6 Steps When a Loved One Passes

Published Jan 15, 2025, 5:07 AM

When a loved one goes home to be with the Lord, it’s often a time of great confusion, as well as grief. Simply making funeral arrangements can be difficult enough, but then there’s an estate to settle, and many find themselves unprepared. On today's Faith & Finance Live, Rob West will go over 6 financial steps to take when a loved one passes. Then he’ll answer your calls on various financial topics. 

Faith & Finance Live is a listener supported program on Moody Radio.  To join our team of supporters, click here.

To support the ministry of FaithFi, click here.

To learn more about Rob West, click here.

To learn more about Faith & Finance Live, click here.

Today's version of faith and finance live is actually not live. So don't call in with a loved one. Goes home to be with the Lord. It's often a time of great confusion as well as grief. What needs to be done and when? Hi, I'm Rob West. Simply making funeral arrangements can be difficult enough, but then there's an estate to settle and many find themselves unprepared. Today, I'll give you the six financial steps to take when a loved one dies. Then we have some great questions lined up for you. But don't call in today because we're pre-recorded. This is faith and finance. Live. Biblical wisdom for your financial journey. Well, before we get to the financial steps you should take when a spouse or other loved one passes, there's a very important spiritual step to take. Prayer. You should invite God to be a part of all your financial affairs and decisions, but especially now, as you begin the process of settling your loved one's estate, it's enough simply to pray for wisdom in this challenging time. James one five teaches, if any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it will be given him. Romans 828 reveals just how much the Lord wants to guide and strengthen you. It reads, The Spirit helps us in our weakness. For we do not know what to pray for as we ought, but the Spirit himself intercedes for us with groanings too deep for words. After a time of prayer, you'll feel more confident and ready to take on the challenge of settling your loved one's estate. So here are the six steps you'll need to take. First, get a copy of the death certificate. This is the legal record of your loved one's death. It's usually prepared by a medical examiner and provided to you by the funeral home you're using for the burial. You may also obtain a copy at your County Vital Records office. It may take a few weeks to obtain the death certificate if you haven't received one in that time. Contact the funeral home or records office to check on it. You really need a copy of the death certificate to begin the other steps in this process, and it's especially important if you are the executor of the estate, because most of the actions you'll take require a copy of the death certificate. Okay, now that you have that document, you can take it and a copy of the will down to your county probate office and file a petition to begin the probate process. If you are the executor, you can then begin carrying out the deceased's last wishes as specified in the will. Ah, but what if there is no will? Well, then things get a bit more complicated. You'll still take the death certificate to probate court and petition the court to begin the probate process. You can also request to be named administrator of the estate. But there's no guarantee the court will honor that request. The probate court will then decide, according to state law, how the deceased's estate will be divided up among the heirs. Things may get complicated at that point, and you may want to have an estate attorney help you through the process of distributing the assets. We recommend getting someone with the CA designation and you can go to faith. Com and just click find a CA. Now in step three you begin notifying the deceased's financial institutions and advisors if any. If your loved one had a financial advisor, that person can be a huge help in determining what assets are involved. You can also check the current balances when you notify financial institutions of your loved one's death. Here's where you may discover that some assets can pass directly to beneficiaries without going through probate. Check with administrators of retirement and standard brokerage accounts for transfer on death or Todd instructions for banks. Check for payable on death or Pod instructions. You'll probably have to provide a copy of the death certificate to get the funds released. At this point, you should also notify the three credit reporting agencies Equifax, TransUnion and Experian of your loved one's passing. Again, you'll need the death certificate. They will close those accounts, get copies of the reports, and check to make sure everything is in order and that there are no fraudulent accounts or transactions. Step four is to contact the deceased's life insurance company or companies. You'll need the death certificate here to also cancel other types of insurance, such as auto or disability, that are no longer needed. Step five is to notify any affected government agencies. Interestingly, the funeral director often notifies Social Security of a deceased death check to confirm that and also notify Medicare and the VA if necessary. Finally, step six is getting started on the deceased's final taxes. Here is where you really should bring in a professional, such as a CPA to help with this. I know that's a lot, but you can get through it one step at a time. And remember to pray for guidance and know that you are never alone. I hope that's an encouragement to you. Now, 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. Don't go anywhere.

You're listening to Faith and finance live, and you can find us online at faith. Com. However, today we are not live. So if you hear that phone number, please don't call. But do stay with us. There's lots of good information ahead.

Paul David Tripp says this about money. He says money is one of God's good creations. But this good thing becomes a bad thing for you when it becomes a ruling thing. Think about that. You know, when money takes a place that it was never intended to take in terms of competing with first position in our lives for our devotion. Well, it was, uh, you know, taken out of God's original context at that point. And our goal is to make sure that money stays in its proper context as a tool to accomplish God's purposes. Well, here on this program, every day we want to help you do that. As we look through the lens of Scripture at the practical decisions and choices you're making every day. And so whether those are related to your lifestyle, maybe it's your giving and giving more wisely. Maybe it's your debt repayment and how you can become debt free over your lifetime, and even tackle perhaps some credit card debt that's gotten out of control in light of high inflation. Or maybe it's your investments, whatever it might be today. Let's talk about it. Let's take a quick email before we head to the phones. This one comes to us from Emily. By the way, if you have a question you'd like, read on the air. We'd love to hear from you. Send it along to ask Rob at dot com. That's rob@f.com. Emily writes I'm employed and currently receiving Social security income. I tithe on my salary. Should I also tithe on my Social Security income? I love your program and listen at work. Thanks. And Emily, thanks for this question. Clearly you're wanting to be a generous sower. Be faithful in your giving to the Lord, and I appreciate that. Uh, here's my perspective. First of all, the tithe is a great beginning point for our giving. It's we're no longer under the law of Moses. And yet, uh, we I think we should give proportionately. We see that in the, in the New Testament, for sure. We should give sacrificially. And so starting with this idea that we would recognize God's ownership and give in proportion to our income. The tithe is a great principle to apply to that. So you would give, in the case of a tie, the 10th of your increase. The question is, is your Social Security increase if you tithe on your gross income throughout your working life? Clearly, a portion of what you're getting from Social Security is a return of what you put into the system. The challenge is it would take an army of CPAs to figure out what portion is yours, what portion was your employer's contribution? Because remember, they paid half of the FICA tax. And then what portion was the growth that occurred while it was in there? And so I think for that reason, I would probably take the perspective that let's look at anything we receive from the Lord as a gracious gift from the Lord, no matter what its source was, whether it's SSI or Social Security or disability or an inheritance or a paycheck. And just say, Lord, I'm going to demonstrate my trust in you as my provider, knowing that your provision is complete. And I want to be partnered with you in giving in proportion to how you've prospered me. That would be the approach that I would take, as opposed to trying to figure out what portion falls into which bucket. But at the end of the day, Emily, I realize that the heart behind this is that you want to honor the Lord. And so I would just be on your knees if you're married, you and your husband just asking the Lord, what would you have me to do? And I think as long as you follow the leading of the Lord, you give cheerfully as an act of worship. I don't think the the percentage or checking a box is really the most important thing. So hopefully that's helpful to you as you think and pray through this before we head to the phones. You know, as we think about our retirement years, Social Security income and managing our investments, let me encourage you to do some retirement planning. This is not just the mindless accumulation of wealth that we're promoting here. We want to have a plan. We want to be prayed through on that plan. We want to think about our values and our priorities. Establish a realistic goal for what we would have to accumulate between now and retirement, so that in that season, no matter what God directs us to, whether it includes pay or not, that we're able to fund that God honoring lifestyle. And having something saved beyond Social Security is a key way to do that. So hopefully that's helpful to you today. All right. We're going to head to the phones here. Let's begin in Texas today. Thank you for calling. Go right ahead.

Yes, Rob, thank you for taking my call. My daughter recently was in an accident which resulted in a lawsuit in which she is going to be granted $250,000. She is 50 years old. She has no savings plan, and she is at a quandary. She's supposed to meet with the lawyers next week, and she's been told they're going to instruct her to take this money in the form of an annuity, which we know nothing about. So how would you instruct her to go forward?

Yeah, well, there's potentially a lot of commissions to be paid out on that annuity. So you need to really make sure you're seeking counsel from somebody who has no vested interest in this. You know, I think the opportunity here is to obviously, you know, have this money managed wisely. An annuity certainly is one option where there would be either a guaranteed fixed rate of return on it or a variable rate of return, depending on the underlying performance of the investment. So those are kind of the two paths for annuities. And then it would grow either on a fixed basis or a variable basis. And then at some point down the road perhaps, you know, in retirement she could convert that into an income stream for her life or her life plus a spouse, let's say. And the benefit there is it takes away any downside risk. The thing that I would consider here, perhaps more so than eliminating downside risk is just the fact that she's young and so she's got time on her side. And, you know, even at age 50, where she would be able to let this grow for a considerable period of time and have the potential to have more earning power outside of an insurance product, because in exchange for that downside protection, she's going to give up some of the upside potential. Now with that, she's going to assume the risk that comes with it. So, for instance, as an alternative to an annuity, she could hire an advisor who would understand her goals and objectives. What you know, God is doing in her life, what her values are. Also, you know, what her needs are now and in the future. And then together establish kind of an investment philosophy and then actually be the one the advisor to make the investment decisions with of course, her, you know, clear oversight and communication. And, um, and then, you know, she would get the full upside of any growth. The other benefit to that is she'd have full access to the money if she ever needed it. Whereas inside that annuity product, there are going to be some restrictions and perhaps even some penalties if she wants to get to it early. So I think as an alternative, my preference here would be for her to, you know, interview 2 or 3 advisors. Um, you know, find the one that's the good fit, get that money out in a lump sum, not put it in an insurance product, have it managed and invested, but you know, not have some of the limitations and extra fees and constraints that come with an insurance product. Does that make sense?

It does. And I do have a question. Do you have a number of where she could find, uh, a trustworthy advisor?

I do, yeah. It's not a phone number. I direct you to our website. So here's what we recommend, Kathy. We don't have in our ministry any advisors that work for us. But what we recommend is the only industry designation in the financial services industry that has to do with biblically wise financial advice. It's called the designation Certified Kingdom Advisor. So there's 1800 of these men and women across the US and Canada. They've met character requirements, statement of faith, experience requirements. They've been trained to bring a biblical worldview, pastor and client references, and then an annual continuing education and recertification process. I would have her go to our website faith. Com click find a professional and she can do a zip code search. I'd interview 2 or 3 before she makes a decision. Faith. Com and click find a professional. God bless you. Thanks for your call. We'll be right back. Hey, great to have you with us today on Faith and Finance Live. I'm Rob West, your host. Our team is away from the studio today, so don't call in. But coming up a little later, we'll have more of your questions right here on the program. Hey, let me take a moment to mention the Faith fi app. We'd love for you to download it. Just head to your app store or wherever you download apps and search for Faith fi. That's Faith fi. You can manage your money. You can access the best content in biblical finance podcasts, articles, and videos. You can also participate in our Faith fi community, where you can post questions and get answers from others on their stewardship journey. You'll find it in your app store. Just search for Faith fi or if it's easier, head to our website at Faith fi. That's Faith fi.com and you'll see the app right there on the home page. Hey, before we head back to the phones, you remember those words of Jesus. He says, where your treasure is, there your heart will be also. Our heart follows our money. That's right. Our heart is really anchored to where we place God's treasure, the resources that have been entrusted to us, which just simply says, every spending decision is a spiritual decision, and we need to look at not just the symptom, the the outward expression of how we handle God's money, but the underlying values and priorities that really inform those spending decisions. And when we think through that, what's important to us? Where is God taking us, and how can money be a tool to accomplish all of that? Well, I feel like that's when we put ourselves in a position to really use this incredible tool we have called money. In a way that's God honoring. We want to help you do that on this program every day. In light of your practical questions in your financial life, let's head to Texas. Daniel, you will be next up, sir. Go ahead.

Yes, sir. Thank you for taking my call. Sure. I got I got some questions for you. We're selling our home plus two properties. 27 acres. We're selling at 400,000. We're looking at possibly 840,000 of capital gain. And five acres. We started at 92,000. We're looking at maybe 81,000 at capital gain. And we wanted to know, uh, how do we save on that? Can we do anything to affect the capital gain or, um, just help us out, please?

Yeah, sure. So let me just make sure I understand. These are parcels of land that you're not living on. Is that right?

Yes, sir.

Okay. Uh, and you have a very low cost basis. Is that also true? Meaning that you've. You bought them a long time ago?

Yes.

Okay. Um, and so you think your gain is going to be somewhere around how much for the 27 acres? The profit on it.

Uh, profit is 340,000. 340,000.

Okay, so you think that perhaps your cost basis, your original purchase price was down around 60,000? If my math is correct. Is that right?

Yeah. Yeah, we bought it for 2000 and they're selling for 15,000 or something like.

That per acre. Yeah. Makes sense. All right. Uh, yeah. The only way to, uh. Well, first question is, you know, are you going to have any capital gains? And that has to do with your adjusted gross income. And so are you selling these properties this year at 2024?

Yeah. Hopefully. Yes.

Okay. All right. Let's say you did. Um, is your income. Well let me ask, are you married filing jointly. Yes. Okay. And is your adjusted gross income somewhere between 94,000 and 580,000? Or is it below 94,000?

Before 90. Below 90.

Below. Okay. So. And you'd always want to check with your CPA just to make sure that everything you know is, in fact accurate for your situation. But just so you understand, if this is a long term capital gain, meaning you've held this for more than a year and you're married filing jointly, the capital gains rate is 0%. Nothing until you get above 94,000 in income in adjusted gross income. So if your income is between 0 and $94,000 for 2024, your capital gains rate will be zero. Oh my.

Thank you.

Okay, but.

Does that include the price of the money we make from selling the land.

That. Yeah, that's completely separate. That's a capital gain. That's not income. And so the capital gains rate and it's a little confusing because we're we're talking about two different things. The the capital gain is the profit you made on the asset sale. That's the property The capital gains rate is determined by your adjusted gross income, which does not factor in capital gains. So now again, always a good idea based on your specific situation to check with a CPA, especially in a year like this one where you're going to have something unusual happening. But so long as your income is below 94,000 married filing jointly for 2024, you're not going to have any capital gain. Which would mean if that's the case, then you could take 100% of these proceeds and do whatever you want with it, because you don't have any tax, right? You could give a portion of it. You could, you know, plow it into another property. Uh, you could, you know, take it and boost your savings, pay down debt, uh, anything like that. Where what do you all think you're going to do next with this money? Are you wanting to continue to invest in real estate, or do you have some other thoughts?

Well, we live in Texas. We're going to buy a home in West Virginia. Uh, someplace close to my daughter.

Oh, great.

And, um, so, uh, we're in the process of doing that now.

I'm not sure what we're going to do with the, uh, excess money.

Okay, good. Well, a couple of thoughts. One is make sure you have a fully funded emergency fund. That's 3 to 6 months expenses and liquid savings. I use an online savings account for that. You can get some good interest on it. I'd think about what the Lord might be leading you to do in the way of giving. Uh, this is clearly an increase, the increase on this, uh, which is often how we think about our giving, at least as a starting point, is equal to what would have been your cat or what is your capital gain? Um, because it's the profit and that's your increase that the Lord has provided. So you could you could give off of that. Uh, you could invest it. And if you're looking for an advisor to help you invest it, you could go to our website and find a certified Kingdom advisor at Faith. Com but hopefully that's helpful to you. Uh, Daniel. And some some good news to you and your wife. And we appreciate you calling today. Please call anytime if you have other questions today. We'd be delighted to help you. Thanks for so much for being on the program. In the next segment, we're going to be headed well, we'll stay in Texas and talk to Chuck. I want to Chuck, make sure you have enough time to get your question and answer, and we're up against a break. So you hold right there. You will be first up just around the corner. Hey, folks, we're going to pause now for a brief break, but we'll be back with much more on today's Faith and finance live.

This is faith and finance live with Rob West. Hey, if you hear a phone number mentioned today, please ignore that number and don't call us because today's broadcast was previously recorded. But we think the upcoming information will help you and make you a wise steward of what God has given you. So please stay.

Tuned. Let's head to Texas, Chuck. You've been waiting patiently, sir. How can I help?

I was looking to move some money out of a regular annuity into a, uh, like a donor advisory fund. Do you have one of those funds that you recommend?

Uh, I do, but you are not able to fund a donor advised fund with an annuity. Um, so you can fund a donor advised fund with cash, with various assets, but not with retirement plans or annuities. So you would have to, in this case to fund a donor advised fund. And let me just make sure I'm clear here. You're looking at a donor advised fund. You're not talking about a charitable gift annuity. Correct?

Yeah. Uh, in other words, these, uh, annuities have, uh, gone their full distance, and now I can take the money out. Okay. And, uh, whatever I want to do with it.

Got it. So you would just have to pull it out, and then any tax consequences from you taking it out. You know, whether you have taxes on the if it was put in pre-tax or if you have some gains in there, all that would be taxable. And then as you said, now that it's outside of the annuity, you can do whatever you want with it. And then you could absolutely fund a donor advised fund. At that point. You just can't roll it from the annuity into the donor advised fund and try to preserve some tax deferral status. Is that clear?

Okay. Well, my CPA says I can, but anyway.

He's saying you can roll the annuity into the donor advised fund to save taxes.

As long as I don't ever take it possession of the money.

Yeah. The problem is, uh, to my knowledge, you can't fund a donor advised fund with an annuity. I mean, I'll triple check that, but I'm. I'm almost certain that that is unacceptable. Um, so we'll get you make sure we just double check that. Just given that, it sounds like you're getting conflicting advice, but based on the answer to that, obviously you know whether you have to pull it out first and then recognize any taxable event that would occur as a result of you pulling the money out of the annuity. I do love donor advised funds because then as that money goes in, you would get that charitable contribution for the full amount that you put into the donor advised fund. That could then be deducted so long as you itemize. And often making a large contribution will of course get you up above the standard deduction. So you get the full tax benefit in a single year. And then from that point you would decide how you want to distribute the money from the donor advised fund. Essentially you're turning it over to the donor advised fund sponsor. And then you make recommendations and then they grant the money out based on those recommendations that originate with you, the donor, in terms of which donor advised funds sponsor to use. We often recommend the National Christian Foundation at NCF giving. Com it was started by Larry Burkett and Ron Blue and an attorney named Terry Parker, a wonderful man. And, you know, they're one of the largest Christian ministries in the world. They don't develop their own giving strategies. They're just a giving vehicle for believers like you. And so using one of their giving funds, which is just their name for a donor advised fund, could be a great tool for you.

Okay. You said that NCF giving.com.

Yes, sir. NCF stands for National Christian Foundation NCF giving.com.

Okay okay.

All right.

All right. Well, I'll, uh, I'll check in to them and, uh, see what we can do with the money.

Yeah. Very good. Uh, if you find something else out, let me know. But, uh, I'm fairly confident you're not going to be able to roll that in and avoid any taxes. You just simply can't fund a donor advised funds with annuities and retirement plans. Hey, God bless you, Chuck. I love the fact that you're looking to be generous with this money. Call anytime. Uh, let's go to, uh, let's see. Kansas. Hi, Jim. Go ahead.

Oh. Thank you. Uh, I've kind of fought this, uh, actually, my first time caller, long time listener. But, um, you had an individual call just a bit ago about, uh, dual income husband and wife, and I'm calling about an individual widowed lady. That and I do have, uh, authority to talk for her. We're meeting with her accountant here in a couple of days. But I wanted to get your thoughts. Have a little knowledge going into it. She sold, uh, her property, a small farm, and she has not, uh, actually, her income been so low all these years. She's not actually paid any taxes Over the past ten, 11 years. And is she going to have a big tax liability on selling this property?

Well, again, uh, you know, the capital gains rate. So as long as this is a long term capital gain, which the definition of that is a property held more than a year that is then sold, the capital gains rate, uh, on whatever gain she has on that property is either based on, you know, either last year or this year, uh, zero, 15% or 20%. It's going to be one of those three. And the way that you determine whether your capital gains rate is zero, 15 or 20 has to do with your taxable income. And that long term gain does not factor into the taxable income. So if her taxable income as a as a single filer is less than for 2020 for tax year 2024. If it's less than $47,025 as a single filer. Again, taxable income, not the gain itself. Then her her capital gains rate is 0%. So there is no capital gains tax. If her taxable income is less than 47,025. As a single filer in the year 2024, does that make sense?

Okay. Yes it does. I was wanting that'll that'll ease her mind a bit. For someone else's opinions, we'll talk to her accountant.

Okay. Very good. Always a good idea to get with the accountants. I highly value the work that they do, but, yeah, generally speaking, that's the way this works. Grateful that you're walking alongside her in this gym. And thanks for your call today. Let's go to Georgia. Hi, Wayne. Go ahead. Sir.

Hi. Uh, my question is with regards to a solar roofing system. So, uh, just on the quick here, we have, uh, our home is paid for, uh, our insurance company essentially said we need a new roof due to wind damage, and we would like to incorporate a solar roofing system, uh, when we install the new roof. Uh, that's not a separate tiles. Those are roof systems. So that we will we would qualify for the 30% tax credit. Um, my question is, is the 35 to 40% offset on the solar roof worth it as a as a return on investment? Um, for our home?

Yeah, it's a great question. You know, the downsides of solar energy are, of course, the cost of adding the solar, which depends on your sunlight, your space constraints. Uh, you know, the storage of it is expensive. You know, they last 25 to 30 years, but they're very expensive. So there's high upfront costs. And it's, of course, you know, sunlight dependent. So there are some great tools out there that could help you determine, you know, whether it makes sense in your situation. One of those is just a real simple tool. I would make your decision on it, but it's just a great free resource is called Google Project Sunroof. If you just go to if you just type into a search engine project sunroof, um, you'll be able to put in the address and they will actually analyze the sunlight that hits the roof of the house, and then compare the various finance options and tell you whether or not it could make sense for you. I'd start there. Thanks for your call. We'll be right back.

This is our final segment of a Faith and finance Live program that we previously recorded. Thanks so much for being with us today, and we hope you'll stick around and enjoy the rest of the Program.

Hey, great to have you with us today on faith and finance. I'm Rob West. You know, talking about solar panels. I mean, the payback period is really what you're looking for there. And it's the break even point on those solar panels. So you divide your initial cost by your annual savings that you'd experience on your utility bill. For a lot of households, that could be as much as 13 years before you're kind of in the money, so to speak. And a lot of it depends on how much are you paying upfront? Are you financing that cost? Yes, there are some tax breaks you can often get, but how much sunlight does your roof get? And that's where using this tool Project Sunroof, can analyze for you at no cost your solar analysis. You can put in your electric bill to fine tune your savings estimate and then figure out, you know, with the cost of the financing, if you are going to be borrowing, whether or not it makes sense. And so it's certainly something to look at I find oftentimes that, um, you know, you got to be in this for the long haul. And, uh, before you're ever going to see any kind of benefit in that. But, you know, your situation may be different. And there's just so many factors there. It's certainly worth looking at. Now let's go to Montana. Beautiful. Montana. Linda. Go right ahead.

Hi, Rob. Thanks for taking my call. Um, I was just wondering. We want to put money in the existing 529 plan that our son has. Do I get a tax break from it, or when do we have to give it to them for them to get the tax break?

Yeah. So, uh, you know, the person making the contribution would be the one that would receive the tax break. Um, now, keep in mind there is no federal deduction for a 529 college savings plan contribution. So the only potential tax break would be based on your individual state. Um, is that what you're referring to?

Yeah, okay. My daughter in law just said that they. That we can't get a tax break. They would get it if we gave the money to them and they put it in.

Yes, exactly.

Instead of setting up a whole new 529.

Right. And that's true. So you would have to establish another 529 that you were the owner of and that you would be contributing to, uh, and then you could, you know, get that, uh, that state income tax benefit if one is available. Um, states aren't required to offer that tax deduction. Um, but some of them do and many of them do. But you would have to open one in terms of who gets the best, you know or most benefit. It would be the person in the highest tax bracket would get the, you know, the most benefit from making the contribution. Um, and you can have multiple 529 and so if that was something you all wanted to be able to get the benefit from for your state, you could, you know, open your own, make the child the beneficiary, but you would be would be the one getting that advantage. Um, a great tool, Linda, to explore. All of this is a website called Savingforcollege.com. It's my favorite website for this whole category of college savings, and they'll actually help you with a free tutorial there. Um, you know, go through and look at evaluating the potential tax savings alongside the performance of that particular state's 529. And to help you determine, does it make sense to stay in your state or to go to another state? 529 because even though you may be giving up state income tax deductions, the performance may be lackluster and the greater performance in another state's plan, historically speaking, you know, may outweigh the potential tax benefits. And so that's at least something for you to consider. But at the end of the day, it would it would be the one the person that owns the account that would get that Get that deduction.

Okay. Thank you so.

Much.

You're very welcome. You sound like a wonderful grandmother, Linda, thanks for being on the program today. Uh, quickly to North Carolina. Bill, I've got just about a minute and a half left. How can I help?

Rob, thanks very much. I was telling you, a good producer. My next birthday is going to be 71. It was kind of a shocker. It seems like a 50 years prior. Went by in a flash. And. Yeah, with that in mind, I've been taking some income monthly, uh, on the IRA side of things. And, um, it was based on high dividend stocks, and they're like a little girl with the golden curls. When they're good, they're good when they're bad, bad, bad, they're bad. And it was kind of spooking me a little bit with that being the case, in case something goes kablooey with them in the world and things go south. But, um, I was asking a local advisor along the coast here, and he said, I might want to look into one of these, something called a gimmick annuity that pays 7%. And annuities always gave me the heebie jeebies. I just always could run for cover when I heard the term. And I'm wondering if I'm being a little too scared or a little too gun shy, or if I if it's something I should look into. The word just always instinctively gave me the heebie jeebies. I just never had any understanding of the things. And it's just it's just out of my league. I just don't seem to have the. So anyway, it's they're scary.

Yeah. I mean, I kind of take the same approach, bill. Uh, you know, in terms of thinking about annuities, I mean, do they have a place for some people? Sure. Uh, you know, they're not all bad, but I think for the reasons you mentioned, they're complicated. There's a lot of fine print. You know, you've got fees and expenses. You're tying up your money. So why would you do all that? Well, people do it because they want the peace of mind to know that they're transferring that market risk away from themselves over to an insurance company in exchange for a guaranteed return. And if that's something that gives you peace of mind, then you need to really do your homework to make sure you're getting the annuity you want because you're giving up control of that money. You're losing partial access to it, at least for a period of time. And then what happens when you die? Is it all gone or does it get transferred, you know, to a beneficiary? Uh, you know, and they're not all created equal. And you've got to determine a lot of that on the front end. So my preference would be even at 71. Take a long term view. Let's say the Lord tarries and you're in good health. We need this money to last maybe to age 100. That's that's almost 30 years from now. So regardless of what the market does, you can weather that. And by using an advisor outside of an insurance product, you've got full access to the money if you need it for long term care or whatever God may lead you to do. Yeah, you're taking some risk, but it's still my preferred approach. That's just my thought. Uh, I appreciate your call today, and hopefully that can help you overcome your heebie jeebies. All right, let's go to North Dakota and welcome Claudine to the broadcast. Go right ahead.

Um, a little over two years ago, my husband passed away, and at that time, my CPA said, um, if nothing changes in my finances, I don't have to worry about filing taxes anymore. And I just I accepted that, but I'm just I just need some confirmation that that could possibly be true. I didn't know that there came a point in a senior citizen's life where they didn't have to file taxes anymore.

Yeah, well, it all depends upon your income, Claudine, and your income sources. And if your income is of a certain amount, that is typically for single filers, less than the standard deduction of $13,850, unless you're self-employed and earning income that way, then that is true. You do not need to file a tax return because there is no tax due. Um, what are you living on now? Is it just Social Security alone?

My Social Security comes to about 28,000, and I draw 400 a month from my husband's Floral one K plan.

Okay.

Yeah. Very good. So if, uh, if your Social Security is your only income, uh, typically you won't need to file. It's the other income that can push you up high enough to require filing. And in some cases, even a portion of that Social Security becomes taxable. But if it's Social Security alone, uh, your CPA is exactly right. You would not need to file, uh, in just about every case. And, you know, I would trust that professional's guidance in this situation. But it sounds like given that you're just drawing an income from his investments. And is that inside of a retirement account of some sort?

It's his 401 K.

Okay.

Yeah. Very good. Uh, and how much did you say you're taking out per year?

400 a month.

Okay. Yeah. So a hundred a year.

Very good. So I think the combination of of that 4800 a year plus Social Security being your only Income would likely put you in that situation. I think you could go back to your CPA and just say, hey, I'd love an update on this. Can you take a look at what's going on? But from what I'm hearing here, Claudine, I would concur with what you were told.

Oh, thank you so much. I don't have to worry about the IRS coming after me then.

That's exactly right.

All right. Claudine. Hey, may the Lord bless you. We're so thankful that you called today. And call anytime. Uh. Let's see. We're going to go next to Julie in Louisiana. How can I help?

How are you? Thank you for taking my call. I went on long term disability with my company through MetLife, um, about a year and a half ago. And just in that time, I've been through four high level reviews for MetLife. I think they're trying to avoid paying me. My doctors say that, you know, I should not go. I should not go back to work. Um, but I'm they're applying on my behalf for Social Security disability and whatever that ends up being approved for, whether it does or not. Hopefully it will. Then that will come out of the net, the gross portion that MetLife pays me. My question is, is 55 this year or are there any benefits to SSDI? As far as I don't know whether I'll have to pay taxes on that, or am I going to get hit for heavy taxes from my MetLife retirement?

Yeah. Uh, well, if your only income is your disability benefits, you probably won't be taxed on them. But when you have other income, that's where you have the possibility that you are. They may be taxable. You know, if you have dividends or tax exempt interest or retirement plan income because you're taking withdrawals. Um, so are you married filing jointly or single? Head of household?

Divorced, single head of household.

All right. Yeah. So you can report up to 25,000 of income, uh, you know, half of your SSDI benefits plus other income before you would need to pay taxes on your SSDI benefits. So that's just kind of a good rule of thumb is that 25,000 number, half of which is factored in from SSDI. So if the half beyond the SSDI is more than, you know, 12,500 getting you to a total of 25,000, then that's where you're likely going to need to pay some taxes on that SSDI. So I think the key for you, Julie, is to check with the CPA and just go over all of this. And if you need help, you don't have one. You could go to our website dot com, click Find a Professional. But hopefully that rule of thumb gives you at least a starting place. Thanks for your call. Hey, faith in 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.

Faith & Finance Live

Fresh, relevant, and fun, Faith & Finance Live is a daily radio program to help listeners manage the 
Social links
Follow podcast
Recent clips
Browse 1,121 clip(s)