How Much Should Pastors Save for Retirement? A Practical Guide for Every Season of Ministry

Over the years, I’ve had more than a few pastors quietly admit something over coffee: "I’m not sure if I’m on track for retirement. Honestly, I don’t even know how much I should be saving."

If you’ve ever felt that way, you’re not alone. Pastors face some unique challenges when it comes to saving for the future. And with many serving in smaller churches or bi-vocational roles, it’s easy for retirement planning to fall off the radar.

The good news? It’s never too late or too early to start. In this post, we’ll break down how much pastors should be saving for retirement, with practical benchmarks and realistic strategies you can apply no matter what stage of ministry you’re in.

Why Retirement Planning Looks Different for Pastors

There are some special considerations that make your path different than most:

• Housing allowance may change in retirement. While your church paycheck may end, distributions from a denominational 403(b) plan can still qualify for housing allowance if properly designated. It's important to plan for how your income will be structured in retirement to take advantage of this.

• Opting out of Social Security has been common for many pastors, but it means you may not have that income stream in retirement unless you've paid into the system through secular employment.

• Irregular income or lower salaries can make it harder to save consistently.

This means pastors often need to save more intentionally than their peers. But don’t let that overwhelm you. We’re going to walk through this one step at a time.

Savings Benchmarks by Age

These aren’t hard rules, but they offer a helpful framework for where you might aim to be:

• By age 30: Save at least 1x your annual salary

• By age 40: Aim for 3x your salary

• By age 50: Try to reach 6x your salary

• By age 60: Work toward 8x to 10x your salary

Again, these are general benchmarks. If you're behind, don’t panic. It just means now is the time to be more intentional.

But First: What Does Retirement Look Like for You?

Before we dive into how to catch up, here’s an important question: What do you want retirement to look like?

Do you want to travel? Continue part-time ministry? Live near family? The answer will shape how much you need. There’s no one-size-fits-all target, but clarity about your goals makes your financial plan more meaningful.

How to Catch Up If You’re Behind

If you’re reading this and realizing you’re not where you hoped to be, you’re not alone, and you’re not out of options. Here are some steps to take:

1. Max Out Your 403(b) or IRA Contributions

Take full advantage of your church’s retirement plan if they offer one. For 2025, the employee elective deferral limit for a 403(b) plan is $23,500. If you're aged 50 or older, you can make an additional catch-up contribution of $7,500, bringing your total potential elective deferral to $31,000.

For those aged 60 to 63, a higher catch-up contribution limit applies. Starting in 2025, individuals within this age bracket can contribute an additional $11,250, allowing for a total employee contribution of $34,750, provided your plan permits this enhanced catch-up option.

Remember, your employer can also contribute to your 403(b) plan. The combined limit for both employee and employer contributions, known as the limit on annual additions, is $70,000 or 100% of your includible compensation for 2025, whichever is less.

If your church doesn't offer a 403(b) plan, consider setting up a traditional or Roth IRA. The contribution limit for IRAs in 2025 remains at $7,000, with an additional catch-up contribution of $1,000 for those aged 50 and above, totaling $8,000.

2. Use Housing Allowance to Free Up Cash

While you’re still working, your housing allowance reduces your taxable income. That savings can be redirected into retirement contributions.

3. Delay Big Purchases

Holding off on that car upgrade or expensive trip for a couple of years can give you a chance to put those funds into your retirement plan instead.

4. Start a Simple Side Hustle

A small amount of extra income, especially if you can tuck it straight into savings, can accelerate your progress.

5. Work a Few Years Longer (Strategically)

Sometimes staying on part-time in ministry for a few years post-retirement age can help delay withdrawals and allow savings to keep growing. Just be mindful of how this may impact your housing allowance and RMDs.

Set a Monthly Goal You Can Stick To

If you’re not saving anything now, start small. Even $100 a month into a Roth IRA is a great start. Then build from there.

A general rule of thumb? Try to save 15% of your income toward retirement, especially if you’re not paying into Social Security. If that feels out of reach, start with what you can and aim to increase it by 1 or 2% each year.

Final Thoughts

Pastors are incredibly generous with their time, their calling, and their energy. But don’t forget to care for your future self, too. Retirement isn’t about stepping away from purpose. It’s about having the freedom to say yes to what matters most in the next season.

Start where you are. Use what you have. And know that every small step you take now is a gift to your future ministry, your family, and your peace of mind.