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Sorry for the long post.
So, let's be clear. I'm a minister, as well as work as a "system support specialist." Fancy name for IT Helpdesk. On the ministry side, I find finances to be a very taboo subject among people. There is a large mix of individuals who think "trusting in the Lord" and "God will make a way" means they don't have to save or prepare for retirement. I've even heard some claim that saving for retirement is storing up treasures in this world (not a good thing in the bible). I'm blown away at the excuses I hear for not saving. That is a terrible interpretation of scripture, because the Bible supports saving and even preparing for retirement. In fact, these are the same people who become a burden on everybody else because they are always in need and out of money(due to just spending everything all the time). It's just an excuse to not have to save. Gets under my skin!
Ok, nuff of that.
So, last night I was talking to someone who recently started pastoring this year. They are single, and adopted a child. They have a public job as well, but this is the first time they are filing taxes with the ministry income. They are pretty ignorant to anything money outside of basic paying bills, and saving a bit here and there. I explained briefly about how taxes will work with the ministry income, and how starting a traditional IRA might help pull the taxable income down if they were concerned about paying in. I also explained how a Roth works if they want to go that route. I assumed the help with taxes would be a better push to start an IRA. I also presented the idea (to cut some of the junk people think) that saving for retirement will actually allow them to be a blessing later as well as make them a better steward. I didn't think it could carry much weight, honestly.
I got a call this morning asking more about it. I briefly explained index and mutual funds and told them to check into a Vanguard index IRA account. We talked money for a while longer, and I went about my business.
Later in the morning I get a text "I just started a vanguard IRA account."
WIN!
I explained briefly how saving $200 a month with what they are putting in up front will give them $120,000 in 20 years with only $48,000 being what they put in(based on 8%). Then showed them how just adding $200 a month more on top of that will give them nearly double that amount of $230k. They are now planning to max out their IRA from here on.
WIN #2!
They are going to look more into all this, and I hope they do. We need more properly financially educated people in the ministry. I'm shocked and stoked that someone, especially in ministry, actually listened and took action. They are getting back $3,000, and putting in $2,500 into an IRA. I pointed out they are funding that IRA without any money out of pocket basically. That's smart money.
So, let's be clear. I'm a minister, as well as work as a "system support specialist." Fancy name for IT Helpdesk. On the ministry side, I find finances to be a very taboo subject among people. There is a large mix of individuals who think "trusting in the Lord" and "God will make a way" means they don't have to save or prepare for retirement. I've even heard some claim that saving for retirement is storing up treasures in this world (not a good thing in the bible). I'm blown away at the excuses I hear for not saving. That is a terrible interpretation of scripture, because the Bible supports saving and even preparing for retirement. In fact, these are the same people who become a burden on everybody else because they are always in need and out of money(due to just spending everything all the time). It's just an excuse to not have to save. Gets under my skin!
Ok, nuff of that.
So, last night I was talking to someone who recently started pastoring this year. They are single, and adopted a child. They have a public job as well, but this is the first time they are filing taxes with the ministry income. They are pretty ignorant to anything money outside of basic paying bills, and saving a bit here and there. I explained briefly about how taxes will work with the ministry income, and how starting a traditional IRA might help pull the taxable income down if they were concerned about paying in. I also explained how a Roth works if they want to go that route. I assumed the help with taxes would be a better push to start an IRA. I also presented the idea (to cut some of the junk people think) that saving for retirement will actually allow them to be a blessing later as well as make them a better steward. I didn't think it could carry much weight, honestly.
I got a call this morning asking more about it. I briefly explained index and mutual funds and told them to check into a Vanguard index IRA account. We talked money for a while longer, and I went about my business.
Later in the morning I get a text "I just started a vanguard IRA account."
WIN!
I explained briefly how saving $200 a month with what they are putting in up front will give them $120,000 in 20 years with only $48,000 being what they put in(based on 8%). Then showed them how just adding $200 a month more on top of that will give them nearly double that amount of $230k. They are now planning to max out their IRA from here on.
WIN #2!
They are going to look more into all this, and I hope they do. We need more properly financially educated people in the ministry. I'm shocked and stoked that someone, especially in ministry, actually listened and took action. They are getting back $3,000, and putting in $2,500 into an IRA. I pointed out they are funding that IRA without any money out of pocket basically. That's smart money.
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