For many, the command not to worry about tomorrow is a mandate for ministers to live entirely by faith, especially in financial matters. But the command to be good stewards indicates an equal calling to use resources wisely, which includes planning for retirement.
As Darold H. Morgan says in his book, Personal Finances for Ministers, “Simply stated, biblical stewardship embodies the highest form of responsible living.” Every aspect of life must be managed wisely, whether it be our health, our spirit, our mind or our finances.
GuideStone Financial Resources, founded in 1918 as a ministerial relief organization, now serves as one of the oldest and largest church benefits boards in the nation. Recognized as an expert in church retirement plans and ministerial tax issues, GuideStone offers 10 reasons why every church employee should be an active participant in his or her retirement plan.
1. Tax advantages. Money contributed by the participant through payroll deduction and by the church as employer contributions is tax sheltered. Participants will not pay taxes on 403(b) contributions until those funds are withdrawn. This serves the dual benefit of reducing taxable income now and deferring taxation to a time when the participant will likely be in a lower tax bracket.
2. Housing allowance benefits. Ministers who are eligible for the ministerial housing allowance benefit may continue to receive housing allowance benefits after retirement if they receive those funds from a church pension board.
3. Protection benefits. Eligible participants receive disability benefits up to $500 per month and survivor benefits up to $100,000.
4. Screened investment opportunities. GuideStone plans have access to Christian-based, socially screened investment options. Participants enjoy knowing they are investing their money with a company that shares their values.
5. A company you can trust. GuideStone has 185,000 participants worldwide, including Southern Baptist and other evangelical churches, ministries and institutions, and more than $10.3 billion in organizational assets, as of June 30, 2007. Unlike many organizations, however, corporate profit is not their motivation. GuideStone's products and services are designed to be competitive while adhering to Christian values, with no profit motive and no competing interests.
6. A company with experience serving those who serve the Lord. GuideStone's experience stems from more than 85 years as a provider of retirement and other employee benefit services. They are recognized as an expert in the field of church retirement plans and as a leader in ministerial tax issues.
7. Flexibility to fit changing life needs. There is no minimum contribution and no requirement to continue making contributions. Participants may begin with small contributions and slowly raise their contribution level to optimum levels by joining the 1% Club. They may also take out loans against their accounts.
8. Participant-centered service. GuideStone's Customer Service Center is committed to providing world-class, high-touch service. They are available online at www. GuideStone.org, as well as by phone at 1-888-98-GUIDE (1-888-984-8433).
9. Resources and tools for retirement planning. GuideStone's web site offers online calculators and educational/tutorial presentations, as well as worksheets to assist with retirement planning. Participants who desire to do so may also manage their accounts entirely online.
10. The value of time and compounding. The earlier contributions to a retirement plan are begun, the more time that money has to grow. Compounding can add a multiplying dimension to the money. Additionally, for money contributed to tax-deferred plans, there is a triple growth potential: the growth of contributed money, the growth of earnings off that money, and the growth of money that would otherwise have been paid in taxes.
Many people have good intentions when it comes to setting aside money to meet financial goals such as retirement. Often it isn't lack of knowledge that prevents them from following through with those good intentions. It is simply a failure to prioritize planning, especially when retirement seems so far away.
For others, financial matters are confusing and intimidating. But full knowledge of finances is not necessary for successful retirement planning. It has been said that all roads lead to retirement. With that in mind, it's far more important to start a retirement plan than to have exactly the right plan.
Good stewardship includes planning ahead for retirement. Sadly, however, many ministers approach retirement age with such small retirement accounts that they can't afford to retire. Church personnel and finance committees are strongly encouraged to make it church policy to provide regular retirement contributions on behalf of all ministers and church employees. In addition, ministers and church employees are encouraged to make additional contributions through a salary reduction agreement.
For more information about starting or enhancing your retirement plan, contact Jeff Cranford, Virginia GuideStone representative, by phone at (800) 255-2428, ext. 5344, or 804-915-5000, ext. 5344. Or email Jeff at [email protected].