Retirement Contributions

When it comes to retirement planning, one size does not fit all.

Once you decide to start saving for retirement, a big decision you will make is whether to make tax-deferred contributions, ROTH contributions, or both.  You should carefully consider the tax differences between tax-deferred and ROTH contributions to your retirement account.




You make pre-tax contributions. (Lowering current taxable income)

You receive taxable distributions in retirement. 

You expect to be in a lower tax bracket in retirement.

You currently need as much take-home pay as possible, even if it means paying taxes on distributions in retirement.



You make after-tax contributions.  (Including 15.3% SECA tax)
(Paying taxes up front)

You receive tax-free distributions in retirement.*

You expect to be in a higher tax bracket in retirement.

You can afford less take-home pay now, in exchange for tax-free distributions in retirement.

*ROTH distributions are not taxable if the account has been held for five years and the account holder is over the age of 59 1/2, deceased or disabled.



Did you know you are able to claim minister’s housing allowance (i.e., tax-free income) during retirement?  Section 107 of the Internal Revenue Code allows Ministers for Tax Purposes to exclude some or all of their ministerial income designated as housing allowance (including retirement income) from income for federal income tax purposes.  Considering your housing allowance designation will not be taxed, you may want to consider making tax-deferred contributions as part of your strategy.


The Board of Retirement is here to help you along your retirement planning journey! Contact us today at  1-877-767-7738.   Please seek a competent tax advisor familiar with ministers’ taxes concerning your specific tax questions.