Where Will Your Retirement Income Actually Come From? A Pastor’s Guide to the Pieces That Matter Most
In Part One, Mark and Anna didn’t start with numbers. They started with questions. Questions about where they want to live, how active they want to be, whether ministry will continue in some form, and what kind of life they sense God inviting them into in this next season.
Those questions matter because financial planning doesn’t begin with spreadsheets. It begins with clarity about direction. Until you know the kind of life you’re planning for, the math won’t mean much.
Mark and Anna are a fictional couple used for educational purposes, but their situation reflects what many pastors experience.
For Mark and Anna, those conversations led to a fairly clear picture. They expect to remain in their current community, live simply, continue giving, travel some, and stay involved in ministry on a limited basis. With that picture in mind, the next step is not investing or account selection. The next step is understanding income.
Because at the end of the day, retirement planning isn’t about how much money you have. It’s about how reliably money shows up once a paycheck no longer does.
If Mark and Anna were sitting across the table, this is where the real planning conversation would begin.
Step One: Establish a Realistic Retirement Spending Target
Before talking about income sources, a real plan starts with spending.
Not guesses. Not rules of thumb. And not someone else’s lifestyle.
If Mark and Anna were sitting across the table, this is where I’d slow the conversation down and ask, “What does life actually cost if you’re living the way you just described?”
Based on their answers, a realistic retirement budget might look like this.
Core living expenses
Housing, utilities, insurance, property taxes: $2,200 per month
Food, transportation, medical costs, and daily living: $1,900 per month
That puts their core expenses at $4,100 per month.
On top of that, Mark and Anna want to continue giving, travel occasionally, and have enough flexibility to enjoy this season without feeling constrained.
Giving and lifestyle margin
Tithe (10% of approximately $69,000 annual income): $575 per month
Travel, discretionary spending, and flexibility: $1,025 per month
That adds another $1,600 per month.
All in, Mark and Anna’s estimated retirement spending comes to:
$5,700 per month, or $68,400 per year
Rounded to $69,000 per year for planning clarity.
This isn’t extravagant. It’s not overly conservative either. It reflects a modest pastoral lifestyle, continued faithfulness in giving, and enough margin to enjoy time, family, and ministry without constant financial tension.
With a clear spending target in place, the planning conversation can finally move forward.
Because now the question isn’t, “How much have we saved?”
The question becomes, “Where will $5,700 a month actually come from?”
Step Two: Identify Every Potential Income Source
Once the spending target is clear, the next step is not choosing investments. It’s identifying where income could realistically come from.
If Mark and Anna were sitting across the table, this is where we’d list every potential income source they expect to have in retirement. Not what they hope for. What’s reasonable.
For them, the list looks like this:
Social Security for Mark
Social Security for Anna
Withdrawals from retirement accounts
Possible ongoing ministry or part-time income
At first glance, that list feels reassuring. Most pastors would say, “That sounds about right.”
But a real plan doesn’t stop with a list. It asks a better question.
Which of these income sources can you count on, and which depend on circumstances?
Step Three: Separate Guaranteed Income from Flexible Income
This is one of the most important shifts pastors make in the planning process.
Some income shows up regardless of markets, health, or account balances. Other income depends on choices, timing, and conditions that can change.
For Mark and Anna, the distinction looks like this.
Predictable or guaranteed income
Social Security for Mark
Social Security for Anna
Survivor benefit for the surviving spouse
Flexible or variable income
Withdrawals from retirement accounts
Ongoing ministry income, if available
Guaranteed income forms the foundation of the plan. Everything else is built on top of it.
This simple distinction often brings clarity pastors haven’t had before. It reframes retirement from a vague future event into something that can actually be measured and planned.
Once income is organized this way, the next logical step is to put real numbers to the most reliable source.
That’s where Social Security comes in.
Step Four: Social Security Using Real Planning Numbers
For most pastors, Social Security is the single largest source of guaranteed income in retirement. It’s also one of the most misunderstood.
Mark has paid into Social Security his entire ministry career through SECA. Anna has her own earnings history from years of employment. Like many couples, they’ve assumed Social Security will “cover a good portion of the basics.”
That assumption needs to be tested with real numbers.
Based on earnings histories typical for a couple like Mark and Anna, reasonable planning estimates might look like this at Full Retirement Age.
Mark’s Social Security at age 67: $2,600 per month
Anna’s Social Security at age 67: $1,500 per month
Combined, that produces approximately:
$4,100 per month, or $49,200 per year
This income is predictable. It doesn’t depend on markets. It doesn’t fluctuate with account balances. It shows up every month for as long as either of them is alive.
And this is usually the moment where something clicks.
Social Security helps.
It does not replace a paycheck.
When Mark compares this to their $5,700 per month spending target, it becomes clear that Social Security forms a strong foundation, but it doesn’t fully carry the load.
Which leads directly to the next step.
Step Five: Identify the Income Gap
With spending and guaranteed income now on the table, the math becomes simple.
Estimated retirement spending: $5,700 per month
Estimated Social Security income: $4,100 per month
That leaves a shortfall of:
$1,600 per month, or $19,200 per year
This is the amount Mark and Anna’s savings must reliably produce in retirement.
Not occasionally.
Not only in good market years.
Every year.
This is where retirement planning stops feeling abstract and starts feeling practical.
The question is no longer, “Do we have savings?”
The question becomes, “Can our savings consistently fill this gap?”
Step Six: Translate the Income Gap Into Savings Reality
A real plan doesn’t stop at identifying the gap. It translates that gap into something concrete.
Using a conservative planning assumption of a 4 percent sustainable withdrawal rate, producing $19,200 per yearwould require approximately:
$480,000 in retirement assets
This number isn’t a promise. It isn’t a guarantee. And it isn’t a finish line.
It’s a planning benchmark.
It answers one of the most important questions pastors carry quietly in their 50s:
“Are we anywhere close?”
Some couples discover they’re closer than they thought. Others realize they need to adjust expectations, timing, or savings. Both outcomes are valuable, because clarity is always better than guessing.
But the plan isn’t finished yet.
Because income planning doesn’t just ask how much.
It also asks when and what happens if life doesn’t go according to plan.
Step Seven: Claiming Age and Survivor Planning
Up to this point, the plan has focused on how much income Mark and Anna need and where it could come from. The next layer of planning looks at timing and risk.
Social Security is not just a dollar amount. It’s a decision.
If Mark claims benefits early at age 62, his monthly income would be permanently reduced. Instead of roughly $2,600 per month, his benefit could be closer to $1,900 per month. That reduction doesn’t just affect him. It affects Anna as well.
That’s because when one spouse dies, one Social Security check disappears. The surviving spouse keeps the higher of the two benefits.
In other words, Social Security claiming decisions are not just about income timing. They’re about protecting the surviving spouse from a significant drop in household income.
If Mark delays claiming beyond Full Retirement Age, his monthly benefit increases, and the survivor benefit for Anna increases as well. Delaying benefits can require drawing more from savings early on, but it often strengthens the long-term income picture.
These tradeoffs don’t have a single right answer. But they do need to be understood before decisions are made.
Step Eight: The Role of Ongoing Ministry Income
Mark doesn’t expect to stop ministering entirely.
Like many pastors, he anticipates continuing to preach, teach, or serve in part-time roles for several years after stepping back from full-time ministry.
In planning terms, this income is helpful, but it isn’t guaranteed.
It can:
Reduce early pressure on retirement accounts
Allow delayed Social Security claiming
Add flexibility during the early retirement years
But the plan doesn’t depend on it continuing indefinitely. It’s treated as a bonus, not a requirement.
That distinction protects peace of mind.
What the Income Picture Looks Like at This Stage
At this point in the planning process, Mark and Anna’s income picture looks like this.
Guaranteed income
Social Security for Mark: $2,600 per month
Social Security for Anna: $1,500 per month
Survivor benefit equal to the higher of the two
Flexible income
Retirement account withdrawals covering $1,600 per month
Ongoing ministry income, if available
This is exactly where a real financial plan would be at this stage.
Not finished.
But finally clear.
Why This Level of Detail Matters
Without this work, retirement goals stay vague. Investment decisions lack purpose. Claiming decisions get rushed. Anxiety fills the gaps left by uncertainty.
With it, decisions connect to real numbers. Tradeoffs become visible. Confidence replaces guessing.
This is what real financial planning looks like.
Where We Go Next
Now that Mark and Anna understand what income they can rely on, what gap their savings must fill, and which decisions carry the most risk, they’re ready for the next step.
In Part Three, we’ll look at their accounts. Not as random balances, but as tools designed to support income.
Because once you know what income you need, you can finally ask the question pastors usually ask too early:
What should I do with my investments?
This post is Part Two of a step-by-step financial planning series for pastors. You can read Part One here.
Educational Disclaimer
This post is for educational purposes only and uses a fictional case study to illustrate general financial planning concepts. It is not intended as individualized financial, tax, or legal advice. Every pastor’s situation is unique.
