Should Christians Save for Retirement?

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T Howard's picture

We just had this discussion a couple months ago here about Christians saving for retirement. The argument in the past was, why save for retirement because the anti-Christ will get it.  Now the argument is, why save for retirement because Christian ministries need it.

A few thoughts:

  1. The vast majority of people aren't saving enough (or anything) for retirement to begin with (source). Instead of attacking their retirement savings, how about address the real elephant in the room (see #2).
  2. Poor savings and retirement planning is correlated to lower household income and/or poor money management. If you want Christians to give more to Christian ministries, address their materialism, consumerism, and living above their means. That's where their heart/money is, not their retirement accounts.
  3. Consequently, generosity is a heart issue not an account balance issue.
David R. Brumbelow's picture

I know Alcorn does not totally discount retirement, and I agree we should stay busy for the Lord.  But a few of my thoughts…

Early Christians did not have washing machines, automobiles, electric air conditioners.  Yet I, and most Christians who can get them, have them.  And thank God for the luxuries of life.  The same goes for a retirement fund. 

Put as much money as you can into retirement.  A good general rule to follow is to live on 80% of your income, give 10% to God, and 10% to your retirement.  Put it in a stock market fund that can significantly grow over time.  If you end up with more money than you need in retirement, give me a call. 

A good place to start is with the “Money Answer Book” by Dave Ramsey.  I don’t agree with everything he says, but he has some very helpful information.  It makes a good Christmas gift for your teenage and young adult relatives. 

David R. Brumbelow

TylerR's picture

Editor

This should go without saying, but if you put your retirement money into investments, NEVER, NEVER "trust" your agent and sign blank forms. I am working a case now where just this kind of thing has resulted in a married couple losing several hundred thousand dollars. Please, do not ever trust an agent enough to sign blank forms, no matter how much he assures you that he'll "fill them in back at the office." He'll fill them in, all right - but they won't say what you think!

Tyler is a pastor in Olympia, WA and works in State government.

dcbii's picture

EditorModerator

If you end up with too much in your retirement account at time of death because you over planned, you can always designate a significant portion of that to various ministries in your will, and it will then be used for God (at least to the best of your knowledge, but not hugely different from giving it while you are alive).

I tend to think of what we can do in our "retirement" years as what he mentioned in the article -- we can put in many more volunteer hours into our churches or other ministries, rather than playing golf or sitting on the couch.  A retirement account (and a car and washing machine) will also help to that end.  You won't be able to "do" as much for God (in time or money terms) if you are working two jobs at minimal pay just to get by.

Dave Barnhart

David R. Brumbelow's picture

I believe in the Rapture. 

I also agree with the statement,

“Live as though Jesus was going to return tomorrow; plan and prepare as though He will not return for a hundred years.”

David R. Brumbelow

Jim's picture

We had a Randy Alcorn day at our church (not my present church):

  • Our pastor said from the pulpit "no one needs more than $ 250,000" for retirement
  • How's that for specific, non-personalized financial advice!
  • $ 250,000 with a withdrawal rate of 4% per year = $ 833 per month.
  • Try living on that plus social security. The average SS benefit is $ 1234 per month
  • Can you live on $ 24,000 per year? 
Jim's picture

It was easier years ago. For example - my Dad and Mom:

  • Dad [b 1918], retired with 44 years of service with A.T.&T. (about 1983)
  • Mom [b 1920], retired from the University of Cincinnati
  • They both had pensions + social security X 2
  • Dad died in '99 & Mom this past March (at age of 95 & 10 months) (I'm the executor of Mom's estate. Dad's last pension check was deposited into Mom's account in March)
  • They never needed to put into 401Ks or 403bs
  • ​They had pensions!

How many workers have pensions today? SS answers here Another source says 22% (vs 42% 20 years earlier)

Planning would be simple if one knew when they would die. If one knew he was to die at 65, there would be no need to save at all!

Meanwhile for the rest of us: Today's workers fund our own pensions!

T Howard's picture

To be fair to Randy Alcorn, he may not need a retirement fund because he gets royalties from people buying his book about not having a retirement account.

Jim's picture

http://www.cnbc.com/2016/08/08/social-securitys-looming-32-trillion-shor...

Social Security's total income is projected to exceed its total cost through 2019, as it has since 1982. After 2019, interest income and money taken out of reserves will provide the resources needed to offset Social Security's annual deficits until 2034.

By then, if Congress does nothing, the federal government will collect enough in payroll taxes to pay about 75 percent of scheduled retirement benefits until 2090.

pvawter's picture

T Howard wrote:

To be fair to Randy Alcorn, he may not need a retirement fund because he gets royalties from people buying his book about not having a retirement account.

Unless his circumstances have dramatically changed, Alcorn does not get a penny of royalties, nor does he make more than minimum wage, due to a court judgment requiring him to pay a settlement to abortion providers. He refused to do so and gave up his salary, royalties, and most assets to avoid paying to fund abortion.

pvawter's picture

Quote:
Royalties from Randy Alcorn's books are the property of EPM and have been sent to vital ministries such as World Relief, Joni and Friends, Prison Fellowship, The JESUS Film Project, Action International, John & Vera Mae Perkins Foundation, Voice of the Martyrs, Abort73.com, Bible League, Operation Mobilization, Make Way Partners, and many others. (See Organizations EPM Supports and/or Recommends for a more complete list.) In addition to financial gifts, EPM has the privilege of donating thousands of Randy's books to various Christian organizations for evangelism and discipleship purposes.

Ron Bean's picture

We spent most of our lives in ministries under benevolent (?) dictators who told us that we didn't need to save for retirement. Now we're in our 60's and working in retail and fast food. One of our friends has to make ends meet by painting houses in his 80's.

My question for those who don't feel they need to save for retirement is this: What do you plan to do for income when you're in your 70's? What if you find yourself job hunting when you're that age? "Welcome to Wal Mart." "Would you like fries?"

"Some things are of that nature as to make one's fancy chuckle, while his heart doth ache." John Bunyan

Jim's picture

LInk: http://www.desiringgod.org/interviews/should-i-invest-for-retirement

His reasoning is like this:

  • Unless upon being paid, one spends all that he has, everyone saves. (I suppose there are some who do immediately spend all that they have immediately)
  • So there is small savings ... medium savings ... larger savings
  • Example of small savings: One is paid on Friday and uses the amount for the entire week ahead including grocery shopping. One has saved (every just for a few days) enough to buy groceries
  • Medium savings: Joe buys a car on credit with a 72 month loan. Fred has a series of clunkers over 6 years but manages to, over 72 months, save enough to buy a new car. USA today reports that the average price of new car is $ 33,000. After 6 years, Joe's car has become the clunker and he has to again go through the credit process of applying for a loan to buy a new car. Fred on  the other hand buys his new car cash. Is Fred the hoarder who has greedily amassed $ 33,000 in wealth? or is he the wise one?!
  • Large savings: Two couples make housing decisions. One (John and Sue) takes out a large 30 year mortgage, the other (Wayne and Chris)  lives small in a tight apartment. After 15 years of living frugally Wayne and Chris buy a house with cash. It wasn't easy, they had to save $ 200,000. But they are debt free.
  • In retirement: Joe and Karen don't save at all for retirement. They reason they are "trusting Christ" and "depending upon Him". Roger and Kate meanwhile started early and regularly invested in their companies' 401K's. They pu put in 6% and their employers matched half. Additionally Roger and Kate often had "staycations" and eschewed cruises and other items they regarded as frivolous. Now both at retirement, Joe and Karen have saved little, while Roger and Kate have saved $ 800,000. That seems like quite a bit of wealth and indeed it is but it may have to last them up to 30 years. Who are the wise ones? 
T Howard's picture

pvawter wrote:

Unless his circumstances have dramatically changed, Alcorn does not get a penny of royalties, nor does he make more than minimum wage, due to a court judgment requiring him to pay a settlement to abortion providers. He refused to do so and gave up his salary, royalties, and most assets to avoid paying to fund abortion.

 

According to this source, the Alcorns used a bit a creative accounting to avoid paying the legal fees. He transferred all his assets into his wife's name, thus they kept all of their assets. Both are being paid by their foundation (yes, he makes minimum wage plus honorariums). Having no mortgage or no loans and driving "company" cars helps a lot too. Plus, I imagine they can write off a nice portion of expenses as "business expenses" given they added a foundation office to their garage. Consequently, they don't have to pay what normally would consume 60-65% of a family's paycheck.

pvawter's picture

T Howard wrote:

pvawter wrote:

Unless his circumstances have dramatically changed, Alcorn does not get a penny of royalties, nor does he make more than minimum wage, due to a court judgment requiring him to pay a settlement to abortion providers. He refused to do so and gave up his salary, royalties, and most assets to avoid paying to fund abortion.

 

According to this source, the Alcorns used a bit a creative accounting to avoid paying the legal fees. He transferred all his assets into his wife's name, thus they kept all of their assets. Both are being paid by their foundation (yes, he makes minimum wage plus honorariums). Having no mortgage or no loans and driving "company" cars helps a lot too. Plus, I imagine they can write off a nice portion of expenses as "business expenses" given they added a foundation office to their garage. Consequently, they don't have to pay what normally would consume 60-65% of a family's paycheck.

So, just to be clear, he doesn't get any royalties from his books.

T Howard's picture

pvawter wrote:

So, just to be clear, he doesn't get any royalties from his books.

Not directly, but his foundation pays him minimum wage and pays his wife a salary, and his foundation is largely funded by his book royalties. It's another example of his creative accounting to avoid paying the court-ordered garnishment.

But, back on topic, as I've pointed out, Alcorn can afford to live on very little cash because he has no mortgage, doesn't pay car expenses (gas, maintenance, etc are paid by his foundation), and probably can write off a lot of expenses because his foundation office is part of his home. All of that equals probably 60-65% of what a normal family has to pay. So, Alcorn can live off the 35-40% of the remainder. So could I if I didn't have to pay a monthly mortgage payment, car payment, gas, car insurance, maintenance, and certain expenses I could classify as business expenses.

Alcorn's situation is not realistic for most Christian families. He cannot expect people to live like him given his financial / legal situation.

 

Category         % of Budget   Alcorn || Foundation

Housing           25-25%                                  X

Utilities           5-10%                                       X

Transportation 10-15%                                  X

Healthcare       5-10%                                    X

Food                5-15%              X

Invest/Save     5-10%              N/A                N/A

Debt                5-10%              N/A                N/A

Charity            5-15%                                      X

Enter/Rec        5-9%                X                     X

Misc Person     2-7%                X

M. Osborne's picture

The Piper article does sound better, Jim.

The way I see it, someone pays for my lunch. Either I pay for my lunch, or someone else pays for it. And if I live to be 80, someone will still be paying for my lunch. If that somebody is me, either I'll be earning the money to buy lunch then, or I'll have saved the money now to buy lunch then. If I can't work and I didn't save, then I've just foisted the job of buying my lunch onto someone else. (I'm sure Aaron's going to flag me for a false disjunction here, that I left out the starving option. Smile )

I once had to convince a pastor (at the time, my pastor) to get a high-deductible health insurance policy with an HSA. He and his family had lived for years without any health insurance. I tried to point out that the congregation wouldn't let him suffer a major medical expense, so if he didn't have insurance, the bill was going to fall on the congregation, and that it would be much better for us to self-insure a high deductible than to pay for who-knows-how-much.

I would like to serve the Lord for as long as I have breath. But if my earning capacity drops, I don't want to become a burden to my family.

Michael Osborne
Philadelphia, PA

pvawter's picture

T Howard wrote:

pvawter wrote:

So, just to be clear, he doesn't get any royalties from his books.

Not directly, but his foundation pays him minimum wage and pays his wife a salary, and his foundation is largely funded by his book royalties. It's another example of his creative accounting to avoid paying the court-ordered garnishment.

But, back on topic, as I've pointed out, Alcorn can afford to live on very little cash because he has no mortgage, doesn't pay car expenses (gas, maintenance, etc are paid by his foundation), and probably can write off a lot of expenses because his foundation office is part of his home. All of that equals probably 60-65% of what a normal family has to pay. So, Alcorn can live off the 35-40% of the remainder. So could I if I didn't have to pay a monthly mortgage payment, car payment, gas, car insurance, maintenance, and certain expenses I could classify as business expenses.

Alcorn's situation is not realistic for most Christian families. He cannot expect people to live like him given his financial / legal situation.

 

Category         % of Budget   Alcorn || Foundation

Housing           25-25%                                  X

Utilities           5-10%                                       X

Transportation 10-15%                                  X

Healthcare       5-10%                                    X

Food                5-15%              X

Invest/Save     5-10%              N/A                N/A

Debt                5-10%              N/A                N/A

Charity            5-15%                                      X

Enter/Rec        5-9%                X                     X

Misc Person     2-7%                X

You are right when you say that Alcorn's situation is unique, but i don't see what that has to do with his advice. He's not saying that you shouldn't save for retirement, but that you shouldn't worship money and financial security. I'm not really sure what your objection is, then.

Jim's picture

He said (from article):

How is maintaining a generous retirement plan fundamentally different from the rich fool storing up for his later years to live out his life in comfort and security? We know what Jesus thought of that man’s retirement plans (Luke 12:16-21).

Question: Is this parable about retirement plans? I think not!

T Howard's picture

pvawter wrote:

You are right when you say that Alcorn's situation is unique, but i don't see what that has to do with his advice. He's not saying that you shouldn't save for retirement, but that you shouldn't worship money and financial security. I'm not really sure what your objection is, then.

My objection is that the vast majority of Americans aren't saving ENOUGH or ANYTHING for retirement. Many (most?) Americans are living above their means. So, for Alcorn to write an article suggesting that Christians are hoarding money in their retirement accounts and not being generous is just plain wrong for several reasons.

1) Jim's post above is correct. Alcorn is mishandling Scripture.

2) The vast majority of Americans don't have a significant retirement savings. Those few American Christians who are saving wisely for their future shouldn't be told not to by a Christian leader.

3) If Alcorn wants to address the lack of generosity among Christians, he needs to address materialism, consumerism, and living above one's means. This is where the majority of the problem lies. Attacking Christians with a healthy / generous retirement account is misguided and singles out only a small minority of Christians. However, many Christians with an underfunded retirement account will read his article and think they shouldn't save more for their retirement.

4) Alcorn's lifestyle suggests he has limited understanding of what it takes to run the average household, plan for the future, and still be generous.

pvawter's picture

T Howard wrote:

pvawter wrote:

You are right when you say that Alcorn's situation is unique, but i don't see what that has to do with his advice. He's not saying that you shouldn't save for retirement, but that you shouldn't worship money and financial security. I'm not really sure what your objection is, then.

My objection is that the vast majority of Americans aren't saving ENOUGH or ANYTHING for retirement. Many (most?) Americans are living above their means. So, for Alcorn to write an article suggesting that Christians are hoarding money in their retirement accounts and not being generous is just plain wrong for several reasons.

1) Jim's post above is correct. Alcorn is mishandling Scripture.

2) The vast majority of Americans don't have a significant retirement savings. Those few American Christians who are saving wisely for their future shouldn't be told not to by a Christian leader.

3) If Alcorn wants to address the lack of generosity among Christians, he needs to address materialism, consumerism, and living above one's means. This is where the majority of the problem lies. Attacking Christians with a healthy / generous retirement account is misguided and singles out only a small minority of Christians. However, many Christians with an underfunded retirement account will read his article and think they shouldn't save more for their retirement.

4) Alcorn's lifestyle suggests he has limited understanding of what it takes to run the average household, plan for the future, and still be generous.

Have you read his book, "Money, Possessions, and Eternity"? You may object to this blog post, but your complaints go beyond anything he said there, and I think the volume of his teaching on the subject is quite different from the way you portray it in your post.

He does not condemn wisely saving for retirement or procuring life insurance, but he does speak against trusting in such things instead of trusting God.

He does address materialism, consumerism, and loving above one's means, much more extensively then he does the issue of retirement savings.

And I'm not sure what you mean by "his lifestyle," but maybe you know something about him that I don't.

As far as his use of the parable of the rich fool, is it completely out of bounds to suggest that that man's attitude toward wealth and possessions, and his lack of thought about eternity, exemplify the contemporary attitude of at least some in the church today? Is he off base to suggest that we should evaluate our own attitude about such things in light of Jesus' warning to the man in the parable? I think the next couple of sentences, which Jim did not include in his quote, shed some light on Alcorn's meaning.

Larry Nelson's picture

 

...I've been contributing from 6% to 14% of my salary to a 401K for over 25 years.  Further, my company matches my contribution dollar-for-dollar up to 6%. 

I won't reach retirement age (65 at least) for another 11.5 years, at which time I would have made 37 years worth of 401K contributions.  The projections say I should have a substantial amount to draw from.  (Compounded returns are a wonderful thing!)

With Social Security (whatever it looks like in the future) and a pension annuity from a completely company-funded account (alas frozen to new contributions since 2009), I quite conceivably might have a higher income retired than employed.  (Plus then I will neither be contributing  to a 401K nor paying  Social Security taxes, both of which reduce my net income currently.)

Then I can golf everyday, right?

Wrong!  (I've never once golfed in my life, and I don't foresee starting.) 

No, I'm looking forward to the day when I will be able to do much more in terms of serving God than time permits now---once freed from the necessity of working for pay.  I'd much rather volunteer full-time in ministries than be having to say, "Welcome to Walmart" (as someone else mentioned above).  Saving for retirement is a means to that end for a Christian.  (At least that's how I see it.)  

Is that anti-biblical?