When Should You Take Social Security?

to have Eddie Holland with us today. Eddie's a senior private wealth advisor and partner of Blue Trust in Greenville, South Carolina. He's also a CPA, a certified financial planner, and a certified Kingdom advisor. So a triple threat, so to speak. Eddie, great to have you on the program.

Another consideration is cash flow needs. If someone retires, then there's obviously going to be potentially cash needs that arise. So they may start taking Social Security earlier than full retirement age because there's cash needs, income needs that they need to replace. We have some clients that we've advised that needed to pay down debt. And so if you have debt payment that you need to consider, that's another factor. We've had clients that have said, I just want to

increase my charitable giving. And so I want to draw Social Security, start giving more even in retirement or potentially as a legacy gift. So that's another consideration. Um, one other factor to consider, and I don't mean to be morbid, but health is is obviously a consideration. People that, um, don't have longevity in their family line. They may start taking Social Security benefits a little earlier. Others that plan to live a long time or feel like they're very healthy.

Generally speaking, the longer you live, the more you benefit by delaying Social Security, at least until full retirement age and possibly even later until age 70. Another factor, Rob, that I'll mention. I'll mention a couple more and then one that maybe is a little more nuanced. Legacy goals and inheritance. Most of the time, you can't pass Social Security benefits on to kids or charity, but you can

your portfolio. So some clients have said, I want to earmark my portfolio for giving or for inheritance reasons, and I want to start drawing Social Security. Now, everybody loves to talk about taxes, but income taxes a component to consider. Federal income tax guidelines state that Social Security could be subject to tax. So we've had some clients delay Social Security until a year where they're going to be in

a lower tax bracket. And then one of the more nuanced strategies that really came up a couple of years ago, Rob, was when the market was down significantly. We had had clients that had retired prior to full retirement age. They were starting to draw from their portfolio. They wanted to delay Social Security. Well, the market did not cooperate, had significant market drop. What the client then at that point decided was can I stop or pause my Social Security benefit?

If you are younger than full retirement age and you have started drawing Social Security within the first 12 months, you can do what Social Security calls a withdrawal so you can withdraw your application. But a withdrawal application simply means I had a 12 month free look. Period. I don't want to draw it. I want to have what in golfing terms is a mulligan? Yeah, I don't want to start drawing it back. And it's as if you

never drew it. The benefit of that is that you can turn it back on at a later point, and you're able to potentially act as if you never drew it. Now, that's a very nuanced strategy, something to consider before actually making that decision.

What do we do on this program each day? Well, we set aside an hour to encourage you in your role as a steward of God's resources, recognizing God owns it all. Money is a good gift from God to give, to meet the needs of others, and to love our neighbors and to solve problems. To expand and spread the gospel. To invest in companies supplying business with capital for human flourishing. To create goods and services that should be good and

that love our neighbors. Also to enjoy. You know, I think God smiles when we use money to enrich relationships. Maybe for a joyful celebration that's a good use of God's money. But we also have to recognize that this good gift can actually rival our hearts with devotion to God. Remember, he said, you have to choose. Is it going to be mammon or is it going to be God? So money can be dangerous, just like anything where we worship

the creation over the creator. But I think we see clearly in Scripture that we need to be on our guard with regard to money, not serving its proper place as a tool, but instead becoming an end rather than

a means to an end. And so we want to encourage you in that each day and help you to put money in that role that it was intended to occupy you accept your role as steward and encourage you with very practical answers to the questions you're facing in your financial life, because we understand you're trying to manage it appropriately and save it regularly and give it away generously. And all of that comes with questions. What does that look like in my life? And I made some mistakes

along the way. And how do I deal with those? Well, that's why we're here to be an encouragement to you. So call right now with whatever you're thinking about in your financial life today. That number again is 800 525 7000. Again, it's 800 525 7000. Let's begin with what's in the news today. The markets are moving up positively. The Dow Jones closed up 740 points. The S&;P up 118 points

a little more than 2%. The Nasdaq up 2.5% on the news that, uh, well, perhaps the Trump administration was wanting to make sure that they knew that or that you knew that they were not trying to harm Apple with the iPhone tariffs. They've also put a pause on the tariffs related to Europe. The European Union, that was a big deal. The market responding positively to that on top of consumer sentiment, how consumers are feeling about the economy.

It was up higher than expected. All of that together snapped last week's losing streak, and we saw some pretty good strength in the market today. Again, most of the major indexes up close to or more than 2% today. That's a good sign. We'll get Bob's take on that Bob Dole. That is a little later in the broadcast when he stops by to weigh in on the markets, what's moving them and just the overall health of the US economy. But one of the things we want to

do today is, though get into your specific questions. Also, if you have a testimony, I'd love to hear it. You know, we're always encouraged when you share what God is up to in your financial life. The way to do either of those, again, is to call right now 800 525 7000. Again, that's 800 525 Five. 7000. You know, when we think about managing money practically often, we get asked, what are those basic principles that we need to know coming from Scripture? You know, if I just do these things,

I at least know I'm headed in the right direction. Well, I would give you five. I would say spend less than you earn. Sound simple? It's not. I get it, especially now with everything more expensive than it has been. But it's the key to every financial success that leads to having margin. Because if you live within your means, you're going to have something left over at the end of the month. That's the only way to fund your

longer term goals. Then set long term goals. That's key because the longer term your perspective, the better your decision today. Avoid the use of debt because debt mortgage is the future. And give generously because giving breaks the grip of money. If you understand, God owns it all except your role as steward and apply those five principles, it doesn't mean

you'll be free from worry or difficulty. We live in a fallen world, but you will put yourselves, I believe, in a in a position to experience God's best, and that's what we want to encourage you in each day. All right. Let's dive into those phone calls again. Calls are coming in now, but we've still got some lines open. 800 525 7000 is the number to call. We are going to begin today in Tulsa, Oklahoma. Hi, Christy. Go right ahead.

things are not always, um. Yeah. It's. Sorry. Anyways, my question is, um, due to the possibility that maybe I won't be there for, you know, at the five year mark, would it be wise for me to get a 401 K outside of my employer?

and you can have one. Even if you have a 401 K, you're able to have both and you're able to contribute up to the maximum of both. Now, between the Roth and the traditional, you still cannot exceed the annual IRA contribution limit, regardless of how many different IRAs you put it in. And so you have to decide, do I want a Roth or do I want a traditional. Now the Roth IRA is simply money that you put in after tax. So you get paid, you pay the tax on it, and then you put the after tax

contributions into the Roth. You don't get a deduction. You don't get it to to write it off against your taxes for that year. So why would you do that. Well the benefit of the Roth is it grows tax free. So all the growth between the time you contribute and when you pull it out, let's say in retirement you're not going to be taxed on any of that growth, which is a nice benefit. With the traditional IRA. It's just the opposite. The traditional you put the money in,

you get the current year tax deduction. So you get a tax benefit now and then it grows tax deferred. And then when you take it out you pay tax on it as income. The contribution that you got a deduction on. Plus all the growth gets added to your taxable income in the year that you pull it out. So when you're younger typically better to use a Roth IRA. Now let's do this. I've got to take a break. When we come back I'll answer any questions you have.

And then we'll talk about where you might want to open that. 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. 800 525 7000. That's 800 525 7000. We'd love to hear from you today. Christie was not able to hold. Let me just mention something to make, uh, make clear. So when Christie was referring to that vesting of five years for that 401 K, uh, that does

not apply to her contributions. So when you make contributions to your 401 K, you're 100% vested. You own them right away. Which means if you leave the company, you take your contributions, uh, the employer contributions, the part that they add that would often follow a vesting schedule. And so it may be for, you know, it could be what's called cliff vesting where you get 0% for a

set number of years, like in her case, five. And then you get all of it, or a graded vesting where you get a certain percentage each year building up to the fifth year in her case. But if you leave the company before you're fully vested, you would forfeit some or all of that employer match, but you would absolutely be able to take your contributions with you, which is just like the IRA. You're not going to get

any matching in the IRA, but it's yours immediately. The same would be true with the 401 K. Now, if you don't have a Roth 401 K, though, Christie I if you're young, I would say go ahead and start with that Roth IRA and get that money going in

after tax but growing tax free. Now if you bump into the IRA contribution limit for 2025, which is $7,000, then that's where I would go ahead and start contributing to that 401 K even prior to you reaching the vesting, because to my point, you don't have to worry about your portion. It's only the employer match. So hopefully that helps you just clear up. I know that can get confusing, but we appreciate your call today. Let's, uh, go right back to the phones. By the way, if you have

a question, call right now 800 525 7000. We're going to go out to Coral Springs, Florida. I know it well. Hi, Jessica. Go ahead.

of some kind. The student loan program, the federal one offers income based repayment options. So they're going to let you reduce your monthly payment equal to the reduction in income that you've had for a period of time until you can get back up to the normally scheduled payment. So there's a lot more flexibility there, as opposed to the line of credit, where there's not going to be that option and you've collateralized your home to the loan,

which again, you know, carries additional burden or risk. So I wouldn't go there. I would stay away from that and exhaust the federal loan options. First. They're going to offer fixed rate. And those borrower protections are pretty nice.

buy it and sell it at any time. With a mutual fund, they trade once per day, and you get based on the net asset value of the fund, all the outstanding shares and all the the investments held divided equally. After the market closes. You get that trade once per day on the fees. ETFs are generally lower fees, mutual funds usually have higher fees, and they can have what are called sales loads commissions. Although there are no, you know, no fee or no commission, uh, mutual funds. But generally

the fees are higher. Uh, tax efficiency ETFs are usually more tax efficient. Uh, mutual funds can trigger what are called capital gain distributions when there's a capital gain that incurs, uh, inside the fund and it's passed along to the shareholders and then the minimum investment. Um, the ETFs can be bought with as little as one share. Mutual funds might have a minimum investment. So you can understand quickly why ETFs are gaining and growing in popularity. Because they're less expensive,

more liquid. So you can trade them more frequently. They're tax efficient and they usually have lower minimums. So if you want lower costs and flexibility I'd say go with ETFs. If you want more hands off investing or you want to buy into a particular mutual fund's actively traded manager where you're buying his or her expertise, you know that's where you may want to buy a mutual fund, although more and more mutual funds, you know, are spinning off

ETFs that basically mirror the same investment strategy. So I would say, given what you're looking for, where you want to buy into a particular sector like AI or robotics, I think you're most flexible and cost efficient approach is going to be an exchange traded fund focused specifically on that sector of the market. The only thing I might warn you on, just as I wrap up here, would be just make sure you're not too highly concentrated. You want to be properly diversified, even though I think robo

robotics and I have a great future. You just want to make sure that, you know, as you look over all of your investable assets, that that doesn't comprise too high a percentage, which makes you too highly concentrated. Hope that helps. Thanks for your call. We'll be right back.

required minimum deductions kick in? Um, because I just I didn't want to I mean, like, is it going to be more than 4% or. I just don't know how to plan for that?

Um and so when you get to that point because based on the current law and it could change between now and then, but the required minimum doesn't kick in until age 73. Uh, if you turn 73 and in 2025 or later. Um, so it sounds like, you know, you would be pulling out just based on at least the way the tables are today. With the life expectancy factors, you'd be pulling out a little bit more than you would be required to anyway with a 4% withdrawal rate.

If for some reason you wanted to take less and you weren't getting above it, then you know you could do some of your giving out of it, uh, through what's called a qualified charitable distribution and perhaps replace additional give or the same giving you were doing with after tax dollars from checking or savings. You could instead take it from your IRA. Um, you know, to get up

to the minimum. But just based on your current plans and the way the the tables are structured, you're going to get above it anyway.

stocks and mutual funds. And I didn't know if you could direct me of a way to how to do that, to give them, you know, so I don't have to take that tax burden.

aware of that. And then you would receive the charitable deduction for the the fund's fair market value, which avoids that capital gain. Now, if the charity cannot take the mutual fund, then you'd probably want to consider donating it to a what's called a donor advised fund and then grant the money out in the form of cash after it hits the donor advised fund. Are you familiar with that term?

going to honor your grant request. Now, the way they're supposed to work is you make the grant request and they grant it out to the 500 1C3 charity or your church upon your wishes. But they can establish protocols around certain organizations that they won't give to. But so that's why I like being with a faith aligned organization to ensure they're never going to close you off from giving to the the ministries or charities that you want

to that might have a religious intent. I'm not saying Fidelity or Schwab do that, but they have the ability to do that if they wanted to in the future. But yeah, you would create a donor advised fund with Fidelity or Schwab or the one you talked about or NCF giving com that I mentioned, National Christian Foundation, and then you would make the mutual fund gift. Um, typically, donor advised funds can accept mutual funds as soon as

it hits the account. Then that would be gift. So you'd get the the charitable contribution for the full amount, and then you would be able to grant the money out, usually through an online portal, kind of like online banking at whatever point you want in the future. But at that point you're no longer getting a contribution receipt from the ministry. You're getting it when you make it to the donor advised fund, and then the donor advised fund.

Sponsor will just send cash to the ministry whenever you tell them to. Does that make sense?

that you're looking at. But as long as you verify in advance that they will allow you to grant out to whatever ministry or your church you want to and they will. And cost is a factor. Then you could make it on that basis.

in CCF, National Christian Foundation, NCF. Com. It's called a giving fund, but that's the same as a donor advised fund. All right.

our app. Go to faithful.com and click give. We'll be right back.

But I think we'll get some slowdown as we'll see some unemployment pick up some jobs lost, but not a disaster.

think inflation is going to be that high. But as you know, we've been saying for quite some time, we're not going to get to two absent a recession.

Either we got to fix our debt problem, or we might go the way of these other major powers that have begun to lose importance in the world. Slowly but surely, we've got to tackle it. But the political system whereby folks do all they can to get elected, and immediately they start thinking about reelected, that's not an environment where you're likely to take the goodies away from people to fix the debt.

your adjusted gross income plus the non-taxable interest. So that would only apply if you have municipal bonds let's say plus half of your Social Security benefit for the year. So AGI plus half of your Social Security benefit, if that equals an amount more than the limit, then that's when you start to be taxed. Now do you file file single or married. Filing jointly.

your interest, your capital gains minus, you know, any deductions. So, uh, you know, traditional IRA contributions, things like that. When you add that AGI to half of your Social Security, that's the number you're looking for. And if it's above 25, up to 34, you're going to have up to 50% of your Social Security taxed over 34, up to 85%.

And then do I want to just own the broad market or do I want to pick individual sectors. So you can make those decisions yourself. And there are faith based investing ETFs where you can ensure that the companies are being screened for Christian values to make sure you're not supporting something that's, you know, antithetical to your values and that companies that are being bought are being bought not only because they provide compelling value, but also because

they are promoting the common good flourishing. So, uh, you know, it really just comes down to how much due diligence and research you want to do. The other approach is to connect with our friends at Sound Mind Investing. They could probably help you out with that. Um, and I can send you a book that would help you as well. But, you know, I think it really starts with education, where you need to become familiar and then you need to

make sure you're properly diversified. Another approach that takes some of the guesswork out, Mackenzie, is you could use what's called a robo advisor, which is basically an automated approach that uses ETFs, but it will build the portfolio for you, ensuring that you're properly diversified and ensuring that your risk, the amount of risk you're taking, is appropriate for your age.

And if you wanted to use robo instead of picking ETFs directly, I would look at betterment or the Schwab Intelligent Portfolios.

the show. And that would be a great starting point for you to check out companies that you should be looking at. McKenzie thanks for your call today. God bless you my friend. Well that's going to do it for us today, folks. Faith in Finance Live is a partnership between Moody Radio and Faith. I want to thank say thanks to my team today, Amy, Taylor. Dan and Anthony couldn't do it without them. Plus everybody here at Faith by. Enjoy the rest of your day. We'll see you next time.

God bless you. Bye bye.