How well prepared are you for retirement? Chances are that you, like many pastors, are underprepared. Or not prepared at all.
Dealing with issues about getting older is an uncomfortable thought for many. But the fact is, deny them or not, the issues don’t go away. Ignoring the realities can prove to be a disastrous miscalculation.
Did you know?
- The average pastor goes through a major life challenge every 36 to 40 months. It may be a health issue, a move, a relational challenge, a financial emergency or something else.
- Fifty-eight percent of Foursquare churches have fewer than 80 people in attendance, and many Foursquare pastors are bi-vocational. That makes it really tough to put bread on the table, let alone think about socking money away for retirement!
- Many pastors look at their retirement plan as a savings account, taking the money out for yet another “emergency,” never allowing the “miracle of compounding interest” to go to work for them.
- It’s difficult for many pastors just to make ends meet, and putting additional money away for retirement seems to be a pipe dream.
If any of the above points have described you, read on! You’ll find the information below very helpful.
Realities of Retirement
My name is Harlyn Matson. I pastor a Foursquare church, am the vice president of Foursquare Financial Solutions (FFS), and had the privilege of being one of the architects of the Foursquare Retirement Plan that began January 1, 2000; currently, I am the chairman.
My dad was in the ministry 41 years. He thought he didn’t need medical insurance, and he hadn’t been sick in more than 30 years.
He died from a heart attack on Christmas Day 1985. He left my mom living in a church parsonage—she received an eviction notice 10 days after he died—and with $100,000 in medical bills, a car for which she owed more than it was worth, and no savings or retirement. (She did have a family who loved her very much and was honored to take care of her until the day she passed on.)
Now you see why I have a passion for pastors and their retirement!
According to a 2012 retirement advisors “Measurably Different” report, recent statistics of those taking part in retirement plans tell us that 87 percent ranked their retirement behind only health insurance; 82 percent admitted they would not be saving if not for their retirement plan; and 56 percent ranked their retirement plan as the primary or only source of their retirement.
At the Foursquare Retirement Plan, what do we consider to be a successful outcome? We consider accumulating the highest attainable 403(b) account balance at retirement a great success.
I’d like to introduce you to a not-so-new spiritual principle: Taking care of your retirement is a stewardship responsibility. God has called you to be a steward of your entire life, not just the working years of your life.
Currently, you are projected to live 20 years beyond the retirement age of 66 (according to Retirement Insights Searching for Certainty/JP Morgan Asset Management/2011). Are you preparing for that today?
Foursquare Can Help You
Here’s the great news. You are not alone. Your Foursquare family is passionate about helping you prepare for retirement.
In fact, since the inception of the Foursquare Retirement Plan in 2000, the denomination has invested over $37 million into its Foursquare pastors and staff retirements through the Foursquare Retirement Plan.
We are not just suggesting you prepare for retirement—we are putting God’s money behind the exhortation! During the worst recession since the Great Depression, there was no cutting back on what has been invested in the Foursquare Retirement Plan by the Foursquare central office.
Here’s the question: Are you taking advantage of what may be the greatest opportunity you will have for building your retirement nest egg?
When you put your money into the Foursquare Retirement Plan, you are investing pretax dollars into a retirement vehicle that will grow tax free and can be taken out tax free as a housing allowance to any licensed Foursquare pastor upon his or her retirement. That’s a win-win-win!
Think of the Foursquare Retirement Plan as a four-legged stool—(1) Foursquare; (2) the church you pastor; (3) our government; and (4) you—all working together to make your retirement years some of your best.
Making Money Work for You
It’s all about leveraging the dollars you currently have to their greatest potential.
When you look at the combined assets of 401(k) and 403(b) plans nationwide, the 62 million participants have a median account balance of $26,900 (according to a report from America’s Commitment to Retirement Security/Investor Attitudes and Actions). The Foursquare Retirement Plan account median is $23,322, but we are only 12 years old! Currently, about 30 percent of eligible participants do not participate in our Foursquare-sponsored retirement plan.
Little changes you make right now can have big effects on your future. For example, let’s look at two hypothetical Foursquare Retirement Plan participants: Pastor Joe and Pastor Josephine.
Joe and Josephine’s profiles are identical: Both are age 25; both earn a $30,000 annual salary; both receive a 4 percent annual salary increase; both plan retirement at age 60; both have an 8 percent average annual 403(b) investment return (6 percent to 50 percent match).
Everything is equal, except that Joe waits three years longer than Josephine before beginning participation in the Foursquare Retirement Plan. The differences at retirement age are dramatic.
At retirement, Josephine has a 47 percent larger account balance ($966,000 to $1.4 million), and her retirement income is 47 percent larger ($87,848 to $129,069). Additionally, her retirement income would be 90 percent of her preretirement income, while Joe’s would be only 61 percent—all because Joe waited three years before participating in the Foursquare Retirement Plan!
The Time to Plan Is Now
Participants in retirement plans often vastly underestimate their cost of living. A measly 3 percent inflation rate erodes buying power by 100 percent over 24 years (according to wisegeek.com/seacoastonline.com).
Sixty-eight percent of retirement plan participants think their savings rate is “too low.” But only 14 percent actually plan to start saving (according to Key Finding: Phases of Retirement Report/Society of Actuaries/2009). Amazingly, 23 percent of Foursquare Retirement Plan participants have 100 percent of their money in our cash equivalent fund, eroding away their nest egg most years (Lincoln Financial/2012).
The Foursquare Retirement Plan is here for you today to prepare you for tomorrow. You have access to one of the best retirement plans in the nonprofit world. It is my prayer that you will partner with us in preparing for your retirement—should the Lord tarry and you find yourself retiring!