As a pastor, I have learned firsthand the kind of quality men God has called to the ministry – some of the finest men in the world. I mean that – no tongue in cheek here. The world may think of pastors as the filth of the world and the offscouring of all things, but I know too many good men, men who have committed their life to the gospel and the good of their fellowman to give any credence to that kind of thinking. From across America and around the world, I am blessed by the many pastors and assistant pastors, missionaries, church planters, and Christian school teachers who have committed their life to God’s work.  They love what they do. They don’t consider it a sacrifice. If they could live their lives over again, the men I know would choose the ministry over any other vocational calling.  I think if they had nine lifetimes and could choose any vocation to fill those lifetimes, they would choose the ministry.  The “burdens” are a small price to pay for the joy of serving God and His people full time.  Truly we can say of them that “the world was not worthy.”

One thing I have observed about nearly every pastor or missionary I know: they know what it means to give themselves.  I hope you will keep that in mind as I discuss money mistakes pastors make. Most of their mistakes are made on the side of self-sacrifice and a desire to maximize the Lord’s money.

What I intend to address here is not intended to promote greed or cause anyone to stumble into the love of money.  Too many pastors come to the end of their ministry and have little to fall back on.  After giving themselves to God and their people, they find that they are not in a position where they can retire comfortably and still provide for their wife.  And while I realize that many pastors have an aversion to the “R” word (retire), I also think that much of the discussion on that subject is unrealistic. 

Men in their 80s don’t generally make good pastors.  I hope you won’t pass that along to your favorite elderly pastor.  I don’t mean to insult them or anyone else.  But when a pastor holds onto his church late into his 80s, the church will suffer.  He loses his physical capacity for pastoral leadership.  That is not intended as a disrespectful attitude towards men who are up in years.  I honor these men.  But we also need to face facts. 

When a pastor’s health begins to fail, when he has had a few strokes or a few heart incidents, he can’t always continue on.  And while we all intend to serve God until we die, we ought at least to admit that at some point, the way we serve God will need to change. 

Perhaps the example of John Newton will illustrate what I mean here.  Jonathan Aitken records in his recent biography of Newton that at the age of 80, Newton was almost blind and partially deaf, and yet insisted that he was still capable of preaching.  One man reported that “Mr. Newton is very feeble – had great difficulty to get out of coach.  I was obliged to lift him with all my strength…”

Yet, Newton insisted that he could still deliver good sermons.  According to this man’s report, “Everybody else shakes his head and laments that he preaches at all… His understanding is in ruins, yet its very ruins are precious.”

In his final sermon, Aitken records that “his memory had deteriorated so much that he was unable to remember what he was preaching about and had to be reminded of his subject several times.  After that debacle he was never allowed back into the pulpit…”

While we honor the old man’s pluck, we should also recognize that at some point, for the good of the people he serves, the pastor will need to step down. 

What then?  How is he to take care of himself and his wife?  For many churches, the financial strain of supporting two full-time pastors will be too great to bear. 

Let’s assume a pastor retires in time for his 80^th birthday.  Some would say that is very late, but let’s assume it for the sake of argument.  And, let’s suppose God preserves that man alive until he is in his mid-90s, say 95.  That isn’t unheard of, especially among men whose lives have been relatively free from vices and deadly habits.  During those 15 years, that man will need a place to live, food to eat, and provision for doctors and the care of his daily life.  Chances are, he will be very limited as far as his ability to earn money the way he did throughout his life.  He is not likely to be in much demand for preaching.  He will probably struggle to write books to supplement his income.  His opportunity for earning income will fade quickly, and may be totally unavailable to him.

He will need money to live.  More importantly, he will need his dignity.  It is easy to say, “I’ll just live with my kids.”  I have watched more than a few pastors reach their golden years and need to depend on their children.  It ain’t pretty, friend.  Your kids marry, and their spouse might not be so fond of the idea of moving grandma and grandpa into the family home.  Not to mention, it can be terribly degrading to a man who has been independent and self-reliant his entire life to suddenly find himself dependent on the charity of loved ones. 

Friend, we must think about retirement, whether or not we want to.  For that reason, I want to address five mistakes I believe to be common among pastors.  

Mistake #1: opting out of Social Security

Unless you have a plan in place to put 15% of your income into a retirement account, this is a big mistake.  The truth is, even if you put 15% into retirement, you probably won’t get as much back as you would from Social Security.  You may be able to earn more in interest; you probably can’t replace the benefits.

I understand why pastors do this.  In fact, I did it myself.  Fundamentally, I am opposed to Social Security as a matter of principle.  We have been told for years that Social Security won’t be there when we reach retirement age – though I don’t know why it wouldn’t be, since government owns the printing presses But besides these matters of conscience, more than a few pastors have opted out to save themselves and their church money.  Quite often in setting a pastor’s salary and compensation, the church looks at what the pastor needs to get by.  In fact, many pastors would feel guilty if they earned “too much” money, since that would seem inappropriate.  As a result, the pastor’s salary is set at a minimum so the pastor can survive.  Opting out of social security ultimately saves the church money. The pastor finds the 15% annual contribution to Social Security difficult to pay into, and the church doesn’t offer to pay it for him. So, he opts out.

But the pastor will suffer for it.  When the church approaches the question of the pastor’s salary on the basis of his survival, the pastor will struggle to invest money for retirement.  As we all know, it is impossible to plan your finances on a razor wire.  Too many unexpected expenses come up, and life always costs more than what you thought when you planned the budget.  In most cases, when unexpected expenses come up or the family budget gets stretched a little too thinly, the first thing the pastor cuts is the money he intended to invest in his own retirement.  And as the years go by, he falls further and further behind, and “catching up” becomes more and more impossible. 

It would be very difficult for anyone to retire on Social Security alone.  But if you don’t have Social Security income, then you are that much further behind the eight-ball when it comes time to retire. 

In reality, if you opt out of Social Security, the cost for you will be more than 15% of your income.  This is because, first, you will need to pay out of pocket long-term disability insurance policy.  Let’s say you are in an accident that leaves you completely unable to fulfill your duties as pastor.  Perhaps you lose the use of your voice, or you are paralyzed from the neck down.  Social Security would give you disability income.  But without Social Security, you have no ability to provide for your family.  You cannot collect on your life insurance.  You would have nowhere to turn, and would be thrown onto the charity of others.

But the biggest reason you will need to invest more than 15% of your income if you opt out of Social Security is for the healthcare benefits.  When you reach the age of 65, you will be denied Medicare coverage if you have opted out of Social Security.  This means, at the time of your life when you spend the most in healthcare, you will lose out on a major source of savings.

Dave Ramsey argues that you should opt out.  Devin Carroll does the math to see if Dave is right.  You might dispute some of the math in Devin’s article, but I think he makes a good point.  Here is another perspective of the benefits of opting out, and one more on the conscientious objection issue, to round out the discussion. My opinion: you aren’t likely to beat Social Security on your own, not when you consider all the benefits.

Mistake #2: supporting missionaries before paying the pastor

Look, I get it.  We want our churches to give to missions.  We ourselves are committed to spreading the gospel to the far reaches of the world.  And there are so many needs to be met, so many missionaries to support.  Besides, it seems mercenary for us to put ourselves first.  Missionaries are – forgive me for saying so – the sentimental favorite. 

I regularly hear of church plants and missions taking on missionaries for support before the church is able to support the pastor.  This is a sentimental, not a Scriptural approach.  Paul makes it very clear that the church has a duty to support the pastor (I Corinthians 9:9-14).  That duty takes precedence over any financial support of missions. 

I often hear 2 Corinthians 8 preached in reference to missions support, specifically to promote the idea of “Faith Promise” missions.  Yet, if you read the context of this passage, it has nothing whatsoever to do with missions.  Paul began urging the Corinthian believers to take up a collection for the suffering Christians in Jerusalem in his first epistle (I Corinthians 16:1ff).  Paul revisits that request in 2 Corinthians 8, prefacing his remarks with the example of the Macedonian believers, who “in a great trial of affliction the abundance of their joy and their deep poverty abounded unto the riches of their liberality.”  Paul says that they prayed “us with much intreaty that we would receive the gift, and take upon us the fellowship of the ministering to the saints.”  And because Paul was encouraged by their self-giving sacrifice for these suffering saints, Paul was encouraged to seek the same from the Corinthians (2 Corinthians 8:6). So, the classic passage used to promote Faith Promise missions is actually a passage on helping supply the need of suffering believers.

Please don’t misunderstand what I am saying here.  Our church gives to missions, and we believe we ought to.  Our church uses Faith Promise, which is a wonderfully practical way of supporting missions.  But 2 Corinthians 8 doesn’t teach Faith Promise missions giving, and the Bible never teaches us to put missions support before the provision of the pastor.

I Corinthians 9 does, however, teach the church the duty of supporting the pastor.  In that chapter, Paul answers the charge that his ministry work is mercenary.  He has never taken a dime (to use an American idiom) from the Corinthians (9:15), but Paul insists that he would be within his rights if he did.  Paul’s argument is simple – God established the law in Israel that the people were to provide for the priests.  Thus, in arguing for the church to pay the pastor, Paul repeatedly references Old Testament law (9:8-9).  Paul asks the question, “Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock?”  He speaks of plowing in hope (v. 10).  And then he states it directly:

If we have sown unto you spiritual things, is it a great thing if we shall reap your carnal things?

And again,

Even so hath the Lord ordained that they which preach the gospel should live of the gospel.

Again, this is not intended to be an argument against supporting missionaries.  It is an argument against prioritizing missions support above pastoral support.  The church must provide for their pastor, and until the pastor is financially able to dedicate his full-time attention to the ministry of the saints, the church should not emphasize missions support. 

By the way, as my good friend Pastor Steve Damron points out, research shows that on average, missionaries earn about $30,000 annually more than pastors.

At a minimum, the pastor should be paid the median of the average household income of its members.  The Bible teaches that he is worthy of “double honor” (I Timothy 5:17). Some would take this to mean that the pastor should be paid more than the median. The bottom line is, support the pastor first, then support missionaries.

Mistake #3: foregoing regular pay increases

This is noble, but it is a big mistake.  Between cost of living increases and inflation, if a pastor’s salary isn’t increased by an average of about 3% per year, he is losing money. If he hasn’t had a pay increase in five years, that is the equivalent of giving him about a 15% pay cut  If you receive a 3% increase per year, you aren’t really receiving a pay increase at all. 

My wife is a mighty stretcher of the dollar, and I am regularly amazed at her ability to call in her ships from afar.  But my wife isn’t Miracle Max.  She still hasn’t learned how to multiply loaves and fishes to feed our hungry children.  She needs money.  And, as she reminds me, the cost of food and household goods increases regardless of whether or not we have received a pay increase. 

I understand that churches have down years and can fall behind.  While it may be necessary to forego a pay increase in any given year, this should be rare, and as soon as the church can, it should make up the difference. 

When this is not done, here is what happens: expenses continue to mount.  The pastor’s family continues to grow (and grow more expensive).  Soon, the pastor can find himself in debt, and if he isn’t careful, can find himself in serious debt. 

This might be the most difficult problem for a pastor.  Often, the church figures that unless the pastor is asking for a pay increase, he doesn’t need one.  And the pastor doesn’t know how to ask for one.  As a result, there may be decades that go by without the pastor receiving any pay increase. 

The best solution to this problem is for a man in the church to personally make it his duty to ensure the pastor is taken care of.  If any laymen read this article, let me challenge you to go to your deacons and tell them that you need to make sure the pastor is taken care of.  If you need to, volunteer to be the laison between the pastor and the deacons.  Then, go to the pastor to find out what his financial needs are.

If you are a pastor reading this, you might wonder what you should do. Let me suggest that you print this article off and give it to your deacons.  Or, have a pastor or a retired pastor come in to speak to the men about this need.  If you can, approach one of your men – one who is solidly in your corner, and ask for help with this.  Ask him to be your advocate, to serve as a go-between with your deacons so that you won’t need to come with your hand out every few years. 

A few years ago, I had to humble myself and talk to our men about this.  I was feeling the strain of the huge spike in cost-of-living combined with the strain of minimal pay increases, and I had to do something.  One of the hardest things for a pastor to do is to come with hat in hand and ask the people he pastors to consider him for a pay increase.  But at that point, the need was desperate enough that something had to be done. 

When I mentioned the need to our men, their response was tremendous.  They more than met the need.  And an amazing thing happened – prior to this, our church had been squeaking by for nearly two decades.  We hadn’t had a surplus in years.  But when the men decided to meet the need – even though it was a stretch for the church at the time, God prospered our church like never before.  This past year in the midst of a pandemic, we added thousands of dollars to our church’s reserves. 

Pastor, by suffering in silence, you are robbing your church of a blessing.  When the church takes care of you, God will bless.

Mistake #4: not building up the reserves in the church

They say confession is good for the soul.  Here’s mine.  When I began to pastor Berean, we had a healthy surplus in all our accounts.  I felt very strongly that this was wrong.  The church is not a bank.  The money we take in should be put to work in the ministry, maximizing our ability to bring souls to Christ. 

Not surprisingly, the surplus disappeared.  And from about 2003 until 2020, we were tight.  Skin tight.  We could supply the local drum corps tight.  Our deacon meetings involved a lot of discussion about how to keep paying bills and what expenses we could cut.  As I mentioned a moment ago, that all changed last year when the church stepped up to take care of their pastor.

Socking money away for a rainy day is good, sound stewardship.  For us, it started with a resolve to have the money in place for discretionary items before we spent it, rather than spending the money as it came in through the offerings.  We set goals for feeding various funds, and we waited until the money was in place before we planned events.  To most people, that probably sounds pretty elementary, but that was a change for us. 

More importantly, we set savings goals for our church.  Our goals are very simple: we want six months of regular expenses in reserves.  We made significant progress towards that goal last year, and we continue to work towards that goal this year. 

Pastor, your job is hard enough without needing to worry about money.  It is not a sin to have money in reserves.  Having considered it carefully, it might be a sin not to.  The pastor’s job is to build up the church for the future, so that it will survive over generations.  The church will not survive if it is living offering-to-offering.  If you are one bad month away from extinction, you are in serious trouble.  Let me encourage you: make what adjustments you need to make, and set some serious savings goals.  Make that part of your church’s financial vision.  Present it to the church along with the Biblical principles behind it.  Then scrape and save so that you can provide financial security for the church.

Mistake #5: not learning how to invest

I hope this is the most controversial point in the post, because the others should be obvious.  I realize that, for one reason or another, some pastors are opposed to the stock market.  But in order to provide for your wife in old age, you will need to save enough money, and let it earn enough in interest, to keep up with inflation and cost-of-living increases.  Socking all your money away in savings accounts and money-markets won’t do that.  If you think the stock market is sinful, find some good mutual funds or (my preference) ETFs to invest in.  Do your homework.  Make sure they have a great track record of increasing in value and paying out good dividends.  Get yourself a savings plan, decide how much you need to invest, and stick with it.

As for me, several years ago I decided that I needed to learn how to invest money, rather than just put all my money into one mutual fund or ETF and banking my future on it.  I opened an account at TD Ameritrade, deposited $500, and started watching their wonderful educational videos.  Those videos are some of the most helpful things I have seen.  After about 6 months of watching, with my $500 still safely in place, I decided to try to buy a stock.  At that time, you could not buy a single share of any stock, and as I hunted, I couldn’t find any stock that I could afford.  Just about every investment platform you might use charged $20 per transaction, so you had to earn $20 on a purchase just to break even.  Eventually, I withdrew my money and put it back into my money market.

Then, a missionary friend started talking to me about retirement and investing.  He told me about Robinhood, which hadn’t quite made a name for itself yet.  I opened an account with them.  Robinhood allowed investors to buy single shares then – they now allow fractional shares.  When I started with Robinhood, they didn’t allow dividend reinvestment.  They do now.   There are plenty of other great platforms out there, and I’m not endorsing Robinhood – just telling you what I did.  One of the best things about Robinhood is that they didn’t charge the customary transaction fee for trades.  They make their money other ways, and you should beware of that – they aren’t “giving” anything away.  But they made it possible for a guy like me, just getting started, to navigate the frightening world of investment.

My missionary friend gave me some important advice, right off the bat.  He told me that he never buys stock unless the company pays a dividend.  That way, even if the share price drops, you are still making money.  He suggested that I try investing, not trading.  Traders – especially day traders – rarely do well. 

Under his tutelage, I set up a regular deposit of $25 per month.  I studied various sectors, from REITs to gold (I prefer mining stocks that pay a dividend) to tech stocks.  Some months I buy, sometimes I wait.  When the pandemic hit, I noticed that Apple stock took a big hit and I jumped on it.  That has turned out to be a big winner for me.  I’m not giving advice here, and I am no expert.  I still feel pretty overwhelmed when I go to make a purchase.  But I am learning a ton about investing.  And no, I don’t follow Redditt, and I didn’t buy Gamestop.

In case you are interested in testing the water here, let me offer a couple of suggestions.  Again, please don’t take this as financial advice.  I don’t have a license, and I’m no expert.  I’m telling you some things I learned – a lot of this from my missionary friend, who really is an expert.  Look into it, and if you think it might be helpful, look into it some more.

First, use the Investopedia stock simulator.  Before I got started with Robinhood, I set up a game with my kids on Investopedia.  Their game gives you $100,000 of “play” money (it doesn’t cost you anything, and you don’t get anything from it either, except the experience).  Everything mirrors the markets, so it is very realistic.  I ended up helping my kids research stock to buy, so I got to see what different strategies might look like.  We played the game during the trade war with China, so we mostly lost.  But it was a great experience for us, and it gave me confidence to get started with some real-life investing. I’ll make you a deal. If you want, I’ll set up a game and invite you to join it. That way, you can see what I am doing, I can see what you are doing, and we can learn together. Send me a message however you like – Carrier Pigeons are fine – and I will send you an invite.

Second, buy a subscription to the Oxford Club Communique.  Subscriptions are cheap, and their services are incredible.  Again, I’m not offering advice here.  I use their “Gone Fishin’ Portfolio,” which is a brilliant, award winning strategy for retirement investing.  The Gone Fishin’ Portfolio includes 10 different mutual funds or ETFs (I do the ETFs) that cover a wide variety of sectors, including at least three bond funds, gold mining, REITs, foreign markets, emerging markets, total market, and small caps.  This portfolio has a proven track record and has had an incredible 12% return over its lifetime.  Oxford also has a strategy for what they call their “Wealth Pyramid,” which can help those who need to play catch-up in their retirement savings.  The most important part of the Oxford Club is the market information and stock recommendations.  These guys do their homework, and they are great at what they do.  If you want to learn, I recommend that you buy into their program.  They have a lot of different clubs, and about half of the emails I get from them are trying to upsell me on some other service.  I just stick with the Communique and soak it up like a sponge.

Most of all, let me wish you well my friend.  Many of the mistakes I discuss here are mistakes I have made.  I’m not judging you if you have made these same mistakes.  I just want you to know that it isn’t too late to turn things around.  Be a good steward.  Work hard.  Save up.  And may God richly bless you.