As other documents on our web site suggest, planning for a minister's retirement is an important and sometimes complex task. It is driven by economic concerns, of course, but also by issues of responsibility and propriety. The congregation and denomination need to take responsibility for the care of superannuated
clergy who have spent their life serving the church—often at poor wages. (See the 1924 Presbyterian proposal and Lutheran concerns from 1940.)
Yet the minister must make sure that he plans for his future with propriety. Cleland Boyd McAfee, a professor at McCormick Theological Seminary in Chicago, a Presbyterian institution, wrote Ministerial Practices: Some Fraternal Suggestions in 1928. The constant theme of his fraternal suggestions is that the minister must behave like a gentleman. McAfee offers advice on office procedures, social relationships, and clothing for the minister, stressing throughout that the minister must be a gentleman--while still being a man's man. (That the minister might be a woman wasn't even a possibility at the time, of course.) As this excerpt shows--from the last chapter on "the minister and his savings"--a gentleman must be above reproach when saving and investing. A wise minister avoids debts that could besmirch the church or the ministry, and a scheme that might prove a good investment could still cause a scandal.
By no possibility can a minister, in the direct exercise of his calling, become a man of means or pass beyond definite limitations in the use of money. He may, if he is careful and is not too exalted in his personal or social ambitions, become free from anxiety in money matters, not merely by his trust in God, whose servant he is, but by wise use of what God gives him as the years go on. Some ministers are abnormally capable business men who manage to acquire a competency without sacrificing any of the spiritual values of their work. There is no use in expecting this of most ministers; it is not their line.
Any minister may be reasonably expected to learn wise use of money and to make decent provision for later years when he may be free from routine burdens and ready for generous service of his fellow-believers by means of his riper experience. It does not involve the least doubt of God's love and care to establish a plan of saving whereby little by little a fund accumulates which one may use in later years or may leave to those who survive one's own death. Saving is no harder for a minister than it is for multitudes of other men. It can be accomplished only by sacrifice and forethought and it will never be achieved unless it is thoroughly believed in by the household. There is always enough else to do with money, without saving any of it, but an average of 10 per cent of the income normally belongs to the future as savings.
Many churches have some pension system for their ministers. The cost of participation in the accepted plan is a legitimate saving. This usually provides for an old-age income and a smaller income for those dependent on one at time of death. In addition, every minister should carry enough life insurance to provide a small fund available in case of his death so that adjustments of living can be made without too much difficulty. This will range between $3,000 and $5,000 for the average minister. Of course, many will carry far more. Endowment policies, falling due at the end of twenty years or at the time of largest cost of children's education, are more expensive but have great advantages. Most men will find it desirable to take insurance on term payments in order to have the matter over early in life. It costs more but it crowds the financial sacrifice into the most natural years.
But a pension plan and insurance are not enough for ministerial savings. There ought to be some accumulation of money for emergencies and for later life. Ministerial borrowing is always a burden even when it is necessary. But it ought to be on a business basis and not on the mere good name of a minister. That is, he needs such collateral that if he should need to borrow he can do it on as good terms as any man in the community. Banks live by lending money, but they lend on collateral or on a going business rather than on the basis of personal friendship. Every minister will be happier if he has such collateral available that any bank welcomes him in case of need for money. Some men borrow on their life insurance; most dislike to do so because it lowers the protection secured by the policies in case of their death. Regular business collateral in the form of bonds is more desirable.
Such collateral is available now for men with small salaries, since every city has large and reliable bond dealers, in and out of banks, who sell securities on partial payments and protect a purchaser fully during the purchase. It is always healthy for a minister to keep himself in debt for investments, buying a bond constantly, making such monthly payments as may be practicable until such securities accumulate. A $100 bond can be bought for $10 a month, with multiples at the same rates. The bond is held by the dealer until the payments are completed, when it becomes the property of the buyer and can be laid aside by him; meanwhile every payment increases his equity in it, drawing interest at the rate of the bond. From 5 to 7 per cent is all he can wisely expect in interest. The semiannual interest on these bonds soon becomes an item for further investment. The effect of compound interest is always surprising, and if it is possible to turn income from investments back into investment again, the result will be a fund which may provide for travel or comfort at a later time.
Ministers are often easy marks for speculators. Their natural desire to make a little go a long way is easily used. Speculation should be avoided as a plague. A recent circular says that "one good speculation is worth a lifetime of savings." It omits to state that one bad speculation far oftener wipes out a lifetime of savings. But it is not healthy whether it succeeds or fails. Dabbling in the stock market, venturing on real-estate advances, buying gold-mine shares, or any other methods of sudden wealth bring unrest or woe in their trail.
If one could be sure where he would settle in old age or where his family will want to be, it would be well to secure a home which could yield some income during one's active ministry. Nothing is more comforting then owning a little bit of earth somewhere,
but a minister is not a good real-estate holder beyond his own needs. Being a landlord has it own troubles and it seldom strengthens a minister's service.
For the same reason most ministers are well advised not to take part in local investment or projects of local financiers. A good many find even the admirable building and loan associations burdensome to their work. The less a minister is responsible for business operations, the less complicated does his ministry to others become. His investments are best made in enterprises which are not his personal responsibility, since he cannot give them the care they may need at critical periods. His wisest plan would seem to be to establish connection with some reputable and reliable investment house in a city and lay aside what he can save through its offices.
Cleland Boyd McAfee, Ministerial Practices: Some Fraternal Suggestions (New York: Harper and Brothers, 1928), 215-220.
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