A 16-Point Checklist for Retiring Pastors

“Retirement” has different meanings for Baby Boomers. But, for most of us, retirement will not be of the rocking chair variety, at least not initially. Many new retirees decide to continue to work, but this time at their own pace and hours. Others can’t wait to travel. Still, others are ready to take their hobbies to a new level.

This 16-point checklist, therefore, serves as a reminder of items to consider. It is not a one-size-fits-all guideline. It is also specifically written for pastors and other vocational ministers. Since I have a finance background, I’ve probably spoken to a few hundred pastors about retirement over the past few years. I hope this checklist covers many of your questions.

1. Get financial advice from someone who knows both personal and pastors’ finances. Even if you opt for a short-term counsel to review your retirement possibilities, it is well worth the money. You can avoid investment and tax potholes that many retirees fall into. You mainly need someone who understands the world of pastoral finances. Not all do.

2. Make an initial decision about what life after retirement looks like. You don’t have to make a long-term decision, but prepare to make some kind of decision. A retiree who leaves work for retirement without plans is typically lost in this new world. A pastor or church staff member who leaves vocational ministry without initial plans especially feels unsettled at best and depressed at worst.

3. Consider new training for your next phase. I know one pastor who became a Certified Financial Planner (CFP) after he retired from his church. Two major needs retiring pastors can fill are interim pastorate and church revitalization. Church Answers now offers both Interim Pastor Certification and Church Revitalization Certification for the price of one. We will keep this offer open for a few weeks with the hope that we can prepare retiring pastors and staff for two of the greatest needs in ministry today.

4. Understand your retirement benefits. You need to know where your retirement income will come from. Will you get Social Security? If so, at what age? Do you have a 401(k) or a 403(b)? When will you start taking distributions from them? Are you one of the rare retirees today who will get a pension?

5. Don’t get risky with your retirement funds. Retirement is the time to get more conservative with your funds. I know a man who lost half his retirement funds (almost $1 million) during the Global Financial Crisis of 2007 to 2008. He did not feel he could ride out the market, so he sold his stock funds, which were almost all of his portfolio. As a consequence, he never recovered from his losses.

6. Understand the laws behind the RMD (required minimum distribution). If you have a 401(k),  403(b), 457(b), IRA (except Roth), or similar fund, you will need to withdraw a minimum amount each year. That minimum amount is called a required minimum distribution or RMD. For many of you, the RMD begins at age 72 (73 if you reach age 72 after Dec. 31, 2022), though you can take it earlier. You must pay income taxes on the RMD. That leads to my next point.

7. Consider taking any RMD as a housing allowance. You might be eligible to take your RMD as a housing allowance. It depends on where your retirement funds are invested and the entity holding your investments. That could be a huge bonus because you pay no federal income taxes on housing allowances. Of course, you must abide by the IRS rules on eligibility for housing allowances.

8. Be prepared to live longer than you think. I know that sounds weird, but you want your retirement funds to last as long as you live. For example, estimating you will live to 85 may not be wise. Many of us will live to be 100 years old or older. We don’t want to be penniless for the last 15 years because our retirement funds ran out.

9. Make wise decisions about Social Security benefits. If you are eligible to receive Social Security payments, it can be confusing to understand at what age you should take the benefits. Ages 62, 63, 64, 65, and 66 are considered “early.” Age 67 is now considered “full” retirement. But you can still hold off receiving benefits until ages 68, 69, and 70. At age 70, you must begin receiving the benefits if you have not to that point. Despite the labels, the principle is simple. Your annual benefit grows each year you wait up to age 70. While the principle is simple, the rationale for taking the benefits at each age is not. Again, get financial advice from someone who understands this world.

10. Plan wisely for healthcare costs. This single issue is one of the most important issues you will want to consider in retirement since it will likely be one of your most significant expenses. Currently, healthcare costs as a percentage of income are about 15% for retirees, but they can be much higher. Will you be eligible for Medicare? That’s another world where it is helpful to have a guide.

11. Decide where you will live. Many retirees take this new phase of life to relocate. They might want to downsize. Some desire to move closer to family. Some relocate to be closer to amenities and quality health care. Some retirees just want to go to Florida! I get that. Relocation is a major financial and emotional decision. Be thoughtful and intentional about making this jump.

12. Budget wisely for a new era. While the basic principles of budgeting are the same in retirement, your income will change, and your expenses will change. If you have never done a budget, retirement is a good time. You should not head into retirement without reasonable income and expense estimates. I love my Spending Tracker app as my spending and tracking tool. It is incredibly intuitive. It received over 16,000 reviews, most of them five stars. The basic version is free. I recommend you get the Pro Upgrade. It is only $2.99, a one-time fee.

13.  Plan for the unexpected. You will often get advice from financial advisors encouraging you to have an emergency fund. That principle is still important when you retire. Like the days before your retirement, we all have unexpected financial issues. Don’t assume you won’t need it. You will.

14. Continue to give generously. Retirement is not the time to change your life of generosity. Continue to give proportionally and generously. Giving to my church and others is one of my greatest joys.

15. Pursue a deeper walk with Christ. You might find yourself with more time on your hands. Spending more time in the Bible and prayer is a wonderful gift. Seek ways to share the gospel more freely. Try The Hope Initiative to reignite your passion to share Christ with others.

16. Get ready for the final retirement. We realize we are much closer to heaven when we retire. Use these precious years to pursue a deeper walk with Christ and leave your house in order. There is so much to say here. One point will not suffice. I will return to this topic soon if Jesus does not return before then.

Retirement means many different paths to people. Pastors and other church staff especially have issues unique to them. I pray that we all finish well and are all good stewards of the time we have left. Then all we have left is that glorious day when we see Him face to face.

Posted on May 6, 2024


With nearly 40 years of ministry experience, Thom Rainer has spent a lifetime committed to the growth and health of local churches across North America.
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7 Comments

  • Julius Noble says on

    Hello my comment is on your topic of retirement. After serving as the pastor of a church that began as a bus ministry to children in a suburb of Chicago for 32 1/2 years, retirement has been challenging. The challenge during retirement comes from properly knowing and stepping into what this new season of life is for my wife and self is without being in church leadership. Our finances are good because God has blessed us. Julius retired servant of God.

  • J. Noble says on

    Hello my comment is on your topic of retirement. After serving as the pastor of a church that began as a bus ministry to children in a suburb of Chicago for 32 1/2 years, retirement has been challenging. The challenge during retirement comes from properly knowing and stepping into what this new season of life is for my wife and self is without being in church leadership. Our finances are good because God has blessed us. Julius retired servant of God.

  • Danny Blair says on

    Excellent tips for retirement! Thanks, Thom!

  • Bob Myers says on

    Thanks for this, Thom. My thoughts are frequently on this topic as I turn 70 next year. For me, I will likely keep working FT until I reach 73 when I have to take RMDs. Yes. 73. The IRS fortunately recently changed the rules.

    “Required minimum distributions (RMDs) are the minimum amounts you must withdraw from your retirement accounts each year. You generally must start taking withdrawals from your traditional IRA, SEP IRA, SIMPLE IRA, and retirement plan accounts when you reach age 72 (73 if you reach age 72 after Dec. 31, 2022).” (https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs)

    Thanks again!