Salary, benefits, housing allowance, parsonages, and other compensation receive special tax treatment if earned by clergy. Another “perk” for ministers is the opportunity to elect out of Social Security. This is a complex decision to consider, and increasing take home pay is not a reason for making this election.
In order to opt out of Social Security, you must attest to the following statement:
I certify that I am conscientiously opposed to, or because of my religious
principles I am opposed to, the acceptance of any public insurance that
makes payments in the event of death, disability, old age, or retirement;
or that makes payments toward the cost of, or provides services for,
medical care.
This is a weighty proclamation to make and simply not true in most cases. Certainly there are less mainstream churches and Christian sects that eschew government mandates, restrictions, and interventions. However, this is not a part of Methodism. You may personally be opposed to acceptance of public
insurance, but that is not what is presented here.
If the statement is true, then there is no reason to continue reading about the consequences of the opt-out election. This is a moral stance for which money and benefits are not factors.
However, some pastors may still consider the election. Thus, please continue for more information.
The election is irrevocable. It is permanent. This means that a job change, marital status change, family change, retirement plan change, or insurance change, will NOT change your ability to opt back into Social Security.
All the planning and saving that must be done now, must continue through any of those changes.
Save for 100% of retirement financial needs
Pay for disability insurance
Pay for life insurance
Pay for all health insurance upon retirement age
Prepare for children’s financial future in case you die before they are independent
Prepare for spouse’s financial future in case you die before retirement age
Social Security may be a large deduction from income now. However, it converts into income upon disability or premature death in the near future. In the long-term future it transforms into retirement income and covers some of the costs of healthcare.
Serious financial analysis and personal reflection is needed before declaring that Social Security incompatible with your morals and forgoing the benefits for you and your family is not a financial consideration.