receive these new shoes, they're being seen, and that's weighty, but you're also sharing the Gospel, right?
Shawn Spurrier: Absolutely. Every pair of shoes that we we provide is going to have uh, first off, a handwritten note in it that will express the love of Christ to them. Um and we also get to kneel in front of them, wash their feet, mirror Christ in that way, spend time with them, and communicate it to them directly. Um and so every pair of shoes is an opportunity for us to tangibly and verbally express the Gospel to them and their families often.
Rob West: Yeah, incredible. Well, after this break, we're going to hear from a mother named Alma, and she's going to share what it meant to see her child receive a new pair of shoes. Folks, Faith Fi and Buckner Shoes for Orphan Souls are partnering this month, through the end of September, to provide new shoes for 1,000 children around the world. Each pair can help protect a child's health, support access to education, restore dignity, and create opportunities for children and families to hear the hope of the Gospel. Every $15 provides a new pair of shoes at giveshoestoday.org. We'll be right back.
SEGMENT 2
Rob West: A pair of shoes may seem ordinary, but it can express love, dignity, and hope, and remind a child and family they haven't been forgotten. And that's why all month long, our team at FaithFi has partnered with Buckner Shoes for Orphan Souls to provide a new pair of shoes and socks to 1,000 children around the world. And for these children, this means protecting their health, supporting access to education, restoring dignity, and the opportunity to share the hope of the Gospel to the child and his or her family. You can be a part of it. Help us reach our goal of 1,000 shoes when you make a gift of $15 at giveshoestoday.org. $15 provides shoes, socks, and transportation for those shoes for one child, $150 for 10 children. Giveshoestoday.org. We're joined today by Shawn Spurrier, Director of Buckner Shoes for Orphan Souls. And, Shawn, I know you've talked about something before that you call the "theology of the ordinary." How can a simple act like providing a pair of shoes become really a meaningful expression of our faith?
Shawn Spurrier: Yeah, you know, one of the things that animates my faith the most is that theology of the ordinary, that God uses ordinary people in ordinary places and ordinary means to love and serve His world. And I think when we're providing shoes, we're we're getting to participate in that. Something as small as a gift of a pair of shoes does—it provides dignity, it provides the Gospel to them, and it gives us the opportunity to just see so many doors opened. And so I've seen countless opportunities when providing that pair of shoes, that simple, ordinary gift, just opens the doors to tremendous Kingdom opportunity in terms of ministry and opportunity for families and children to thrive.
Rob West: Yeah. Shawn, before the break, you talked about seeing moms and dads watch their child receive a new pair of shoes and just how meaningful that is for you and the others that are a part of these shoe distributions. I want us to hear from one of those mothers directly. This is from one of your trips to Mexico. This is Alma sharing what it meant to see her child receive new shoes. Take a listen.
Alma: I am full of emotion. The truth is that this is something that perhaps I could not receive in my childhood. But for my children, it is real. I am very grateful, and I cry with joy for you and my children. The truth is that always here in my heart is joy that through God is a blessing for you and for me. I don't know, and I can't explain why. The only thing that I can do is to thank God for you and see that joy for my children because I say I didn't have maybe that, but they do, and I thank God. Thank you very much.
Rob West: Shawn, when you hear Alma say that, what stands out to you?
Shawn Spurrier: Rob, I can remember asking her the question, and the tears welling up in her eyes when we just asked, "You know, what was it like when you saw your children receive shoes?" As parents, we want to see our kids experience things that are that are better than what we've gotten to; we want them to have a better life. And Alma obviously didn't have access to the same things that her her children are now getting access to, even as small as the gift of a pair of shoes. And so, it really just kind of pulls you back. It reminds me of why we are doing what we're doing, and it shows me that this is a very tangible ministry that we're we're participating in.
Rob West: Mm, yeah. There's something especially moving about hearing Alma say she never had something like that growing up, but now her children do. Shawn, do you often meet parents who simply want a different experience or a better future for their children, maybe than the one they had?
Shawn Spurrier: I think that's probably the case for every parent that brings their child to a shoe distribution. They're coming in to receive something that their children need desperately to achieve education and and health, and and they're coming from communities where often that hasn't been readily accessible. And so, absolutely. And and that's that's one of the things that Buckner wants to provide beyond the shoes is a longer-term ministry that's going to help vulnerable children and families achieve sustainability and an experience that maybe those parents didn't have when they were growing up.
Rob West: I know you shared a little bit about this, but this relational approach is so important, Shawn. Describe just what that includes.
Shawn Spurrier: Well, again, every every pair of shoes kind of opens the door to relationship if we're not already in relationship with these families. And so when you open doors to education, your your children are going to be operating in an environment where relationship is is rich and they are growing there. But we're we're opening the door to to ministries where they're going to have family coaches and and community members and friends who are are coming alongside them to help them achieve sustainability in their God-given potential. And we're plugging them in to to local churches that we work alongside and other ministries. And so this work is truly relational. This is not just dropping a pair of shoes off and leaving. This is really, oftentimes, the beginning of a relationship or continuing or furthering a relationship. And again, it's one that really ties to some strong overall ministry opportunity.
Rob West: Our goal is 1,000 shoes. Every $15 given will help us move toward that goal and, Lord willing, pass it. Giveshoestoday.org is the place to go. Shawn, as we enter the final week of our September campaign, what is someone really becoming part of when they choose to give through Buckner's work?
Shawn Spurrier: Shoes are—they're an opportunity for kind of a one-to-one direct impact. So every pair of shoes represents the life of a child. We don't—we don't always know what story that pair of shoes is going to enter, but you're entering a thousand stories if we collect a thousand pairs of shoes here, if we provide a thousand pairs of shoes. We're providing access to health for a thousand children, access to education, lowering barriers to education that's vital to their rising above poverty for a thousand children, and having an opportunity to communicate the Gospel in a very tangible way to a thousand children. So every pair is an opportunity, and every pair represents the life of a child who's going to be impacted. And beyond that, their families will be impacted, and we've seen entire communities impacted. And so, it's simple, but the impact can really be profound.
Rob West: Yeah, there's no doubt about it. And, folks, entering those stories also means greater protection for their health, greater access to education. Not only that, but dignity, confidence, encouragement, and the sharing of the love of Christ, and that is paramount. Shawn, we have just a week left in this campaign. What would you say to someone who may be wondering whether a gift of just $15 can really make a meaningful difference in a child's life?
Shawn Spurrier: It absolutely can. You know, every $15 actually provides a pair of shoes, socks, and it gets the shoes to the ministry program that is going to serve them, so it gets that pair of shoes to that child. You know, $150 will provide that for 10 children. These small gifts can become really powerful when when people participate together. And again, we we truly believe that God uses this this very practical gift to to do some really extraordinary things in the lives of children. So we need our friends to come alongside us to help us further this work, and we would encourage you to really consider that.
Rob West: Excellent. Well, a pair of shoes may seem ordinary, but it can become an expression of love and dignity and hope, and a reminder to a child and family that they've not been forgotten. And that's what it's all about here. Shawn, we're so thankful for you and your team at Buckner Shoes for Orphan Souls. Thanks for helping us see the children and families beyond every pair.
Shawn Spurrier: Likewise, Rob. We're so thankful for you and the FaithFi family. Thanks for having us on.
Rob West: Absolutely. That's Shawn Spurrier, Director of Buckner Shoes for Orphan Souls. All right, there's still time to join us as we work toward providing new shoes for 1,000 children around the world. A gift of $15 provides shoes for one child, $150 shoes for 10. To be a part of this effort, go right now to giveshoestoday.org. That's giveshoestoday.org. As I said, we're off today, so don't call in, but we've got some great calls lined up in advance. So we'll go to those just around the corner. I'm Rob West, and this is Faith & Finance on American Family Radio. Biblical wisdom for your financial journey. We'll be right back.
SEGMENT 3
Rob West: Great to have you with us today on Faith and Finance on American Family Radio. I'm Rob West. So grateful for my team that makes all of this possible every day. You know, each day our heart's desire as a team is just to come alongside you, to encourage you, to equip you, to point you back to God's word, to remind you that Christ is your ultimate treasure, to remind you that God owns everything, and that you and I have been given a high calling as a steward. Money is a tool. Yes, we can enjoy it and provide for our families with it, but we can also give it generously to be a part of God's redemptive work in the world. We can invest it in a way that aligns with our values and promotes human flourishing. But we're going to make mistakes along the way. We're going to have questions, and that's why we seek wise counsel. We're so grateful for the calls that come in each day to this program. In fact, let's head to the phones. We're going to go to Missouri and Clara. Thanks for calling. Go ahead.
Clara: Hi, I was calling you because I'm 66. I have a 401(k), but my full retirement age would be 67, and I was wondering if I got a part-time job or anything, if I could add money to the 401(k) or if I should close it or just... I don't know.
Rob West: Yeah, it's a great question. So a 401(k) is attached to a company through their provider, the plan administrator, it's called. When you separate from employment, you have a couple of options. You can no longer contribute to that 401(k) because the only way you can contribute to a 401(k) is through salary deferral, so it has to come out of your paycheck. And so if you're no longer with that company, you can't put anything else in.
In terms of what you've already got in that 401(k), you can leave it where it is. You can roll it to a new 401(k) with your new employer, so long as that plan administrator allows that. Most do, not all. Or you could roll it to an IRA, an individual retirement account. So you'd have to open an IRA at, let's say, Charles Schwab or Fidelity or, you know, one of the other brokerages. You'd then roll it in—it's a trustee-to-trustee transfer, so it's not a taxable event because it goes from the pre-tax 401(k) to the pre-tax IRA.
The only thing about that is that, unlike the 401(k) that has a limited menu of investments that's fairly easy to select from, as soon as you get into the IRA, you have unlimited investment options, which is great, but, you know, there can be some analysis paralysis there just because you have unlimited options. And I could point you in the direction of how you might get some recommendations on investing it. What do you have in your 401(k) currently? Rough balance?
Clara: Oh, it's about 25 or 28, something like that. Thousand.
Rob West: Okay, yeah. So what I would do is—are you will have a new 401(k) or new employer, is that right?
Clara: That's what I was going—I was going to work, yeah, from... This is a hospital, and I was going to go work through the school district.
Rob West: Okay, great. So what I would do is just leave that 401(k) with your previous employer right where it is. Let's get you settled into your new job, get that retirement plan going, and then ask them, "Can I roll my old 401(k) in?"
I like that option the best because it just keeps things simple. You've got all your retirement assets in one place, you just manage one account, and you get everything. You don't have to worry about that separate account and getting the statements and picking the investments. So that would be my preferred option. And then, as soon as you're able to, start contributing to that new 401(k). Those new contributions, plus what you roll in from the old 401(k), would allow you to continue to build your nest egg for the future.
Clara: Okay. All right.
Rob West: Okay?
Clara: Yeah, that's great. Thank you.
Rob West: Excellent. Thanks for your call today. If I can help further, Clara, along the way, don't hesitate to reach out.
Let's go to Savannah, Georgia. Tommy, go ahead.
Tommy: Hello. Good afternoon. So I'm wondering, should I leave a payoff amount in my will for a friend of mine who still has a mortgage on her house? She's essentially retired on a fixed income with not a whole lot of cushion, and we can figure out the tax, the legal nonsense—we can figure that up with the accountant. I'm just wondering the epistemological—is that wise? Is that something that a smart person would do?
Rob West: Well, it sounds like a wonderful blessing to your friend, and I don't see any reason why you wouldn't want to do that. If your goal is you want to simplify your friend's life and you want to bless this friend through the giving of essentially a part of your estate to pay off the mortgage, what a wonderful gift that would be. There's really not any reason that you would not want to do that.
Ultimately, you've got to decide who the next steward is, and there's really only three options: the government, heirs (I'd put friends in that category), or generosity—giving to your church or a ministry that you care about and love. We really don't have to think much about the government in the sense that the estate tax thresholds are so high that you'd have to have an estate at least, under current tax law, of $15 million before you'd have any estate tax at the federal level. So that's off the table.
So now it's just heirs and giving. If as a part of you choosing the next steward, you'd like to bless this friend with paying off the mortgage, I think that's great. There is no federal inheritance tax, so it would not be taxable to your estate, it would not be taxable to your friend, and what a wonderful gift that would be.
Tommy: Well, fair enough. Thanks for your help. Appreciate it.
Rob West: Okay. Lord bless you, Tommy. You sound like a wonderful and generous man. If we can help further along the way, don't hesitate to reach out.
Well, folks, taking your calls today. We've had some good ones. So thankful for each of you. You know, it just comes through that your desire is to honor the Lord. You want to be found faithful, and we want to help you do that each day.
One of the ways we do that is through the resources that we create and provide to you. In fact, our brand-new special edition of the Faithful Steward magazine is out. I just got the first edition the team did here in the office, and it's a special edition all focused on women and wealth. It's beautiful, it's 80 pages long, and you're going to love it. It's going to be mailed to every partner.
If you want to become a partner to ensure that you get every new resource, just head to our website, faithfi.com/give. Partners give to the ministry $35 a month or $400 a year, and it's a key part of sustaining the ministry: faithfi.com/give.
Now, just a quick reminder as we head into this next break: don't call in. Our team is not here today, but we have some great questions we've lined up in advance. Those will be coming just on the other side of this break. More to come on Faith and Finance right after this. We'll be right back.
SEGMENT 4
Rob West: So, thankful to have you with us today on Faith and Finance here on American Family Radio. Hey, by the way, perhaps you're not in a place where you can call in right now, but you still have a question. Well, you can send that to us by email. We'd love to receive it. We try to get one to two emails on the broadcast each day. I'll read them, and we'll even try to get you that response in case you didn't hear it. But if you'd like to send it along, pass your email to us at [email protected]. That email address again, simply [email protected]. We'd love to hear your questions. Let's go out to Wyoming. We don't get a lot of Wyoming calls. Sarah, thanks for being on the program today. Go ahead.
Sarah: Oh, well, thanks, Rob. It's been many, many years that I've been able to listen to your program off and on, and I've always appreciated the biblical wisdom that you give. Where we're at, my husband and I are right around 70, and we basically, we just don't have a lot of savings at all. And our home is paid for. We have one vehicle payment. And I was just wondering, is there, I mean, is there a place or a way that even at this late stage that we can start with minimal amounts? You know, I don't even know what that might look like or if you had any advice. The other thing was whether or not a revocable or irrevocable trust is the way to go.
Rob West: Yeah, great questions. So, Sarah, I'm so thrilled that you called, and thanks for your kind remarks about the program. You know, appreciate the background. You and your husband are 70 years old, you have no investments or savings, and you've been able to pull a few thousand dollars together. That's great. Let's keep that up. I would say, you know, to the extent you can, live below your means. Even an extra $25 or $50, you know, going into that savings account is really important just because it's going to continue to build that nest egg.
I would say just given where you're at, I would not be looking to invest. I would be looking to build what I call your emergency fund. And, you know, normally during your working years, we say you need three to six months expenses in emergency savings. And that just simply means we're not looking at your income, we're looking at what does it take to fund your lifestyle for a month's time, and we need three to six months worth of those expenses in savings for the unexpected. Not the planned maintenance and things that we know are going to come that we can count on them. No, we're looking at those unexpected things that come out of left field. If we don't have that emergency fund, then the only thing left when they come—and they will—is credit cards or some other borrowing, and we don't want to do that.
And so I think in your situation, being in your 70s, retired, you want at least six months. And so I would say for the foreseeable future, we want to take that money and park it in a savings account. Now, it could be a high-yield savings account where at least you're getting a little bit of interest on it, you know, maybe 4%, maybe more. But I don't think you have even enough to do that. I would probably leave this as a cushion, you know, in your checking account—at least $1,000—and then maybe you take the next $1,000 and move it over into the savings account, and then you continue adding to that.
Now, if you can find your local bank or credit union that's paying a decent rate of interest, which I think today is a minimum of 4%, then great. If not, you know, one of the things you could do would be to contact our friends at AdelFi Christian Banking. They're the biggest credit union—Christian credit union—in the country. We've got some of our team members that use AdelFi and love it. And they have a money market that pays 4% up to $100,000 for at least a year. And there's a bonus when you open a new account if you are a Faith Fi listener of up to $400. And if you want more information on that, you could stay on the line, our team will give it to you. But that's the kind of thing I would be doing. I would not be looking to invest with a with a few thousand dollars if that's really all you have in reserve.
Sarah: Okay, thank you for that.
Rob West: All right, Sarah. Listen—yeah, go ahead.
Sarah: No, I was going to say that that's pretty good. It's like, well, yeah, you need to be able to protect yourself for support yourself during emergencies. So that's very wise. Thank you.
Rob West: Yes, ma'am. Sure. I know you also asked about a revocable trust, and essentially, it can be a useful estate planning tool, but it's not an automatic, especially if you're in a situation where you don't have a whole lot in your estate, because just setting up the trust itself is going to run you $3,000 plus. You know, could be $3,000, could be, you know, more. And really, what a trust is going to do is to allow you to bypass probate, so your assets can pass automatically based on how the trust is set up and not run through the probate courts. They could be managed if you were incapacitated. It does provide a little more privacy, and it could allow you to transfer assets beyond your life, meaning it doesn't all have to happen at death; it could happen over time. But unless you have a real reason to do that—multiple properties or maybe a little bit of a larger estate or more complex—I just think for the average person, a simple will is going to cover it. There's really not a strong need for a revocable trust.
Sarah: With a will, will things have to go through probate?
Rob West: They will, but that's okay. You know, essentially that would take a little bit of time. There would be some court costs for the probate court. But, you know, that happens every day, and it's not something I would be concerned about. And again, unless there's a real reason for it, the cost of setting up that revocable trust is going to be prohibitive unless you have a real reason to do it.
Sarah: Okay. All right. Well, thank you very much for your time and for your information. And I would like some information on the AdelFi.
Rob West: Okay, great. Well, thanks for calling today, Sarah. Lord bless you. We'll be headed back to the phones here in the final segment. Right after the break, we'll head to Texas and talk to Petra. We'll go to Ohio and talk to Don. Jim's calling from Indiana, and perhaps your question as well.
Hey, our new field guide is out, and it tackles the question: How Much Money Is Enough? You know, as we think about the most common questions we get where your faith intersects with your finances, this idea of how much is enough really bubbles up to the surface so often. And it's really around this idea of: What does it look like to think biblically around a lifestyle and a lifetime finish line? And it may be in a situation where you haven't reached your finish line yet. That's okay. Thinking through it prayerfully is a really worthwhile exercise. Maybe you have reached it. Maybe your lifestyle finish line is something lower than what you're living at today. This resource will help you look at God's Word and explore this topic, give you the worksheets and the action steps to determine your lifetime and lifestyle finish line, and then give you some case studies of people who have gone before you. If you'd like to check it out, it's available in our store at faithfi.com/shop. All right, a quick break, and back with our final segment.
SEGMENT 5
Rob West: Thanks for joining us today on Faith and Finance here on American Family Radio. I'm Rob West. Here in our final segment, we're going to get to as many calls as we can. Let's head out to Texas. Petra, thanks for calling. Go ahead.
Petra: Yes. I hope I can explain myself. I'm trying to figure out a way of what to do with a... it's a little bit of money that my mother left me as a beneficiary. But I have two options. One is to roll it over, and the other one is to get a lump sum and pay 20%. Well, I'm not working anymore, so I never did a 401(k). But I did talk to my tax lady, and she's telling me that if I get that money, I'm going to end up paying more than the 20%. So at this point, I mean, I wanted to use it on her headstone and my father's headstone, but I'm trying to figure out a way of maybe not paying so much or what to do if you can tell me what to do.
Rob West: Sure, I'd be happy to talk you through it, Petra. So let me just understand: you got a $10,000 inheritance. Is this money inside an IRA—an individual retirement account?
Petra: No, it was from her... well, it was from her retirement. It's like... I want to say it was more like a... what do you call it, like a...
Rob West: 401(k)?
Petra: Like for funeral expenses... no, for like funeral expenses, but they're calling it an inheritance because I was just the beneficiary. So...
Rob West: Okay. It sounds like a burial policy, like an employment benefit with some life insurance paid to a beneficiary to cover funeral expenses. Is that right?
Petra: Yes, I think that's really what it is. Yes. I believe that that's...
Rob West: All right. Well, what's confusing to me about that is if it was a life insurance policy—what they call a burial policy—specifically a smaller death benefit like $10,000 paid to a beneficiary to cover funeral and burial expenses, that should not be taxable. That should be non-taxable, so I'm not sure what it is that the CPA is saying is triggering the taxable event.
Petra: Okay. Well, I mean, how would I know exactly what it is? Because according to her retirement, she worked through the TRS system. Who do I call to make sure what exactly it is?
Rob West: Okay. Yeah, I mean it's important that you get the documentation on it. Who is her executor? Is that you?
Petra: Yes.
Rob West: Okay. So I think the thing you need to do is try to pull all the information. If it was part of the Teacher Retirement System, then that's a retirement or a pension plan. The options depend on which state—in this case, it sounds like it was Texas, is that right?
Petra: Yes.
Rob West: Okay. And so with the Texas Teacher Retirement System, essentially what would happen here is if it was a $10,000 death benefit from the Texas TRS and you're the beneficiary, then you could take the lump-sum survivor benefit in addition to continuing annuity benefits. But in that case, it could be a taxable event given that it was a part of this retirement plan.
At that point, you'd have a decision to make: do you do what's called a rollover distribution where it's directly rolled over, and therefore it's not a taxable event, or do you take the money out and use that money then to pay expenses?
If you really don't have any retirement account to speak of, I like the idea of you rolling it over and keeping it in what's called an inherited IRA. That would be if you don't need the money; it would keep it in that tax-deferred environment, and therefore you don't create a taxable event, and then it could be invested and grow for the future. But do you have some burial-related expenses you need to be able to cover?
Petra: No, I took care of all that, so it's all clear. I just don't know what to do with this part because I was already paying... owing the IRS, and that's what the lady told me, my tax lady, that I would be paying even more. She did recommend to put it like in an IRA, but I don't know where to go. She couldn't tell me where or what to do with that part.
Rob West: Yeah, very good. Well, an IRA is right if you're going to keep it in a tax-deferred environment. It's called an inherited IRA, and you would roll it over. You would probably want to open an account at Fidelity or Schwab. Those are discount brokerage firms, meaning low cost. It could be rolled over, you don't have to do anything other than roll that money in, and then you would be able to pick the investments and let it grow. If you needed it at some point, you could take it out as you need it, rather than taking it all at once, which would add the full $10,000 to your taxable income in one year.
Once you roll it over, you could also just stick it into some CDs or a money market account inside the IRA if you didn't want to take any risk with it.
Petra: Uh-huh. Okay. So due to my age also, I mean, can that be passed on to somebody else, like one of my children?
Rob West: Yes, absolutely. So once that's in the IRA, you can name a beneficiary, and so at your passing, any accounts you have with a named beneficiary would pass directly to that person.
Petra: Okay. So where do you recommend that I should go? To one of these, Fidelity or Schwab, to one of those places?
Rob West: Yes, that's what I would do. You need to decide how you want it invested. If you want to take the minimal amount of risk, once you roll it into Fidelity or Schwab, you could just ask them to put it into a CD or money market. If you want to invest it because you don't plan to touch it for a minimum of five years, then you could put it in a pretty simple portfolio of maybe two or three exchange-traded funds.
If you go to soundmindinvesting.org, they have an article there on a strategy called "Just the Basics," and that could get you pointed in the right direction. But I think the first step is to get that rolled over into an IRA at Fidelity or Schwab. There wouldn't be any required minimum distributions—or there shouldn't be, at least—and that would allow you to get that invested and just take it as you need it.
Petra: Okay. All right, well thank you.
Rob West: Okay, we appreciate your call today. Lord bless you, thanks for being on the program. Let's head to Ohio and talk to Don. Go ahead.
Don: Hi Rob. First of all, I wanted to say thank you for coming to Northeast Ohio last year at CVCA, Cuyahoga Valley Christian Academy. It was a blessing.
Rob West: Oh yeah, that was great!
Don: Yeah, it was a great time, and we appreciate meeting you and the book you gave us there on Our Ultimate Treasure, I think it was. It's a fantastic book. We've often used it in our church offering talks, kind of in an edited fashion, for the offering. So thanks for that ongoing ministry.
Rob West: Oh, that's incredible, Don. Thanks for saying that.
Don: Well, it's great, and we appreciate it. A quick question I had was: I turned 70 and a half a year ago, a little over a year ago, and I showed up at my financial advisor's office because I said, "I think I'm supposed to be here now I'm 70 and a half for something," and I wasn't sure what. So we had a good discussion, a good talk, and he was able to advise us and steer us into a QCD that came out of an IRA that I have.
And so we've been using that for the past year, but—and maybe I don't understand it all correctly—we use it for the past year for our charitable giving out of a checkbook that it has. My wife and I, the question we had was, if we don't have that checkbook with us and we want to give to something, how do we do that? Is there such a thing as a debit card attached to that, or... I find unless... if I wanted to give to say, for example, Samaritan's Purse online because of Nepal or whatever, usually I'd have to use a credit card for that. I guess I could write a check to that, but I almost want to get it there quickly. So anyway, what are your thoughts on that, or maybe you can educate me a little bit better?
Rob West: Yeah, I'd be happy to. I love the Qualified Charitable Distribution; it's a great tool once you're 70 and a half. It's the only way to get that money out of a pre-tax retirement plan, an IRA, without anything else being a distribution which is taxable. But it does have to go directly to an eligible charity—your church, really any 501(c)(3). It can't come to you first in order to satisfy the IRS requirements.
So what are your options? Well, it really depends on your IRA custodian. So in this case, your advisor's custodian. They will tell you what options they make available. Many of them do make an IRA checkbook available, so that's what you have access to. You can write a check, you write it directly to the qualified charity; this is very common and it's very convenient.
The other approach would be an online QCD request. Some custodians let you enter the charity online and have the custodian send the payment, so like, for instance, Fidelity has that. Some, you would call the custodian and instruct them to mail a check directly to the charity, and they would mail it for you. And then some custodians can do what's called an EFT, an electronic funds transfer from your IRA electronically to the charity.
Again, that depends on which custodian you're with. I've never found one that has a debit card option. I don't think that exists, and I would question whether that would even meet the IRS rules and regs. But I would say either calling them and having them mail a check or using that checkbook for your IRA would get it done.
Don: Great! Well, thank you, I appreciate that explanation, that's very helpful. Thank you.
Rob West: Absolutely, Don. Lord bless you, my friend. Big thanks to my team today, thankful for Taylor and Devin and Patty and everybody that makes this possible here at FaithFi every day. Go out and live as a faithful steward, make God your ultimate treasure, hold money loosely, make it a tool, give it generously, invest it strategically, and come back and join us tomorrow. We'll see you then. Bye-bye.
Rob West: Sometimes the simplest gifts can carry the deepest meaning. For one mother in Mexico, seeing her children receive new shoes brought tears of joy and gratitude to God. I am Rob West. All month long, we've been partnering with Buckner Shoes for Orphan Souls to provide new shoes for children around the world. Today, Shawn Spurrier joins us to show us why a simple pair of shoes can mean far more than we might imagine. And we have lots of great listener questions ahead, but we won't be taking your live calls today because this program is pre-recorded. This is Faith & Finance on American Family Radio. Biblical wisdom for your financial decisions.
Well, Shawn Spurrier is the director of Buckner Shoes for Orphan Souls, a ministry of Buckner International that serves vulnerable children and families here in the US and around the world. Through Shoes for Orphan Souls, a new pair of shoes can protect a child, remove barriers to education, and remind them they are seen and valued. This month, we're partnering with Buckner to provide shoes for 1,000 children worldwide, and you can be a part of it when you go to giveshoestoday.org. Shawn, great to have you back.
Shawn Spurrier: Rob, it's great to be with you today.
Rob West: Shawn, we've talked this month about how something as simple as a new pair of shoes can make a really big difference in a child's life. For those just joining us, and maybe this is a new idea to them, remind us what that gift can mean for a vulnerable child in really a difficult part of the world.
Shawn Spurrier: Absolutely. You know, for you and I, a pair of shoes was a was a choice that we made this morning, a maybe a fashion choice or um had something to do with what we were going to be doing today. But for tens of millions of children around the world, a pair of shoes is a primary need for attending school. Um shoes prevent injury um and disease. Uh and beyond that, having a pair of shoes can restore dignity and confidence for children who lack access to them. Um and they and they let them know that they're loved and they're cared for and not forgotten when provided for them.
Rob West: Mmm, it's such an opportunity. And I love that we do this in September. We did it last September; we're doing it again this September because so many of us, and this includes my household, you know, we're just automatically, "Well, it's back-to-school month, and so let's just run out and get a new pair of shoes for the kids. It's a great fresh start." And that's just not a reality for children around the world in so many cases. And so what an opportunity, $15 at a time, to put a new pair of shoes, socks, and the cost to transport them on the feet of a young child, and this can make all the difference.
Now, Shawn, we often focus on what a new pair of shoes means to the child receiving them, but Buckner is also coming alongside the parents who may be struggling to provide basic necessities. So, what do you see in those moms and dads when they watch their child receive a new pair of shoes?
Shawn Spurrier: Goodness, that's that's often as as special as the moment the child receives the shoes. For moms and dads, even here in the United States, uh it is difficult sometimes to provide what we what we need to for our kids. We talk to moms and dads regularly who are struggling and deciding whether or not they can provide shoes and clothing or food for their kids. Yeah. Um and so we have an opportunity to come alongside families and carry a practical burden for them. Um and we often see just an an immense amount of gratitude in the in the eyes of moms and dads who who see that their families are being cared for and loved and and that somebody's coming alongside them to to help provide in that way.
Rob West: Mmm, it's incredible, and you're plugging them in to local ministries, whether it's one of your Hope Centers or a local church on the ground in these communities, right?
Shawn Spurrier: Absolutely. So, our family Hope Center is our our present to help provide resources and services, um after-school programs, economic empowerment, spiritual discipleship, but also we are working with other ministries, organizations, and churches in these communities. Um and we just want to ensure that we're providing holistic care. So, um and often shoes are the way that we get to to connect families to those programs.
Rob West: Mmm, and these children, as they receive these new shoes, they're being seen, and that's weighty, but you're also sharing the Gospel, right?
Shawn Spurrier: Absolutely. Every pair of shoes that we we provide is going to have uh, first off, a handwritten note in it that will express the love of Christ to them. Um and we also get to kneel in front of them, wash their feet, mirror Christ in that way, spend time with them, and communicate it to them directly. Um and so every pair of shoes is an opportunity for us to tangibly and verbally express the Gospel to them and their families often.
Rob West: Yeah, incredible. Well, after this break, we're going to hear from a mother named Alma, and she's going to share what it meant to see her child receive a new pair of shoes. Folks, Faith Fi and Buckner Shoes for Orphan Souls are partnering this month, through the end of September, to provide new shoes for 1,000 children around the world. Each pair can help protect a child's health, support access to education, restore dignity, and create opportunities for children and families to hear the hope of the Gospel. Every $15 provides a new pair of shoes at giveshoestoday.org. We'll be right back.
SEGMENT 2
Rob West: A pair of shoes may seem ordinary, but it can express love, dignity, and hope, and remind a child and family they haven't been forgotten. And that's why all month long, our team at FaithFi has partnered with Buckner Shoes for Orphan Souls to provide a new pair of shoes and socks to 1,000 children around the world. And for these children, this means protecting their health, supporting access to education, restoring dignity, and the opportunity to share the hope of the Gospel to the child and his or her family. You can be a part of it. Help us reach our goal of 1,000 shoes when you make a gift of $15 at giveshoestoday.org. $15 provides shoes, socks, and transportation for those shoes for one child, $150 for 10 children. Giveshoestoday.org. We're joined today by Shawn Spurrier, Director of Buckner Shoes for Orphan Souls. And, Shawn, I know you've talked about something before that you call the "theology of the ordinary." How can a simple act like providing a pair of shoes become really a meaningful expression of our faith?
Shawn Spurrier: Yeah, you know, one of the things that animates my faith the most is that theology of the ordinary, that God uses ordinary people in ordinary places and ordinary means to love and serve His world. And I think when we're providing shoes, we're we're getting to participate in that. Something as small as a gift of a pair of shoes does—it provides dignity, it provides the Gospel to them, and it gives us the opportunity to just see so many doors opened. And so I've seen countless opportunities when providing that pair of shoes, that simple, ordinary gift, just opens the doors to tremendous Kingdom opportunity in terms of ministry and opportunity for families and children to thrive.
Rob West: Yeah. Shawn, before the break, you talked about seeing moms and dads watch their child receive a new pair of shoes and just how meaningful that is for you and the others that are a part of these shoe distributions. I want us to hear from one of those mothers directly. This is from one of your trips to Mexico. This is Alma sharing what it meant to see her child receive new shoes. Take a listen.
Alma: I am full of emotion. The truth is that this is something that perhaps I could not receive in my childhood. But for my children, it is real. I am very grateful, and I cry with joy for you and my children. The truth is that always here in my heart is joy that through God is a blessing for you and for me. I don't know, and I can't explain why. The only thing that I can do is to thank God for you and see that joy for my children because I say I didn't have maybe that, but they do, and I thank God. Thank you very much.
Rob West: Shawn, when you hear Alma say that, what stands out to you?
Shawn Spurrier: Rob, I can remember asking her the question, and the tears welling up in her eyes when we just asked, "You know, what was it like when you saw your children receive shoes?" As parents, we want to see our kids experience things that are that are better than what we've gotten to; we want them to have a better life. And Alma obviously didn't have access to the same things that her her children are now getting access to, even as small as the gift of a pair of shoes. And so, it really just kind of pulls you back. It reminds me of why we are doing what we're doing, and it shows me that this is a very tangible ministry that we're we're participating in.
Rob West: Mm, yeah. There's something especially moving about hearing Alma say she never had something like that growing up, but now her children do. Shawn, do you often meet parents who simply want a different experience or a better future for their children, maybe than the one they had?
Shawn Spurrier: I think that's probably the case for every parent that brings their child to a shoe distribution. They're coming in to receive something that their children need desperately to achieve education and and health, and and they're coming from communities where often that hasn't been readily accessible. And so, absolutely. And and that's that's one of the things that Buckner wants to provide beyond the shoes is a longer-term ministry that's going to help vulnerable children and families achieve sustainability and an experience that maybe those parents didn't have when they were growing up.
Rob West: I know you shared a little bit about this, but this relational approach is so important, Shawn. Describe just what that includes.
Shawn Spurrier: Well, again, every every pair of shoes kind of opens the door to relationship if we're not already in relationship with these families. And so when you open doors to education, your your children are going to be operating in an environment where relationship is is rich and they are growing there. But we're we're opening the door to to ministries where they're going to have family coaches and and community members and friends who are are coming alongside them to help them achieve sustainability in their God-given potential. And we're plugging them in to to local churches that we work alongside and other ministries. And so this work is truly relational. This is not just dropping a pair of shoes off and leaving. This is really, oftentimes, the beginning of a relationship or continuing or furthering a relationship. And again, it's one that really ties to some strong overall ministry opportunity.
Rob West: Our goal is 1,000 shoes. Every $15 given will help us move toward that goal and, Lord willing, pass it. Giveshoestoday.org is the place to go. Shawn, as we enter the final week of our September campaign, what is someone really becoming part of when they choose to give through Buckner's work?
Shawn Spurrier: Shoes are—they're an opportunity for kind of a one-to-one direct impact. So every pair of shoes represents the life of a child. We don't—we don't always know what story that pair of shoes is going to enter, but you're entering a thousand stories if we collect a thousand pairs of shoes here, if we provide a thousand pairs of shoes. We're providing access to health for a thousand children, access to education, lowering barriers to education that's vital to their rising above poverty for a thousand children, and having an opportunity to communicate the Gospel in a very tangible way to a thousand children. So every pair is an opportunity, and every pair represents the life of a child who's going to be impacted. And beyond that, their families will be impacted, and we've seen entire communities impacted. And so, it's simple, but the impact can really be profound.
Rob West: Yeah, there's no doubt about it. And, folks, entering those stories also means greater protection for their health, greater access to education. Not only that, but dignity, confidence, encouragement, and the sharing of the love of Christ, and that is paramount. Shawn, we have just a week left in this campaign. What would you say to someone who may be wondering whether a gift of just $15 can really make a meaningful difference in a child's life?
Shawn Spurrier: It absolutely can. You know, every $15 actually provides a pair of shoes, socks, and it gets the shoes to the ministry program that is going to serve them, so it gets that pair of shoes to that child. You know, $150 will provide that for 10 children. These small gifts can become really powerful when when people participate together. And again, we we truly believe that God uses this this very practical gift to to do some really extraordinary things in the lives of children. So we need our friends to come alongside us to help us further this work, and we would encourage you to really consider that.
Rob West: Excellent. Well, a pair of shoes may seem ordinary, but it can become an expression of love and dignity and hope, and a reminder to a child and family that they've not been forgotten. And that's what it's all about here. Shawn, we're so thankful for you and your team at Buckner Shoes for Orphan Souls. Thanks for helping us see the children and families beyond every pair.
Shawn Spurrier: Likewise, Rob. We're so thankful for you and the FaithFi family. Thanks for having us on.
Rob West: Absolutely. That's Shawn Spurrier, Director of Buckner Shoes for Orphan Souls. All right, there's still time to join us as we work toward providing new shoes for 1,000 children around the world. A gift of $15 provides shoes for one child, $150 shoes for 10. To be a part of this effort, go right now to giveshoestoday.org. That's giveshoestoday.org. As I said, we're off today, so don't call in, but we've got some great calls lined up in advance. So we'll go to those just around the corner. I'm Rob West, and this is Faith & Finance on American Family Radio. Biblical wisdom for your financial journey. We'll be right back.
SEGMENT 3
Rob West: Great to have you with us today on Faith and Finance on American Family Radio. I'm Rob West. So grateful for my team that makes all of this possible every day. You know, each day our heart's desire as a team is just to come alongside you, to encourage you, to equip you, to point you back to God's word, to remind you that Christ is your ultimate treasure, to remind you that God owns everything, and that you and I have been given a high calling as a steward. Money is a tool. Yes, we can enjoy it and provide for our families with it, but we can also give it generously to be a part of God's redemptive work in the world. We can invest it in a way that aligns with our values and promotes human flourishing. But we're going to make mistakes along the way. We're going to have questions, and that's why we seek wise counsel. We're so grateful for the calls that come in each day to this program. In fact, let's head to the phones. We're going to go to Missouri and Clara. Thanks for calling. Go ahead.
Clara: Hi, I was calling you because I'm 66. I have a 401(k), but my full retirement age would be 67, and I was wondering if I got a part-time job or anything, if I could add money to the 401(k) or if I should close it or just... I don't know.
Rob West: Yeah, it's a great question. So a 401(k) is attached to a company through their provider, the plan administrator, it's called. When you separate from employment, you have a couple of options. You can no longer contribute to that 401(k) because the only way you can contribute to a 401(k) is through salary deferral, so it has to come out of your paycheck. And so if you're no longer with that company, you can't put anything else in.
In terms of what you've already got in that 401(k), you can leave it where it is. You can roll it to a new 401(k) with your new employer, so long as that plan administrator allows that. Most do, not all. Or you could roll it to an IRA, an individual retirement account. So you'd have to open an IRA at, let's say, Charles Schwab or Fidelity or, you know, one of the other brokerages. You'd then roll it in—it's a trustee-to-trustee transfer, so it's not a taxable event because it goes from the pre-tax 401(k) to the pre-tax IRA.
The only thing about that is that, unlike the 401(k) that has a limited menu of investments that's fairly easy to select from, as soon as you get into the IRA, you have unlimited investment options, which is great, but, you know, there can be some analysis paralysis there just because you have unlimited options. And I could point you in the direction of how you might get some recommendations on investing it. What do you have in your 401(k) currently? Rough balance?
Clara: Oh, it's about 25 or 28, something like that. Thousand.
Rob West: Okay, yeah. So what I would do is—are you will have a new 401(k) or new employer, is that right?
Clara: That's what I was going—I was going to work, yeah, from... This is a hospital, and I was going to go work through the school district.
Rob West: Okay, great. So what I would do is just leave that 401(k) with your previous employer right where it is. Let's get you settled into your new job, get that retirement plan going, and then ask them, "Can I roll my old 401(k) in?"
I like that option the best because it just keeps things simple. You've got all your retirement assets in one place, you just manage one account, and you get everything. You don't have to worry about that separate account and getting the statements and picking the investments. So that would be my preferred option. And then, as soon as you're able to, start contributing to that new 401(k). Those new contributions, plus what you roll in from the old 401(k), would allow you to continue to build your nest egg for the future.
Clara: Okay. All right.
Rob West: Okay?
Clara: Yeah, that's great. Thank you.
Rob West: Excellent. Thanks for your call today. If I can help further, Clara, along the way, don't hesitate to reach out.
Let's go to Savannah, Georgia. Tommy, go ahead.
Tommy: Hello. Good afternoon. So I'm wondering, should I leave a payoff amount in my will for a friend of mine who still has a mortgage on her house? She's essentially retired on a fixed income with not a whole lot of cushion, and we can figure out the tax, the legal nonsense—we can figure that up with the accountant. I'm just wondering the epistemological—is that wise? Is that something that a smart person would do?
Rob West: Well, it sounds like a wonderful blessing to your friend, and I don't see any reason why you wouldn't want to do that. If your goal is you want to simplify your friend's life and you want to bless this friend through the giving of essentially a part of your estate to pay off the mortgage, what a wonderful gift that would be. There's really not any reason that you would not want to do that.
Ultimately, you've got to decide who the next steward is, and there's really only three options: the government, heirs (I'd put friends in that category), or generosity—giving to your church or a ministry that you care about and love. We really don't have to think much about the government in the sense that the estate tax thresholds are so high that you'd have to have an estate at least, under current tax law, of $15 million before you'd have any estate tax at the federal level. So that's off the table.
So now it's just heirs and giving. If as a part of you choosing the next steward, you'd like to bless this friend with paying off the mortgage, I think that's great. There is no federal inheritance tax, so it would not be taxable to your estate, it would not be taxable to your friend, and what a wonderful gift that would be.
Tommy: Well, fair enough. Thanks for your help. Appreciate it.
Rob West: Okay. Lord bless you, Tommy. You sound like a wonderful and generous man. If we can help further along the way, don't hesitate to reach out.
Well, folks, taking your calls today. We've had some good ones. So thankful for each of you. You know, it just comes through that your desire is to honor the Lord. You want to be found faithful, and we want to help you do that each day.
One of the ways we do that is through the resources that we create and provide to you. In fact, our brand-new special edition of the Faithful Steward magazine is out. I just got the first edition the team did here in the office, and it's a special edition all focused on women and wealth. It's beautiful, it's 80 pages long, and you're going to love it. It's going to be mailed to every partner.
If you want to become a partner to ensure that you get every new resource, just head to our website, faithfi.com/give. Partners give to the ministry $35 a month or $400 a year, and it's a key part of sustaining the ministry: faithfi.com/give.
Now, just a quick reminder as we head into this next break: don't call in. Our team is not here today, but we have some great questions we've lined up in advance. Those will be coming just on the other side of this break. More to come on Faith and Finance right after this. We'll be right back.
SEGMENT 4
Rob West: So, thankful to have you with us today on Faith and Finance here on American Family Radio. Hey, by the way, perhaps you're not in a place where you can call in right now, but you still have a question. Well, you can send that to us by email. We'd love to receive it. We try to get one to two emails on the broadcast each day. I'll read them, and we'll even try to get you that response in case you didn't hear it. But if you'd like to send it along, pass your email to us at [email protected]. That email address again, simply [email protected]. We'd love to hear your questions. Let's go out to Wyoming. We don't get a lot of Wyoming calls. Sarah, thanks for being on the program today. Go ahead.
Sarah: Oh, well, thanks, Rob. It's been many, many years that I've been able to listen to your program off and on, and I've always appreciated the biblical wisdom that you give. Where we're at, my husband and I are right around 70, and we basically, we just don't have a lot of savings at all. And our home is paid for. We have one vehicle payment. And I was just wondering, is there, I mean, is there a place or a way that even at this late stage that we can start with minimal amounts? You know, I don't even know what that might look like or if you had any advice. The other thing was whether or not a revocable or irrevocable trust is the way to go.
Rob West: Yeah, great questions. So, Sarah, I'm so thrilled that you called, and thanks for your kind remarks about the program. You know, appreciate the background. You and your husband are 70 years old, you have no investments or savings, and you've been able to pull a few thousand dollars together. That's great. Let's keep that up. I would say, you know, to the extent you can, live below your means. Even an extra $25 or $50, you know, going into that savings account is really important just because it's going to continue to build that nest egg.
I would say just given where you're at, I would not be looking to invest. I would be looking to build what I call your emergency fund. And, you know, normally during your working years, we say you need three to six months expenses in emergency savings. And that just simply means we're not looking at your income, we're looking at what does it take to fund your lifestyle for a month's time, and we need three to six months worth of those expenses in savings for the unexpected. Not the planned maintenance and things that we know are going to come that we can count on them. No, we're looking at those unexpected things that come out of left field. If we don't have that emergency fund, then the only thing left when they come—and they will—is credit cards or some other borrowing, and we don't want to do that.
And so I think in your situation, being in your 70s, retired, you want at least six months. And so I would say for the foreseeable future, we want to take that money and park it in a savings account. Now, it could be a high-yield savings account where at least you're getting a little bit of interest on it, you know, maybe 4%, maybe more. But I don't think you have even enough to do that. I would probably leave this as a cushion, you know, in your checking account—at least $1,000—and then maybe you take the next $1,000 and move it over into the savings account, and then you continue adding to that.
Now, if you can find your local bank or credit union that's paying a decent rate of interest, which I think today is a minimum of 4%, then great. If not, you know, one of the things you could do would be to contact our friends at AdelFi Christian Banking. They're the biggest credit union—Christian credit union—in the country. We've got some of our team members that use AdelFi and love it. And they have a money market that pays 4% up to $100,000 for at least a year. And there's a bonus when you open a new account if you are a Faith Fi listener of up to $400. And if you want more information on that, you could stay on the line, our team will give it to you. But that's the kind of thing I would be doing. I would not be looking to invest with a with a few thousand dollars if that's really all you have in reserve.
Sarah: Okay, thank you for that.
Rob West: All right, Sarah. Listen—yeah, go ahead.
Sarah: No, I was going to say that that's pretty good. It's like, well, yeah, you need to be able to protect yourself for support yourself during emergencies. So that's very wise. Thank you.
Rob West: Yes, ma'am. Sure. I know you also asked about a revocable trust, and essentially, it can be a useful estate planning tool, but it's not an automatic, especially if you're in a situation where you don't have a whole lot in your estate, because just setting up the trust itself is going to run you $3,000 plus. You know, could be $3,000, could be, you know, more. And really, what a trust is going to do is to allow you to bypass probate, so your assets can pass automatically based on how the trust is set up and not run through the probate courts. They could be managed if you were incapacitated. It does provide a little more privacy, and it could allow you to transfer assets beyond your life, meaning it doesn't all have to happen at death; it could happen over time. But unless you have a real reason to do that—multiple properties or maybe a little bit of a larger estate or more complex—I just think for the average person, a simple will is going to cover it. There's really not a strong need for a revocable trust.
Sarah: With a will, will things have to go through probate?
Rob West: They will, but that's okay. You know, essentially that would take a little bit of time. There would be some court costs for the probate court. But, you know, that happens every day, and it's not something I would be concerned about. And again, unless there's a real reason for it, the cost of setting up that revocable trust is going to be prohibitive unless you have a real reason to do it.
Sarah: Okay. All right. Well, thank you very much for your time and for your information. And I would like some information on the AdelFi.
Rob West: Okay, great. Well, thanks for calling today, Sarah. Lord bless you. We'll be headed back to the phones here in the final segment. Right after the break, we'll head to Texas and talk to Petra. We'll go to Ohio and talk to Don. Jim's calling from Indiana, and perhaps your question as well.
Hey, our new field guide is out, and it tackles the question: How Much Money Is Enough? You know, as we think about the most common questions we get where your faith intersects with your finances, this idea of how much is enough really bubbles up to the surface so often. And it's really around this idea of: What does it look like to think biblically around a lifestyle and a lifetime finish line? And it may be in a situation where you haven't reached your finish line yet. That's okay. Thinking through it prayerfully is a really worthwhile exercise. Maybe you have reached it. Maybe your lifestyle finish line is something lower than what you're living at today. This resource will help you look at God's Word and explore this topic, give you the worksheets and the action steps to determine your lifetime and lifestyle finish line, and then give you some case studies of people who have gone before you. If you'd like to check it out, it's available in our store at faithfi.com/shop. All right, a quick break, and back with our final segment.
SEGMENT 5
Rob West: Thanks for joining us today on Faith and Finance here on American Family Radio. I'm Rob West. Here in our final segment, we're going to get to as many calls as we can. Let's head out to Texas. Petra, thanks for calling. Go ahead.
Petra: Yes. I hope I can explain myself. I'm trying to figure out a way of what to do with a... it's a little bit of money that my mother left me as a beneficiary. But I have two options. One is to roll it over, and the other one is to get a lump sum and pay 20%. Well, I'm not working anymore, so I never did a 401(k). But I did talk to my tax lady, and she's telling me that if I get that money, I'm going to end up paying more than the 20%. So at this point, I mean, I wanted to use it on her headstone and my father's headstone, but I'm trying to figure out a way of maybe not paying so much or what to do if you can tell me what to do.
Rob West: Sure, I'd be happy to talk you through it, Petra. So let me just understand: you got a $10,000 inheritance. Is this money inside an IRA—an individual retirement account?
Petra: No, it was from her... well, it was from her retirement. It's like... I want to say it was more like a... what do you call it, like a...
Rob West: 401(k)?
Petra: Like for funeral expenses... no, for like funeral expenses, but they're calling it an inheritance because I was just the beneficiary. So...
Rob West: Okay. It sounds like a burial policy, like an employment benefit with some life insurance paid to a beneficiary to cover funeral expenses. Is that right?
Petra: Yes, I think that's really what it is. Yes. I believe that that's...
Rob West: All right. Well, what's confusing to me about that is if it was a life insurance policy—what they call a burial policy—specifically a smaller death benefit like $10,000 paid to a beneficiary to cover funeral and burial expenses, that should not be taxable. That should be non-taxable, so I'm not sure what it is that the CPA is saying is triggering the taxable event.
Petra: Okay. Well, I mean, how would I know exactly what it is? Because according to her retirement, she worked through the TRS system. Who do I call to make sure what exactly it is?
Rob West: Okay. Yeah, I mean it's important that you get the documentation on it. Who is her executor? Is that you?
Petra: Yes.
Rob West: Okay. So I think the thing you need to do is try to pull all the information. If it was part of the Teacher Retirement System, then that's a retirement or a pension plan. The options depend on which state—in this case, it sounds like it was Texas, is that right?
Petra: Yes.
Rob West: Okay. And so with the Texas Teacher Retirement System, essentially what would happen here is if it was a $10,000 death benefit from the Texas TRS and you're the beneficiary, then you could take the lump-sum survivor benefit in addition to continuing annuity benefits. But in that case, it could be a taxable event given that it was a part of this retirement plan.
At that point, you'd have a decision to make: do you do what's called a rollover distribution where it's directly rolled over, and therefore it's not a taxable event, or do you take the money out and use that money then to pay expenses?
If you really don't have any retirement account to speak of, I like the idea of you rolling it over and keeping it in what's called an inherited IRA. That would be if you don't need the money; it would keep it in that tax-deferred environment, and therefore you don't create a taxable event, and then it could be invested and grow for the future. But do you have some burial-related expenses you need to be able to cover?
Petra: No, I took care of all that, so it's all clear. I just don't know what to do with this part because I was already paying... owing the IRS, and that's what the lady told me, my tax lady, that I would be paying even more. She did recommend to put it like in an IRA, but I don't know where to go. She couldn't tell me where or what to do with that part.
Rob West: Yeah, very good. Well, an IRA is right if you're going to keep it in a tax-deferred environment. It's called an inherited IRA, and you would roll it over. You would probably want to open an account at Fidelity or Schwab. Those are discount brokerage firms, meaning low cost. It could be rolled over, you don't have to do anything other than roll that money in, and then you would be able to pick the investments and let it grow. If you needed it at some point, you could take it out as you need it, rather than taking it all at once, which would add the full $10,000 to your taxable income in one year.
Once you roll it over, you could also just stick it into some CDs or a money market account inside the IRA if you didn't want to take any risk with it.
Petra: Uh-huh. Okay. So due to my age also, I mean, can that be passed on to somebody else, like one of my children?
Rob West: Yes, absolutely. So once that's in the IRA, you can name a beneficiary, and so at your passing, any accounts you have with a named beneficiary would pass directly to that person.
Petra: Okay. So where do you recommend that I should go? To one of these, Fidelity or Schwab, to one of those places?
Rob West: Yes, that's what I would do. You need to decide how you want it invested. If you want to take the minimal amount of risk, once you roll it into Fidelity or Schwab, you could just ask them to put it into a CD or money market. If you want to invest it because you don't plan to touch it for a minimum of five years, then you could put it in a pretty simple portfolio of maybe two or three exchange-traded funds.
If you go to soundmindinvesting.org, they have an article there on a strategy called "Just the Basics," and that could get you pointed in the right direction. But I think the first step is to get that rolled over into an IRA at Fidelity or Schwab. There wouldn't be any required minimum distributions—or there shouldn't be, at least—and that would allow you to get that invested and just take it as you need it.
Petra: Okay. All right, well thank you.
Rob West: Okay, we appreciate your call today. Lord bless you, thanks for being on the program. Let's head to Ohio and talk to Don. Go ahead.
Don: Hi Rob. First of all, I wanted to say thank you for coming to Northeast Ohio last year at CVCA, Cuyahoga Valley Christian Academy. It was a blessing.
Rob West: Oh yeah, that was great!
Don: Yeah, it was a great time, and we appreciate meeting you and the book you gave us there on Our Ultimate Treasure, I think it was. It's a fantastic book. We've often used it in our church offering talks, kind of in an edited fashion, for the offering. So thanks for that ongoing ministry.
Rob West: Oh, that's incredible, Don. Thanks for saying that.
Don: Well, it's great, and we appreciate it. A quick question I had was: I turned 70 and a half a year ago, a little over a year ago, and I showed up at my financial advisor's office because I said, "I think I'm supposed to be here now I'm 70 and a half for something," and I wasn't sure what. So we had a good discussion, a good talk, and he was able to advise us and steer us into a QCD that came out of an IRA that I have.
And so we've been using that for the past year, but—and maybe I don't understand it all correctly—we use it for the past year for our charitable giving out of a checkbook that it has. My wife and I, the question we had was, if we don't have that checkbook with us and we want to give to something, how do we do that? Is there such a thing as a debit card attached to that, or... I find unless... if I wanted to give to say, for example, Samaritan's Purse online because of Nepal or whatever, usually I'd have to use a credit card for that. I guess I could write a check to that, but I almost want to get it there quickly. So anyway, what are your thoughts on that, or maybe you can educate me a little bit better?
Rob West: Yeah, I'd be happy to. I love the Qualified Charitable Distribution; it's a great tool once you're 70 and a half. It's the only way to get that money out of a pre-tax retirement plan, an IRA, without anything else being a distribution which is taxable. But it does have to go directly to an eligible charity—your church, really any 501(c)(3). It can't come to you first in order to satisfy the IRS requirements.
So what are your options? Well, it really depends on your IRA custodian. So in this case, your advisor's custodian. They will tell you what options they make available. Many of them do make an IRA checkbook available, so that's what you have access to. You can write a check, you write it directly to the qualified charity; this is very common and it's very convenient.
The other approach would be an online QCD request. Some custodians let you enter the charity online and have the custodian send the payment, so like, for instance, Fidelity has that. Some, you would call the custodian and instruct them to mail a check directly to the charity, and they would mail it for you. And then some custodians can do what's called an EFT, an electronic funds transfer from your IRA electronically to the charity.
Again, that depends on which custodian you're with. I've never found one that has a debit card option. I don't think that exists, and I would question whether that would even meet the IRS rules and regs. But I would say either calling them and having them mail a check or using that checkbook for your IRA would get it done.
Don: Great! Well, thank you, I appreciate that explanation, that's very helpful. Thank you.
Rob West: Absolutely, Don. Lord bless you, my friend. Big thanks to my team today, thankful for Taylor and Devin and Patty and everybody that makes this possible here at FaithFi every day. Go out and live as a faithful steward, make God your ultimate treasure, hold money loosely, make it a tool, give it generously, invest it strategically, and come back and join us tomorrow. We'll see you then. Bye-bye.
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