Pastor’s wives carry many responsibilities.
Supporter of her spouse and faithful companion. Ministers to others. Prayer warrior. Server. Volunteer. Hostess. Mother and homemaker. And the list goes on…
It’s a fulfilling job, but it’s also often underappreciated. Pastor’s wives pour their hearts into serving alongside their husbands and loving the people they’ve been called to shepherd—all while just trying to maintain a regular life like everyone else. Yes, it can be extremely fulfilling, but it can also be emotionally and physically exhausting.
On top of all of this, many pastor’s wives are not involved in the family’s financial matters. And if something happens to their spouse, they’re left trying to pick up the pieces, even if they know little to nothing about their financial situation.
They’re left asking questions like, “Does my church have a retirement plan set up for the pastor? What other investments do we have and who has access? And what debts exist?”
If you’re a pastor’s wife, these are just a few of the questions you should be asking now. At TruthPoint Financial, we’re committed to walking alongside you and your spouse so you can thoughtfully (and prayerfully) prepare for a healthy financial future.
If you’re a pastor’s spouse and know little to nothing about your financial situation (and future), we’d recommend getting answers to the following questions:
- Do we own real estate? Whose name is it under?
- How much does life insurance pay out in case of a death? When would this happen?
- What debts/mortgages exist? Do we owe mortgage insurance?
- Do we have disability insurance? How/when would it pay?
- Do I have access to all bank accounts?
- Do we have an estate plan? If my spouse dies, how is their ownership transitioned?
- Do we have a Living Will and a Last Will and Testament?
- Do I have a Power of Attorney (for financial and health situations)?
- Should ownership of assets be held in a Trust (or will a Will suffice)?
- Where do we invest (retirement accounts, IRA, 529 education accounts, etc.) and who has access to these accounts?
Finding the answers to these questions is a great place to start. However, as a retirement plan provider, our goal is to ensure you and your spouse have the knowledge to plan for retirement with confidence.
So how can you make sure you’re set up for a successful retirement?
Here’s what we’d suggest:
Don’t wait to discuss retirement with your spouse.
Yes, even if you’re young. It may seem like a lifetime away, but the earlier you start planning, the more time your investments have to grow through compound interest. Start by finding out if your church offers a retirement plan. If they don’t, look for providers that are experts in church retirement planning (like TruthPoint Financial). If your church does have a plan, make sure you’re contributing monthly. Here are some tips on talking about retirement with your spouse.
Talk about your future goals and dreams.
It’s important that you and your spouse are on the same page when it comes to life after retirement. What are your goals and dreams? You may find out that your spouse has different expectations than you do. Start these discussions early so you can eliminate unneeded stress in retirement. Here’s a great blog that can help you find your purpose and meaning in retirement.
Start saving as early as possible.
The sooner you start saving, the better. This is because your investments have more time to grow through compound interest. What do we mean by this? Compound interest is like a snowball rolling down a hill, gaining momentum. Your earnings grow not just on the initial amount but also on the interest earned in previous years. So, if you invest $1,000 at 5% annual interest, you’ll have $1050 at the end of the year. By year two, that amount will turn into $1,102.50, and by year 3 it will be $1,157.63. This is assuming that all you did was invest $1,000 in year 1.
Budget and plan for retirement.
How much can you contribute each month? Often, this depends on your monthly spending habits. Start by creating a budget. How much are you spending monthly? Can you cut any costs? What do you have left over to save? Ideally, you want to put 10% – 15% of your paycheck into retirement, but if you can’t, save what you can. You can always raise your contribution amount later. Here’s a great blog that can help you determine how much you’ll need to save for retirement.
Understand your social security benefits.
Are you eligible to receive social security in retirement? Unfortunately, many pastors are advised to opt out of social security when they first begin the ministry. First, find out if your spouse opted out of social security benefits. Then, head on over to our article on social security benefits which should answer most of your questions about social security. And yes, we discuss what you should do if your spouse did opt out of social security.
Don’t forget to budget healthcare costs.
Typically, medical costs will rise with age. So it’s critical to put money aside just in case this happens. Consider exploring long-term care insurance options and factoring healthcare inflation into your overall retirement budget. Doing so can provide a more realistic picture of your financial needs in retirement. Plus, it will help you better prepare for unexpected medical costs.
Understand what your retirement plan offers.
Understanding how retirement plans work does not come easy for everyone. This is because it involves complex concepts like investment options, tax implications, and compound interest. You don’t need to know everything. But we would recommend knowing the basics of your plan.
Start here:
- What kind of plan does your church offer? Some plans—like a 403(b)(9)—are designed specifically for churches and have better benefits for churches.
- Does your church offer a match? If so, take advantage of this. Here’s how it would work: let’s say your church matches up to 5%. If you contribute 5% of your paycheck, your church would also contribute 5%. Essentially, they would double your savings for that period.
- Did you know that pastors get a big tax break? It’s called the minister’s housing allowance, which allows you to exclude a portion of your gross income—spent on housing expenses—from federal and state income taxes. Find out everything you need to know about the minister’s housing allowance here.
- What investments are you in? Make sure you are your spouse are on the same page when it comes to your choice of investments.
- Do you know how to access your retirement plan funds in case your spouse is not physically able to? If not, get this information from your spouse and save it so you won’t forget.
- Are you paying taxes on your retirement contributions now, or will you be paying taxes when you withdraw your money later?
Seek professional advice
Understanding the ins and outs of retirement can feel overwhelming. If you feel this way, we’d suggest seeking out the advice of a financial advisor (and especially one that understands the unique rules and regulations of church retirement plans). This will give you the peace of mind that you’re on the right path to a financially secure retirement.
At TruthPoint, we’re so grateful for the roles pastor’s wives play within the church and the community. That’s why we’re passionate about giving them the tools and resources they need to educate themselves on their financial future. If you’re a pastor’s wife and would like to discuss this further, reach out to us. We’d love to discuss the ways you can learn and grow as you save for retirement.