Minister Retirement
The Minister’s Program sponsors a retirement program exclusively for Free Will Baptist ministers. This plan was designed from the ground up as a vehicle to help ministers achieve their retirement goals and dreams. The plan has no hidden charges or loads and every dime invested goes toward your retirement.The plan is also flexible and portable. You can change you investment options and contributions by completing simple forms available through the Minister’s Program.
What do you need to know about retirement?
Almost everyone over the age of 50 has asked the question, “How much money do I need to have to retire?” If you can accurately answer the following questions you will have no problem determining the amount.· When do you plan on retiring?
· How much income will you need each month?
· How long are you going to live?
· How much will inflation affect your goals?
· How much can you earn on retirement savings?
Once you answer these questions you are well on your way to planning for your retirement. However, as you may have figured out these questions are difficult to answer with any degree of accuracy so you have to use estimates and historical averages.
Financial planners say that the average retiree will need 70% - 90% of their pre-retirement income to live comfortably in their “golden years”. The first lesson in retirement planning is that Social Security will not be enough! Another consideration is whether or not you have depended on parsonages during your ministry. If so you need to invest additional funds for housing.
Everyone needs a plan!
You need to determine how much you should set aside each year to be able to enjoy a meaningful and worry-free retirement. Then have your employer or church participate with you in helping you reach your financial goals.
What are the tax advantages of this plan?
Contributions to your retirement account are excluded from your taxable income. This means no state, federal or self employment taxes are due. An IRA requires self employment taxes to be paid on the contribution. These deposits grow tax free until retirement and then the monthly income is designated as a housing allowance and is tax free to the extent it is used to provide housing for the minister. This is the only plan like it for ministers in our Convention. Let’s recap the tax savings:
1) Contributions made by your church to your account are non-taxable, within legal limits.
2) Contributions by the minister made through a salary reduction agreement are non taxable, within legal limits.
3) Contributions grow tax free in the retirement account.
4) Contributions made to the plan are not subject to self-employment taxes.
5) Retired ministers who select a monthly income option receive those funds as a tax free housing allowance, within legal limits.
5 ways to save on taxes!
What investment options are available?
The minister can choose to invest in a fixed fund where all deposits are invested in government insured and guaranteed instruments. In addition to the fixed fund, there is also a managed fund that is invested in stocks and bonds. This fund is directed by professional money managers. The minister is free to choose either option or a combination of the two.
What retirement options are available?
When the minister retires, usually at 59 1/2 or later, he has several options available to him. They are:
V. Full or partial lump sum withdrawal
VI. Guaranteed lifetime income for the participant
VII. Guaranteed lifetime income for the participant and spouse
How do I get started?
The time to get started is now! Remember you are not planning for a brief period of time. A man who reaches the age of 65 today has a life expectancy of almost 20 years. Your planning today will make for a retirement that that is both enjoyable and meaningful. To begin this important step in taking control of your financial future all you have to do is contact the Minister’s Program or you can download the retirement forms on this website and forward them to our office.
TO APPLY, CONTACT:
Justin Tart
CRPS, AIF
President InnerBanks Financial Partners
252-833-4205