In this issue of Tomorrow, we continue our focus on education. Our experience has taught us that sound education is key to achieving financial wellness. We begin with our third article from Rev. Marvin A. McMickle, Ph. D, “What Do New Pastors and Young Pastors Need to Know?” which focuses on preparing pastors and preachers for life in the real world. McMickle discusses the importance of having mentors who aided in shaping his life, his preaching and his understanding of what it means to be a leader in the church.
Unfortunately, many of us do not consider the costs of healthcare in retirement. Be sure to read “Don’t Let Healthcare Costs Derail Your Retirement” which offers helpful information on steps that you can take now to become informed and financially prepared.
The fall is the beginning of a busy time for many churches and communities, so it’s a good idea toget a jump start on your year-end financial planning as we move into the holiday season. Our “Year-End Financial Checklist” provides a list of reminders that you should attend to before the end of 2017.
Learn more about the opportunities we are providing through our grant, the Financial Wellness Project for Pastoral Leaders and their Congregations awarded by the Lilly Endowment, Inc. In“Our Lilly Grant Initiatives Focus on Financial Wellness,” we discuss the implementation of our three grant initiatives, the Strategic Pastoral Excellence Program , The Pilot Project on Addressing Financial Stress for Pastoral Leaders and the Financial Wellness Program .
In the last issue, we provided information on corporate email management and why it’s important for your church or faith-based organization. In the article, “MMBB Technology Solution Moves Toward Completion” we update readers on our progress and the scheduled implementation of two of the three remaining components this fall
Equipping you with resources that educate and empower has been central to MMBB’s ministry. We take seriously the scripture which encourages all of us to “let the wise listen and add to their learning, and let the discerning get guidance” (Proverbs 1:5 NIV). We are here to support you, your family and your congregation and guide you on your journey to financial wellness.
It is our privilege to serve you.
Louis P. Barbarin, CPA
Chief Executive Officer
By Rev. Marvin A. McMickle, Ph.D.
I wish that every young pastor and preacher could have the blessing of being mentored as I was by those who aided in shaping my life, my preaching, and my understanding of what it means to be a leader in the church of Jesus Christ.
There is not enough space in this article for me to express my gratitude to Samuel Dewitt Proctor, William Augustus Jones, Jr., and Gardner Calvin Taylor for the impact they had on my life. I believe it is safe to say that every success I have had in my ministry over these more than forty years is largely a result of the lessons I learned from them. It is also safe to say, that whatever failures or mistakes I have incurred can be traced to my failure to follow both the example they set and the lessons they taught me over the years.
Thus, the first thing young pastors and preachers need to know is that they do not know everything. The world did not begin when they arrived. The church had a history before they appeared on the scene. Do all you can to learn the lessons of the past. Seek out some elders from preceding generations from whom great wisdom can be garnered. Sit with some senior citizen preachers and learn about their struggles, their aspirations, their successes, and their spiritual disciplines. Every Timothy needs to stay in touch with Paul. Every Joshua needs to remember the example of Moses. Young women, as well as young men entering the ministry should learn all they can about “The Daughters of Thunder” whose life stories as trailblazing women in ministry have been collected in the book by that same name by Bettye Collier-Thomas.
Secondly, every young preacher needs to appreciate and practice one of the cardinal values of the Baptist church which is the associational principle. We are stronger together than we are when we seek to operate apart from one another. It was always intended that the notion of local church autonomy be balanced by the work we do in partnership and association with one another. The massive challenges that confront our world today cannot be effectively confronted from within the walls of a single church or by the work of a single preacher. In fact, such an approach to ministry is self-defeating, because it will quickly lead to clergy burn-out and to repetitive practices by individual churches which could have had a bigger impact if their collective efforts had been employed.
This example was established by Jesus who gathered the twelve apostles around him, and then sent them out “two-by-two.” As much as preachers need the wise counsel of those who were in ministry before us, so also do we need the support and comradeship of those who are engaged in ministry alongside of us. Young preachers need mentors, but they also need friends, and co-laborers, and partners who stand with them and work with them day-by-day. This need can be met in one of several ways. Be an active member of a local clergy association. Be involved in your local or regional Minister’s Council. Reach out to pastors in other denominations for Bible study, prayer gatherings, collaboration on civic issues of mutual concern, and for sponsoring community-wide events during Holy Week, Thanksgiving, or the Advent and Christmas season.
Third, every young preacher needs to know that they will not be young forever. The years will begin to roll by. Before you know it, you will be like me; almost seventy-years old and recalling when you were once the young kid on the block, but now younger preachers refer to you as “the senior man.” That being the case, take advantage of the wonders of compound interest and start saving for your retirement and your later years as early as you can. It may seem strange to insert words about retirement in an essay intended to advise young preachers and pastors, but that is EXACTLY what I am doing! Consult with an MMBB CERTIFIED FINANCIAL PLANNER™ professional at your earliest opportunity, and in coordination with your local church, or based upon your other sources of income begin to calculate an amount that can be set aside and left untouched whether as a rainy-day fund, a retirement fund, or any other unanticipated future need. To quote the lyrics of a Fleetwood Mac song that was popular during the campaign events of President Bill Clinton, “Don’t stop thinking about tomorrow.”
Finally, never confuse your church family with your family at home; spouse, children, parent, siblings, and even close friends. There is a haunting verse in Song of Solomon 1:6 that says, “They made me keeper of the vineyards, but my own vineyard I have not kept.” Pastors can become so drawn in to the affairs of other persons and families that they begin to neglect the persons and problems within their own family circle. The children in the church begin to take precedent over their own children at home. Planning for the church anniversary can cause a pastor to lose track of the date of his/her own wedding anniversary. Work replaces vacation time. Evening meetings squeeze out time with the family. Do not become so busy taking care of the “vineyards,” the homes of your church members, that you fail to attend to the needs of your own home and family.
You cannot make up for a missed band concert at school where your child had a solo part that you did not hear, because you allowed people to schedule you into meetings at times you should have protected. My experience has been that if you tell your church that there are some times you plan to reserve for your family, the dinner hour, a well-deserved day off from work, or an earned vacation, they will gladly plan around your schedule. In doing this, you will be setting a good example for other families in the church who should also be spending more time together.
Marvin McMickle, Ph.D. is President, Professor of Church Leadership, and Director of the Program of Black Church Studies at Colgate Rochester Crozer Divinity School, Rochester, NY. He was elected to be the 12th President of Colgate Rochester Crozer Divinity School in 2011. From 1987-2011 he was Senior Pastor of Antioch Baptist Church of Cleveland, Ohio. where he led the church in establishing a ministry for people infected with or affected by HIV/AIDS. It was the first church-based program of its kind in the entire country! From 1976-1986 he served as pastor of St. Paul Baptist Church of Montclair, New Jersey. While there he served as president of the New Jersey Council of Churches from 1982-1986. Dr. McMickle has taught homiletics at several institutions including New York, New Brunswick and Princeton Theological Seminaries. He is the author of numerous books, sermons and articles in print and is a sought-after preacher
If you think Medicare will cover all your healthcare costs when you retire, think again. The sobering reality is that Medicare generally only covers about 60% of the cost of basic healthcare services for individuals aged 65 and older.
A recent study by the Employee Benefits Research Institute (EBRI) examined the amount of savings Medicare beneficiaries are projected to need to cover program deductibles, premiums and other health expenses over the course of their retirement. While it is difficult to predict how much healthcare you’ll need as you age, the study* estimated that as of 2016 a 65-year-old man would need $72,000 in savings and a 65-year-old woman would need $93,000 if each had a goal of having a 50% chance of having enough money to cover healthcare expenses. Even worse, if each wanted to increase their chances of having enough savings to 90%, the man would need $127,000 and the woman would need $143,000. Most retirees don’t have savings set aside specifically to pay for healthcare expenses in retirement. When retired, they typically pay for their healthcare using current income such as Social Security, pensions, earned income and retirement account distributions. Health insurance premiums and out-of-pocket healthcare expenses account for 13% of healthcare spending in retirement. Many retirees will need to save even more to cover long-term care expenses and other healthcare expenses not covered by Medicare such as dental care and hearing aids.
There are steps you can take now to become educated and financially prepared for healthcare expenses in retirement. Cyndi Hutchins, Director of Financial Gerontology at Merrill Lynch, recommends estimating out-of-pocket costs such as insurance co-pays, and Medicare premiums to forecast what potential healthcare costs could look like, including long-term care. Long before you retire, spend time learning as much as you can about Medicare (Parts A and B), including Medicare Advantage (Part C), and Part D plans for prescription coverage, and supplemental Medigap plans.
* EBRI’s saving targets represent the present value of projected expenses over the course of the individual’s retirement.https://www.ebri.org/publications/notes/index.cfm?fa=notesDisp&content_id=5527
For most of us, the fall season means an increase in ministry projects with activities throughout the church and community in full swing. The calendar is packed with observances, celebrations and outreach events. You may not be thinking about your financial plan, but in many ways this is a good time to reflect upon your goals for the coming year and think back over the current year. It’s the perfect opportunity to create a year-end financial checklist.
Here’s a list of some of the things that you should do before the end of 2017.
Meet with Your Financial Advisor.
Review and Rebalance Your Portfolio.
Take a look at how your portfolio assets are currently allocated. Are your asset allocations consistent with your investment strategy, goals and risk tolerance? As market conditions change, your portfolio may deviate substantially from your planned allocation. This is a good time to rebalance your portfolio or reevaluate your allocation strategy to make sure it continues to be aligned with your goals and tolerance for risk.
Review Your Housing Allowance.
Ordained ministers who own or rent their home are entitled to receive the housing allowance. This important tax benefit must be designated prior to the year in which it will apply. Be sure that your church or trustee board officially designates a housing allowance for 2018 before the beginning of the year. The federal tax code provides clergy with a tax exemption on the portion of their compensation that is designated as a housing allowance. However, it is considered taxable income for Social Security and Medicare. Visit the MMBB website http://www.mmbb.org/ our-plansservices/housing-allowance-advantage/ for details regarding the Housing Allowance.
Maximize Your Retirement Contributions.
You should take a look at your retirement accounts now. Have you maximized your contribution to your retirement account? If the answer is “No,” consider doing so to lower your taxable income and better save for retirement. For the 2017 tax year, the IRS allows employees to contribute up to $18,000 to their 403(b)and 401(k) retirement plans. Those over age 50 can make an additional catch-up contribution of $6,000. Keep in mind that any contributions you make within IRS allowable amounts are tax deferred until after you retire or begin taking withdrawals.
Review Your Yearly Budget.
The end of the year is the perfect time to evaluate your budget. Are you on track? Did you overspend? Did you have to dip into your emergency fund? Taking stock of your annual spending will help you draft your new budget for the coming year.
Plan Charitable Donations.
Charitable donations made to qualified organizations may help to lower your tax bill. You must make your charitable contributions by December 31 and they must be itemized if you are claiming these contributions as a tax deduction.
Spend What’s Left in Your FSA.
Many health insurance plans now include a Flexible Spending Account or FSA. If you have an FSA, it may be wise to check with your employer as IRS regulations may have changed in recent years. In the past you had to spend everything before the year end. Otherwise, you would lose it. Now, employers can offer to carry over up to $500 or offer a grace period. Make sure that you understand your employer’s policy so that you don’t end up losing money you could have spent.
Evaluate Your Insurance Policies.
Whether it’s auto, health or life insurance – review your policies annually to make sure that you are receiving the coverage and the service that you need. The final months of the year are typically the open enrollment period for employer insurance coverage. Pay close attention to changes in health insurance benefits. Many employers offer several plans that may have different costs and benefits, so it’s important to review all of your options.
Update Your Beneficiary Information.
Is your beneficiary information up to date and correct? Make sure that you update your beneficiary information following any major life events such as a marriage, birth or death and that you haven’t forgotten to name a beneficiary on any of your accounts.
Prepare for 2018.
Gather financial documents you’ll need to meet with your financial advisor and make sure that everything is up to date, especially if you have had a change in 2017. Something as simple as making sure your address is updated can save you a lot of frustration later.
In our second quarter issue of Tomorrow, we explained that financial wellness is a state in which you have an honest understanding of your financial circumstances and you manage them so you can be prepared for the inevitable financial adjustments that may be needed.
Financial wellness has become a popular topic in the workplace and human resources departments are making a number of related services available as a benefit to their employees. Financial wellness may be a new term in the current lexicon, but MMBB has been working for many years to create financial wellness for our members at every stage in their financial journeys. Indeed, it is at the heart of our call to ministry. One aspect of our work in financial wellness centers around the three-year grant we received from the Lilly Endowment Inc. in December 2015 under their National Initiative to Address Economic Challenges Facing Pastoral Leaders. We are excited by the opportunities we are providing through our grant, the Financial Wellness Project for Pastoral Leaders and their Congregations, which will serve as a new paradigm building upon what we do best.
Our overarching goal for the Lilly initiatives is to expand our efforts to reach a broader network of pastoral leaders and churches to increase the financial wellness of church leaders and staff. We believe this will have a ripple effect that favorably impacts the financial health of their congregations. We strongly believe that our initiatives can increase awareness and knowledge that leads to wise planning, spending and saving of the financial resources that God puts at your disposal. In 2016 we began implementation of our three grant initiatives.
The first one is the Strategic Pastoral Excellence Program, (SPEP), one of the core Lilly initiatives that will be administered during the three-year period. It is designed to strengthen the personal and organizational financial skills of pastors who have been identified as key leaders of healthy congregations. The activities of this intensive program are devised to achieve two primary goals:
Nominations are solicited from American Baptist Regional Executive Ministers and other denominational leaders for candidates who are then invited to apply for the program. Participants are selected by a committee comprised of members of MMBB’s internal Lilly Planning Team. The first cohort took place this past January facilitated by MMBB’s CERTIFIED FINANCIAL PLANNER™ professionals. We were excited by the enthusiastic engagement and meaningful lessons that occurred for participants and facilitators alike. One pastor remarked, “I didn’t expect the week to go as it has. For me the experience has not only been financial, but more relational–relationship with God, with myself, with money, and with others. It has been a profoundly deep experience.” It is our hope that every participant can leave with such a keen sense of empowerment and the tools that foster financial wellness. Each participant and spouse are also assigned to one of our CERTIFIED FINANCIAL PLANNER™ professionals who will work with them throughout the three-year program.
A workshop connected with our second Lilly initiative, The Pilot Project on Addressing Financial Stress for Pastoral Leaders was held last October and another one will take place again this fall. This one-and-a-half-day workshop was developed with the assistance of pastors who are also trained counselors. They possess insights about the psychological and spiritual issues surrounding money. ABC clergy who are MMBB members and their spouses were invited to participate. In addition to financial skills such as tracking monthly cash flow, budgeting and managing debt effectively, the workshop also addresses the impact of family experiences on the formation of attitudes and practices about money in adulthood. Each family is matched with a coach who will work with them over a 12-month period to achieve the goals which they set during the workshop. The coaching component has been particularly impactful. One pastor shared that “our coach has been very effective at lifting up the positive aspects of our financial and professional lives [by reminding] us that we are accomplishing much more than we give ourselves credit for.”
The third Lilly initiative, the Financial Wellness Program will address the day-to-day challenges faced by pastoral leaders by providing financial education resources and financial literacy workshops throughout the country over the course of three years. Debt Management will be the initial focus for many of these workshops because our research indicates that far too many clergy and lay staff are carrying considerable seminary debt as well as consumer debt.
This year we look forward to adding another resource, the MMBB Financial Wellness Institute. It is an online learning curriculum which initially will offer educational support for the three Lilly grant initiatives. Next year, this resource will be available to all MMBB members and employers. We know that people can often feel intimidated about money so the curriculum is designed to be engaging and informative. Using animation, our videos invite participants to join with us in a safe space to learn about finance at their own pace as they build financial know-how. The first course is on Debt Management and will cover several topics including, “Managing Your Debt”, “Establishing Your Financial Goals,” “Identifying Your Debt,” and “Strategies for Eliminating Debt.” To learn more about participating in our Lilly grant initiatives please contact us at 800.986.6222.
In last quarter’s issue of Tomorrow, we discussed the importance of corporate email management in preparation for the launch of the next two portals in the Ariel online financial and retirement benefits solutions. These innovative solutions will enhance MMBB’s ability to provide state of the art financial services, increase operational efficiencies and reduce cyber risk.
The Administrative Portal, also launching this fall, will allow MMBB’s service and benefits staff to work together seamlessly with employers and members in an interactive environment providing the ability to view members’ screens and immediately assist as necessary.
With the future implementation of additional Ariel technology solutions, MMBB Financial Services will continue to grow our ministry and services as a premier provider of retirement benefits plans, making the process more efficient for employers, members and MMBB staff.