Should You Invest in a 403(b) with High Fees to Have a Housing Allowance in Retirement?
Pastors who save into their church’s retirement plan are eligible to withdraw some of that money as a tax-free housing allowance in retirement. It’s a great benefit to have. Unfortunately, a lot of church retirement plans have investments with higher fees than are available in IRAs. Because of this, I have been asked multiple times if it is worth it. Does the ability to claim a housing allowance outweigh the cost of the higher fees? As with everything in financial planning, the answer is that it depends. It depends on a lot of things, the primary one being your tax situation. Since the question involves calculations and doesn’t have an easy answer, I asked one of my amazing colleagues, Cal Treichler, to help me out. In addition to being a Certified Financial Planner, Certified Student Loan Planner, and PK, he’s also a spreadsheet whiz. In his free time, he created this ...
Recent Comments