Lutherans in Minnesota

Pastors postpone retirement dreams

As members of the baby-boom generation near the end of their work years

Just like members of their congregations, pastors in the baby-boom age category seem to be adjusting to the current economic situation by deferring retirement. That gives them time to analyze how their income from various sources will pay out in retirement. Some are opting to continue working but cutting back from full-time positions.

At the Evangelical Lutheran Church in America (ELCA) Board of Pensions, Catherine Malotky, Retirement Planning Manager, says the current annual rate of retirements is 100 less than in 2005. She observed that many won’t retire “cold turkey,” but will ease into retirement, for example, by working part time. Some will gravitate to visitation pastor or supply preacher roles. Others have gone into development work. Still others attending retirement planning seminars have demonstrated their concern for the future by indicating they might become “greeters” at Wal-Mart.

Rev. Catherine Malotky

Additional factors influencing retirement plans are longer life expectancies and generally better health. That means people need to manage their assets over a longer period of time. In that, pastors and church workers are no different than others in today’s society.

Malotky commented, “We can’t control the market, but we can control how long we work and how much we work.”

For many ELCA retirees, their retirement income decreased by nine percent for 2010. Though results have improved somewhat, 2011 will see a six percent decline. That is still painful. Malotky reminded, “Living below our means is always a good idea.”

Are pastors staying in the pulpit longer?

At one suburban church, the preaching pastor recently remarked that he had just opened his retirement account statement. He quipped, “I hope you like me because I’ll likely be preaching until I’m 105.”

Since defined contribution retirement plans have replaced defined benefit plans, most participants in plans such as the ELCA’s have shifted to more conservative investments as they approach their projected retirement dates. That, according to Malotky, has insulated participants somewhat from the equity (stock) market declines of the past several years. However, income-producing investments such as bonds have not been immune to the broader economic trends.

Kyle Molin, Group Partner with the Crossroads Group, Thrivent Financial for Lutherans, observed that he’s seeing “some concerns among pastors approaching retirement age that they might need some additional income for a comfortable retirement when the traditional church-related plan is experiencing reductions in payouts.” Molin observed that his experience in this area is somewhat limited since only a small percentage of Thrivent’s three million clients are pastors.

Bob Lee, former president of the Association of Free Lutheran Churches (AFLC), and now a faculty member at the Plymouth, Minnesota, Bible school operated by that group, says he’s noticed a “trend among pastors not to retire at 65, 66, or 67.” He says there is talk of organizing a “Jacob Tanner Society,” named for the Lutheran professor who taught at Waldorf College in Forest City, Iowa, into his 90s, after “retiring” from another Lutheran college. Legend has it that Tanner shingled the roof of his Minnesota vacation cabin in his 90s and drove to Texas alone when he was 100.

Peter Meier of the Minnesota South District of the Lutheran Church—Missouri Synod says he has noticed that pastors are “hanging on beyond normal retirement age to protect their retirement income.”

Where do retiring pastors go?

Most pastors who continue to work, but on a reduced schedule, choose to stay within the church or in church-related occupations.

The ELCA Board of Pensions provides pre-retirement seminars (offered periodically through synods) and financial coaches to work with members as they move into their 50s and beyond. The coaches help members identify the decisions they will need to make in order to be ready to retire:

* First, coaches ask members to tell a story about what they imagine their lives will be like in retirement. Then the members work through how much it might cost.

* Second, coaches help members identify what resources they have that will, or could, provide the income they will need to pay for that retirement life. A retirement savings account is not yet an income stream.

* Third, coaches help members think through what they can do between now and then to meet their goals. Decisions are always the member’s responsibility, but coaches help provide specifics.

Coaches help members keep the big picture in mind as they plan, thinking strategically based on their vision of retirement. It’s all connected, says Malotky. The full process can happen across a series of appointments, over time, though sometimes members want a deeper dive into one or two issues. Again, the idea is to think strategically.

Members with accounts in the ELCA Retirement Plan are welcome to call with questions. Coaches work by appointment. Malotky can be contacted by calling 612/752-4453 or via e-mail at cmalotky@elcabop.org.

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