It can be hard to save for retirement. Especially for pastors who need to because they’ve opted out of Social Security. A lot of big denominations have pensions, but what about independent pastors? Non-denominational pastors usually don’t have workplace retirement plans. That doesn’t leave them with much more than an IRA. Or does it?
If you’re reading this, you’re probably a licensed minister who has opted out of Social Security. I’ll bet you were thrilled at the opportunity to opt out of a system that is facing a perilous future and is quickly depleting its reserves. But was it really the right move for you? And are you maintaining your integrity by doing so?
As soon as they are licensed, many pastors jump at the chance to opt out of Social Security. Social Security taxes total 15.3% of a pastor’s salary, so opting out represents significant savings. However, there are certain benefits that Social Security provides that must be replaced if you opt out.