Retirement Plan Leakage and Non-Profit and Ministry Workers 

Retirement plan leakage refers to the premature withdrawal or borrowing from retirement accounts before reaching retirement age. This can include cashing out retirement accounts during service or after separation of employment, taking hardship withdrawals, delaying participation in retirement plans, or borrowing against the account balance. Leakage diminishes the long-term growth potential of retirement savings and may result in penalties, taxes, and reduced retirement income. While this issue impacts workers broadly, including ministers and pastors, there are distinct reasons why it may pose particular challenges for them and others in similar roles. 

Financial instability stands out as a pivotal factor contributing to retirement plan leakage among non-profit and ministry workers. Many individuals in these positions grapple with lower salaries compared to counterparts in the private sector, hindering the accumulation of substantial retirement savings. Additionally, non-profit employees, including ministers and pastors, often confront irregular income streams or periods of financial uncertainty, intensifying the difficulty of saving for retirement. 

The nature of non-profit and ministry work further complicates retirement planning. Employees in these roles frequently exhibit a high level of dedication and sacrifice, prioritizing the organization’s mission over personal financial goals. Consequently, retirement planning may take a back seat or be deferred, rendering individuals more vulnerable to leakage when unforeseen expenses arise. 

In light of these challenges, individuals are encouraged to reach out to our stewardship advisor before making important financial decisions. Our advisor can provide personalized guidance and support to help navigate retirement planning effectively, mitigate the risk of leakage, and ensure long-term financial security.