Retirement planning for pastors.
Retirement works differently when your pay has included a housing allowance, your largest account is a church plan, and you may have opted out of Social Security decades ago.
Three decisions that are hard to take back
Most retirement planning is a series of adjustments. For ministers, a few of the choices behave more like doors that close. These are the ones worth getting right the first time.
1. Moving money out of the church plan
A 403(b)(9) church plan has a feature no IRA has. Roll the balance into an IRA for a reason that looks good on a spreadsheet and that feature does not come with it. The rollover itself is easy, which is the problem. Whether to do it, and how much, deserves to be a planning decision rather than a paperwork one.
2. The Form 4361 exemption
Under current law it is irrevocable, and the ministerial earnings it covers never build Social Security or Medicare credit. That means no retirement benefit from those years, no disability coverage, and no premium-free Part A. Planning around it is real work, and there is usually more room than people assume if you start early enough.
3. What happens to the allowance when you stop serving
The housing allowance is not automatically a retirement benefit. What a retired minister can exclude depends on where the distribution comes from and who designated it, and the IRS has expressly declined to rule on part of it. Plan on the facts, not on what a colleague told you at a district meeting.
General education, not advice. Clergy tax rules turn on specific facts, and individual situations vary considerably. Nothing on this page is advice about your circumstances or a prediction of any outcome. Talk with a qualified tax professional about your own facts before you act.
On the Social Security opt-out, since it comes up every time
Under current law a Form 4361 exemption cannot be revoked. The statute says so directly, and the Social Security Administration is equally direct that a minister cannot later acquire credit for the earnings the exemption covered.
There is pending legislation. The Clergy Act, H.R. 227, passed the House on April 27, 2026 by a vote of 350 to 5. It would open a limited two-year window for ministers to revoke the exemption. Its Senate companion, S. 639, has been sitting in the Finance Committee since February 2025 with no recorded action, and the bill is not law.
So the planning answer is the unglamorous one. We build your plan on the law as it stands, we do not count on a change, and if the law does change we will tell you and we will look at it together.
What we actually look at
- What is in the church plan, what it can do, and what leaving it would cost you
- Your Social Security record, or the size and shape of the gap if you do not have one
- Medicare, and specifically Part A, if you opted out
- Required minimum distributions, which begin at 73 or at 75 depending on the year you were born
- The housing allowance now, and the honest range of what it may do later
- Whether your household could absorb the loss of the allowance if you died first
- The distance between your current trajectory and the life you have described as enough
Start here
The Pastor Retirement Checkup
One focused engagement. You bring your situation, we tell you in writing where your retirement actually stands, and you decide what happens next. No ongoing commitment.
$599 for an individual. $799 for a married couple.