Lee Wright said retirement has been different than he expected, and ministers contemplating it should know that it’s more than “quitting work.”
Wright, church compensation specialist for the Alabama Baptist State Board of Missions, directed a training session on retirement issues Aug. 1 at the conference center of the Birmingham Metro Baptist Association.
He said he understands there are two camps among ministers.
“One group really wants to leave church ministry and do things they’ve perhaps had no time for before,” he said, “but the other group can’t imagine life without ministry. The current shortage of ministers means that many ministers are working beyond normal retirement. The shortage is especially keen in part-time churches, so retired ministers can continue service on a less-than-full-time basis.”
Things to consider
Wright has continued to work on a part-time basis with SBOM since his retirement.
He said it’s recommended that retirement income be somewhere between 70 and 90% of preretirement income.
“I’d recommend closer to 90%,” he said. “Some expenses decrease in retirement, such as work travel and clothing, but inflation has remained at around 3% each year since 1916, and housing and food continue to increase.”
Another consideration is longevity.
“If a minister has reached 65, his lifespan is 83 1/2, and for women, 86 years,” he said. “So we must consider if retirement funds provide enough income for life, especially since some now will live longer than the actuarial tables say.”
He noted sadly that some Alabama Baptist ministers are working longer because they really can’t afford retirement.
Another consideration is the minister’s emotional health.
“A major surgery, for example, makes us feel more dependent rather than invincible,” he said.
Along with health needs, a further consideration is moving.
“Many in retirement move to be closer to children and grandchildren, so this is another area to think through,” he said.
“Can you move to a new place, make new friends and find a new church? Yes, you can. This is what my wife and I did.”
Wright said they thought their house would be their “forever” house but decided to move closer to family when their grandchild was born.
Benefits
Wright said he’s not an employee of GuideStone Financial Services, but he’s happy to recommend it since retirement plans offered by GuideStone are great venues for ministers.
“GuideStone’s rate of return is competitive, and ministers have many options for withdrawal or annuity (regular income in retirement),” he said. “A relatively new option is an income annuity with a 1% annual increase rather than a fixed amount for life.”
Another GuideStone benefit is that a minister can receive part or all of his retirement income as a housing allowance. He explained that a housing allowance for the employed minister is determined by the lowest of three numbers: the amount approved for housing, the amount spent or the fair market rental value furnished, plus utilities. The same basic formula is used when a minister retires.
“Thus, a minister can contribute to GuideStone retirement as a tax-deferred contribution, then take retirement funds tax-free when retired,” he said.
Wright is available to help with other church financial issues. He can be reached at 800-264-1225, ext. 2241 or at 334-613-2241.
Several helpful documents are posted at alsbom.org/ministries/church-compensation.
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