5 Financial Myths Many Pastors Believe and Why They’re So Costly
The Myths That Cost Pastors the Most
Pastors are great at spotting bad theology. But when it comes to money? Many of us live by myths. And those myths cost us more than we realize. They cost us retirement security. They cost our families stability. And sometimes, they cost us the chance to finish ministry well.
The problem is, these myths don’t show up in a seminary classroom. They creep in quietly through assumptions, half-truths, or the way we have seen other pastors live. They feel harmless in the moment. But over decades, they shape decisions that can leave us unprepared and even vulnerable.
Let’s talk about five of the most common financial myths pastors believe and what to do instead.
Myth #1: “The church will take care of me when I retire.”
It feels reassuring. After decades of faithful service, surely the church will step in. But here is the hard truth: churches change. Boards turn over. Congregations move on. And the promise that feels solid at 40 can disappear at 65. I have seen too many pastors step into retirement shocked that the church was not in a position to help.
What is wiser: See church generosity in retirement as a blessing, not a plan. Your security needs to be built on savings, not assumptions. A 403(b), IRA, or Roth is far more reliable than a handshake promise.
Myth #2: “The parsonage or housing allowance will take care of me.”
Many pastors assume that as long as the church provides a parsonage, or as long as they are using a housing allowance, they do not need to think much about retirement. But here is the truth: parsonages do not last forever. At some point, most pastors will retire, and the house that came with the job will no longer be there. And while housing allowance can reduce your tax bill now, it only helps with today’s cash flow unless you are also building retirement savings.
Here is where a lot of pastors miss out: if you are not contributing to a church-sponsored 403(b), you will not be able to designate housing allowance on your retirement distributions. That means one of the most valuable clergy benefits, housing allowance in retirement, is off the table.
What is wiser: If you are in a parsonage, save separately so you will be prepared to cover housing when you retire. If you receive housing allowance, use it wisely but also contribute to a 403(b) or similar plan so you can extend those housing allowance tax benefits into retirement. The benefit is powerful, but it is not a retirement plan by itself.
Myth #3: “Opting out of Social Security is the smart move.”
I get why this one is tempting. Less SECA tax today means more money in your pocket. But here is what you give up: disability coverage, survivor benefits for your family, and a baseline of retirement income. I have talked with pastors who opted out in their twenties, only to realize later that it left them exposed. By then, it was too late to reverse the decision.
What is wiser: If you have already opted out, you have to create your own replacement. That means more retirement savings, private disability insurance, and life insurance for your family. If you have not opted out yet, think long and hard before you do.
Myth #4: “I do not make enough to save.”
I hear this one all the time. “Once I get a raise, then I will start.” But here is the deal: the secret to saving is not about the amount, it is about the habit. I have seen pastors who started setting aside $50 a month in their twenties or thirties, and that small faithfulness compounded into something significant by retirement. I have also seen pastors wait until their fifties to get started, and it is an uphill climb.
What is wiser: Start with what you can, right now. Even $25 a paycheck. Build an emergency fund first, then contribute consistently to retirement. Small seeds today grow into a harvest tomorrow.
Myth #5: “Talking about money is unspiritual.”
This one is sneaky. We worry that if we bring up money, in our personal life or from the pulpit, people will think we are greedy or self-serving. So we stay quiet. But Jesus was not quiet about money. In fact, He talked about it constantly, because money reveals our hearts. “Where your treasure is, there your heart will be also” (Matthew 6:21).
When we avoid talking about money, we do not protect people. We keep them stuck. And when we avoid planning our own finances, we are not being spiritual. We are being shortsighted.
What is wiser: See money as part of discipleship. Teach your people, and give yourself permission to steward well. It is not unspiritual. It is faithful.
Financial myths sound harmless, even spiritual. But they cost pastors dearly. They keep us from saving, blind us to risks, and set us up for painful surprises later in life. Here is the good news: you do not have to keep living by them. Start small. Tell the truth about your situation. Take the next wise step.
Imagine the legacy of a pastor who not only preached faithfulness but modeled it in their own financial life, providing for their family, retiring with dignity, and leaving behind a story of wise stewardship. That is the kind of story worth writing.
If this stirred something in you and you want to take the conversation deeper, my book Legacy Together was written to help couples and small groups talk honestly about faith, money, and purpose. You can even download the complimentary small group facilitator guide here: Legacy Together Facilitator Guide.
Disclosure: This article is provided for educational purposes only and should not be considered specific tax, legal, or investment advice. Pastors and ministry leaders should consult with a qualified professional who understands clergy compensation and tax law before making financial decisions.
