By Thom S. Rainer
Rarely a week goes by that I don’t hear from Boomer pastors who just retired, are considering retirement, or wish they could retire.
I am listening carefully. And I am learning a lot as I listen. Most of it is not very encouraging.
- Most pastors are underpaid. I have to monitor my sanctification when I hear snarky comments like, “Pastors are in it for the money” or “Pastors make too much money.” Sure, there are ungodly exceptions. But they are indeed exceptions and they are rare. As I listen to Boomer pastors and understand their compensation through the years, my heart breaks. Many of these servants, for the hours they work, have barely been paid living wages.
- Too many pastors refuse raises. Their motives are honorable. They want the money to go to ministry. They want their staff better paid. They want the church to pay off its debt. They don’t want to hurt the church. But now these Boomer pastors realize they don’t have sufficient funds for retirement. They fear they will be a burden to their families. Pastors: Stop saying “no” to raises. You are hurting your family now and in the future.
- Few pastors give sufficient thought to retirement. They commonly say, “God will take care of me.” Others say, “I don’t ever plan on retiring.” The problem is many Boomer pastors are “retired” involuntarily by their churches. Some are not physically able to remain as a pastor. Others are close to emotional burnout. Again, these pastors become dependent on others in retirement.
- Many pastors have too much debt leading into retirement. The most common scenario we are hearing from Boomer pastors is they bought their home later in life. They have a 30-year mortgage with 10 years remaining. Some have also burdened themselves and their families with consumer debt just to get by.
- A number of pastors have given little thought to health care costs. Even if these pastors are eligible for Medicare, many of them have no concept of what Medicare does not cover. Sadly, they are often unable to afford any Medicare supplements. As a consequence, these retired pastors neglect their own health for fear of uncovered expenses.
- The common theme of many of these Boomer pastors is over-spiritualizing their financial reality without the wisdom of planning for their future years. Yes, faith that God will take care of us is a good thing. No, faith without planning is not wise. The writer of Proverbs said it in 15:22: “Plans fail for lack of counsel, but with many advisers they succeed.” Jesus said it Luke 14:28: “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it?”
Pastors: Learn these lessons from your fellow Boomer pastors who are retirement age. Learn and apply their lessons before it’s too late for you.
Posted on October 21, 2019
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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20 Comments
Very helpful article which should be shared with many.
I would like to see a series of required classes on financial planning be part of Seminary and Bible college curriculums.
By having one class a year dealing with personal financial planning as well as financial management for the church, I believe we could prepare developing pastors and church leaders to make wise decisions earlier rather than later.
Good article. But, it doesn’t cover the real problem in this area. Most churches would pay more with benefits if they could. Truth is they are too small for a full time pastor especially if you are talking a real wage, health, and retirement. I would like to see you write up some options on how to work in these scenarios. Every option I have seen comes with negatives, but the church stays open, at least for a while. Or is it better to say if the church is incapable of full wage and benefits it should close its doors?
In the Christian Reformed Church we do have a Ministers Pension Fund which helps pastors when they retire. Even when they retire they may still take on some preaching assignments to supplement their retirement income.
I will say this is one of the downsides to “autonomous” church life (specifically looking at SBC churches which is the context I am in). Other denominations have set policies in place that require churches to follow a standard process for retirement/pension contributions. I have a retired Methodist pastor friend that is grateful for that requirement now that he is in retirement. He did not really have to think about it during his ministry. Certainly, pastors should exercise personal responsibility and plan for retirement..but it would not be a bad thing for there to be a set policy.
As an Episcopal minister the Episcopal Church in the United States has a mandatory pension plan which is funded by each parish (employer). I am able to pay into a 403(b) plan on top of that. The parish part of the pension plan is enough to take your breath away (18% of my pay: salary, housing, and SECA offset). That payment is hard for some parishes but the belief is – the church takes care of their clergy.
These are wise words that I wish I had read early in my ministry. As a young man, you just assume that the church will always do good by you. They mean well, but most churches are forcing their minister to make as little as there lowest earning member or in the median income level, when in fact he is treated by the government as a independent business owner and will pay more taxes than most people in a congregation as a whole. While he does have tax breaks, those should not be held against him. For churches providing a house (parsonage) remember that your minister is not able to gain equity off of that property. If you have had the place paid off for years, stop telling the minister that he is being given a great asset and should take less from the church, because in the end, he is not going to have anything to show for all of those years he has been staying in the house. He will have to move on at some point and needs to be financially sound. As for the hours a man of God spends on the work, he is on call every day and never knows when he will be called upon to serve. If in secular employment, this man would receive top rate for overtime and availability. Let’s take some time to reflect on how well we are treating these servants of God.
This is so sad. Pastors, in general, hold advanced degrees and do a work few could do. I am a pastor in my 40’s, and am putting things in place to make sure the future is secure, including working outside jobs in a different field. . My call to ministry has brought enough heartache to my family for me to add to it as a senior.
We have tried now for over decade to get our pastor to begin a retirement plan, and he refuses and uses all fo the reason you relate above. We are paying him well and updating his parsonage, but trying to get him to do the basics of financial planning for the future, without literally forcing it on him, is virtually impossible. I want to propose, again, this year that we establish a retirement program for staff and I would suspect we will get push back again. Suggestions?
For whom are you trying to start a retirement program? If only for the pastor and they refuse to participate or cooperate two responses: 1) so be it. They don’t have to save for their retirement; and 2) document the offering so they can’t complain “my church didn’t adequately prepare me for retirement.”
If for a staff that includes people other than the pastor, offer to work on a retirement program with them with the same documentation – acceptance or denial of pension/retirement plans.
A practical question: how do you envision the retirement plan playing out? Another way, is the retirement simply personal deductions – either pre- or post-tax – or some form of matching plan? Is your church willing to pay into the retirement, even if the pastor doesn’t?
You might get some assistance from your synod/denomination/convocation or other governing body with which you are affiliated. Regardless, good luck.
Thom, I think all of us have our personal experience whether we have successful retirement plan or a disastrous one and everything in between.
The fact is that we must all pay attention to those who have traveled the road and learn from them. This is a tough thing to do when we are young and charging forward in ministry trying to win the world in our time. But alas retirement time comes and then what we did or did not do catches up. To this I say “Young Man Pay Attention now” May God give you all wisdom.
Thanks so much, Joe.
I am one who was forced to retire… A few folks didn’t want to change so as to grow. My wife and I are in our 60’s STRUGGLING to make ends meet, had unexpected medical bills, bought our home 10 years ago. I served small congregations which could not afford pensions. We hate to ask for help. Yet, for church members who can help please do so quickly and quietly, and generously. Help please to get pastors out of debt. Pastor Jim
My prayers for you and your family, James.
I would encourage pastors to put retirement needs before their golf game. I quit put down the golf clubs and picked up a hammer. I loved remodeling houses on mission trips and decided I would enjoy a bit of construction in my spare time. I found something that I enjoyed and could make money. I added $3,000 a month to my retirement by staying busy at something that was both productive and enjoyable. Find what you enjoy that’s productive and profitable.
A laborer is worth of his hire. And we all know hirelings are not to be trusted. So there we are.
My husband is working as a pastor within his retirement from his previous job as a scientist. We have all our needs met by his past labors and the financial planning he did then. We serve a very poor congregation. If a wealthy person joins, they simply do not understand the inability of this congregation to spend! Spend! Spend! Wealthy people want giant screens and multiple instruments. Too bad.
Husband does not take a salary, but only a small stipend for standing up and talking for half an hour every Sunday. Sometimes a marriage or funeral will add to that amount, but sometimes they don’t realize there should be a bit of reimbursement.
And yet—when I do counseling, he insists I accept pay. Hee hee.
I think it’s a thing of pride, more than anything. Sort of a guy thing? Idk…
Thanks, Katharine.
Tom – you are so right about Pastors who under-prepare for retirement. I had a mentor friend in my 20’s who helped us to understand how important that preparation is and we took him to heart. I am retired and we are living very comfortably and will as long as God leaves us here. I have shared my “prep for retirement” story with hundreds of young Pastors and continue to do so today.
Wise man, Terry. Thank you.