Retirement does not necessarily mean the cessation of ministry activity. Rather, it simply means no longer relying on ministry to generate revenue needed to support your lifestyle. Everyone’s path to retirement will certainly look different. However, there are people like Al LaCour who have retired and can offer insights from their experience.
Al is a retired PCA pastor who also served as the National Coordinator for RUF’s ministry to international students. Al and his wife, Elaine, have been and continue to be faithful financial stewards from their first jobs to beyond retirement. By retirement, they were able to be debt-free, mortgage-free, and free to be generous givers.
For Al, stewardship means simply, “to manage the time, talents, and treasure that you are given and do not own.” Al offered four principles he used personally when planning for retirement:
1. All things work together for good
Every minister will face unique life opportunities and challenges. Some may have double incomes, some may not. Some may have inherited assets, some may not. Some may have prolonged medical issues, some may not. Ultimately, God directs your steps.
Comparison will not help you plan for retirement. Faith and counsel will. Too many pastors compare their situation to others, leading either to pride or envy. We have to trust that God knows the end from the beginning. When faced with challenges, we need to turn to God for wisdom and adjust appropriately.
2. Tithe on all income
Honor the Lord with your first fruits. Your first payment every pay period should be a tithe to the Lord. Tithe on all of your income but not on pre-tax retirement savings, at least not yet—that’s deferred income. You can tithe on it later as you take distributions from your retirement savings.
Tithe on all your current income, including your housing allowance. While it is untaxed, it should not be un-tithed as current income. Since your church members tithe all their income, you should too.
3. Be like the ant
Like the ant of Proverbs 6 works and gathers and prepares, so should we work and save and invest. If you’re taking a leaf from Al LaCour’s book, you would live solely off of your “net income.” Basically, live on anything leftover after tithes, pre-tax investments, and savings prepayments.
If you don’t regard deferred income as tithable, you have an opportunity to tithe when you retire. After you tithe, maximize your pre-tax retirement savings and investments. It’s recommended you contribute 12-15% of your income towards retirement. It could be tempting to defer retirement savings while you’re younger, but those are years you could be earning significant interest. Your contribution limits will increase during your 50s when you’re an empty nester and are in a better position to allocate more of your compensation package to fund contributions to your retirement account.
After tithing after contributing to pre-tax investments, set aside savings for prepaid expenses. This could mean writing a check to a money market savings account to save and earn interest or contributing to a health savings account for out-of-pocket expenses. Predicting payments for major or recurring expenses helps level your cash flow in heavy payment months.
You can’t predict life, but you can prepare for it. You may have to live frugally after tithing, investing, and saving, but those years don’t last forever. It’s better to save for your future before you spend in the present.
4. Seek counsel
Don’t “D.I.Y.” on your taxes, retirement, health, or estate planning. As an old saying goes, “It’s not what you know, but who you know.”
Assemble a competent life planning team: your Social Security and Medicare consultant, a CPA for tax preparation and planning, a Certified Financial Planner (CFP) to advise you how to allocate your investments, a family doctor, and an attorney for your will and health care directives.
Just as you schedule a doctor’s appointment for your annual physical, you should schedule annual checkups with all of your advisors. It’s especially important to set annual checkups with a professionally credentialed Certified Financial Planner to make sure your contributions and balances are where they need to be.
Al set goals before he retired. He knew he wanted to continue growing, but perhaps not at the same rate as before. So Al lowered his velocity and ramped up his focus. Al has reduced regular preaching and teaching and limits his committee work. He is focused on his loved ones.
Al and Elaine audited a seminary course, attend lectures, read more books, grow their minds, and grow their relationships. As long as God mercifully grants you health, retirement is a season to focus on things you’ve done best and enjoy most.
PCA Retirement & Benefits has a keen interest in seeing our ministers thrive in ministry and life. To that end, we have Financial Planning Advisors who are Certified Financial Planners and welcome the opportunity to partner with you on your financial journey. Please schedule a consultation today and make sure you are on the right track, both now and in retirement.
Geneva Benefits Group serves those who serve others, providing practical support for the financial, physical, and mental wellbeing of people who work in full-time ministry.