The general dangers of debt are obvious, but we’re starting to see a rising problem with a very specific form of debt that’s affecting seniors. On today's Faith & Finance Live, Rob West will talk with Harlan Accola about the danger of carrying your mortgage payments into retirement. Then Rob will answer your calls on various financial topics.
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The prudent, see danger and take refuge, but the simple keep going and pay the penalty. Proverbs 22, verse three. I am Rob West. That verse is all about how critical it is to look ahead and spot potential problems. So you have more time and resources to fix them before they happen. Harlan Accola joins us today to discuss the dangers of keeping mortgage payments into our retirement years. And then it's on to your calls at 800, 525 7000. That's 800, 500, 25, 7000. This is faith in finance. Live biblical wisdom for your financial decisions. Well, our friend Harlan Accola joins us again today. Harlan is a faithful brother in Christ and an expert on reverse mortgages with Movement Mortgage, an underwriter of this program. Harlan, great to have you back with us.
Glad to be here. Thanks for the opportunity.
Harlan, we talk a lot about the dangers of debt in general, but you're seeing a problem with a very specific form of debt. And that's with seniors still making mortgage payments after age 65. Explain this problem and what's causing it.
Well, it's very, very different than the last generation. So a lot of people aren't familiar with it because there are so many boomers that are reaching 65. In fact, this year there will be 4.2 million people that reach the age of 65, and that will continue for several years. And more than 50% of them are still making mortgage payments. Some of them are making double payments, extra payments. That's the highest percentage ever in history. When my father retired back in the 80s, less than 5% of people had mortgage payments. It was a very different time, and there weren't as many 30 year mortgage payments and house prices were not as high. And a lot of things were different. And now because of that, there's a lot of seniors that are unprepared for retirement, and so many of them are putting too much focus on trying to pay down their mortgage debt. And by doing so, they're not taking care of their retirement monies. And the rest of their cash flow hurts. And sometimes it even goes into credit card debt and they're taking care of their older parents. Inflation is at a higher rate. Uh, lifestyle. The cost of living is still high. And so there's just a convergence of several different things that is causing this. And many people don't know that if they have more than 50% equity, they don't have to continue to make mortgage payments. They can safely turn those payments to zero and make them optional.
Yeah, let's talk about that in a moment. But first you mentioned something and that is that it's not just the mortgage payments. There's other types of debt that they're bringing into this season as well. Right.
Well credit card debt is at an all an all time high. Our generation. I'm 64 and I got my first credit card, probably in my 20s, and I remember when my dad first got a Mastercard. It was something unusual. So we're the first generation to heavily use credit cards, and many of us pay off our balances every month, and we use it for points and convenience. And it's not something that we run up debts. But when people have a health crisis or somebody dies and they lose a job when they didn't anticipate it, sometimes they can't pay off those credit card debts. And now those are at a much higher level than what they were in the past. And when people are making mortgage payments, sometimes they don't pay down their credit card debt. So it's a series of dominoes.
Well, that's a great point. Now let's talk about the opportunity specifically related to the home. As you said, if they have more than 50% equity in their house, they have the opportunity at a minimum to stop the payments. They could even turn that into an income stream with a monthly check in the mail. Explain those options.
Yeah. So the first goal would be to eliminate the mortgage payment, because that's usually the biggest payment that anyone has. And if they can eliminate that or make it optional, that automatically increases income by default because they're not paying that out. Um, and uh, if they have a significant amount of equity and they're down at 10 or 15 or 20% equity or they have their house completely paid off, then we can turn that into an income stream so that they do not rely on credit cards, and they do not pull too much money out of their investment accounts too early, shorting themselves for the future.
Yeah. And I think the key points here is not only can you put more money in your pocket by eliminating the payment or even beyond that, getting a check, but the home is going to continue to appreciate. And this is unlike any other debt, because what a lot of people don't realize is reverse mortgage is what's called non-recourse debt, which means you have no risk of required payments over and above the value of the home. So you're protected even in a housing crash, which is amazing. Now, I suspect you have questions on this topic today. Good news is Harlan is going to stick around and answer those questions. He's our go to guy in reverse mortgages. And when we come back we can tackle that topic and anything else. When you call 800 525 7000.
We'll be right back.
The opinions offered during this program represent the personal or professional opinions of the participants, given for informational purposes only. Any information provided is not intended to replace advice from a financial, medical, legal, or other professional who understands your specific.
So glad to have you with us today on Faith and finance live. I'm Rob West with me today riding shotgun here, my friend Harlan Accola Haase. Harlan is an author. He's written the book Home Equity and Reverse Mortgages. He's a reverse mortgage specialist with Movement Mortgage, an underwriter of this program. By the way, if you'd like to learn more, you can connect with these folks at movement.com/faith. Now, although we can take your questions on anything financial today Harlan is going to stick around. So it's a great opportunity. If you do have a question specifically on reverse mortgages, maybe you've heard some things in the past that gave you a bad taste. And I will be quickly to say these aren't for everyone, but I think they're often misunderstood. And as a financial planning tool in this season of life, 62 and older, as we look at the various assets that we have and whether we've under accumulated to sustain our living expenses or we've over accumulated or we're trying to decide, do we pull out of the IRA or when do we take Social Security? I think the ability to look at home equity through a reverse mortgage as one tool in the toolbox is absolutely the right one. And there's good reason for that, because the reverse mortgages of today, what's often referred to as a home equity conversion mortgage, a hecm, has some unique features. And we'll talk about those with, uh, with Harlan while he's here today. But, uh, we do have lines open. If you have a question, go ahead and get in on the conversation today. The number 800, 525 7000. You can call right now. Uh, let's head to Albuquerque first. And, uh, Lynette, thanks for calling. How can we help?
Uh. Thank you. Rob. I appreciate the work that you and your staff do in helping people understand biblical finances.
I appreciate that that means a lot.
It means a lot to me as well when I've listened to your program. So I just wanted to put that out there that I do appreciate what you do.
Thank you. How can I help you today?
Well, my mother is 84. I'm 54 and I live with her now to assist her. She moved to New Mexico, where I was living from Colorado. She sold the home I grew up in. And, uh, because she could no longer. It was a larger home, and it was just getting too expensive for her. My grandfather, who passed away, had left her with some money and some annuities. And through the years since his death, she used that to supplement her Social Security. And when she. I had been encouraging her for years, also because of the climate where I grew up. She wasn't equipped to handle the winters, and it was costing her a lot of money financially to to help with the snow removal and roof removal of snow and so forth. So finally then when she told me she only had a year or two of my grandfather's money, then that she was concerned that with her Social Security, she was not going to be able to keep the house any longer. And where she was living, the whole community. Um, well, more and more people with money were moving in, and it was driving up the prices of property and rent, essentially becoming a place for rich people. And so I had encouraged her again, and she took me up on it, saying that she could downsize by buying a smaller piece of property here. And that would help her financially because she could use the sale of her home to fund or supplement her Social Security. So she did that. And in 2016, she moved down here. Um, she stayed in a rental, and it took her over two years and 50 some odd houses later to finally make a decision. Uh, so we got it ready for her. I mean, she and I did, with painting and so forth moved in because then she was needing my help. She had some mental health issues, including beginning stages of dementia. So fast forward to 2020 or 2019. Um, my mom wasn't quite forthright with what her finances were when I suggested about we needed to do up a budget. So I got a sense that she was hesitant, and I asked her, you need to be truthful with me regarding your finances. And she was. And I realized that she only had a year or two left of what she had. Of the sale of her house after buying her home with cash. And, uh, so we talked about that. And then, um, I, we thought we'd have to sell the home in a year or two. I did some research for seniors and found out about the reverse mortgage and the hecm, so I talked with her about it. She decided to do that. So we did a hecm, and she's been using that since then to basically live on in addition to her Social Security. But as she uses the equity in the home because it is considered a loan, so to speak, she gets more and more worried. And we've discussed doing a budget. I've gone through her finances a couple of times since she took out that reverse mortgage in 2019 and trying to figure out. Are there other options for her? Unfortunately, with just her Social Security, she can't even afford rent in an apartment. She can afford to rent an apartment, but there would be no money left over. And because of her condition, as she gets older, I am unable to work because I handle a lot of things for her, including the property. So I wanted to get some biblical advice because I've seen the scripture in the Bible regarding finances, but it doesn't speak about Hecomes, of course.
Yeah. That's right. Well, that was a helpful background, Lynette, a couple of questions. We'll get Harlan's thoughts. Um, is she taking a monthly income stream on the hecm, or is she just have a line of credit?
She has a line of credit, a lock, and she draws on it when she feels that she needs to draw on it. There is. She does use most of that line of credit for finances because their Social Security is only 100 and I'm sorry, not 100. $884 and some odd cents.
Do you know how much equity she has in the home today?
Well, I actually have her mortgage statement before her. I mean, before me. And I'm sorry. Ask that question again.
Do you know how much equity she has in the home today?
She has. Um, if I can read this accurately, her original principal limit. Uh, it was 100 and is 124,898. Her loan balance, or her current principal limit is. Uh, that was the original one. Her current principal limit is 153,000, basically about 815. And when she has done, she has only done the initial hecm. She has not done a second assessment. But when I talked to the advisor to get an idea of what if the equity has grown at that point, a couple of years ago, he said, it was about 209,000.
Okay. Yeah, I'd be interested. And we'll get Harlan to weigh in after the break here. I wanted to just clarify those things. I'd be interested to know, you know, if she could build a budget around not just a line of credit, but a monthly income stream from the reverse mortgage. And if combined with her, Social Security would give her enough to meet her obligations, including the taxes and insurance on the house. But let's do this. That was really helpful, a great overview. We're going to take this break. We'll come back. We'll get Harlan to weigh in on what you shared. Lynette, stay right there. This is Faith and finance live. We'll be right back. Great to have you with us today on faith and finance live. I'm Rob West. We're taking your calls and questions today on any financial topic. But if you have a question specifically on mortgages and in particular reverse mortgages, I've got the the man with the answers here today, Harlan Eckler, a good friend and reverse mortgage expert from Movement Mortgage and underwriter of this program, is riding along in the studio today and is happy to weigh in on your questions. In fact, let's go back to the phones before the break. We were talking to Lynnette in Albuquerque and she shared a really helpful description of her mom's situation. Her mom had sold her home that was very expensive, downsized, paid for it with cash, trying to take that. What was left over and alongside Social Security turned it into enough to live on. Unfortunately, that's just not the case with Social Security. At less than 1000 a month plus what she has left, she may only have a year or two remaining. And Len s just wondering, should we continue to ride this reverse mortgage that she's got on the property, which is currently in a line of credit, not a monthly check. Or should she try to sell and rent? And Harlan, you may have some extra questions here, but I'll let you jump in and and take it from here.
Uh, yes. Uh, Lynette, do you know how much the value of the house is? Uh, roughly what it would go for today?
Uh, not currently, but as of a couple of years ago, it would have been around 209,000, according to the advisor.
Okay. And, uh, how much is left in the line of credit that you, uh, is just on the right side of that statement? You mentioned that there's 153,000 owed.
The net principal limit, which is your line of credit is currently $26,009 and some odd cents.
Okay. So when you think about it, the cheapest way to live when we're in our fourth quarter of life, I have my own personal reverse mortgage. And so all I have to do is pay the pay the taxes and the insurance. So the least expensive way to live is to be able to have a reverse mortgage, because of course, the payment is zero until you pass away. And then of course the house is sold or refinanced in your name if you wish to keep it from there. So, um, my best advice from everything you've given in the detailed explanation is it's doing exactly what it should do. You've made the right decisions along the way. It's hard to live on $800 a month, um, or $900 a month. Um, and she's probably done quite well with that in that situation. And there's $26,000 left, obviously. Life expectancy, we don't know. Um, but, uh, it's, you know, to sell the house and go rent is going to be certainly more expensive and accelerate the problem. Um, I'd be happy to go into more detail, um, and take a look. But Albuquerque homes have went up quite a bit, so I'm sure it's worth more than 209,000. Um, but I think that she's probably in the best situation that she can be at this stage. Um, but if you want to go a little bit deeper, I'd be happy to do that. Um, and, and kind of custom go over your situation off the air.
Very good. Yeah. Lynette, I think if you want to hold the line, we'll get your information and get Harlan in touch with you. I think the the idea is, as he said. Very well, you know, the perhaps the least expensive way. Now that she's already downsized, she's already got the hecm in place. She's already paid the fee to FHA. And so rather than adding a big rental payment on top of this, uh, you know, just continue to enjoy the fact she's never going to have to pay a mortgage payment. She's never, uh, you know, going to have to leave that home as long as she can cover the taxes and insurance and perhaps take the remaining equity and convert that to an income stream for life. And the idea, hopefully, is that those two, uh, the income stream plus the Social Security could ultimately, you know, cover her living expenses. Um, and I suspect she's living modestly, but let's have him review that and give you some more specific information. So you stay on the line and we'll get somebody in touch with you. Thanks for your call today to Coeur d'Alene, Idaho. Corey. Go ahead.
Good afternoon, sir. Hi there. So my wife and I, we have some, um. So I retired from the Bakersfield Police Department in central California, um, medically about four years ago. And while I was there, I put some money in a deferred comp, but I didn't really manage it that well or really know anything about investing at all. So I ended up only having about 28,000 in there. And she was a schoolteacher there in California. And, um, with her, she has calstrs retirement. I have a CalPERS retirement, um, between her deferred comp Accounts and and mine. Um, we have about $135,000, and I'm 37 years old. She's 35 years old. I think we're kind of behind the eight ball, but we want to try to invest that wisely now and do something with it, because it didn't make anything. I think it didn't make anything basically where it's sitting now. So we need to we need to put it somewhere. So, um, just talking to a few financial guys, they said, you know, you should do a, do a Roth, um, you know, but not put that money in the Roth. But take it from your, you know, what's in your current bank account now and then take that 135,000 and put it in a regular IRA. Um, but he mentioned that because it's the beginning of the year, you know, you could each person can put in $7,000 in a Roth each year. Is that Is that correct?
That's right. Yeah. If you're under age 50.
If you're under age 50. Yeah. So he said that we could double that this year because it's the first year or something. Um, I don't know. Uh, we have I think we have about $65,000 in the bank. So we'd be putting in 28,000 right now. And my wife, she her current job right now is she creates some online science curriculum for for an online company and for schools and such. Um, and because of that, she's it's it's I'm trying to understand it, but the taxes it's like you're a contractor and, um, basically we're going to take a pretty big tax hit is what I'm understanding.
Yeah, yeah, yeah. Because you've got the self-employment taxes where you're going to pay what the employer would have paid, uh, as a part of the FICA taxes. Yeah. I think you're right here. Uh, I think the idea is let's maximize what you've got and get that to an advisor who can manage that and keep it in the IRA. But take active management of the investments so you're not having to second guess that or try to do that. And that'd be a certified Kingdom advisor on our website at dot com. And then I like the idea of first of all understanding what tax hit are we going to have. And then moving forward doing estimated payments but then getting a Roth going, let's do this. Stay on the line. We'll finish up on the other side of this break. We'll be right back. Helping you see God is your ultimate treasure. Integrating your faith and your financial decisions for God's glory. That's our objective here. Each day on faith and finance live. I'm Rob West with me today. My friend Harlan Accola. He's a reverse mortgage expert. We're mixing those questions in today alongside questions on any financial topic. Before the break, we were talking to Corey in Coeur d'Alene. Uh, he and his wife have a couple of retirement accounts. Uh, Accounts. He was a he's a retired police officer. Uh, she was a school teacher. She's now working, uh, self-employed. And, uh, he's wondering what to do with these, uh, retirement accounts, uh, as state employees for California. And then also, what about new contributions moving forward? Uh, Corey, just to make sure I understand. I know she's working as a contractor. Uh, what are you doing right now?
So I work, um, part time for the Idaho Department of Fish and Game. Um, and so I don't make much money doing that. My retirement, because I retired medically, it was 50% tax free of what I was making there. So it ends up being about, um, $3,300 a month. Um, coming from that. And then I supplement it with, with my other job, so. Got it.
So you don't have access to a retirement plan in your current capacity?
I actually am there. I am involved in the state of Idaho's retirement plan. It's called Percy. I am in that. It's just, um. I'm not contributing a whole lot because I don't make a whole lot doing working there. So, um, we're just trying to. Yeah. To plan ahead here.
Excellent. Well, I think here's the thing. I mean, first thing we need to do is make sure we understand what you're going to hit with, get hit with on taxes for her employment. If you haven't been setting anything aside or paying in quarterly, there is a self-employment tax. It's about 15.3% because you've you know, you're paying the full Social Security tax, yours and the employer's portion plus the Medicare tax. Then you've got federal income tax, state and local taxes on top of that. And you are supposed to make quarterly estimated payments. And if you don't, it's not a huge deal. But there will be some small probably interest and maybe some penalties. And so now obviously she can deduct expenses against that. And she should probably get with the CPA to determine, okay, what am I going to owe for the prior year and how much should I should I be sending in moving forward on a quarterly basis? And am I taking every allowable deduction or expense against my income that I have as a self-employed person? So that's step one. Step two is I'd reach out to a certified Kingdom advisor on our website, because you don't have a lot of experience in investing. And although you believe you're behind in terms of the investments that you have, the 130,000, that's still a lot of money. And we want to maximize that for you guys over the next, you know, 30 years till retirement or whatever it is. Um, you know, plus, uh, you know, if the Lord tarries and you're in good health, we need that to last for decades, even once you're in retirement. So I think, you know, that's the key there. And then I do like the idea of funding some Roth IRAs. And you're right, up until you file last year's tax return, you can still contribute. And for 2024. So that's what they were talking about there. You could put in 14,000 7000 apiece and then turn around and fund 2025 at the same time. Another 14,000. That would be a great option. And that same advisor could manage that. So I think that's your next step. Does that make sense?
It does. Yeah I just wanted your thoughts on um, so if we got about 60,000 in the bank like I said. And then we have to if we put in 28 grand and then we estimate at least a $10,000 tax hit, um, you know, that would leave us, uh, you know, around 30, 30,000 or whatever it is. Do you think that's an acceptable number?
Yeah. I would make sure you're left with at least three months worth of expenses. And if you're going to dip below that, I'd probably short yourself on the the Roth contributions and maybe try to do it before the end of 2025, but I wouldn't go below three months expenses. If you wanted to be safe, you'd have a full six months expenses in there. But I think step one is to understand what are the what is the tax hit going to be. And then second, let's not put too much in so that you deplete your emergency fund below that threshold.
And you said you could pay off this tax bill, you know, through the year.
Oh, yeah. You want to make what's called in the CPA could help you with this quarterly estimated payments. There's an online portal you'll pay that in to the IRS. You'll tell them your Social Security number, what tax year you're paying toward. And that's going to ensure that you don't have any interest in penalties by not paying it in soon enough. As long as you get it in by that each quarter deadline. And so I would I would get with the CPA to estimate that hey God bless you Corey. We appreciate your call today sir. Let's go to Cleveland. Hi, Gina. How can we help?
Hi, Rob. I appreciate your program so much. You've been a blessing to many of us. I that's very kind. Thank you. I have a question for Harlan. Okay. I own a home outright. No mortgage left on it, but I'm on leased property. Is it possible to get a reverse mortgage on a home like that.
Uh, land lease. Harlan, what are your thoughts?
Well, it's a great question, Gina. It depends on how long the land lease is. Um, usually it has to be 99 years. Um, which is kind of typical in a lot of them. Or they can be extended. So the answer would be maybe, um, uh, we would just have to take a look at your title and the agreement that you have. But the short answer is yes, it is possible to do it on lease land. Um, but not always. So we'll just, uh, you know, if you, uh, go to Facebook or if you go to Movement.com, we would be able to specifically look at that and give you a yes or no answer once we saw the documentation.
Is that helpful, Gina?
Yes. Thank you.
Okay. Well thank you. We appreciate your kind remarks about the program. Glad you called. Call anytime. Uh, down to Florida. Hi, Victor. Go ahead.
Hi. How are you? Thank you for taking my call. Sure. I have a house and I owe 113,000 on it right now. Um, my interest rate is 3.25. Um, I went through two bankruptcies to get that, but, uh, and, um, so, um, I have $26,000, uh, saved cash on the side as a emergency fund. And, um, I'm just wondering if that if the reverse mortgage would you get. I mean, what would you get the the market value of your property, or would you get a lesser value? How does all that work?
Yeah. Let me ask you, before Haaland weighs in on that. Victor, what is it you're trying to accomplish? I mean, you got a nice low mortgage. Sounds like you went through some bankruptcies. Hopefully you're on the other side of that and and starting to build your financial foundation. I love the fact that you have an emergency fund. What are you trying to solve for at this point?
My my interest, my insurance is killing me. My my escrow, I pay I pay $2,000 a month. Now they just they just raised it another $300. And, um, it's it's just a high payment for a great rate. I think it should be less. But but there's nothing I can do. It's forced. It's forced insurance on the house because I got it with the house, and I was. This is my first house. My only house. Me and my wife. And, um. So we we've been fighting to survive, you know? Um, yeah. In 2006, when we got the house, I had, uh, a 10.9% interest rate and an 80, 20 split mortgage, uh, with a balloon at the end of it. And, uh, I swam till now. And basically this last, this last, uh, bankruptcy brought it down to 3.25, and, and, uh, the thing is, is they're getting me from from the other side from, you know, from the insurance part of it. And so.
Yeah, which obviously that wouldn't go away. I mean, the, the, uh, the principal and interest on the 113 could go away with a reverse mortgage even though the interest rate would go up, you know, pretty significantly the taxes and insurance. And I realized there in Florida, that's a really difficult spot. And and that's been really challenging for so many families. Obviously those taxes and the insurance would need to continue to be paid for you to do this. So that doesn't alleviate that. It only would get rid of the the principal and interest portion. Um, let's do this. We've got to take a break here. We'll be back for our final segment. We'll get Harlan to weigh in on this. And then, uh, Louis, I know you're waiting patiently there in Florida as well to talk about your 401 K with, uh, and your rental property. We'd love to do that as well. We'll be right back on faith and finance live. So glad to have you with us today on Faith and finance live. I'm Rob West with me today, Harlan Accola. Harlan's with Movement Mortgage. If you want to learn more, go to movement.com/faith. We've been talking reverse mortgages and often And misunderstood financial planning tool for those in the fourth quarter. As Harlan likes to say, season of life. And, uh, you know, looking at the home equity as one means one asset alongside the others, especially for those who either are a part of this group. Now, more than 50% of retirees entering this season with a mortgage perhaps haven't saved up enough. That largest expense is the difference between being able to make ends meet and and home equity conversion mortgage can eliminate that and let you stay in the home for the rest of your life, and perhaps get you to a place where you can balance the budget. And and so we're talking about that today. But before the break, Victor was sharing his situation. He's in Florida. He's had a couple of bankruptcies. He's just really hurting over what's happening there with property taxes and specifically the insurance he's up to. I think you said, Victor, 2000 a month, uh, just in the In the insurance. And, you know, obviously that's dramatic, even though, you know, you have a low interest rate and wondering about a home equity conversion mortgage, unfortunately, because of his age, I don't think it applies. Victor, what is your age and your wife's age?
Uh, 55 and 52.
Yeah. So, Harlan, your thoughts?
Yeah. So, uh, how much is your house worth? Victor.
Two 5259 something like that. And I think it could possibly be more, uh, I've got an in-ground pool and, um. Sure.
Um, I mean, it's always this is this is pretty involved, but I will tell you that there is a tremendous amount of people in Florida that we have helped with the insurance issue, because obviously that's one of the biggest expenses, period. Uh, but you would not be eligible for a hecm because you have to be over 62 years old. We do have proprietary loans that are for those that are 55, but your wife is 52, so we'd have to wait about three years for that. Um, however, $2,000 seems extreme. And so my guess is, is that it was behind. And so they're doing it to catch up. So that might not be the cost all the time. Um, but we deal with this all the time, and I'd be happy to, uh, really help you offline on this and go into more detail, uh, to get that balance, because on a $259,000 house, even $300,000 house, $2,000 a month is is much higher than what it should be. And so I'd kind of like to untangle what's going on with your escrow account and maybe be of help, because it'd be about three years before you'd be eligible for the reverse mortgage. Um, uh, we we do. Those loans are specifically for younger people down to 55, and they're proprietary loans that we have available different scenarios than the Hecm, but it still works. And and there's only in a few states in Florida is one of those states. But be glad to help and try to untangle this. Um, it's a little bit more complicated than we can do quickly on the radio.
Very good. Victor, stay on the line. We'll get your information and get, uh, Harlan in touch with you, at least just to interpret what you've got there on that, uh, that, uh, escrow account and help you understand, you know, perhaps when that might be coming down and, and, uh, just give you another, you know, some advice and a sounding board to hopefully help you move forward here. We appreciate your call. I know you're in a tough spot, my friend. And, uh, we'll be praying for you as well. Thanks for your call today. Uh, let's stay in Florida and welcome Luis. Go ahead.
Thank you for taking my call. And I appreciate the job you're doing. Uh, for many years. And, uh, I hope many people benefit. Well, I know for sure, uh, so many people benefit from what you've been doing, so thank you. Uh, I have, um, I have a few questions. Uh, actually, my I never. I heard about, um, reverse mortgage, but I never really know much about it. And I'm 62.5, and I would like to know a little bit about it. And then also, my mother in law, my, uh, she's 74 and, uh, she's, uh, probably will be interested on the reverse mortgage as well. And, um, I have like I said, I have a few other questions in terms of my 4k. Um, I know that I don't want to take too much long, but, uh, I wanted to know when would be the best time for me to either transfer that money to IRA, because, uh, every economist is saying that the, uh, the stock market is going to do very good under the president. But, uh, the last couple of weeks, what I'm seeing, uh, you know, I'm not too crazy and I'm 62.5. I can't take too much risks. So can you guide me and some of the stuff? And then also I have, um, a property that I live on, and also I have a rental property, so I just want some guidance.
Okay, let's do this. Let's tackle the 401 K and the reverse mortgage. And I think that's what we're going to have time for today. Uh, with the 401 K. Um, have you separated from your employer or are you still with that employer that has the 401 K?
No, I'm still with the employer. Okay.
Yeah. So you can't move that to an IRA until you separate from service from that employer. When that time comes, Louis, when you get to retirement, I do like the idea of you rolling that 400,000 out to an advisor, and you may even want to select that advisor now. And to your point about not taking unnecessary risk, perhaps you go ahead and get that get that advisor to look over your 401 K investment options to help you position that money so that you're not taking unnecessary risk. But it's still available to grow, you know, between now and retirement. And then you already have that relationship and you can roll that out to an IRA. And then that advisor would have complete discretion at that point, you know, in line with your goals and objectives to build the portfolio the way that they would like to, you know, to manage it on your behalf. Um, if you want to find an advisor, just go to our website. Com click find a professional and you could interview 2 or 3 certified Kingdom advisors. So I think that's perhaps your next step. I will say along those lines of the market, I wouldn't get too fixated on what the market's going to do in the next quarter or even the next year or even the next couple of years. I mean, you can even at 62, you can still take a long term view, because once you get to retirement, you know, if the Lord tarries and you're in good health, you need this money to last for decades. So, you're, you know, I would be thinking 30 years down the road for this money to last, which means that although you don't want to throw caution to the wind and you need to be properly diversified, and at 62, I'd probably be thinking, you know, as a 50 over 50 portfolio, 50 stocks, 50 bonds. So it's not as volatile as a is 100% stocks, but you still want a good bit in my view in stocks. So you have the ability to grow. And even if we got into a recession and the market was down 20% and that portion of your portfolio was down 20, you don't need the money the next day or the next year. You need to still take that long view, and you'd leave it right where it is and wait for it to come back. So I think your next step is to, you know, connect with an advisor who can walk alongside you, help you position the portfolio now and then prepare for when you roll it out to an IRA. So you've got somebody that can manage it. Uh, let's help though, Lewis. Um, with, uh, an understanding of of what a reverse mortgage is. Harlan. Harlan.
Go ahead.
Uh, yeah. In conjunction with what you're doing, the yours is a perfect example. You know that at 62, you can start taking Social Security. You know, at 59.5, you can take money out of your 401 K. So the answer to should you do a reverse mortgage is always maybe it depends on when you're going to retire. It depends on your tax situation and a number of other things. I chose to do my reverse mortgage right away at 62, like a lot of my clients do, because of what else is going on in their other plans. And so it certainly should be something that you look at. I'm not saying you should definitely do it. I don't have enough information to say, yes, you should do it or no, you shouldn't. But should you consider it when you're eligible? Yes, just like you should. Even though you might not take Medicare because you have insurance at your employer, you still need to do things at 65 to take a look at Medicare. At 62, you should take a look at how will this fit into my overall plan. And that's really where we talk to a Kingdom advisor to a financial advisor at the same time. To find out how does this fit with your other plans? So virtually everyone that's listening to this, um, you ask a great question is should I do it? It depends on what else is going on. And that's really the overall factor. And one other thing that I want to mention, Robert movement. We can take money out of our 401 K before we have separation of services, as long as we're past 62. So he should just check on that because more and more companies are I guess are starting to do that. So that's just one other thought that you might want to have it all managed by a Kingdom advisor right now. But certainly you might be like me that you decide to do a reverse mortgage as soon as you turn 62, and you might want to wait a while. Just depends on some of the other factors, but we'd be glad to consult together with you and your other advisor.
Uh, movement. Faith. Uh, Juanita is in Illinois. Uh, let's finish here today. We've got to be brief. Juanita. Uh, thanks for your call. Uh, what was your question today for Harlan?
I just happened to have my radio on, and I think it was really a blessing because I really got excited about what I heard to say relative to, uh, equity in your property. Uh, and I celebrated my 80th birthday last year. Uh, and, uh, my property, uh, the counter assessor valued it, which is always less than the market value. It's 200,000, but the market value is 250. Somewhere in my block. Just sold their house for 315.
Uh, I hate to cut you off.
I've got about 25 seconds left. What is your question for Harlan today?
Well, my balance is, uh, on my mortgage is 68,000. Okay. And the house is valued between, uh, approximately 250,000.
Okay. Yeah. So, Harlan, a pretty typical situation that you encounter, huh?
Well, it sure is.
You have to make the decision of whether or not this makes sense for you to continue to send the payment in, or whether or not there's other things that you can do with it. Remember that a reverse mortgage has an optional payment. It's not. And right now you have to make that payment. It may make sense at this stage of life, like it did for me and many other people to just say, hey, I want to make this payment optional, and we'd be happy to discuss how that would affect everything with you, but it's certainly something worth looking at this at this point.
Excellent. Juanita, you can go to Movement.com to learn more. Thanks so much for your call today. I wish we had more time for you, but we do appreciate you checking in. Harlan. Always a joy, my friend. Thanks for being here.
Thank you. Appreciate it.
All right. Big thanks to my team today, Amy. Taylor. Dan, Tara couldn't do it without him. Faith and finance is a partnership between Moody Radio and Faith fi. You can check out our website, learn how to become a partner there as well. And we'll see you tomorrow. Bye bye.