For a very brief window at the beginning of their ministry, pastors have the option to opt out of Social Security. But what happens if you change your mind and want to opt back in? What options are available to you?
I’ve always thought that the two most important decisions you make in your life are to follow Jesus and who you marry. But there’s another one that’s pretty high up on the list for pastors. And there’s a lot more pressure with that decision because it’s only available to you for a short window of time.
Will you opt out of Social Security or not? The IRS takes young people fresh out of seminary who have no idea what they’re doing and forces them to make a decision that will affect their families and finances for multiple generations. That just doesn’t seem fair, does it?
At least Jesus and marriage are much more flexible than that. Can you imagine if they weren’t?
Can Pastors Change Their Minds?
So, today’s question is: can you opt back into Social Security? You can turn your back on God or rededicate your life to him, you can get divorced or remarried, but do you get to change your mind with Social Security?
No. The decision is irrevocable. Once you’ve made your decision, you’re stuck with it for the Rest. Of. Your. Life.
At least where your pastoral income is concerned.
What To Do If You Regret Your Decision To Opt Out
If you’ve come to regret the decision you made to opt out of Social Security, you do have some options:
Get A Secular Job
You can get back into the Social Security program by earning non-ministerial income. See, opting out only affected your ministerial income. You could get a secular job today and you would have to pay into Social Security, regardless of the decision you made when you were ordained.
In order to be eligible for Social Security benefits, you have to earn a certain number of credits. You can learn more about how that all works here. Basically, for retirement benefits, you have to have worked and paid into the system for at least 10 years. There is a minimum amount of money for you to earn during those years, but it is very low.
For 2018, you need to earn $1,320 per credit and you can earn a maximum of 4 in a year. So, you could go get a secular part-time job right now, earn $5,280 before the end of the year, and be well on your way to qualifying for Social Security retirement benefits.
Other Social Security benefits require you to have earned different amounts of credits. Here is a great article that goes into more detail regarding the credits you need at different ages for each benefit.
Count On Spousal Benefits
If you’re not in a position to get a secular job and work your way into the Social Security system, you can have your spouse do it. In fact, you may already be eligible for benefits through your spouse if they have paid into the system.
Spousal retirement benefits are 50% of your spouse’s full benefit. So, if your spouse is eligible for a $2,000 retirement benefit, you will get $1,000. You are entitled to that benefit even if your spouse has passed away and sometimes even if you are divorced. You can read more about it here.
Create Your Own Social Security
If there’s no feasible way for you to get back into the government’s Social Security system, then you can make your own of sorts. If you were self-employed, you would be required to pay 15.3% of your income into the system. So, every paycheck, set aside 15.3% as if you were paying it to the government.
Social Security is more than just retirement benefits, it also covers disability insurance, survivor’s insurance, and some Medicare costs. You can learn more about each area in detail by following the link in the previous sentence. To create your own Social Security system, simply use the 15.3% of your income that you set aside to buy insurance and invest for retirement. Honestly, it shouldn’t be hard for you to get a better return on your savings than you would get with Social Security. If you start this early, you could come out ahead in every area by the time you retire.
So, the simple answer to our question is that no, you cannot opt back into Social Security. However, it isn’t as absolute as it sounds and you do have options available to you. Whether or not you are a part of the Social Security program and regardless of how you feel about your decision, I highly recommend you read the article What You Need To Know About Social Security Even If You’ve Opted Out. Social Security is such a large part of every American’s life that we all should have at least a basic understanding of it.
How about you? Did you opt out of Social Security? Looking back, do you think you made the right decision? Why or why not? Share with us in the comments!
57 Responses
Tracy
September 18, 2018I have been looking for financial answers concerning a pastor and his income and your website has been an answer to prayer! My husband is a pastor and we are going through many of the situations you have addressed. Please keep up the good writing and may God bless you for being such a blessing to those in Ministry.
Amy
September 18, 2018Thank you for the encouragement, Tracy. If there’s anything specific you would like me to address in the future, please let me know. I want this website to be as helpful as possible for those of you give so much for the ministry. Thank you for your service!
Dwaine
October 18, 2018I made a terrible mistake by opting out. I only put 10% into retirement and that’s it. I’m also in debt up to my ears. I have no idea what I’m going to do when I get older. My wife was a stay-at-home mom for most of our marriage, so her benefits will be very small.
I am regretting this decision so very much.
I am using the Dave Ramsey “snowball” system to get out of debt, but that is even going to take many years. I am 49, so by then, I will have reached retirement age anyway.
I made a huge mistake.
Amy
October 21, 2018Dwaine,
I’m so sorry to hear that you are in that position. I’m glad that you have developed a plan and are working your way out of it. I pray that you are able to increase your income so that you are out of debt much sooner than anticipated and have all that you need in retirement.
Valerie
September 8, 2023I have 40 credits, mostly not from income as a pastor (I am 2nd career and started at 40). I don’t remember when I opted out and nobody seems to be able to find the original paperwork. I’ll still get benefits because of my earlier income, right?
Amy
October 1, 2023Opting out does not disqualify you from credits from secular income. I would recommend setting up an account at ssa.gov so you can see the earnings history that they have for you and what your estimated benefits are.
J
June 20, 2019scenario: minister has opted out of social security, then a disability claim is filed (cancer-related) and social security amounts are deducted from disability benefits paid
question: are disability payments considered non-ministerial income such that social security amounts should be deducted? or should the insurance carrier be acknowledging the opt-out and not deduct these amounts (same as ministerial employer’s payroll)?
Amy
June 24, 2019J, I think it would depend on where the disability payments are coming from. If they are something that are provided to you in exchange for your ministerial services, then I don’t believe you should be paying Social Security on them (though I am not 100% certain). If it is insurance that you have paid for, then it would not count as ministerial income and would be subject to Social Security. I would recommend speaking with a subject matter expert (the normal employees won’t know) at the Social Security Administration for a definitive answer. I’m sorry about the cancer and I hope you can get this all sorted out easily!
Paul
January 14, 2020I have been a pastor for 19 years, and I opted out immediately not fully understanding the ramifications of that choice. I subsequently became a bi-vocational pastor, still at the same Church 12 years ago. I have been wondering for some time if I would still receive Social Security when I retire because I opted out? I am thrilled to have found the answer to my question in your article. Thank you for helping pastors and their families. It can become so burdensome to try and find answers to the questions so few ever think about.
Amy
January 15, 2020Paul, I’m so glad that I’ve been able to answer one of your nagging questions. My hope is to make things at least a little bit easier for those of you serving on the front lines. Thank you for all you do!
Scott
February 21, 2020Like many of your other commenters I also opted out of Social Security when I finished seminary and was ordained. Now 25 years later I am doubting the wisdom of that decision. At the time that I opted out I had already paid in 36 of the 40 quarters required and my wife had already paid in well over 40 quarters.
I am wondering if upon retirement from ministry if I could get employment at a non-ministry job and again pay into the Social Security program to complete the 40 quarters, so that I will be eligible for Medicaid and disability insurance? Having Medicaid and disability insurance would be a big help to our small retirement savings when the time comes.
Any thoughts? Thanks for your nice article.
Scott
February 21, 2020Sorry, in my original comment I meant to say Medicare not Medicaid. I am not really sure of the difference, but Medicare is what I meant to say. Thanks
Amy
February 24, 2020Scott, the difference between Medicaid and Medicare is that Medicaid is health insurance for low-income people and Medicare is health insurance for people 65 and up. To answer your question, yes, you should be able to work a secular job in order to earn enough credits to be eligible for benefits from Social Security. For 2020, you will earn one credit for each $1,410 of income you have and can earn up to 4 credits per year.
Chris
January 18, 2021Amy, I am 49 and for about 13 years was opted out of Social Security while serving as a pastor from 2007-2019. I am no longer in ministry. I worked in secular work before 2007 for a good 12 years or so and now two additional years for a total of 14 years of non-ministry related employment. Will I still qualify for Social Security with all of my other employment? Also, is there something I need to do with the IRS to inform them that I am not in ministry anymore. I keep thinking since they have my opt-out paperwork from way back in 2007 that it will somehow hurt my chances of getting social security if I don’t change my “status” somehow with them. Thoughts?
Amy
January 19, 2021Chris, those are valid concerns. I would encourage you to create an account at ssa.gov/myaccount/ to see the work history that they have on file for you. It should reflect all of your secular work because your employer should have been paying into the system for you and withholding taxes for you to pay into the system as well. If there is anything from your work history that is missing, now is the time to get it corrected, before you file for benefits. The website will also show you what benefits you are eligible for. You don’t have to inform them that you are no longer doing exempt ministerial work because they learn that when an employer starts sending them tax payments on your behalf.
Beverly J Worth
March 5, 2021If vested, or your spouse is also vested, Medicare Insurance Part A will be provided for you and your spouse. So Scott would not benefit from striving to get 4 quarters.
Raymond J. Fate
December 30, 2020work parttime. take a hiatus from ministry (or inbetween ministries…) make $6,000 doing something and you will be eligible. I would do that asap so that you can track what you would get and you will not have to worry about becoming disabled and not able to work.
Amanda
March 14, 2020Hi amy, your website is incredibly helpful! I haven’t found my exact answer to my situation. My husband I both opted out of social security in our full time ministry position years ago. I have since become a stay at home mom, and after having twins our hospital encouraged us to apply for Medicaid ONLY for the babies. We informed them we don’t pay into social security and gave them my husbands pay checks and they said it should still be okay. We ended up getting approved, but my question is, are the babies considered separate from us in the sense that we didn’t choose for them to never receive government aid, or do they fall under the category of the form 4361 that we filled out? We want to do the right thing and are ready to call the state if something was done that shouldn’t have been. Thank you for any help you may be able to give me!
Amy
March 16, 2020Amanda, I’m glad you’ve found the website helpful. Each state sets their own rules for Medicaid eligibility. As long as the state says it’s okay, you don’t need to worry about it.
DeWayne Watson
April 10, 2020I was ordained in 1996. I opted out of Social Security 2 years later, was refunded all that I had paid in for that two years, and began investing 10% instead of 15. I either followed or just pooled my money with the most successful investors that
I knew, and I continue to do so. The return has been incredible. It’s worth more than $1 million dollars now, has never slipped as I just do what they do, and is sitting still and safe right now while everything is crazy. I’m rolling hundred of thousands into annuities with a return that is beyond belief! I’m so thankful!
Additionally, on housing allowance… Use it to the very highest degree that you can! We bought all the house that we could possibly afford for the double dip tax shelter, and it has been incredible. As long as you can prove your housing expenditures then you are perfectly safe and legal. Ours is 70% of my salary which puts us in a tax bracket so low that we get a huge refund every year, our insurance is amazing and almost free, my school loans are being forgiven and my kids are getting incredible grants for college.
The system is there for you to understand and work. Most people do neither, because it really is work to learn it. Don’t be lazy!!! Learn the system and then work it! It will be a huge blessing to you! Our government has set up massive protections, benefits, loopholes and credits for pastors. Learn about them, understand them, pursue them and use them! It will save you many, MANY thousands of dollars now and in the years ahead.
Dwaine
April 10, 2020I failed to save.
In fact, I was pretty foolish and didn’t even save for retirement when I should have.
I’m fifty-one and only have around $250,000 in Annuity Board retirement set at “mildly aggressive”. I do put 20% in now tho.
I’m really glad for you tho.
I wish I had taken people’s advice when I was younger.
Oh, I also foolishly told my kids I’d pay for their college, and now I’m paying for that – I didn’t save for it either.
Oh, if I could go back knowing what I know now.
Amy
April 12, 2020Dwaine, I’m sorry that you have regrets about your money management in your earlier years, but it sounds like you are doing a great job now and you still have time to get yourself into a much better position.
Amy
April 12, 2020Dewayne, I’m glad that you were able to figure out your finances at a young age and now are reaping the benefits of your diligence.
Mark Bennett
December 18, 2020What pool of investors do you follow? Thanks
Amy
December 19, 2020I don’t follow any specific investors. I’m familiar with Dave Ramsey’s ways, but most of what I know is what I learned in school and on the job.
Adrienne
June 1, 2021Hi Amy, my confusion is with a change of ministerial employment. One employer filed exempt status for my husband (as he had filed 4361 under their employment). In 2020 my husband switched churches (same state, different city) & switched roles from Associate Pastor to Worship Arts Pastor, he is obviously still ordained, but the new church immediately started paying into social security & Medicare & have never heard of Ministers opting out. Our CPA decided to let it ride out for one year & wev signed into SSA & last year’s “ministerial” income is counted as paid in amounts. My husband has always had secular side income alongside ministerial filing our CPA just always checks the exempt box for ministerial portion. WHAT DO WE DO?! The church CPA wants to file us “normal”, our CPA says why not because SSA accepted it, my husband wants to collect benefits & would love to opt in….& they’re all just assuming he legally can by switching EMPLOYERS. Please help!
Amy
June 1, 2021When a minister opts out, it’s a lifetime election regardless of employers that is supposed to be based on personal convictions, per IRS rules. Just because the SSA accepted last year’s payment doesn’t mean you won’t have trouble in the future because your husband legally opted out. They could catch the mistake several years down the road and it could be a bigger problem. Of course, I’m not exactly sure what would happen if a pastor who opted out just started paying in and the SSA never caught it, I only know that’s not in accordance with the law. I think the best thing for you to do would be to call the IRS and speak to a subject matter expert. I’m concerned about your church, though. Even if your husband hadn’t opted out, the church should not be paying into SS and Medicare for him, all ministers are supposed to pay under SECA as if self-employed. Also, the fact that they have never heard of ministers opting out, which is pretty basic, is worrisome. I think they should consult with a CPA that specializes in working with churches, since there are a lot of unique issues that most CPAs are unaware of. I would encourage you to do what you feel is right, even if it seems to create more work for those around you.
Adrienne
June 1, 2021Yes, thank you, I am deeply concerned with it all. The current employer allows the ministers to choose either regular W2 with employer paying in and also employee withholdings OR W2 with Housing Allowance but no withholdings….but they had never heard of opting out via Form 4361. Perhaps they do understand more of it than I’m able to convey but I still haven’t felt resolved by all of their input. Thank you for the hard work you’ve put in & the services you offer, clearly a lot of us need you!
Amy
June 5, 2021You’re welcome!
The Rev. Valerie A Strickert
June 30, 2021I worked for years before I was a pastor. I started ministry in 2004. I wasn’t given the opportunity to opt out till 2018. Was that actually legal? And since I did opt out, what about the 14 years of ministry taxes I paid into the social security program?
Amy
July 1, 2021Rev. Valerie,
Was it your church that didn’t give you the opportunity to opt out? That sounds strange to me. However, if the IRS approved your Form 4361, then it must be legal because they are the ones that make the rules. I would think that the years that you paid in should count towards Social Security benefits, however I would encourage you to set up an account at ssa.gov so that you can see what earnings history the Social Security Administration has on file for you because that is how they will calculate your benefits.
Valerie A Strickert
July 2, 2021Thanks for your reply. I wasn’t aware that I could opt out, and when I switched churches, they asked if I wanted to. It wasn’t something I had heard aboutone. I will check online.
Mike
October 6, 2021This is really helpful. Maybe I missed it in the discussion but is it true that since I’ve been in ministry over thirty years and most of those years my wife and I have been opted out of SS, that our prior non ministry work before does not apply to our SS credits?
Mike
October 6, 2021…related, do those years in ministry that when we had not opted out count as credits? So, I did go on the ssa.gov website and it says, “You have 34 of 40 work credits you need to receive Retirement benefits.” The record shows that I last paid into it in 1989, I’m currently 56. Would you recommend that I get a part-time job or work a secular job to make up those credits?
Amy
October 8, 2021Mike,
As you saw on the Social Security website, your prior work where you paid into the system does count towards eligibility. For 2021, you get one credit for each $1,470 of earnings and you can get up to 4 credits per year. Thus, you could earn $5,880 of secular income this year and about half of that next year (the credit amount usually goes up a bit each year) and you would be eligible for benefits. As for whether or not you should, I don’t know enough about your situation to advise. If you are interested in becoming eligible for benefits, there aren’t many downsides. It wouldn’t take a lot to earn enough credits and many places are hiring right now.
Chris
January 22, 2022Hi Amy, my question is a little different. If I’ve been ordained in one organization for the last 15 years and I never opted out of SS, then I change ministries and get ordained through another organization, can I opt out of SS under the employment/ordination of the new organization?
Also, I already have my 40 credits to get the benefits when I retire (I.e. Medicare and disability), so if I am able to opt out will I get those benefits still? And will I still get my SS check from what I’ve already paid in?
Thanks!
Chris
Beverly J Worth
January 22, 2022Yes, with aa new date of hire in a non-connectional church, a minister can timely file Form 4361 for exemption.
Yes, your 40 quarters will qualify you for medicare and yes, you will receive fhe social security income based on what
has been contributed.
Fully discussed in “Worth’s Income Tax Guide for Ministers”, Chapter 4.
Chris
January 23, 2022Thank you!
Amy
January 25, 2022Chris, Beverly is correct (thanks for jumping in, Beverly!). Some pastors who opt out have had trouble when trying to claim benefits because not all Social Security Administration employees understand how it works. However, you are eligible for the benefits you’ve already earned and when those pastors persisted they were able to claim their benefits.
Chad Coleman
January 26, 2022I have opted out of SS, but have done 12 years of secular work. 7.5 part time and 4.5 full time. It there a way to check my SS status to see if am eligible for benefits.
Amy
January 26, 2022Chad, as Beverly said, you should set up an account at https://www.ssa.gov/myaccount/ where you can see the earnings history that the Social Security Administration has on file for you as well as your estimated benefits.
Beverly J Worth
January 26, 2022Everyone can go to SSA.gov and set up your account at any age and you can get your record.
Beverly J Worth
January 26, 2022Everyone can go to SSA.gov and set up your account at any age and you can get your record. It is a good idea for everyone to be sure their earnings are reported correctly.
Jackie North
August 22, 2023If a pastor signs up for social security and Medicare and retires but comes out of retirement.
Does he have to stay with social security or can he opt out of SS since he already retired?
Amy
September 8, 2023A pastor can only opt out within the first 2 or so years of being ordained. If this is a brand new pastor, then he could opt out. However, you are not allowed to opt out for economic reasons.
Tracy Martin
August 23, 2023A retired or working pastor can earn SS credits by doing work unrelated to the ministry. A person can pay self employment tax and receive up to 4 credits or quarters per year. Many pastors already have credits from jobs prior to going into the ministry. You need 40 credits to draw benefits.
Mark Smith
September 7, 2023Many thanks for your guidance. I have a related question. I filed form 4361 when I was young and idealistic. I was told at the time that I would be ineligible for SS payments, but would be eligible for Medicare through my wife. She is now 63, and we’ve been married 43 years. Is this true?
Raymond Fate
September 7, 2023If you have had secular income outside of your ministerial income for 10 years you will collect ss and Medicare.
Mark Smith
September 7, 2023Thanks, Raymond. That’s what I’ve understood. Sadly, I have 32 credits with SS from secular employment. I would need 40. But my understanding from long ago, when I signed up for 4361 was that I’d be ineligible for SS, but eligible for Medicare because my wife had the 10 years (and much more). I know there is a spousal eligibility for Medicare part A (for example, for spouses who never worked), but what I don’t know is whether I am eligible for it or disqualified because of 4361. Any guidance?
Raymond Fate
September 7, 2023That’s not true. Often social security doesn’t understand their own rules. Go get a part time job and make $5500 for the next two years. For every $1125 you make you get another quarter. When you go to retire file it as normal.
Amy
September 8, 2023Depending on his wife’s earnings history, Mark may receive a higher spousal benefit than he would be able to earn by completing 40 credits.
Amy
September 8, 2023Mark, you are ineligible for Social Security benefits based on your ministerial earnings, but you can still be eligible based on your own secular earnings (though you would need 8 more credits) and are still eligible for spousal benefits based on your wife’s earnings. You are eligible for Medicare no matter what. The difference is whether or not you have to pay for Part A. It sounds like you will be eligible for premium-free Part A based on your wife’s earnings.
Amy
September 8, 2023If your wife has paid into Social Security enough to be eligible for benefits, then you are also eligible or premium-free Medicare Part A based on her record and also spousal retirement benefits based on her record. Sometimes when people in your situation go to apply for such benefits they are denied, but end up with the benefits once they escalate it high enough. https://pastorswallet.com/what-social-security-spousal-benefits-can-a-pastor-who-has-opted-out-receive/
Todd
October 27, 2023Good evening, Amy. I have worked as a full-time missionary for the past 25 years with a ‘status’ as part of a ‘religious order.’ I opted out of social security when I went into ministry. I am vested with 40 quarters. I just began working for another Christian ‘missional’ non-profit . How do I know if they fall under the ‘religious order’ status and/or do I need to be an ‘ordained’ minister and as listed in Publication 517. Most of your posts indicate the decision to ‘opt out’ is irrevocable but I am not moving from one church to another. Would value your input if I have to now go back into paying SS or if I can remain opted out.
Amy
November 2, 2023Todd, once you have opted out, you are opted out for all “ministerial” income. In your new position are you required to be a minister or can anyone do the job? If you are required to be a minister for the position, then it would be considered ministerial income and you would not pay into Social Security. If it is a position that anyone (with the proper qualifications, of course) can do and you just happen to also be a minister, then it would be considered secular income and you would start paying SS.