Rob West: If there's one word that defines our culture, it's more: more upgrades, more comfort, more square footage. Yet with all that more, so many of us feel less satisfied than ever. I am Rob West. That's because contentment doesn't come from what's next; it's shaped in the heart, right where we are. Today we're talking about choosing contentment, not as something accidental, but something Scripture says we can learn. Then we have lots of great listener questions ahead, but we won't be taking your live calls today because this program is pre-recorded. This is Faith and Finance on American Family Radio, biblical wisdom for your financial decisions.
Let's be honest, we're all tempted to believe the next purchase, promotion, milestone, or change will finally make us feel settled. But this longing for just a little more is as old as humanity itself. Ecclesiastes tells us that King Solomon denied himself nothing his eyes desired, yet he concluded it was all meaningless, a chasing after the wind. Even the richest man in the ancient world discovered that satisfaction cannot be bought, achieved, or accumulated. It slips through our fingers the moment we reach for it. Paul understood this too. In Philippians 4:11 he writes, "I have learned in whatever situation I am to be content." Notice that word learned. Contentment isn't natural; it doesn't come from circumstances; it's cultivated through walking with Christ. And Paul explains the secret to this kind of contentment: "I can do all things through Christ who strengthens me." That verse isn't about achieving goals or maximizing performance; it's about persevering with trust. Paul wrote those words from prison, not from a moment of victory. He was saying, "Christ gives me strength to rest, to trust, and to be content whether I have plenty or very little".
Contentment is the fruit of relationship with Jesus. It's not found in having everything; it's found in knowing the One who is everything. As I write in my devotional, "Our Ultimate Treasure," contentment begins with recognizing we have a Shepherd who provides: The Lord is my shepherd; I have all that I need. Contentment starts with identity. We are His sheep, we live under His watch, we live within His provision, and because of that, we have enough.
Hebrews 13:5 adds another beautiful layer: "Be content with what you have, for he has said, 'I will never leave you nor forsake you.'" In other words, the root of contentment is God's presence, not our possessions. If He is with us, then we're never without what we truly need. But the devotional highlights something else surprising and practical: gratitude is the engine of contentment. Wherever gratitude grows, contentment thrives. When we pause to say "thank you," the heart shifts from craving what's next to appreciating what's now, from longing for more to recognizing what God has already given, from scarcity to sufficiency.
When we leave everything in God's hands, we eventually start seeing God's hand in everything. So, how do we begin choosing contentment? Well, it can be as simple as keeping a gratitude journal, writing down three blessings each morning or evening. Not grand things—just real things: a warm cup of coffee, a quiet moment, a roof over your head, breath in your lungs, a conversation that uplifted you. Let small joys accumulate until they reshape the heart. Maybe it looks like pausing before buying something new and thanking God for something you already have. Maybe it looks like turning off the endless scroll that feeds comparison. Maybe it means naming God's provision out loud in front of your kids, your spouse, or your own anxious heart.
Contentment is not a destination, it's a daily path. It's not discovered in perfect circumstances, but in a surrendered heart. When we learn to say, "Jesus, You are enough," we discover that true abundance is not tied to income; it's tethered to our Shepherd. And if you want to go deeper into what it looks like to choose contentment each day, "Our Ultimate Treasure" was written with that very purpose in mind. It's a 21-day devotional designed to help you loosen your grip on the things of this world and grow in your trust in the One who provides everything you truly need. You can pick up your copy of "Our Ultimate Treasure" today at faithfi.com/shop. And if you'd like to place a bulk order for your church or small group, we offer discounts as well. That's faithfi.com/shop.
Remember, contentment doesn't mean we stop planning, pursuing goals, or enjoying the good gifts He provides. It means those things no longer have to carry the weight of satisfying our souls. We can hold them with open hands because our security rests somewhere far better. In a world constantly whispering "more," Jesus invites us to rest in Him and say, "I have enough, because He is enough." That's real contentment, and it's available to every believer who chooses to trust the Shepherd who never leaves and never forsakes.
We'll be right back with your questions after this. Stick around.
SEGMENT 2
Rob West: Great to have you with us today on Faith and Finance on American Family Radio. I'm Rob West. Hey, don't call in today; our team is away from the studio, but we did line up some questions that we will get to, and I'm confident you will enjoy them. You know, we hear from so many of you that tell us that God is at work through this ministry in your life, and we're so grateful. If you want to support our work here at Faith and Finance, the easiest way to do that is for you to become a FaithFi partner. Just head to faithfi.com and click "give," and as a way of encouraging you in your stewardship journey, we'll send you all kinds of resources every quarter. Just go to faithfi.com/give.
Rob West: Let's see, we'll head to Joy, and Joy is in Chicago. Go ahead.
Joy: Yes. Thanks for taking my call. And my grandson is moving to Bali, and I'm just wondering, would it be better if he sends the money he makes home or start a bank account there?
Rob West: Hmm. Yeah. How long is he planning to be there, Joy?
Joy: Um, two years. He has a limit, his company will only take two years.
Rob West: Okay. Yeah, so if he's planning to return to the US in two years or less, it's going to be wise to keep, you know, a good bit of his savings in the US. This avoids having all of his assets exposed to the Bali banking system or currency, and that's going to make it easier to pay US bills or invest for the future. He's probably just going to want enough money in Indonesia just to cover living expenses and maybe a small emergency fund while he's there. But I would consider having him transfer excess savings beyond his living expenses and an emergency fund back to the US periodically, rather than letting a large balance accumulate overseas.
Rob West: Does that make sense?
Joy: Yes. Thank you so much.
Rob West: Yeah, you're welcome. Yeah, absolutely. It sounds like a great experience. I think he needs to check into the exchange rates and the transfer fees before moving the money, and, you know, he's just got to remember, as a US citizen, he's going to need to report and pay US taxes on his worldwide income even while he's living overseas, though there are some tax credits and so forth and exclusions depending on his situation. But I think the big idea here is just keep enough money locally there in Indonesia based on what he needs to live, but don't feel obligated to keep all of your savings overseas. I think the bulk of it should stay here and, you know, these uh the reporting and tax rules can be pretty complex, so it'd be it'd be worth him connecting with a CPA or a tax professional who really specializes in, you know, expat taxation before he makes any major decisions. But Joy, thank you for calling. Let us know if we can help further.
Rob West: Let's go to Indiana. Greg, go ahead.
Greg: Hi, Rob, love the show. Thank you. I have a question—I have a question for you about retirement. Um, so I'm currently 61, and uh, I'd like to retire in a couple of years, so I'd be 63 and my wife would be 61. And um, right now our portfolio is about 80% in pre-tax investments, so IRAs and my 401(k), and we have about 20% in Roth IRAs. And based on our living expenses and how much we're going to have to pull from our portfolio every year, um, my my advisor is basically, um, having us pull from the pre-tax accounts first. And if we do that, then we're going to be over the ACA threshold to get any subsidies. So I'm trying to figure out the best way to pay for healthcare and wondering if I should consider like a Roth IRA conversion or some way to lower that uh, what do they call it, MAGI, they call it, right?
Rob West: Yeah, the modified adjusted gross income. Yeah, it sure does. You know, and this is exactly the kind of planning opportunity you want to think about before retirement. Um, and the key really isn't managing the investments in the portfolio; it's managing taxable income, as you said, the modified adjusted gross income during the years before Medicare. So, since the ACA premium tax credits are based on income, the way you take withdrawals makes a pretty significant difference. So, if your portfolio is currently 80% pre-tax, 20% Roth, and, you know, taking all the withdrawals from the pre-tax will increase your, you know, MAGI and could therefore reduce or eliminate the ACA tax credits, I think to your point. So, it may make sense to use a combination of pre-tax and Roth contributions to manage that taxable income because those qualified Roth withdrawals are not going to increase the ACA, you know, calculation.
Uh, a Roth conversion could be beneficial, but the timing is important because the conversion increases the modified adjusted gross income in the year it's done. So doing one during the ACA years could reduce or eliminate those premium tax credits for that year as well. So, many people instead consider partial Roth conversions in the years before they retire while they're still working, only if you're in a favorable tax situation, or after you reach Medicare at age 65 when the ACA subsidies are no longer a factor. Although then you're just going to have to factor in the IRMAA on the the the additional premium on the the Medicare. So, really the timing depends on your current tax bracket while you're working, your expected retirement income, your long-term goals, and then future RMDs.
So, I I wouldn't automatically convert now just to qualify for the subsidies. I think the better approach is probably to work with, and maybe you've already got this, a tax-savvy financial planner or a CPA to project your income over the next several years and coordinate those withdrawals and any Roth conversions so you balance current tax savings, ACA ACA credits, future RMDs, and then the Medicare IRMAA and try to find the sweet spot between all of it. You're going to have to make some assumptions because we don't know future tax rates, but the value of those ACA subsidies can be substantial. So, it's worth running the numbers before you make any conversions.
Greg: Right, right. That's not complicated at all.
Rob West: No, not at all. Yeah, I mean it's just uh, you know, a day in the life, right?
Greg: Right. Okay. And and I guess the other thing that I keep thinking about is they say that you should keep your Roth accounts for later in your retirement years and not pull from that. But yeah, I'm going to have to pull from that in order to, you know, get these subsidies, so again it's a bit of a balance.
Rob West: Yeah. It it is, and I think that's where you've got to just run all the scenarios, and that's where a savvy financial planner could be great. And they have some pretty sophisticated software that can run all these scenarios for you once you plug in your current tax rate, you know, your mix of of pre-tax versus after-tax retirement accounts, your, you know, future expected income in retirement, we can plug in, you know, current tax rates um and then we can just run all kinds of scenarios. You're going to have to make some assumptions, but you can probably find that sweet spot, and then you update it every year and react accordingly.
Greg: Sure. Okay. All right, I appreciate it. Thank you so much.
Rob West: Absolutely, Greg. We appreciate your call today, sir. God bless you. Let me mention, folks, uh if you haven't checked out the FaithFi app, we'd love for you to do that. Think about this: inside the app, there is a community of stewards that are sharing best practices, asking questions, encouraging each other on their stewardship journeys, and there's no cost to participate in that. Also, all of our broadcast archives are there, and we bring together the best content in biblical finance anywhere uh in our learn tab. And then, you could also use the money management the spending plan portion if you want. It's based on Larry Burkett's uh digital envelope system. It's all in the FaithFi app. Go to faithfi.com and click "app," and you can download it today. We'll be right back with your questions. Stay with us.
SEGMENT 3
Rob West: Well, delighted to have you with us today on Faith and Finance on American Family Radio, where we apply the wisdom from God's word to your financial decisions and choices, recognizing God owns it all, we're stewards, so money is now a tool to accomplish God's purposes. Money is, keep in mind, morally neutral. It's a blessing. It was created by God to be used for good works, to enjoy, to provide for our families, to be able to create memories, to be able to support the needs of others and to give generously. It's when we make the object of our affection money and the things that money can buy, when we align our hearts toward the pursuit of wealth only for wealth's sake—well, that's when we can get awry. But when we see it as a blessing and we use it in the way it was intended, well, it can accomplish all kinds of good and, as to Scripture, it can be enjoyed, and that's the way we want to encourage you today as you think about the practical decisions and choices you're making. All right, let's try Oswego, and Lupe. How about, are you there?
Lupe: Yes, I am. Good afternoon, Rob.
Rob West: Great! How can I help you?
Lupe: Yes. Hello to you and and everyone. And, uh, just like to ask, um, for advice, um, as far as my daughter that's going to turn 20 in December. Um, uh, you know, we're trying to figure out how, um, she could start building credit—and she's not currently working right now; she just, um, got her license for a nail technician—um, but just trying to kind of trying to guide her. I feel like I am lost myself. I've been in my job for 25 years in the medical field, so I don't—she's not interested in anything like that. But I would like for her to start, you know, building her credit.
Rob West: Yes. Okay. Yeah, very good. And the goal, when you're just starting out, is to—okay. Yeah, excellent. The goal is to build positive credit history while avoiding debt. And so we certainly don't want to take on any debt, we don't want to pay any interest, we don't want to develop that cycle of using debt to live beyond our means. And yet we recognize we live in a system that requires, or it's helpful to have, cost-effective to have, credit over time. Whether you're renting an apartment, or borrowing money to buy a car that fits into your budget—all of those things require good credit. So there's a couple of ways to go. One would be to become an authorized user on a parent's credit card. So, for instance, your card, if you have a long history of on-time payments and a low balance, or no balance because you pay it off every month, then your daughter could be added to your account to benefit from your account's history, assuming the card issuer reports authorized users to the credit bureaus, which most of them do. Now, the risk there is, even if you don't ever give her the card or she doesn't have access to charge anything, the risk is if you had a missed payment, or you had a balance that crept up over 30% of the limit—meaning you had a high credit utilization—then she would get your negative history along with the positive, so you just have to be careful there. But it is a strategy a lot of people use. The second, which is a little safer because it's, you know, separate from you, is to open a starter credit card in her own name. Could be a student card, um, you know, it could be—Capital One has some cards that are designed specifically for those with little to no credit just starting out. Could be a great option. I suspect if if she's 19, she's probably already started to get the solicitations. I wouldn't just take whatever comes in the mail; I would probably, you know, look and do some research maybe on Bankrate or NerdWallet and find out who has the best credit cards—the Savor card from Capital One was one that a lot of students use. But she's got to be very disciplined and you've got to make sure there's safeguards in place, because again, we wouldn't want to enable her to live beyond her means, not understanding the dangers of debt and get into a difficult situation. Which leads me to the third option, which again is is more safe, and that would be what's called a secured credit card. Where you simply put a certain amount on deposit with a bank—and you'd again want to research who offers the most compelling secured cards—but you put a certain amount on deposit, let's say it's $200 or $300, they give you a limit equal to what's on deposit, you charge against it with budgeted items. So let's say there was a monthly subscription that she was already planning on. She's she's going to do it anyway, and it's it's budgeted, meaning she's got the money for it. She could let that hit the secured card every month, she pays it off in full, now she's starting to get some positive credit history reporting to her credit file, and the nice part is that because it's secured, there's no risk. Because worst case, she charges up to the limit, $200, she's unable to pay it—well, they're just going to take the money on deposit, pay it off, and she's done. And so it's secured by the balance of the deposit, which just means there's no risk of her charging money beyond what she has the ability to pay. So if she had, let's say, one card, either secured or unsecured, with a small, recurring expense, like gas or a streaming subscription, and she paid the statement balance in full every month, she would pay no interest, she'd keep low utilization—meaning the balance versus the limit—and then, uh, she would over time begin to build some credit history. But let me stop there and just get your thoughts on those ideas.
Lupe: Oh, I really like, yeah, I really like and very helpful with those three ideas. Um, I was considering adding her on, possibly on my credit card. Um, even though they are asking me for her Social Security number, um...
Rob West: Yes.
Lupe: Is that something that I do need to give, like besides her name and our home address, which she still currently lives at home? Um, is that something safe to give over the phone, um, her Social Security number? And is that necessary?
Rob West: It is only—it is necessary, and it can be safe. So it's necessary, meaning if she's going to be added as an authorized user and you've weighed the considerations I mentioned about all the history reporting, um, then yes, you would have to give them her Social. And it is safe so long as you know who you're talking to, meaning you initiated the call to your credit card company using the phone number on the back of the card, not somebody calling you and claiming to be from your credit card company. But yes, as long as you initiate it, you know you're calling the right company, uh, then yes, you could give them that Social and uh add her as an authorized user. So, Lupe, I hope that helps. You sound like a great mom. Hey, stay on the line; I want to send you a resource to pass along to her that I think will be a real blessing. It's called Open Hands Finance. We'll be right back.
SEGMENT 4
Rob West: Great to have you with us today on Faith and Finance on American Family Radio. I'm Rob West. Our team is not here today, so let me just remind you not to call in, but I will also remind you that we have some great questions that we lined up in advance. So let's go down to Florida, Martha. How can I help?
Martha: Hi. Thank you for having me on, and I really appreciate your show. I've learned a lot listening over the years. My life is—well, thank you, Martha. I inherited land in 2003 from my parents' trust. Uh I sold some over the years, but I sold the last of it in 2025. I've I've been late on filing my taxes, which is costing me, but um I'm working on it with an accountant. Uh I was apparently the the tax, the accountant has come up with is a lot more than I thought I would owe. I was thinking that with my donations and the um amount that is not included because of an inheritance would cut the taxes way down, but it's still quite a bit. So I wanted to know, does the inheritance waiver apply to the amount after I sell it after I inherited it? I know there's capital gains tax based on the price it was when I got it and what it is now. But does the inheritance waiver help me at all now?
Rob West: Yeah. So because you inherited this back in uh 2003, I mean there's a a misconception around, you know, if you inherit more than a certain amount, you automatically owe tax. That's not how it works. There is no federal inheritance tax. There's a a federal estate tax that's due with estates of a certain size. I mean for 2026, that's a state estate is larger than $15 million. Uh but inherited real estate uh is not taxable to the in the person inheriting it, and it does receive receive that step-up in basis. So if you later sell it, which you've done, you owe the capital gains tax only on the appreciation after the date of death. So that would be, you know, what you would have going on here where you'd verify the cost basis um and and that basically is what the value was in 2003, and then you'd include all the selling costs and any capital improvements. And then if the property was sold, um, you know, you would uh have ultimately whatever that gain is that would be subject to capital gains tax. Be about 15% of Yeah, I mean what is the total gain that you realized for your portion?
Martha: Well, it started out being uh appraised at around 10,000 an acre, and it has come up to one piece sold for uh 24 an acre, and the other sold for 30 an acre, and there were uh about 20 24 acres all together.
Rob West: Okay, but do you know what the total capital gain is that you realized?
Martha: Um, you mean the sale price?
Rob West: Sale price minus the cost basis.
Martha: I haven't done that yet. The accountant's working on that.
Rob West: Okay. Yeah, so for 2025, if that's the year you sold it, last year, the long-term capital gains rates were 0, 15, and 20%. Do you file uh as a single person?
Martha: Oh, yes.
Rob West: Single?
Martha: Yep.
Rob West: Okay. Yes. So, um, you know, if you have a a total capital gain plus your ordinary income, your taxable income, the total of those two together, uh if it's between 90 uh or 48,533,000, uh which is where most people would fall, because again, it's the capital gain plus your income, then it's 15% on the gain.
Martha: So that's a reasonable amount what I'm paying then. Uh I should have planned bet. Yeah, sorry, I know. Yeah. Should have planned.
Rob West: Yeah. So have you already spent that money or allocated it somewhere?
Martha: Well, I have uh some allocated for that, but I thought my donations giving 10%, you know, over the years uh and that year would cover it, somehow I thought, but I should have paid 15% instead of 10% on donations.
Rob West: Yeah. Um, so yeah, donations made in the year of the capital gain, uh, you know, could affect your total taxable income assuming assuming you itemize, uh, but it's not a direct offset. Um, so, you know, if you make donations in the same year of a large capital gain, it can be effective, but again, it's going to reduce your overall tax bill by reducing your taxable income in that year, which is not a direct offset for the capital gain itself. So those two things, you know, are unrelated. Now, if you gave enough such that you reduced your taxable income to offset the gain, well, that that may work, but uh you would just have to get with your CPA and see what kind of impact your contribution is going to make uh on your taxable income and whether you're going to owe more than you've set aside in the first place.
Martha: Right. Okay. It's a hard pill to swallow, but the Lord will take care of it, right?
Rob West: He will. And there are options here. You know, you can connect or have your CPA connect with the IRS and work on a payment plan or something like that. This does come up regularly, and the IRS is ready for it, and they're probably more accommodating than than people give them credit for with these kinds of things. And so just know you're not going to have to write that check all at once, and if you can't, there are other ways to approach it. So, uh thanks for your call today, Martha. All the best to you. Illinois is where we're headed next. Gwendolyn, how can I help?
Gwendolyn: Hi. Um, I have two questions. Um, I'm interested in knowing if there's a product you can recommend that would combine both life insurance and long-term care benefit and also, would this product can it be combined with an investment aspect or would you have to buy a separate product for an investment along with an insurance?
Rob West: Yeah. Uh, great question and, you know, having uh a hybrid policy, um, can be an effective solution. It's not the right fit for everyone. Basically, you've got three approaches. You've got a traditional long-term care insurance policy, which is specifically for long-term care, and if you ever need care, you'll receive the benefit as long as you qualify, uh based on a a certain number of what's called activities of daily living that you cannot function or perform. And then the second option is life insurance with a long-term care rider, which is what you're talking about, that's a hybrid policy. So if you need the long-term care, you get part of the death benefit to help pay for those expenses, um, and if you you know, ever uh if you never need it, your beneficiaries receive the life insurance death benefit. So, you know, this addresses the concern of use it or lose it. And then there's, you know, other types of uh asset-based uh policies as well if you're not going to sell fund. And ultimately it comes down to your overall health and insurability and whether you have have enough assets to self-insure, um, but the hybrid policy can be a very effective tool as long as you need the the true life insurance alongside it. Let's do this. I'm up against a break. Uh I'll give you some other thoughts and address the investment component right after the break. Stay with us.
SEGMENT 5
Rob West: I'm grateful to have you with us today on Faith and Finance here on American Family Radio. Sit back and enjoy. We're going to cover a lot of ground here in our final segment. We'll get to as many calls as we can. Before the break, we were talking to Gwendolyn in Illinois. She's wondering about long-term care insurance combined with life insurance and then separately whether there's such a thing that includes both of those plus an investment.
Let's go back to when you would want straight long-term care insurance or versus a hybrid policy, life insurance plus a long-term care insurance rider. And keep in mind, before we even get to that, you know, 70% of Americans 65 and older will need long-term care for some period of time, usually two to three years, and full nursing care is expensive. It can run $100,000 a year or more. And so if if there's a risk, an unknown risk that you want to mitigate in this season of life that could erode your assets, the need for expensive and ongoing long-term care is probably up near the top of the list, if not at the top of the list. But these policies are expensive, they have increases, and, you know, a lot of people just struggle to pay for them. And a lot of people struggle with the use-it-or-lose-it, meaning, wait a minute, if I pay all this money in and I never need it, I don't get anything for it? Well, that's right, kind of like your car insurance if you don't have a wreck or your term life insurance if you don't pass away, you're offsetting the risk.
Now, who would be best suited for a traditional, kind of straight long-term care insurance product? Well, that would be somebody whose primary concern is paying for the future long-term care expenses they may have, and you want the most long-term care coverage per premium dollar because you're not adding any other features in. And, you know, you have sufficient retirement assets, but typically this is someone who wants to protect them from the high cost of extended care. Meaning, yeah, we can reasonably see how we can fund our lifestyle for the rest of our lives based on what we've saved, but we know there is this chance that if we needed extended care and it was expensive, that that could be a problem, and so therefore we're going to add this long-term care insurance policy. It's less ideal, ideal, if you don't like the idea that you may never use the policy and therefore the money is, quote-unquote, lost, or you have difficulty qualifying medically.
Now, who would want a hybrid life insurance plus long-term care? Well, that's the person that says, "I don't want to pay premiums and get nothing back if I don't need care." Those who have need for permanent life insurance—who who is that? Well, that'd be a parent of a child with special needs that needs lifelong financial support, a business owner who needs funding for a buy-sell agreement, people with significant estates, a lifelong dependent, high-income earners who have already maximized other tax-advantaged savings like 401(k)s or IRAs. Otherwise, most people don't need permanent life insurance. That's why we recommend generally that you just buy term insurance while you're working, save in your 401(k), and then you drop the insurance when you get to retirement. And again, if you have sufficient retirement assets, but you're worried about expensive long-term care, you'd add a straight long-term care insurance policy at that point.
All right, now the final piece, Gwendolyn, was what about an investment component? Yes, some permanent life insurance policies like index universal life, IULs, and variable universal life, VULs, can accumulate cash value and could have a long-term care insurance rider. However, I generally don't recommend buying life insurance as an investment. Now, I've thrown a lot at you there. Is that helpful?
Gwendolyn: Wow. Yes. So you don't recommend the index—people go with that idea, index universal life, because it's something sitting there that's earning, but [cough] can be used.
Rob West: Yeah.
Gwendolyn: If need be.
Rob West: Yes.
Gwendolyn: And then paid back in, too, if there's a need to borrow against it.
Rob West: Yeah, I mean a lot of people will say that's the, you know, the benefit is you've got the permanent life insurance, if it's properly funded, the tax-deferred cash value growth, you've got the downside protection, and you can access through policy loans if it's structured properly, tax-free access to cash. Um, but they're complex, they're expensive, the growth is capped, which is where most of the long-term annualized growth of an investment portfolio comes in the strong up years, but you don't get that in these products because you have to give that to the insurance company once you get above the cap. If the policy is underfunded because rising insurance costs later in life reduce the cash value or causes it to lapse, so there's just a lot of qualifiers there, and and at the end of the day, I just find that for most people it's not the best solution.
Gwendolyn: Oh, okay.
Rob West: Yeah.
Gwendolyn: So just continue to invest in an IRA or some a Roth IRA, a traditional IRA, uh, and by term, and then once you get to be 65, though, you know, your term insurance starts to increase with every ring of age.
Rob West: But you don't need it at that point because you've got the retirement assets, so therefore there is no risk because no one's depending upon you for your income at that point. So that insurance is no longer necessary. It's kind of like if you sold your car, you wouldn't need car insurance. Uh, well, if you if you stop working, you don't need insurance to cover the risk of the loss of income. And at that point, your only risk is, or a risk is, the primary one is the need for extended long-term care, and again, if you can afford it, that's where a long-term care insurance policy can be helpful. So, hopefully this has given you a few things to think about, Gwendolyn. Thanks for your call today.
Rob West: Uh, let's go to Florida, Richard. Go ahead.
Richard: Yeah, I just want to know your thoughts, um, regarding somebody who has equity in the home and maybe they're thinking about getting a home equity line of credit. Um, I've seen some new products called home equity um arrangements versus a home equity line of credit.
Rob West: Yeah. Yeah, I don't like the HEA, it's a home equity agreement, uh, and the reason is you lose uh your home's future appreciation. So, you know, with an HEA, if your home appreciates significantly, you're giving up a share of that appreciation, which can become much more expensive than paying interest on a loan. Uh, and the contracts are complex, so it's important to understand what you're getting yourself into and how the payoff is calculated. Um, so, you know, neither is inherently good or bad; they're different tools, but I would just far prefer, uh, you know, the home equity line of credit, uh, which is for someone who has good credit, sufficient income to qualify, and you have short- to medium-term borrowing needs, you know, and I like them most often for home improvements, certainly not lifestyle spending. But, you know, the the benefit is it's secured by your home, you retain 100% ownership of your home's future appreciation, so if your home value rises—which historically homes have risen in value consistently—all of that increase belongs to you.
Richard: All right, got it. Appreciate it.
Rob West: Absolutely. Thanks for your call today, Richard. God bless you. Uh, let's see, we've got uh yeah, time for one more call. Let's go to Georgia, Anna. How can I help?
Anna: My husband and I are about to give up um, so that full-time nursing student for one year. And because of the way that we have lived, um, we just haven't spent, um, and so we've managed over the course of our marriage, um, on salaries of about 30,000 to save up. And so we are looking towards this coming year, because I got into my dream school, um, it will be an accelerated program, and we will be paying full tuition because it's out of state and living off of our savings for the year.
Rob West: Yes. All right. Uh, is your husband working?
Anna: No. Um, well, we we homestead, so basically what we do is he works our land, um, so that we can live off of our dairy, meat, and garden, um, and not not spend. Um, so his job is kind of eliminating our expenses.
Rob West: Yeah. Uh and then how are you going to handle the the schooling being out of state?
Anna: Um, well, it's the only reason it's out of state is because it's the, um, uh we're kind of on the border, so we don't have another one close to us. I see. Okay. Um, so it's it's not like far away.
Rob West: Yeah. Very good. Well, I love this. I mean, congratulations. You got into your dream school, your your husband obviously is a hard worker, wants you to be able to pursue your dream. That's amazing. And I love that you're thinking about this now before you, you know, just kind of go full head you know ahead headfirst into this new opportunity. Um, it can be a wonderful investment in your future, but you want to make sure you're not creating a financial crisis in the process. So, you know, really it comes down to what will it cost to live for the next year, and I love the fact that your expenses are are minimal because of what your husband is doing to, uh, produce, you know, for you all to live off of the land there that you have. Uh, the second would be how much cash do you have available, and then ultimately, you know, what is your backup plan if school takes longer or an unexpected expense comes up, uh, things like that. Um, so just given what you know about your lifestyle and your expenses and your savings, kind of where would that leave you after you finish school? Uh, would you have exhausted your savings? Would you be able to uh still have some some you know some emergency savings, or where would you be?
Anna: We think that we will still have um savings. Um, it'll be about 35 38,000, and from what we're looking at now, we haven't used we've saved each year that I've worked, so we don't seem to be using up um my full 28,000 salary each year. Um, and so we would probably still have approximately uh $40,000.
Rob West: Okay. So once you graduate, you'd still have 40,000 in the bank based on your calculations? The the best I can just off the cuff.
Okay. Yeah. Well, I mean I think that's the key, as long as you've run the numbers, you know what it's going to cost you both for your lifestyle spending plus your college uh tuition, your uh to get the degree, and, you know, any other costs, and as long as you just don't squeeze yourself too much financially, I'm on board with this. What a what a gift and a blessing that you and your husband can do this together.
Unfortunately, that's going to do it for us. Listen, folks, always appreciate you having uh you stopping by on the program. I hope today you found something helpful and encouraging. I hope above all else we pointed you back to Jesus, because here's the reality: money is a good gift, it's a tool, we want to steward it wisely, hold it loosely, yes, enjoy it and provide, but also use it to uh further God's purposes through our investments and our generosity. Listen, I couldn't do this without my amazing team each day, Devin Patrick, producer, uh Sandy, Patty, Taylor, and everybody here at FaithFi that makes this possible. Come back and join us next time. We'll see you then. Bye-bye.
Rob West: If there's one word that defines our culture, it's more: more upgrades, more comfort, more square footage. Yet with all that more, so many of us feel less satisfied than ever. I am Rob West. That's because contentment doesn't come from what's next; it's shaped in the heart, right where we are. Today we're talking about choosing contentment, not as something accidental, but something Scripture says we can learn. Then we have lots of great listener questions ahead, but we won't be taking your live calls today because this program is pre-recorded. This is Faith and Finance on American Family Radio, biblical wisdom for your financial decisions.
Let's be honest, we're all tempted to believe the next purchase, promotion, milestone, or change will finally make us feel settled. But this longing for just a little more is as old as humanity itself. Ecclesiastes tells us that King Solomon denied himself nothing his eyes desired, yet he concluded it was all meaningless, a chasing after the wind. Even the richest man in the ancient world discovered that satisfaction cannot be bought, achieved, or accumulated. It slips through our fingers the moment we reach for it. Paul understood this too. In Philippians 4:11 he writes, "I have learned in whatever situation I am to be content." Notice that word learned. Contentment isn't natural; it doesn't come from circumstances; it's cultivated through walking with Christ. And Paul explains the secret to this kind of contentment: "I can do all things through Christ who strengthens me." That verse isn't about achieving goals or maximizing performance; it's about persevering with trust. Paul wrote those words from prison, not from a moment of victory. He was saying, "Christ gives me strength to rest, to trust, and to be content whether I have plenty or very little".
Contentment is the fruit of relationship with Jesus. It's not found in having everything; it's found in knowing the One who is everything. As I write in my devotional, "Our Ultimate Treasure," contentment begins with recognizing we have a Shepherd who provides: The Lord is my shepherd; I have all that I need. Contentment starts with identity. We are His sheep, we live under His watch, we live within His provision, and because of that, we have enough.
Hebrews 13:5 adds another beautiful layer: "Be content with what you have, for he has said, 'I will never leave you nor forsake you.'" In other words, the root of contentment is God's presence, not our possessions. If He is with us, then we're never without what we truly need. But the devotional highlights something else surprising and practical: gratitude is the engine of contentment. Wherever gratitude grows, contentment thrives. When we pause to say "thank you," the heart shifts from craving what's next to appreciating what's now, from longing for more to recognizing what God has already given, from scarcity to sufficiency.
When we leave everything in God's hands, we eventually start seeing God's hand in everything. So, how do we begin choosing contentment? Well, it can be as simple as keeping a gratitude journal, writing down three blessings each morning or evening. Not grand things—just real things: a warm cup of coffee, a quiet moment, a roof over your head, breath in your lungs, a conversation that uplifted you. Let small joys accumulate until they reshape the heart. Maybe it looks like pausing before buying something new and thanking God for something you already have. Maybe it looks like turning off the endless scroll that feeds comparison. Maybe it means naming God's provision out loud in front of your kids, your spouse, or your own anxious heart.
Contentment is not a destination, it's a daily path. It's not discovered in perfect circumstances, but in a surrendered heart. When we learn to say, "Jesus, You are enough," we discover that true abundance is not tied to income; it's tethered to our Shepherd. And if you want to go deeper into what it looks like to choose contentment each day, "Our Ultimate Treasure" was written with that very purpose in mind. It's a 21-day devotional designed to help you loosen your grip on the things of this world and grow in your trust in the One who provides everything you truly need. You can pick up your copy of "Our Ultimate Treasure" today at faithfi.com/shop. And if you'd like to place a bulk order for your church or small group, we offer discounts as well. That's faithfi.com/shop.
Remember, contentment doesn't mean we stop planning, pursuing goals, or enjoying the good gifts He provides. It means those things no longer have to carry the weight of satisfying our souls. We can hold them with open hands because our security rests somewhere far better. In a world constantly whispering "more," Jesus invites us to rest in Him and say, "I have enough, because He is enough." That's real contentment, and it's available to every believer who chooses to trust the Shepherd who never leaves and never forsakes.
We'll be right back with your questions after this. Stick around.
SEGMENT 2
Rob West: Great to have you with us today on Faith and Finance on American Family Radio. I'm Rob West. Hey, don't call in today; our team is away from the studio, but we did line up some questions that we will get to, and I'm confident you will enjoy them. You know, we hear from so many of you that tell us that God is at work through this ministry in your life, and we're so grateful. If you want to support our work here at Faith and Finance, the easiest way to do that is for you to become a FaithFi partner. Just head to faithfi.com and click "give," and as a way of encouraging you in your stewardship journey, we'll send you all kinds of resources every quarter. Just go to faithfi.com/give.
Rob West: Let's see, we'll head to Joy, and Joy is in Chicago. Go ahead.
Joy: Yes. Thanks for taking my call. And my grandson is moving to Bali, and I'm just wondering, would it be better if he sends the money he makes home or start a bank account there?
Rob West: Hmm. Yeah. How long is he planning to be there, Joy?
Joy: Um, two years. He has a limit, his company will only take two years.
Rob West: Okay. Yeah, so if he's planning to return to the US in two years or less, it's going to be wise to keep, you know, a good bit of his savings in the US. This avoids having all of his assets exposed to the Bali banking system or currency, and that's going to make it easier to pay US bills or invest for the future. He's probably just going to want enough money in Indonesia just to cover living expenses and maybe a small emergency fund while he's there. But I would consider having him transfer excess savings beyond his living expenses and an emergency fund back to the US periodically, rather than letting a large balance accumulate overseas.
Rob West: Does that make sense?
Joy: Yes. Thank you so much.
Rob West: Yeah, you're welcome. Yeah, absolutely. It sounds like a great experience. I think he needs to check into the exchange rates and the transfer fees before moving the money, and, you know, he's just got to remember, as a US citizen, he's going to need to report and pay US taxes on his worldwide income even while he's living overseas, though there are some tax credits and so forth and exclusions depending on his situation. But I think the big idea here is just keep enough money locally there in Indonesia based on what he needs to live, but don't feel obligated to keep all of your savings overseas. I think the bulk of it should stay here and, you know, these uh the reporting and tax rules can be pretty complex, so it'd be it'd be worth him connecting with a CPA or a tax professional who really specializes in, you know, expat taxation before he makes any major decisions. But Joy, thank you for calling. Let us know if we can help further.
Rob West: Let's go to Indiana. Greg, go ahead.
Greg: Hi, Rob, love the show. Thank you. I have a question—I have a question for you about retirement. Um, so I'm currently 61, and uh, I'd like to retire in a couple of years, so I'd be 63 and my wife would be 61. And um, right now our portfolio is about 80% in pre-tax investments, so IRAs and my 401(k), and we have about 20% in Roth IRAs. And based on our living expenses and how much we're going to have to pull from our portfolio every year, um, my my advisor is basically, um, having us pull from the pre-tax accounts first. And if we do that, then we're going to be over the ACA threshold to get any subsidies. So I'm trying to figure out the best way to pay for healthcare and wondering if I should consider like a Roth IRA conversion or some way to lower that uh, what do they call it, MAGI, they call it, right?
Rob West: Yeah, the modified adjusted gross income. Yeah, it sure does. You know, and this is exactly the kind of planning opportunity you want to think about before retirement. Um, and the key really isn't managing the investments in the portfolio; it's managing taxable income, as you said, the modified adjusted gross income during the years before Medicare. So, since the ACA premium tax credits are based on income, the way you take withdrawals makes a pretty significant difference. So, if your portfolio is currently 80% pre-tax, 20% Roth, and, you know, taking all the withdrawals from the pre-tax will increase your, you know, MAGI and could therefore reduce or eliminate the ACA tax credits, I think to your point. So, it may make sense to use a combination of pre-tax and Roth contributions to manage that taxable income because those qualified Roth withdrawals are not going to increase the ACA, you know, calculation.
Uh, a Roth conversion could be beneficial, but the timing is important because the conversion increases the modified adjusted gross income in the year it's done. So doing one during the ACA years could reduce or eliminate those premium tax credits for that year as well. So, many people instead consider partial Roth conversions in the years before they retire while they're still working, only if you're in a favorable tax situation, or after you reach Medicare at age 65 when the ACA subsidies are no longer a factor. Although then you're just going to have to factor in the IRMAA on the the the additional premium on the the Medicare. So, really the timing depends on your current tax bracket while you're working, your expected retirement income, your long-term goals, and then future RMDs.
So, I I wouldn't automatically convert now just to qualify for the subsidies. I think the better approach is probably to work with, and maybe you've already got this, a tax-savvy financial planner or a CPA to project your income over the next several years and coordinate those withdrawals and any Roth conversions so you balance current tax savings, ACA ACA credits, future RMDs, and then the Medicare IRMAA and try to find the sweet spot between all of it. You're going to have to make some assumptions because we don't know future tax rates, but the value of those ACA subsidies can be substantial. So, it's worth running the numbers before you make any conversions.
Greg: Right, right. That's not complicated at all.
Rob West: No, not at all. Yeah, I mean it's just uh, you know, a day in the life, right?
Greg: Right. Okay. And and I guess the other thing that I keep thinking about is they say that you should keep your Roth accounts for later in your retirement years and not pull from that. But yeah, I'm going to have to pull from that in order to, you know, get these subsidies, so again it's a bit of a balance.
Rob West: Yeah. It it is, and I think that's where you've got to just run all the scenarios, and that's where a savvy financial planner could be great. And they have some pretty sophisticated software that can run all these scenarios for you once you plug in your current tax rate, you know, your mix of of pre-tax versus after-tax retirement accounts, your, you know, future expected income in retirement, we can plug in, you know, current tax rates um and then we can just run all kinds of scenarios. You're going to have to make some assumptions, but you can probably find that sweet spot, and then you update it every year and react accordingly.
Greg: Sure. Okay. All right, I appreciate it. Thank you so much.
Rob West: Absolutely, Greg. We appreciate your call today, sir. God bless you. Let me mention, folks, uh if you haven't checked out the FaithFi app, we'd love for you to do that. Think about this: inside the app, there is a community of stewards that are sharing best practices, asking questions, encouraging each other on their stewardship journeys, and there's no cost to participate in that. Also, all of our broadcast archives are there, and we bring together the best content in biblical finance anywhere uh in our learn tab. And then, you could also use the money management the spending plan portion if you want. It's based on Larry Burkett's uh digital envelope system. It's all in the FaithFi app. Go to faithfi.com and click "app," and you can download it today. We'll be right back with your questions. Stay with us.
SEGMENT 3
Rob West: Well, delighted to have you with us today on Faith and Finance on American Family Radio, where we apply the wisdom from God's word to your financial decisions and choices, recognizing God owns it all, we're stewards, so money is now a tool to accomplish God's purposes. Money is, keep in mind, morally neutral. It's a blessing. It was created by God to be used for good works, to enjoy, to provide for our families, to be able to create memories, to be able to support the needs of others and to give generously. It's when we make the object of our affection money and the things that money can buy, when we align our hearts toward the pursuit of wealth only for wealth's sake—well, that's when we can get awry. But when we see it as a blessing and we use it in the way it was intended, well, it can accomplish all kinds of good and, as to Scripture, it can be enjoyed, and that's the way we want to encourage you today as you think about the practical decisions and choices you're making. All right, let's try Oswego, and Lupe. How about, are you there?
Lupe: Yes, I am. Good afternoon, Rob.
Rob West: Great! How can I help you?
Lupe: Yes. Hello to you and and everyone. And, uh, just like to ask, um, for advice, um, as far as my daughter that's going to turn 20 in December. Um, uh, you know, we're trying to figure out how, um, she could start building credit—and she's not currently working right now; she just, um, got her license for a nail technician—um, but just trying to kind of trying to guide her. I feel like I am lost myself. I've been in my job for 25 years in the medical field, so I don't—she's not interested in anything like that. But I would like for her to start, you know, building her credit.
Rob West: Yes. Okay. Yeah, very good. And the goal, when you're just starting out, is to—okay. Yeah, excellent. The goal is to build positive credit history while avoiding debt. And so we certainly don't want to take on any debt, we don't want to pay any interest, we don't want to develop that cycle of using debt to live beyond our means. And yet we recognize we live in a system that requires, or it's helpful to have, cost-effective to have, credit over time. Whether you're renting an apartment, or borrowing money to buy a car that fits into your budget—all of those things require good credit. So there's a couple of ways to go. One would be to become an authorized user on a parent's credit card. So, for instance, your card, if you have a long history of on-time payments and a low balance, or no balance because you pay it off every month, then your daughter could be added to your account to benefit from your account's history, assuming the card issuer reports authorized users to the credit bureaus, which most of them do. Now, the risk there is, even if you don't ever give her the card or she doesn't have access to charge anything, the risk is if you had a missed payment, or you had a balance that crept up over 30% of the limit—meaning you had a high credit utilization—then she would get your negative history along with the positive, so you just have to be careful there. But it is a strategy a lot of people use. The second, which is a little safer because it's, you know, separate from you, is to open a starter credit card in her own name. Could be a student card, um, you know, it could be—Capital One has some cards that are designed specifically for those with little to no credit just starting out. Could be a great option. I suspect if if she's 19, she's probably already started to get the solicitations. I wouldn't just take whatever comes in the mail; I would probably, you know, look and do some research maybe on Bankrate or NerdWallet and find out who has the best credit cards—the Savor card from Capital One was one that a lot of students use. But she's got to be very disciplined and you've got to make sure there's safeguards in place, because again, we wouldn't want to enable her to live beyond her means, not understanding the dangers of debt and get into a difficult situation. Which leads me to the third option, which again is is more safe, and that would be what's called a secured credit card. Where you simply put a certain amount on deposit with a bank—and you'd again want to research who offers the most compelling secured cards—but you put a certain amount on deposit, let's say it's $200 or $300, they give you a limit equal to what's on deposit, you charge against it with budgeted items. So let's say there was a monthly subscription that she was already planning on. She's she's going to do it anyway, and it's it's budgeted, meaning she's got the money for it. She could let that hit the secured card every month, she pays it off in full, now she's starting to get some positive credit history reporting to her credit file, and the nice part is that because it's secured, there's no risk. Because worst case, she charges up to the limit, $200, she's unable to pay it—well, they're just going to take the money on deposit, pay it off, and she's done. And so it's secured by the balance of the deposit, which just means there's no risk of her charging money beyond what she has the ability to pay. So if she had, let's say, one card, either secured or unsecured, with a small, recurring expense, like gas or a streaming subscription, and she paid the statement balance in full every month, she would pay no interest, she'd keep low utilization—meaning the balance versus the limit—and then, uh, she would over time begin to build some credit history. But let me stop there and just get your thoughts on those ideas.
Lupe: Oh, I really like, yeah, I really like and very helpful with those three ideas. Um, I was considering adding her on, possibly on my credit card. Um, even though they are asking me for her Social Security number, um...
Rob West: Yes.
Lupe: Is that something that I do need to give, like besides her name and our home address, which she still currently lives at home? Um, is that something safe to give over the phone, um, her Social Security number? And is that necessary?
Rob West: It is only—it is necessary, and it can be safe. So it's necessary, meaning if she's going to be added as an authorized user and you've weighed the considerations I mentioned about all the history reporting, um, then yes, you would have to give them her Social. And it is safe so long as you know who you're talking to, meaning you initiated the call to your credit card company using the phone number on the back of the card, not somebody calling you and claiming to be from your credit card company. But yes, as long as you initiate it, you know you're calling the right company, uh, then yes, you could give them that Social and uh add her as an authorized user. So, Lupe, I hope that helps. You sound like a great mom. Hey, stay on the line; I want to send you a resource to pass along to her that I think will be a real blessing. It's called Open Hands Finance. We'll be right back.
SEGMENT 4
Rob West: Great to have you with us today on Faith and Finance on American Family Radio. I'm Rob West. Our team is not here today, so let me just remind you not to call in, but I will also remind you that we have some great questions that we lined up in advance. So let's go down to Florida, Martha. How can I help?
Martha: Hi. Thank you for having me on, and I really appreciate your show. I've learned a lot listening over the years. My life is—well, thank you, Martha. I inherited land in 2003 from my parents' trust. Uh I sold some over the years, but I sold the last of it in 2025. I've I've been late on filing my taxes, which is costing me, but um I'm working on it with an accountant. Uh I was apparently the the tax, the accountant has come up with is a lot more than I thought I would owe. I was thinking that with my donations and the um amount that is not included because of an inheritance would cut the taxes way down, but it's still quite a bit. So I wanted to know, does the inheritance waiver apply to the amount after I sell it after I inherited it? I know there's capital gains tax based on the price it was when I got it and what it is now. But does the inheritance waiver help me at all now?
Rob West: Yeah. So because you inherited this back in uh 2003, I mean there's a a misconception around, you know, if you inherit more than a certain amount, you automatically owe tax. That's not how it works. There is no federal inheritance tax. There's a a federal estate tax that's due with estates of a certain size. I mean for 2026, that's a state estate is larger than $15 million. Uh but inherited real estate uh is not taxable to the in the person inheriting it, and it does receive receive that step-up in basis. So if you later sell it, which you've done, you owe the capital gains tax only on the appreciation after the date of death. So that would be, you know, what you would have going on here where you'd verify the cost basis um and and that basically is what the value was in 2003, and then you'd include all the selling costs and any capital improvements. And then if the property was sold, um, you know, you would uh have ultimately whatever that gain is that would be subject to capital gains tax. Be about 15% of Yeah, I mean what is the total gain that you realized for your portion?
Martha: Well, it started out being uh appraised at around 10,000 an acre, and it has come up to one piece sold for uh 24 an acre, and the other sold for 30 an acre, and there were uh about 20 24 acres all together.
Rob West: Okay, but do you know what the total capital gain is that you realized?
Martha: Um, you mean the sale price?
Rob West: Sale price minus the cost basis.
Martha: I haven't done that yet. The accountant's working on that.
Rob West: Okay. Yeah, so for 2025, if that's the year you sold it, last year, the long-term capital gains rates were 0, 15, and 20%. Do you file uh as a single person?
Martha: Oh, yes.
Rob West: Single?
Martha: Yep.
Rob West: Okay. Yes. So, um, you know, if you have a a total capital gain plus your ordinary income, your taxable income, the total of those two together, uh if it's between 90 uh or 48,533,000, uh which is where most people would fall, because again, it's the capital gain plus your income, then it's 15% on the gain.
Martha: So that's a reasonable amount what I'm paying then. Uh I should have planned bet. Yeah, sorry, I know. Yeah. Should have planned.
Rob West: Yeah. So have you already spent that money or allocated it somewhere?
Martha: Well, I have uh some allocated for that, but I thought my donations giving 10%, you know, over the years uh and that year would cover it, somehow I thought, but I should have paid 15% instead of 10% on donations.
Rob West: Yeah. Um, so yeah, donations made in the year of the capital gain, uh, you know, could affect your total taxable income assuming assuming you itemize, uh, but it's not a direct offset. Um, so, you know, if you make donations in the same year of a large capital gain, it can be effective, but again, it's going to reduce your overall tax bill by reducing your taxable income in that year, which is not a direct offset for the capital gain itself. So those two things, you know, are unrelated. Now, if you gave enough such that you reduced your taxable income to offset the gain, well, that that may work, but uh you would just have to get with your CPA and see what kind of impact your contribution is going to make uh on your taxable income and whether you're going to owe more than you've set aside in the first place.
Martha: Right. Okay. It's a hard pill to swallow, but the Lord will take care of it, right?
Rob West: He will. And there are options here. You know, you can connect or have your CPA connect with the IRS and work on a payment plan or something like that. This does come up regularly, and the IRS is ready for it, and they're probably more accommodating than than people give them credit for with these kinds of things. And so just know you're not going to have to write that check all at once, and if you can't, there are other ways to approach it. So, uh thanks for your call today, Martha. All the best to you. Illinois is where we're headed next. Gwendolyn, how can I help?
Gwendolyn: Hi. Um, I have two questions. Um, I'm interested in knowing if there's a product you can recommend that would combine both life insurance and long-term care benefit and also, would this product can it be combined with an investment aspect or would you have to buy a separate product for an investment along with an insurance?
Rob West: Yeah. Uh, great question and, you know, having uh a hybrid policy, um, can be an effective solution. It's not the right fit for everyone. Basically, you've got three approaches. You've got a traditional long-term care insurance policy, which is specifically for long-term care, and if you ever need care, you'll receive the benefit as long as you qualify, uh based on a a certain number of what's called activities of daily living that you cannot function or perform. And then the second option is life insurance with a long-term care rider, which is what you're talking about, that's a hybrid policy. So if you need the long-term care, you get part of the death benefit to help pay for those expenses, um, and if you you know, ever uh if you never need it, your beneficiaries receive the life insurance death benefit. So, you know, this addresses the concern of use it or lose it. And then there's, you know, other types of uh asset-based uh policies as well if you're not going to sell fund. And ultimately it comes down to your overall health and insurability and whether you have have enough assets to self-insure, um, but the hybrid policy can be a very effective tool as long as you need the the true life insurance alongside it. Let's do this. I'm up against a break. Uh I'll give you some other thoughts and address the investment component right after the break. Stay with us.
SEGMENT 5
Rob West: I'm grateful to have you with us today on Faith and Finance here on American Family Radio. Sit back and enjoy. We're going to cover a lot of ground here in our final segment. We'll get to as many calls as we can. Before the break, we were talking to Gwendolyn in Illinois. She's wondering about long-term care insurance combined with life insurance and then separately whether there's such a thing that includes both of those plus an investment.
Let's go back to when you would want straight long-term care insurance or versus a hybrid policy, life insurance plus a long-term care insurance rider. And keep in mind, before we even get to that, you know, 70% of Americans 65 and older will need long-term care for some period of time, usually two to three years, and full nursing care is expensive. It can run $100,000 a year or more. And so if if there's a risk, an unknown risk that you want to mitigate in this season of life that could erode your assets, the need for expensive and ongoing long-term care is probably up near the top of the list, if not at the top of the list. But these policies are expensive, they have increases, and, you know, a lot of people just struggle to pay for them. And a lot of people struggle with the use-it-or-lose-it, meaning, wait a minute, if I pay all this money in and I never need it, I don't get anything for it? Well, that's right, kind of like your car insurance if you don't have a wreck or your term life insurance if you don't pass away, you're offsetting the risk.
Now, who would be best suited for a traditional, kind of straight long-term care insurance product? Well, that would be somebody whose primary concern is paying for the future long-term care expenses they may have, and you want the most long-term care coverage per premium dollar because you're not adding any other features in. And, you know, you have sufficient retirement assets, but typically this is someone who wants to protect them from the high cost of extended care. Meaning, yeah, we can reasonably see how we can fund our lifestyle for the rest of our lives based on what we've saved, but we know there is this chance that if we needed extended care and it was expensive, that that could be a problem, and so therefore we're going to add this long-term care insurance policy. It's less ideal, ideal, if you don't like the idea that you may never use the policy and therefore the money is, quote-unquote, lost, or you have difficulty qualifying medically.
Now, who would want a hybrid life insurance plus long-term care? Well, that's the person that says, "I don't want to pay premiums and get nothing back if I don't need care." Those who have need for permanent life insurance—who who is that? Well, that'd be a parent of a child with special needs that needs lifelong financial support, a business owner who needs funding for a buy-sell agreement, people with significant estates, a lifelong dependent, high-income earners who have already maximized other tax-advantaged savings like 401(k)s or IRAs. Otherwise, most people don't need permanent life insurance. That's why we recommend generally that you just buy term insurance while you're working, save in your 401(k), and then you drop the insurance when you get to retirement. And again, if you have sufficient retirement assets, but you're worried about expensive long-term care, you'd add a straight long-term care insurance policy at that point.
All right, now the final piece, Gwendolyn, was what about an investment component? Yes, some permanent life insurance policies like index universal life, IULs, and variable universal life, VULs, can accumulate cash value and could have a long-term care insurance rider. However, I generally don't recommend buying life insurance as an investment. Now, I've thrown a lot at you there. Is that helpful?
Gwendolyn: Wow. Yes. So you don't recommend the index—people go with that idea, index universal life, because it's something sitting there that's earning, but [cough] can be used.
Rob West: Yeah.
Gwendolyn: If need be.
Rob West: Yes.
Gwendolyn: And then paid back in, too, if there's a need to borrow against it.
Rob West: Yeah, I mean a lot of people will say that's the, you know, the benefit is you've got the permanent life insurance, if it's properly funded, the tax-deferred cash value growth, you've got the downside protection, and you can access through policy loans if it's structured properly, tax-free access to cash. Um, but they're complex, they're expensive, the growth is capped, which is where most of the long-term annualized growth of an investment portfolio comes in the strong up years, but you don't get that in these products because you have to give that to the insurance company once you get above the cap. If the policy is underfunded because rising insurance costs later in life reduce the cash value or causes it to lapse, so there's just a lot of qualifiers there, and and at the end of the day, I just find that for most people it's not the best solution.
Gwendolyn: Oh, okay.
Rob West: Yeah.
Gwendolyn: So just continue to invest in an IRA or some a Roth IRA, a traditional IRA, uh, and by term, and then once you get to be 65, though, you know, your term insurance starts to increase with every ring of age.
Rob West: But you don't need it at that point because you've got the retirement assets, so therefore there is no risk because no one's depending upon you for your income at that point. So that insurance is no longer necessary. It's kind of like if you sold your car, you wouldn't need car insurance. Uh, well, if you if you stop working, you don't need insurance to cover the risk of the loss of income. And at that point, your only risk is, or a risk is, the primary one is the need for extended long-term care, and again, if you can afford it, that's where a long-term care insurance policy can be helpful. So, hopefully this has given you a few things to think about, Gwendolyn. Thanks for your call today.
Rob West: Uh, let's go to Florida, Richard. Go ahead.
Richard: Yeah, I just want to know your thoughts, um, regarding somebody who has equity in the home and maybe they're thinking about getting a home equity line of credit. Um, I've seen some new products called home equity um arrangements versus a home equity line of credit.
Rob West: Yeah. Yeah, I don't like the HEA, it's a home equity agreement, uh, and the reason is you lose uh your home's future appreciation. So, you know, with an HEA, if your home appreciates significantly, you're giving up a share of that appreciation, which can become much more expensive than paying interest on a loan. Uh, and the contracts are complex, so it's important to understand what you're getting yourself into and how the payoff is calculated. Um, so, you know, neither is inherently good or bad; they're different tools, but I would just far prefer, uh, you know, the home equity line of credit, uh, which is for someone who has good credit, sufficient income to qualify, and you have short- to medium-term borrowing needs, you know, and I like them most often for home improvements, certainly not lifestyle spending. But, you know, the the benefit is it's secured by your home, you retain 100% ownership of your home's future appreciation, so if your home value rises—which historically homes have risen in value consistently—all of that increase belongs to you.
Richard: All right, got it. Appreciate it.
Rob West: Absolutely. Thanks for your call today, Richard. God bless you. Uh, let's see, we've got uh yeah, time for one more call. Let's go to Georgia, Anna. How can I help?
Anna: My husband and I are about to give up um, so that full-time nursing student for one year. And because of the way that we have lived, um, we just haven't spent, um, and so we've managed over the course of our marriage, um, on salaries of about 30,000 to save up. And so we are looking towards this coming year, because I got into my dream school, um, it will be an accelerated program, and we will be paying full tuition because it's out of state and living off of our savings for the year.
Rob West: Yes. All right. Uh, is your husband working?
Anna: No. Um, well, we we homestead, so basically what we do is he works our land, um, so that we can live off of our dairy, meat, and garden, um, and not not spend. Um, so his job is kind of eliminating our expenses.
Rob West: Yeah. Uh and then how are you going to handle the the schooling being out of state?
Anna: Um, well, it's the only reason it's out of state is because it's the, um, uh we're kind of on the border, so we don't have another one close to us. I see. Okay. Um, so it's it's not like far away.
Rob West: Yeah. Very good. Well, I love this. I mean, congratulations. You got into your dream school, your your husband obviously is a hard worker, wants you to be able to pursue your dream. That's amazing. And I love that you're thinking about this now before you, you know, just kind of go full head you know ahead headfirst into this new opportunity. Um, it can be a wonderful investment in your future, but you want to make sure you're not creating a financial crisis in the process. So, you know, really it comes down to what will it cost to live for the next year, and I love the fact that your expenses are are minimal because of what your husband is doing to, uh, produce, you know, for you all to live off of the land there that you have. Uh, the second would be how much cash do you have available, and then ultimately, you know, what is your backup plan if school takes longer or an unexpected expense comes up, uh, things like that. Um, so just given what you know about your lifestyle and your expenses and your savings, kind of where would that leave you after you finish school? Uh, would you have exhausted your savings? Would you be able to uh still have some some you know some emergency savings, or where would you be?
Anna: We think that we will still have um savings. Um, it'll be about 35 38,000, and from what we're looking at now, we haven't used we've saved each year that I've worked, so we don't seem to be using up um my full 28,000 salary each year. Um, and so we would probably still have approximately uh $40,000.
Rob West: Okay. So once you graduate, you'd still have 40,000 in the bank based on your calculations? The the best I can just off the cuff.
Okay. Yeah. Well, I mean I think that's the key, as long as you've run the numbers, you know what it's going to cost you both for your lifestyle spending plus your college uh tuition, your uh to get the degree, and, you know, any other costs, and as long as you just don't squeeze yourself too much financially, I'm on board with this. What a what a gift and a blessing that you and your husband can do this together.
Unfortunately, that's going to do it for us. Listen, folks, always appreciate you having uh you stopping by on the program. I hope today you found something helpful and encouraging. I hope above all else we pointed you back to Jesus, because here's the reality: money is a good gift, it's a tool, we want to steward it wisely, hold it loosely, yes, enjoy it and provide, but also use it to uh further God's purposes through our investments and our generosity. Listen, I couldn't do this without my amazing team each day, Devin Patrick, producer, uh Sandy, Patty, Taylor, and everybody here at FaithFi that makes this possible. Come back and join us next time. We'll see you then. Bye-bye.
If there’s one word that defines our culture, it’s “more.” More upgrades, more comfort, more square footage. Yet with all that “more,” so many of us feel less satisfied than ever. That’s because contentment doesn’t come from what’s next—it’s shaped in the heart right where we are. On this Faith & Finance on AFR, Rob West will talk about choosing contentment—not as something accidental, but something Scripture says we can learn. Then, it’s on to calls.
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