Planning for retirement is perplexing and complex to many. The goal is to provide a framework, a way of thinking about, and a way to successfully plan for retirement to show “double honor” to those who labor as ministers. When approaching the issue of retirement, there is an interdependence between the church and the minister. When they are both in tune, the resulting music will be beautiful. When they are not, the discord will be painfully evident.
In a recent webinar, , and in an by the same name, ECFA lays out the roles of both the church and the minister, best practices to do what is right before God and man, and important concepts for practical application.
In this post, we’ll highlight the first four essentials from the webinar and eBook.
Essential 1: Understand the Stages of Retirement
The stages of retirement can be broken down into three main categories. While the precise ages may vary from person to person, each of these stages is unique and packed with Kingdom-building opportunities.
- Active Application (67-77) – slowing down a bit, but still productive in leadership, bringing energy and insight to any endeavor
- Insightful Stewardship (78-87) – bringing wisdom and insight through mentorship; leadership roles are collaborative
- Reflective Sharing (Ages 88+) – reflecting on what God has done, and sharing that with those in your sphere of influence
Essential 2: Help Staff and Ministers Understand the Need
It is important to guide your church and its leadership to develop a well thought out, financially sound, and tax conscious retirement plan for ministers and staff. Factors to consider include longevity (life expectancy), cost, and future service (what God will call each person to in the stages of their retirement). The two biggest expenses to plan for are healthcare and housing.
Essential 3: Assess the Church’s Role in Retirement
As stewards of God’s resources, churches have a measure of responsibility for the long-term well-being of our Christian brothers and sisters, ministers, and staff. Churches are encouraged to:
- Provide tax-advantageous opportunities to save
- Assist by making contributions to the plans available
- Encourage participation and preparation for both ministers and staff
Essential 4: Select the Right Vendor
For ministers not already covered under a denominational plan, it is critical to work with a vendor that specializes in church retirement plans. It is key that the vendor understands how to utilize the housing allowance as it relates to contributions to the retirement plan, as well as offering values-based investments (funds that align with biblical values). It is also imperative to have access to an IRS approved plan document to ensure that the plan meets all IRS requirements.
Please watch this blog for Part 2 on this topic, which will cover Essentials 5-8 from the ECFA webinar and eBook 8 Essentials of Retirement Planning for Ministers and Churches.
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