Can pastors ever retire?

Does a retirement plan for pastors truly exist? Can pastors ever retire? If you are serving as a pastor or on staff at your local congregation, you may be wondering if you will ever be able to retire. Most likely you are making a modest income, and your bank account is perhaps not as robust as you would like. We understand those realities, but we also hope you are adequately preparing for retirement because retirement will indeed come at some point. Therefore, pastor retirement planning does indeed exist!

We at Servant Solutions believe in the biblical notion of reducing one’s work load as we age, but not fully retiring from pouring life and wisdom into others coming along behind us in our sphere of influence. It is a scientific fact that people are living much longer now. Many individuals will spend 20 - 30% of their lives in retirement which can mean 20 – 30 years. That is a long time to live without actively bringing in income. While retirement is a great opportunity to pour life into others, taking proper steps now to be financially prepared for the future is very wise.

You may have heard of or be familiar with what is called a “403(b) Retirement Plan.” This IRS designation is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations such as hospitals, and employees of churches, such as ministers. 

Servant Solutions is a 403(b)(9) by IRS designation, which means it is a church-sponsored plan for a tax-exempt organization. It is a defined contribution plan specifically designed for the needs of pastors and other individuals on staff at church and church-sponsored organizations. Our plan has similarities to other 403(b) and 401(k) plans, but it also offers special retirement benefits that all pastors need to be aware of. One such benefit is that retired ordained pastors can take retirement distributions designated as housing allowance. This means not only did their contribution go into their account tax-deferred, it also may come out of their account tax-free. Only 403(b)(9) plans allow this special tax savings. And remember, all employees of churches and church sponsored agencies are eligible to participate in our 403(b)(9) retirement plan, unless the organization specifically excludes them. (The employer decides which employees are eligible.)

 The following chart is helpful when comparing the Servant Solutions’ 403(b)(9) Plan to others in the marketplace. Please contact our office if you have specific questions. We would love to assist you in making wise choices today for a more robust retirement in every way!

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