Benefits

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How Much Vacation Should a Pastor Receive?

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Here is my latest article over at the Christian Broadcasting Network's website:

Without any hesitation or doubt, I believe that pastors should be given a generous amount of paid vacation or personal leave time.

While in seminary, I worked in the credit card and, later, mortgage departments of an international bank. Within three months of my employment, I was already receiving 18 days of paid time off (PTO) every calendar year (not including holidays). This wasn’t because I was special in any way. It was just their standard policy for all employees. That was three-and-a-half weeks of paid vacation! By the time I left, I was entitled to 23 days of PTO – nearly five weeks!

Now, think about that from this perspective: that was for a job that never once called me in the middle of the night because of an emergency; that never once had me in tears over someone’s pain or sinful choices; that never once asked me to stand at the bedside of a dear friend to watch him take his last breath; and that never once was going to require me to answer for the souls of the people we served.

If there was ever an employee in the history of the world that should be given generous time off, it has to be a pastor.

As an additional thought on this, consider the fact that pastoring is not a normal “40 hour/week” kind of job. In a very real sense, it never ends. There are no days off from loving your people and being concerned about them. There is no vacation from one’s responsibility to care for their souls. Again, if there was ever a “job” that should be provided with as much PTO as possible, it has to be the job of a pastor.

So, be generous with the paid vacation time you provide for your pastoral staff. You have no idea how much they need it.

To read more about benefits pastors should receive, pick up a copy of my book, How to Not Be a Broke Pastor!

Listen to what readers are saying:

"Really liked this book. Highly recommend it for anyone who is working through the maze of non-profit pastoral finances. There is not enough help subject and this book is a very needed addition in this regard. The book is enjoyable, well outlined, and makes a complex subject easy to understand." - Ilya

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Why every pastor should receive disability insurance from their church

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While fairly standard in the secular workplace, disability insurance coverage does not seem to be as common amongst pastors and churches. Yet, the possibility of a pastor becoming disabled is no less than any other worker in any other profession, and churches should be ready to care for any pastor who becomes disabled - either directly or through the purchase of disability coverage.

Notice the two options I just gave for caring for a disabled pastor (I’m assuming that a church not providing care for a disabled pastor isn’t one of their options. How unloving, uncaring, and un-Christlike would that be?).

One option is for the church to care for a disabled pastor directly – meaning, the church is willing and able to keep that pastor on its payroll (at some level or another) indefinitely, regardless of work performed or services rendered. While this may save the church money on annual premium payments now, it places all of the long-term risk on the church – a commitment that may or may not be feasible in the present or future.

The second option - and the one I would highly recommend - for caring for a disabled pastor is through the purchase of disability insurance coverage. Yes, the church will incur an expense related to the annual premiums, but this is generally minimal – especially when you compare it to the idea of keeping a pastor on your payroll indefinitely should they become disabled. This way, the church transfers the long-term risk to the insurance provider, and everyone can have peace-of-mind knowing that the pastor will be cared for should the unthinkable happen.

Does your church offer disability insurance coverage to your pastor?

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Healthcare.gov Open Enrollment Begins Today!

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Open enrollment begins today for all of us who get our medical insurance through one of the Obamacare exchanges. For pastors and churches, this can be a great way to get excellent medical coverage at a very reasonable rate.

For example, I just enrolled, and for my family of four, our monthly premium will only be about $105, and our out-of-pocket limit will be $3600! That's pretty good.

If you enrolled today, I would love to hear what rates you received. Please leave a comment below or on my Facebook page.

BUY YOUR COPY TODAY!!

Over the past three years, our church has saved over $100,000 in health insurance premiums by using the provisions of the Affordable Care Act (a.k.a Obamacare) to our advantage - $100,000 that we have used to hire additional staff, send one of our members into foreign missions, and pay down our church's mortgage!

Written for both pastors and church decision makers, Benefitting from Obamacare is the story of how we did that, the challenges we faced, the things we had to consider, and what we have experienced since.

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Should Churches use a SEP IRA?

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Of the three main options available to most churches for establishing retirement plans for their pastors - SIMPLE IRA, 403(b), and SEP IRA - my favorite option is the SEP IRA. The most obvious difference between a SEP and either a SIMPLE or a 403(b) is that employees are not allowed to make contributions to a SEP. Only the employer can contribute.

In my experience, this isn’t an issue for most pastors since most pastors probably don’t have a ton of money to contribute out of their own budgets towards retirement anyway; and even if they do, they can usually still do so through making contributions to their own personal Traditional or Roth IRA.

The biggest thing I like about the SEP IRA is that the church can choose to contribute up to 25% of the pastor’s salary towards his retirement. As with SIMPLE plans, please note that this only applies to the pastor’s actual salary, not their total income. If a pastor has a total income of $50,000, but designates $25,000 of that as being housing allowance, the church can only contribute up to $6,250 ($25,000 x 25% = $6,250).

This provides both the pastor and the church with a multitude of options regarding how to best care for the pastor and his family.

As for what I don’t like about SEPs . . . yeah, I can’t think of anything. They’re easy to setup and operate. They provide a way for the church to be as generous as it can afford to be to all employees. There really is no downside that I can see.

Obviously, a lot more could be said about the intricacies of and requirements surrounding SEPs. As I have said in the past, I am not an accountant, tax professional, or certified financial planner, and you should definitely seek counsel from one or more of these individuals before deciding on which plan is best for you and your church.

For a nice overview of SEP IRAs, click here.

What do you think? Leave a comment below, or follow me on Facebook and leave a comment there.

BUY YOUR COPY TODAY!

THE PASTOR'S GUIDE TO WISE INVESTING

Pastors are so good at so many difficult things - preaching/teaching, counseling, discipling, caring - but can very often be completely clueless when it comes to handling their money wisely. This can be true of their day-to-day finances, but is often more true in regards to their retirement planning.

The Pastor's Guide to Wise Investing takes the, often, confusing world of investing and makes it simple and easy to understand by compiling and condensing the best advice from the best investors of our day into one simple, easy-to-read guide.

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Best of the Web: The Cheap Way to Bless Your Pastor

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I love it when I find other people saying EXACTLY what I say. Read this article from Kevin DeYoung to see what it is. Hint: this is what I talk about in chapters 5 and 9 of Structuring Pastoral Compensation!

Buy Your Copy Today!

STRUCTURING PASTORAL COMPENSATION

Is your church structuring its pastoral compensation package in a way that truly blesses your pastor? Is your church doing all it can and should to financially provide for the pastors who keep watch over your souls?

The fact of the matter is that most churches have never given any thought to what a pastoral compensation package should look like, and much less to how they should structure it so that their pastor receives the maximum benefit.

Structuring Pastoral Compensation is written for church decision makers (Elders, Deacons, Trustees, Committee Members, etc.) to help them understand what should be included in their pastor's compensation and how to best implement the various pieces so that their pastor will be truly blessed.

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Should Churches use a 403(b)?

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The non-profit equivalent of a 401(k) account is called a 403(b) account. If you have ever had a 401(k), then you know how it works. Unless your church is very large, I can almost guarantee that this will not be the best choice for you.

What I like about 403(b) accounts is that there is a lot more flexibility for increased contributions from both the pastor and the church. What I hate about 403(b) accounts is that they are MUCH more complicated to operate and administrate than either a SIMPLE IRA or a SEP IRA, and I would not recommend creating such a plan without the direct help of both an accountant and a tax professional. Personally, I think that most churches (particularly small and medium sized churches) have a better option.

A lot more could be said about the intricacies of and requirements surrounding 403(b)s. Since I am not an accountant, tax professional, or certified financial planner, you should definitely seek counsel from one or more of these individuals before deciding on which plan is best for you and your church.

For a nice overview of 403(b)s, click here.

What do you think? Leave a comment below, or follow me on Facebook and leave a comment there.

BUY YOUR COPY TODAY!

THE PASTOR'S GUIDE TO WISE INVESTING

Pastors are so good at so many difficult things - preaching/teaching, counseling, discipling, caring - but can very often be completely clueless when it comes to handling their money wisely. This can be true of their day-to-day finances, but is often more true in regards to their retirement planning.

The Pastor's Guide to Wise Investing takes the, often, confusing world of investing and makes it simple and easy to understand by compiling and condensing the best advice from the best investors of our day into one simple, easy-to-read guide.

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How Our Church Saved Over $100,000 in Healthcare Costs

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BUY YOUR COPY TODAY!

It's true. As of the end of this year, our church will have saved more than $100,000 (over a three year period) in healthcare costs associated with providing medical insurance for our pastoral employees.

We did it by using the provisions of the Affordable Care Act (a.k.a Obamacare) to our advantage. Not only did it save our church a TON of money, but it provided amazing health insurance for our pastoral staff. To learn how, buy Benefitting from Obamacare today!

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Should Churches use a SIMPLE IRA?

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As the name suggests, SIMPLE IRAs are extremely simple for churches to operate. SIMPLE plans can be setup as either matching or non-matching plans. If a church chooses to use the matching approach, they can match, dollar-for-dollar, each employee’s retirement contributions up to 3% of the pastor's total salary (ONLY their salary and NOT their housing allowance). They can do less than 3%, but no more. In this setup, employees can also contribute up to $12,500 towards their SIMPLE plan as of 2017.

If the church chooses to use the non-matching approach, they must contribute 2% of every employee’s salary towards their respective SIMPLE plans regardless of whether or not the employee makes any contribution.

What I like about SIMPLE plans is that they are, well, simple. They are extremely easy to set up and administrate. What I hate about SIMPLE plans is that the church can only contribute a very small amount towards the pastor’s retirement account.

Obviously, a lot more could be said about the intricacies of and requirements surrounding SIMPLE IRAs. I am not an accountant, tax professional, or certified financial planner, and you should definitely seek counsel from one or more of these individuals before deciding on which plan is best for you and your church.

However, while it is definitely better than nothing, my non-credentialed belief is that you can do a lot better than a SIMPLE IRA for your pastors.

For a nice overview of SIMPLE IRAs, click here.

What do you think? Leave a comment below, or follow me on Facebook and leave a comment there.

Coming Soon!

THE PASTOR'S GUIDE TO WISE INVESTING

Pastors are so good at so many difficult things - preaching/teaching, counseling, discipling, caring - but can very often be completely clueless when it comes to handling their money wisely. This can be true of their day-to-day finances, but is often more true in regards to their retirement planning.

The Pastor's Guide to Wise Investing takes the, often, confusing world of investing and makes it simple and easy to understand by compiling and condensing the best advice from the best investors of our day into one simple, easy-to-read guide.