At least 10% of salary a year is the floor, and if you were hired at 35 or older with little saved, you likely need far more. Starting from zero at 40, a pastor needs about 19% of salary a year from church and pastor combined just to get by in retirement, and about 28% to retire strong.
The number most pastors are afraid to run
If you’re a pastor in your 40s, you’ve probably done this math late at night. You came into ministry young, you were paid like it, and retirement was something you’d get to when the church could afford it. Now you’re looking at your 403(b) and doing subtraction.
You’re not alone. In a Lifeway Research survey of 2,451 retired and retirement-age pastors and missionaries, 36% had less than $100,000 saved. At a typical 4% withdrawal rate, $100,000 provides about $4,000 a year. Among younger ministers, the 2024 GuideStone study found about a third had stopped or reduced retirement saving to cover emergencies, and more than three in four wished they’d started saving earlier.
That’s why so many pastors stay in the pulpit long after they’re ready to hand it off. It’s not that they don’t want to. They can’t afford to stop.
How much to save, by the age you were hired
Most lead pastors are hired at 35 or older with little saved. The later you start from zero, the bigger the share of salary it takes to catch up. This is the chart from Part 5 of the book, church and pastor contributions combined:
| Hired at, with nothing saved | To get by (8× salary) | To retire strong (12× salary) |
|---|---|---|
| 35 | 14% of salary a year | 21% of salary a year |
| 40 | 19% | 28% |
| 45 | 26% | 39% |
| 50 | 39% | 59% |
| 55 | 65% | 98% |
Based on Fidelity’s guideline of about 10× final salary by 67 (closer to 8× for a modest lifestyle, 12× for a fuller one or retiring at 65). Assumes no savings at hire, retirement at 65 and a 4% real return. From Pay to Thrive, Part 5.
Read the 40 and 45 rows slowly. Starting from zero at 40, you need about 19% of salary a year just to get by, and about 28% to retire strong. Wait until 45 and it’s 26% to 39%. By 55, retiring strong takes 98% of salary a year. Every year you put this off makes the number harder.
Now look at what most churches put in: often nothing, and at best the 10% GuideStone recommends. For a lead pastor hired at 40 with nothing saved, 10% covers only about half of what he needs just to get by.
Why a pastor can’t save his way out alone
Ministry is last in starting pay and first in debt. In Georgetown University’s study of 137 college majors, theology and religious vocations ranked 131st in earnings. A youth pastor who becomes the lead pastor of a mid-size church, the best-case path for most of us, earns about $2.9 million over 40 years. That’s less than a teacher ($3.0 million) or an accountant ($3.4 million). Most pastors lead small churches, and that path comes to about $2.4 million.
And the teacher has a pension. A common formula pays 2% of final average salary for every year of service, so a teacher who retires after 30 years at about $86,000 would get roughly $51,000 a year for life. Buying that income at retirement would cost roughly $650,000 to $750,000. To be fair, the pension only pays off for teachers who stay: about half won’t qualify for even a minimal one, and about 40% of teachers aren’t covered by Social Security. But a career teacher retires with a guaranteed income. A career pastor usually retires with whatever his church remembered to put in his 403(b).
A pastor who is underpaid for 40 years can’t save his way out. The fix has to come through the package.
Retirement belongs in the package, not the leftovers
In a thriving package, retirement is one of five pieces, next to salary, housing allowance, the SECA offset and health coverage: a 403(b) contribution of at least 10% of salary, and more for pastors hired after 35. In the book’s Florida example for a one-income family of four, that 10% line is $10,322 on a $103,219 salary. You can run your own on the worksheet in Pay to Thrive, line 5.
And it belongs in the church budget as its own line, not something buried in salary. You’ll rarely find a real line for staff retirement in a church budget. Here’s what one looks like:
A church with $300,000 in staff salaries should budget at least $30,000 a year for retirement contributions, on its own line, every year. If that sounds like a lot, it’s the cost of letting a pastor step down with dignity instead of staying in the pulpit because he can’t afford to leave.
Scripture isn’t quiet about this. “A good man leaveth an inheritance to his children’s children” (Proverbs 13:22). That’s hard to do without a retirement plan.
How to get the church to fund it
If you’re the lead pastor, this conversation starts with you. Your package is the ceiling every other role gets priced under, so if your retirement line is zero, your staff’s will be too.
- Run your number. Find your row in the chart above. Write down the share of salary you need, and what the church puts in today.
- Bring it as part of the whole package. Retirement isn’t a perk to negotiate separately. It’s inside the thriving standard: MIT living wage for your county plus 20%, a SECA offset, and retirement of at least 10%, more if you were hired after 35.
- Ask for its own budget line. Not “we’ll add to it if giving is up.” A line, every year, for every staff member.
- Frame it as succession. A pastor who can retire with dignity can hand off well, and that makes room for the next generation. A pastor who can’t is a pastor who stays too long.
- Step out of the vote. Ask for a compensation committee so you’re not setting your own number. (Here’s how to make the ask, start to finish.)
If your board can only add one thing to the package this year, make it retirement.
Fix it for the pastors behind you
Lead pastor, would you tell your own son to go into ministry? For most of us, the honest answer to “what would have to change” includes this: his church would fund his retirement from day one. Every one of those changes is within a church’s control.
This is one more reason the fewer-and-better staffing model matters. A lean team paid to thrive is a team the church can actually afford to retire well. Start with your own line, then put one in for everyone you lead.
Not tax or legal advice. Have your church’s CPA review your package.
