When an ordained, licensed, or commissioned minister receives a portion of their compensation as housing allowance, that portion is excluded from gross income and therefore not subject to federal income tax. This can represent substantial tax savings for the minister. Further, when an ordained, licensed, or commissioned person retires, a portion of their 403(b)(9) retirement plan distribution can be received as housing allowance, providing additional tax savings in retirement.
As a leader in your organization, it’s important for you to make sure that your employees are educated on being financially prepared for retirement. But how do you do this?
It can be difficult to help your staff become motivated about their future. But when you're able to encourage their saving by helping them understand the concept of their future funded ministry, saving begins to have a purpose and something that they can look forward to.
Here is some encouragement you can give to your staff as you explain the importance of funding their retirement:
We all have unique passions, abilities, and experiences that God wants to use in ALL seasons and stages of our lives. But these stages of life must be funded. We must save for that time when the paycheck stops but our call to ministry continues—what we call our future funded ministry.
For most people, retirement is seen as a time during which you withdraw or cease from work. However, there is never a time in which we stop having value or influence in the lives of others. In fact, God has created us to minister to others for a lifetime. "Future Funded Ministry" is a redefining of retirement where we as Christians embrace our lifetime calling to love, serve, and minister to others.
Free your future from the common financial constraints many today will face and instead prepare for a new season with the flexibility to do whatever God calls you to do. As Joseph prepared Egypt during the seasons of plenty for the time when they would have need, so we also prepare now for our future.
From starting a retreat home for missionaries to using horses to help those with special needs to traveling across the country and serving at RV parks, there are endless dreams people have embraced during their 4th quarter in life.
Start praying and researching your future plans today.
As a Christian, you are called by God to serve. This calling does not end when you stop receiving a paycheck. Retirement is not only a reward for past service but a stepping-stone to future ministry. We call this your Future Funded Ministry! When you successfully construct and fund a retirement plan, you are creating a source of money to fund your future ministry activities. What an exciting way to live!
It may be the hardest thing to do. Change suggests disruption, confusion, difficulty and inconvenience. We are wired to keep doing what we’ve always done. And yes, we will then get what we always got. If what we have is too painful, not encouraging and/or just plan hard, I’m open to change. What about you?
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