Prepare for a rainy day and welcome the golden years with peace of mind
【Pastor's Chapter】
Interviewee/Qiu Maosong
Interview‧Photography/Shi Lingyu
Pastor Moshew of the Methodist Church in Keever, New Hampshire, retired after 46 years of pastoring. His life suddenly fell into trouble. He received $1,200 a month, most of which was Social Security pension plus food stamps ( food stamps) to barely maintain food and clothing. On snowy nights, he had to keep the heater at a low temperature of 52 degrees Fahrenheit (11.1 degrees Celsius) just to afford the electricity bill that month.
The 72-year-old Moxiu had an annual salary of US$75,000 before retiring in 2005, which included half salary, half housing allowance and other benefits. After retirement, the church only provided a monthly subsidy of US$300.
There used to be stocks worth US$200,000 in the investment account, but they were severely impacted by the two financial tsunami in 2002 and 2008. Moxiu had no choice but to sell the house in order to pay off the debt.
Mo Xiu said that when he was called, he never expected to become a rich man one day in his life. He simply believed that the congregation he served would take care of him. He never imagined that his later life after retirement would be so miserable.
In the North American church, Pastor Mosho’s story is not unfamiliar. According to a survey by the interdenominational Association of American Church Administrators, the average annual salary of a senior pastor of a small or medium-sized church is about US$70,000, and more than 13% of respondents said they did not receive any welfare subsidies after retirement.
Called to plan, spend the rest of your life with peace of mind
"Many preachers serve God until they are gray. They think it's time to retire, but they can't do so because the mortgage is still there and the income from their Social Security pension is not enough." Qiu, Director General of the Los Angeles Chinese Church Workers' Federation Pastor Maosong pointed out that Chinese church pastors in the United States are just like ordinary American families. More than half of them have insufficient retirement savings and lack of financial planning, resulting in financial constraints after retirement.
When it comes to retirement financial planning, the first reaction of most Christians is that they are "unspiritual"; they adhere to the idea that "God will provide, God will control, and God will bless" and ignore the lessons that God teaches us to manage our assets faithfully. . In fact, in the four gospels of the Bible, more than half of the thirty-eight parables used by the Lord Jesus in preaching are related to money. If preachers can cooperate with the church during their calling life and make financial plans in advance, they can continue to use their gifts without financial pressure in retirement, and they can better bear witness to God's grace and good will.
Qiu Maosong, who is responsible for contacting and caring for 260 Chinese churches, 100 gospel organizations, and 500 pastors in Southern California, said that affected by the 2008 U.S. financial crisis, the finances of middle-class families have shrunk, and local churches are also in financial distress. Young people want to take over the pastorate, but old preachers cannot "retire and never stop."
Plan your retirement path, one step at a time
In view of the general lack of awareness of retirement financial planning among Chinese pastors, Qiu Maosong summarized and compiled relevant information collected from newspapers, magazines and the Internet over the years, and shared it with preachers through this exclusive interview. He hopes pastors can plan properly before retirement and wait until their life is satisfactory. When the time comes, retire with peace of mind and continue to enjoy a blessed life.
▲As long as the truth is firmly rooted and you get rid of your ignorance and fear of money, you can become a faithful, kind and knowledgeable steward of God, and build a blessed retirement career for yourself. (Image source: http://www.bbc.co.uk/radio4/womanshour/02/media/couple_on_bench.JPG)
Seven key ages determine the level of retirement financial management
✽Source: Qiu Maosong, Charles Schwab
55 years old
If you plan to withdraw the amount in your 401(K) account early when you retire after reaching the age of 55, you will be exempt from paying the 10% early withdrawal penalty, but you will still need to pay income tax on the withdrawal amount.
59 and a half years old
When you reach age 59 and a half, you can make penalty-free withdrawals from any retirement account such as an IRA, 401(K) or 403(B). However, you still have to pay income tax on the profits of these retirement accounts or the amount of deposits that were previously tax-deductible.
62 years old
If you have no physical or mental disability, age 62 is the earliest age at which you can withdraw your Social Security pension. But you can only receive 75% (if you were born after 1943, you must wait until you are sixty-six or sixty-seven to receive the full amount. The age range from sixty-two to seventy is the legal age range for receiving social security pensions.)
65 years old
Medicare eligible. Those who have started receiving Social Security pensions will automatically register for federal health insurance (Medicare’s Plan A and Plan B); those who have not started receiving Social Security pensions must start applying three months before and after their sixty-fifth birthday. , otherwise there will be a penalty.
66 years old
Sixty-six is the legal age to receive full social security pension. Those born in 1960 or later cannot receive full social security pension until age 67. If you continue to work and do not receive it, social security pension will increase by 8% every year until seven years. Until the age of ten.
70 years old
This is the last year to extend your Social Security pension, and it will no longer increase by 8% every year. If you start receiving the full amount after you have passed the age, you can increase the amount you receive by a certain percentage year by year until you reach the age of seventy. Assuming that the age for full withdrawal is sixty-six years old, the amount withdrawn every year after that can be increased by 8% and delayed until the age of seventy. The withdrawal amount is 132% at the age of sixty-six.
70 and a half years old
You must start withdrawing the minimum amount from tax-deferred retirement accounts, such as IRA, 401 (K), and 403 (B) before April 1 of the first April 1st when you turn seventy and a half years old (for example: if Xiao Wang withdraws on June 30, 2014 When he reaches seventy and a half years old, he must withdraw it before April 1, 2015), and thereafter before December 31 of each year. In addition, if the first withdrawal of pension is in the year after reaching the age of 70 and a half, the withdrawal must still be made before the end of that year. In this case, the income tax rate will be increased if the pension is withdrawn twice a year. There are mandatory withdrawal provisions. If you do not withdraw, a penalty will be deducted. However, if you are still working, this does not apply to 401 (K) and 403 (B).
The secrets you need to know about the Social Security retirement system
1. Pastor’s tips on tax filing
Qiu Maosong said that most churches are afraid of trouble and will issue 1099 forms to pastors when filing taxes. In fact, W2 is a right granted to pastors by Congress, and church institutions should provide pastors with W2 statements.
2. The longer you wait, the more you get.
Unless you are in poor health or have special personal circumstances to retire early, try to plan to retire at the age of 66 to 67, so that you can receive full social security pension by then. Don’t think that you can start receiving benefits at the age of sixty-two and receive more at the age of sixty-six. You are wrong! But if you delay the withdrawal until the age of 70, the withdrawal amount will be 132% at the age of 66.
3. Count up to thirty-five years
After working for ten years and accumulating forty points, you are eligible to receive a Social Security pension. An income of US$1,160 counts as one point, and a maximum of four points can be accumulated in a year. The amount of Social Security pension after retirement is determined by the average annual income over the past 35 years. If you work for less than thirty-five years, your average annual income will naturally be lowered. Preachers' salaries are meager and they should try to obtain the highest benefits possible.
4. Spouses can also receive unpaid social security pensions. Dual-income couples have different approaches.
Qiu Maosong said that there are as many as 81 ways for couples to jointly receive Social Security pensions, including who gets it first, who gets it last, and how much. Pastors must consult with the Social Security Bureau and do their homework. In order to choose the most advantageous way to receive it. Qiu Maosong pointed out that dual-income families are more secure, and he opposed the traditional Chinese church's disapproval of the concept that teachers' wives also have salaried jobs. If the preacher’s spouse can jointly bear the family finances, it will allow the master’s servants to have no financial worries and concentrate on serving.
5. Is the Social Security retirement system going bankrupt?
Don't listen to rumors! Qiu Maosong said that you should never not pay Social Security retirement benefits because you are afraid that the Social Security retirement system will go bankrupt. Paying taxes is a Christian duty and responsibility.
Eight key points in retirement planning
1. Be sure to join the Social Security Retirement System
Pastors, like ordinary civil servants, have the right not to participate in the Social Security retirement system, and churches have no obligation to help pastors pay Social Security retirement benefits. But if the pastor does not plan ahead, he will have to pay a high price for Medicare out of his own pocket when he retires at the age of 65.
2. Try to meet the maximum savings amount of retirement accounts IRA, 401 (K), and 403 (B)
The annual investment limit of an Individual Retirement Account (IRA) can be up to $5,500, and those who are fifty or older can save $6,500. Others such as 403(B) with higher limits can be used. These annual savings accounts should be contributed to the maximum amount possible to maximize benefits.
3. Invest prudently and do not speculate
Qiu Maosong said that in this investment era with an average low return rate of 3% to 5%, preachers’ salaries are meager, and financial management needs to be more prudent and prudent. You should diversify your investments or buy a house for retirement, and try to buy low-cost index funds in the securities market (such as S&P), or buy annuity (Annuity), do not speculate in foreign exchange or cheap common stocks (Penny Stock), and remember to invest prudently.
4. Buy insurance in advance
The average life expectancy of modern people is long. If you plan to retire at the age of 65, your life expectancy needs to be 85 years old, preferably over 90 years old. When you are healthy, buy life insurance, nursing insurance, funeral insurance, etc. Qiu Maosong strongly suggested that the church help the pastor buy term life insurance (Term Life). Instead of raising temporary donations of love to deal with emergencies, it is better to spend a small amount of money to buy insurance on a regular basis, which will give everyone peace of mind.
5. Properly handle Living Trust/Estate Planning (You can find a Christian lawyer)
This will prevent future generations from being in a hurry after returning to heaven.
6. Set aside an emergency reserve fund of more than six months
7. Plan for retirement income in advance
If the current average household income in the United States is US$4,500 per month (a total of approximately US$54,000 per year), and deducting the current average monthly Social Security pension of US$1,240 for American retirees, the couple will receive approximately US$2,000 per month, and the shortfall of US$2,500 will be required. Where does it come from? The couple needs to coordinate and discuss this and plan ahead.
8. If you want to have an ideal return on retirement income, the sooner you start saving, the better, and let the power of compound interest come into play.
Smart investment is the key way to build wealth. If you invest US$3,000 every year from the age of twenty-five, and the annual return rate is calculated as 8%, by the time you are ready to retire, you will have a wealth of half a million US dollars, of which approximately 80% will be invested. is the return on investment.
There are five old people in retirement, but by the grace of the Lord
In addition, Qiu Maosong proposed that when a preacher retires, the "five old factors" should be included in the planning scope: boss, wife, old nest, old friends and old line of work. Both spouses should sit down and make an approximate assessment and calculation of living expenses, remaining assets, income, etc. after retirement. Only by being considerate to each other can the spouses enjoy their golden years. Where will you live after retirement and what will happen to your house? In addition to economic factors, you should also consider that the location of your home should not be too far away from your children and old friends, so that you can invite friends to spend time together in your free time. Finally, after retirement, explore different interests, help in the church and community, continue to shine for the Lord, and continue to serve the Kingdom of God.
“Those who plan diligently will have plenty, but those who act hastily will have want.” (Proverbs 21:5)Qiu Maosong emphasized that preachers should not refrain from financial planning just because they are busy or because their income is small. Our ability to obtain wealth comes from Jehovah. Of course, we do not need to exclude the relevant knowledge of financial management or insurance. As long as the truth is firmly rooted and ignorance and fear of money are put aside, we can become faithful, kind and useful to God. Be a knowledgeable and good steward and create a blessed retirement career for yourself.
受訪者小檔案 邱茂松牧師，1985年蒙召全時間事奉。自1991年起迄今擔任洛杉磯華人教會同工聯會總幹事。與師母陳愛梅育有一子。
Reporter profile Shi Lingyu, former Zhongtian TV news anchor and correspondent. She settled in Southern California with her husband and daughter, and enjoyed an ordinary and simple home life. However, her husband, an architect who loves to travel, often took her around.