I am a pastor of a small church and live in the church's parsonage. I am concerned about where I might live after retirement, since I don't have enough in savings to purchase a house. How do I plan for this?

This is a difficult situation to be in, since ministers who live in a parsonage receive an income that many times is just enough for living expenses, with little or no funds left over to invest in a home of their own. Once the minister retires, he has no place to go, and is often shocked to find out how expensive housing can be. Churches and ministers in this situation can make plans now that will lessen or alleviate this problem.

Some ideas for churches:

• Consider selling the parsonage, investing the proceeds, and using the income to provide a housing allowance.
• If the parsonage is located on the church's property, it may not be practical to sell it. In this case, the church should work to adjust their budget each year to gradually increase the housing allowance for your pastor. Once the pastor moves out of the parsonage, use the building for education or office space.
• Consider making or increasing retirement contributions to your pastor's retirement plan.

Some ideas for pastors:

• Begin planning now for retirement by saving as much as you can each month.
• When you retire, you may be able to reduce your taxable income by designating funds you withdraw from your Annuity Board retirement as housing allowance. Be sure to contact the Annuity Board first to determine the taxability of the withdrawn funds.
• Look into purchasing a home to rent out. If possible, set the rental payments at an amount that will cover your mortgage, taxes, insurance, and maintenance. When you retire, either sell it and take your proceeds to pay down on a house for yourself, or move in.

When the pastor and the church work together to plan for the future, they end up ministering to each other, and all are blessed.