Why Your Pastor May Not Be Able — or Allowed — to Retire

The surprising revelation about the clergy and retirement, and how you and your congregation can help.

It’s no secret among religious circles: Retirement options for the clergy are poor, especially among clergy who are baby-boomers.

In America magazine, a leading publication on religious issues, it was recently revealed that, for clergy of some denominations, the combined retirement benefits of pension and Social Security added up to a mere $15,600 to $18,000 per year at age 70. Others receive only slightly more. And this is just part of the problem.

Some clergy are not allowed to retire at age 70. In fact, many often are denied retirement even at age 75. Why?

There simply aren’t enough clergy to replace them. And the reason, quite simply, is because everyone knows that clergy are often doomed to poverty in retirement. Since nobody is taking care of the current generation of clergy, there’s less incentive for younger generations to join the ranks of the clergy. This is a serious problem. Just look at how the clergy are treated like orphans by the IRS.

For income tax purposes, clergy are considered church employees by the IRS. However, unlike every other worker in the United States (including lay employees of churches), clergy are required to give up 15.3% of their pay in FICA taxes. That’s twice as much as all employees in the U.S. pay. As a result, many churches reduce the benefits they give clergy. And that’s still only part of the problem.

Another concern is housing. Most priests, says America magazine, do not own their home. Instead, the church owns it. As a result, priests are forced to obtain their own housing – at their own cost – upon retirement. With such a grim outlook in their golden years, is it any wonder the clergy is having such difficulty filling the lower ranks? What can you do to help ensure a safe, comfortable retirement for your current pastor, and show would-be-pastors that you won’t leave them to fend for themselves when it comes time for them to retire?

How a $10 Contribution Can Help Fund a Safer Retirement

Now you and the members of your congregation can help secure the future of your clergy person. Announcing the Retirement InCome – for Everyone Trust®, also known as the RIC-E Trust®. It’s a unique and innovative retirement vehicle that allows you to make a tax-deductible, charitable contribution toward your clergyman’s retirement, and you can do so for as little as $10 per person.*

It’s true: If every member of a 500-person congregation donates just $10 per year for 20 years (a contribution of $5,000 per year), the clergyman would have $315,012** in 20 years, assuming a 10% annual return. That’s enough to comfortably produce a retirement income of $25,000 per year for life, assuming an 8% distribution rate. And $25,000 a year would go a long, long way to making your clergy’s final years much more comfortable.

Your contributions would be collected by your church or synagogue for the benefit of your clergy. The church then establishes a RIC-E Trust® for its pastor, priest, preacher or rabbi and places the combined contributions into it. The Trust manages the assets on behalf of your clergy until he or she reaches retirement age (which is determined by your church or synagogue, a minimum of age 59½). Until then, the clergy pays no income taxes on the money contributed, nor on its growth. And there are no annual trustee fees, either. (There is only a one-time set-up fee of $300.) When the clergyman reaches the retirement age that was pre-set by the church, he or she can begin withdrawing the money. And should the clergy ever become disabled, the money would be available immediately.

Never before has a $10 contribution been able to make such a difference for the leader of your congregation. It’s a wonderful way to acknowledge all that he or she does for you and for the entire congregation.

To learn how to get your church or synagogue started, simply call 1-800-762-9797 or click here.