The Parable of The Shrewd Fiduciary: Income Tax

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Answer the question had ever since read about the story. The parable of the shrewd fiduciary and how and when you look at Luke 16 there is this very peculiar story, you know, for those of us who have read it before, I'm sure you like me like really Jesus is saying this guy did good, stole from his boss. Let's read through this and and think about what may be Jesus really is teaching it will work on this. The parable of the wise fiduciary, but you may be coming the shrewd, shrewd fiduciary, but first may need to know what fiduciary means and soils that have one right in my certified financial planner/fiduciary on trial salons within the definition of fiduciary.

It means like in my occupation that I put my clients ahead of myself in terms of making decisions. As you know if something is asked to be better for my clients than it is for me or they need to be in first order and as opposed to suitability and suitability doesn't have anything to do with me and my interests in this thing is just means that I'm going to sell them something that is suitable for them in the eyes of the law hearts of this bear with me a minute.

As I read this because you can get it without him the story of Mrs. from Jesus that we know that Ellison said he also said the disciples. There was a rich man who had a manager and charges were brought to him that this man is wasting his possessions, meaning the master's possessions were being wasted. I think about that. Keep that in mind that this guy was wasting his masters possessions and he called in many said to them, what is this I hear about you turn in the accounts of your management for you can no longer be my manager. In other words, you're fired and the manager said to himself, what shall I do, since my masters taking the management away from me. I'm not strong enough to dig and I'm ashamed to beg. I decided to do. He had an idea. He had a thought, so that when I'm removed for management people may receive me into their houses.

What can I do to make my client so that they love me so summoning his master's debtors one by one. He said to him hey how much the all my master. He said 100 measures was said to them, I'll take your bill sit down quickly and right 50 and he said to another, how much do you owe he said hundred measures of wheat, he said, well, take your bill and make it down to 50 right begin the picture that here comes the part that blows me away because the master now this is first aid you look at it.

Luke 16. Eight it says right here. The master commended the dishonest manager what if it says for his shrewdness and then says for the sons of this world are more shrewd in dealing with their own generation than the sons of light and I tell you, make friends for yourselves by means of unrighteous well so that when it fails they may receive you into eternal dwellings. So here there is a very curious story there right there, but it begins cons with the idea of we tend to waste our wealth and what we talked about today in income taxes really for a lot of folks they're just not dealing shrewd and you might remember Jesus in Matthew says where he says you know you're supposed to be as shrewd as snakes and as innocent as doves. So that's the idea here today on right the shrewd fiduciary will yeah and so the you know I'm not reading in that story did God is telling us to cheat on your taxes. Okay, now I'm sure Jason stopped on the end with the connection that I'm getting is is there is value in shrewdness as were dealing with the resources that are of this world okay and were not to waste them and paying unnecessary taxes or paying taxes because we haven't planned in the smart way is wasting and if the very thing if you don't need the resources or you don't need the money, certainly the church could use it. The kingdom could use it.

The poor could use it so being shrewd in how you deal with paying your US taxes in your state income taxes and your property taxes but were in pretty much be talking about federal income taxes here and in the state of North Carolina those taxes as most states there mirrored the federal income tax code and when you're in retirement. You have more control over your receipt of taxable income than you did when you were working in your working when your employer wants to give you a check to just take it.

That was confusing to me the first time you sent that to me but that I began to really consider because you know right now. Obviously Turner Broadcasting is in charge of my end and I don't necessarily control you know by month what I can get what I'm not to get its common as it goes and you get to the end of the year.

You have a certain amount of income is pretty predictable and if you needed to buy something or you had some emergency, poor, need to replace others. A large expense. You you really have choices. If you have savings you could pull savings or you can go to the bank get a loan. Just put a down payment and you can spread over several year.

A lot of retirees don't operate that way is they don't want to get loan and that's pretty good smarts is not to be borrowing money in retirement because so when you have a large expenditure come up, and they will come up in retirement. You don't want to all of a sudden make a big distribution from your IRA and this can put you into gigantic human tax brackets and it's also good to make your Social Security either taxable more or where it wasn't taxable so you have control over how much income your reporting by how you make withdrawals from your retirement accounts, and where those withdrawals felt correct. What were talking about here is being smart or being shrewd if we will use that word in terms of paying taxes and all of retirement and planning. We most folks don't do this and it's part of our financial planning is the last chapter in the seven worries and in the complete kernel guide to planning for living in retirement. The book I wrote, and then also the book we have the workbook. It's the last chapter, so it's not like retreating it last because it's a factor in everything we do. So as we put together a retirement plan to redo that together for you to have an eye toward taxes. In most folks. Their goal is to pay the least amount taxes they can in retirement, fright, and idea of spikes and keeping those somewhat to a minimum. If at all possible, and in the Army. I got several stories in the books. The stories of clients that all of a sudden there children go through a very difficult union called disaster through something where all of a sudden working to go to the only place that there's money is mom and dad. You know that money he had set aside for me in my IRA. I really could use some of it now and parents will come to their aid and so all of a sudden they need $50,000 and then you come to me and you say well we got drought 80 of the IRA. If that's the place were going for it because without pay 30 in taxes to net 50 and then now we fold 80 grand out of IRA. That's gonna get added on top of all the other income we have year to year and so we might have 100 and 1000 and 2000 and $30,000 income plot. Say hi to you with that scenario. Okay, I need 50 grand. My kids are no their lives in a house, and I've got no I feel obligated, what would you recommend will meet soon as you bring me the situation and this is the first time of talk to you then I'm going to recommend that you withdraw the 80 grand pay the 30 in taxes and pay the extra in taxes and take the 50 grand and get your kids when it's hard. I'm just curious because I'm dissident I analyzing the situation going what I be better off to go borrow the money, possibly that would be another alternative.

Okay I'm a let you bring that up. I'm not. I come out with a recommendation that that it might be smarter if you truly needed the demo to borrow like for the $50,000 interest would be a lot less than 30 grand on think it would. Well, the interest, but you're going to have to pay, how you pay back when HME get a loan I get payback so she get a loan for 50 grand. You have to pay it back out of the IRA so you don't have to withdraw that I could use that I can have a minimum distribution on so coming out anyway dependent on how you looking at it depends on how much they were taking that that's a possible strata survey refinanced it over five years then were probably going to have to drive 16 grand a year for five years and pay six grand and taxes on top of the 10 that we keep that we make the payments with so you can't escape the tax member that might be a little more prudent. It would it would flatten out the spike but anyway shake it when you pull money out of your IRA, you gonna have pay taxes on. And if you're pulling the money out to make the payments as to have to do we want to do is come up with a predictable stream of income for the whole of your retirement. We have put inflation in here got a pair of unforeseen expenses and were have a certain amount of those in a budget so you saw me five years before that I needed the 50 grand paddle account and I were talking about the first of all I'm going to have to point out to you and I will point out to you that you might need 50 grand for some unforeseen amount mean we you've got all the savings and by then I'm gonna learn that you have $280,000 in your IRA and I'm also to learn that you only got $7000 in your savings account so right off the bat. I mean look at this guy concerns me because most of the money that this person has is in the IRA. So if we ever have to jump at a large amount of money all at once is controllable retirement plan and our tax planning on wax so right off the bat on point this out to you and my goal is going to be to make some systematic withdrawals from this IRA. Maybe even before our MDs are in excess in excess of armed dues which are required minimum distribution in drought more of it, pay the taxes and then add to that seven grants were going to build up a savings account over time to where we can get this balance a little better that hopefully we can grow your IRA. In addition, we can grow your savings account so I'm hoping you're here in this shrewd fiduciary today on finishing well, a certified financial planner Hans Giles.

Of course, all this is based on the book the complete cargo guide to planning for living in retirement available@thewebsitecargoguide.com and move the word that we talked about today just told you the last one right income taxes and so you can download that PDF or free disk of the website and there it is on the seven were stabbed or contact Hans and tell him I would like the book when we come back and have more shrewdness and fiduciary myth while coming up on it was out of Hans and I would love to take our show on the road to your church, Sunday school, Christian or civic group. There's a chance for you to advance the kingdom through financial resources by leveraging Hans expertise and qualified charitable contributions veterans aid and attendance IRA Social Security care and long-term care. Just go to cargo guide.com and contact Tom to schedule a live recording of finishing well or civic group contacts on cargo guide.com that's cargo guide.com welcome back to finishing well was certified and fiduciary.

Financial planner Hans child with today show, you know, bringing it out is left at this party could happen. I added here and then I lost it, but I will have the second the parable of the shrewd fiduciary and end I'm sure like me that is really a challenging passage of Scripture like what would Jesus really getting at what what was he really at and also often is the case, he's going way beyond what you think about the money, and he's trying to get to the kingdom and is anything look the monies going away.

It's is going to be burned up all the gold all that all the all the cash it it's going away.

So why not use that one of the shrewd like the people of the world are and use that to build up equity in those people that that's important to write taken the lunch. Let your grandchildren and grandchildren for set up a state of find ways to get their attention that this this is you know what it is this mammon, but it it you know it it it has ways of looking at the feed the poor, right it it there's also some ways you can make that look like a kingdom thing and that's what Jesus is getting at is the fruit and and realize what people's motivations are and and help them determine that and say wow. There's things that are a lot more important than that and and this can be used to point people in that direction. Like in this case the unjust or you eat. Here's the thing I can say that I'm doing. People always want to know what I'm doing okay and I'm waiting till 70 unless something drastically changes start my Social Security mean is going to be up big amount and then my wife will get half that amount.

She's can be on my Social Security Sabrina begin the basal security check and then all my IRA money which I just kept aside all this time and grown, it is all going to be in a Roth by then and so I'm a be able to draw for that and live off of that tax-free and ice and converting it from a traditional IRA to a Roth them doing that before the Medicare years were in the neck of the head with her mother and doing before the Social Security years so that I'm not can be hit with taxes on my Social Security check Simon to be living off of Social Security tax-free.

And I will be living off of Roth income that I'm to be drawn down tax-free and then I would have everything paid for some like a heavy dance and the money that I have saved that is not nonqualified money does not IRA money. Most of that is in life insurance and then I may have some other money that's available to me.

I just always borrow from that and my plan is to live tax-free and return. That's true, it seeks to people sometime in the and all that planning can come. You know, in the in real handy, but those people that are caught there. Now there's this cute CDs and there's other ways to get there. Oh sure any of if I don't have all my Roth she's me all my IRA converted to a Roth, then the remainder I that I am faced minimum distributions are give to the church under two CDs by which those are still setting up the subtle size tax-free qualified charitable distribution right and so if you have a regular traditional IRA and you have to make a minimum distribution or even any distribution right. You can do it in the form of those two CDs will you have to be 70 1/2. But again, if were talking to you talking about planning in your 60 years old like me.

I mean the sort about your parents or your in-laws is, is that a lot of a lot of older folks are stockpiling money and IRA in their given to the church out of their regular money and they could reverse all of that they could they could leave the regular money that they're not making much interest on this where it is or they could give some of that to you now are they could spend some of it and they could give her PCD out of their IRA and then they could also name the church to be the beneficiary of the IRA and then make give the money, that's not tax money to the kids if I'm given a choice to inherit something new. I want IRA money that I got pay taxes on or do I want not IRA money just regular saving so a lot of folks just to have the stuff mixed up and what what we work to do with people's sitdown. First, find out what's important to you okay and in for some people their tax bill is just not of high importance for other people is the most important thing in the world and angers him every dollar they pay in it and it is all bunch people in between. So uniformity financial planning, want to find out what's important to you and how much money you need and want to live off of how much you got and then plan it out and for most folks that's planning it out in such a way that you pay the minimum taxes getting back to and obviously leveraging all you can to abuse the Kent yeah and in and of both. Obviously, given the kingdom to the church like everything that also this state that you leave your children, which in its own way, promotes the kingdom give them an opportunity to give to the church gives them an opportunity to learn how to be charitable and is listen. You can give money to your kids and you can put it in a Roth IRA for them as long as they have service income and they're not doing a Roth IRA themselves which love people learn you can put 6000 bucks in each year. Grandchildren 3/18 and they have some type of work that they're spending that money but you could set up a Roth IRA so you could, there's lots of ways to give money to people give money to the church and so I just stockpiling money in an IRA and we know this is in the IRA section, but I'm just coming back from the slot conference which I go to twice a year and just full of ideas is a lot better uses for money than paying taxes for government and if you think your getting one up on the government in Vienna wise steward by stockpiling money in an IRA and avoiding taxes and the courage or not, because you're gonna die and leave that money to your kids or grandkids and some of might stretch the distributions out but a lot of words can cash it in, pay the taxes and you know or they might come to you, very much in need and you're going to have to withdraw from that thing to take care of them. I'd much rather see you do this in a in a logical thought out, converted men family was in a Roth if you do the whole conversion thing you can pull 50 grand out of Iraq.

They have built former seven maybe they can pay you back on Obviously years and am completely got a different strategy. As far as how your hand on the taxes and you'd mentioned again. Life insurance is in your own situation rather than an given the IRA.

If you had money to the church continued to talk about that stuff will yeah I mean so, so, life insurance comes in a lot of places in the human in retirement and estate planning me for starters, it's a great place to squirrel money by over finding life insurance, which I did have done for many years and then having way more cash value in their than you need, and there's maximum that you can pay depending on how big the policy is and then paying that maximum if you can afford to do it in preparation so if you stockpile money in a life insurance policy. You can later get that tax-free if you need to me you can do it not only tax-free but you can do it you can make a loan from it interest-free. It's complicated to get into that, but there's a there's a strategy most wealthy people that I know own lots of life insurance. That's why always have to laugh somebody's out there writing in the newspaper or talking on the radio and over there on TV and they're saying life insurances is run by will why these people that have wealth whether they have so much okay and in its it's because it's it's it's it's a wonderful product for sheltering tax-free money. So if I never touched that life insurance money that there's a pretty good chance that that won't happen in my retirement then is this going to be a huge sum, the sky go tax-free to my wife or my kids and that's much better than inheriting an IRA and it'll be them. Then I have to converted and assisting US dollars is be a big probably wire transfer status and check. I know that there's gotta be a strategy with long-term care in Texas as well and we had discussed that so and you just came back from Ed slot. I'm curious what you may have the oh yeah, I mean a just so I can marry the subject.

I was just in with life insurance is that you can buy a life insurance policy that will pay for long-term care. If you need if you don't need long-term care then it'll pay out the money that you paid into it. Plus a bunch more to your beneficiaries is kindly use it or lose it. Where's regular long-term care you're going to if you pay premiums for all the years and then you don't use it when you're not gonna know but you have effectively got nothing out of it with life insurance, long-term care, you can you can get the long-term care benefit if you needed but if you don't need, or you don't need all of it is can be a nice death benefit because tax-free to your kids so that might be a strategy as I'm sitting there listening thinking wow you got into your 55 and you got a bunch money in a traditional IRA you could begin to distribute that money into a life insurance policy right that would hold in a way to 59 1/2 for coming and I can do it in a big chunk K and I want to spike year but yeah we could start taking in a manner that can account for the taxes you gotta pay so the net amount paying a premium into a life insurance policy that is can build up a cash value.

We set up overfunded and then is can grow tax-deferred. It can be borrowed against tax-free and then ultimately could be paid as a death benefit tax-free or could be used for long-term care, tax-free treatment, I mean I'm sure the adjuster. I it's interesting to me that the master commended this guy. It was like I've been waiting to see the light human wasted my money but now all of a sudden know when things get tight, you learn the value of the dollar Syrian so now you're worth having your no longer worthless. We just need a little values guidance here. We needed a 20 to channel that shrewdness into a fiduciary. Were you putting my needs as the master head to your needs for God.

Right right right well did I hate once again. We got more so than we got time at the we disconnect ascended to the book, the complete cardinal guides to planning for living in retirement I this is the last chapter on taxes, income taxes so and you could if you email me or you send me a message, a kernel guide.com. I'll be glad to send the book out to you. No charge to ask right thing and also I'm sure you you can see the benefit of of actually bringing Hans into your strategizing at an earlier age when you can really and I take whatever resources, if you got a $50,000 IR $20,000 I write whatever you have no leverage it for the kingdom. Why not you know bring were many counselors plan succeed. You can reach him at Cardinal guy. Don't forget the guy that Ricardo Cardinal guy thank you thank you. We hope you enjoyed finishing well north you by Cardinal guy.com visit Cardinal guy.com for free downloads of the show previous shows on topics such as Social Security, Medicare and IRAs long-term care life insurance and investments and taxes as well as non-best-selling mood complete cardinal guide to planning for and living in retirement and the Lord once again for dozens of free resources shows what you get. Hans will Cardinal guy.com, comment or suggestion for future shows and click on the finishing well radio show on the website and send us a word. Again, that's cardinal guide.com Cardinal guy.com