Financial planning for senior missionaries
A mission changes your income, your taxes and your health coverage all at the same time. Planned properly, that is an opportunity, not a problem.
How do you serve God with all your heart, might, mind, and strength if your own house is not in order?
It starts with an income plan you don’t have to babysit.
Planning for a senior mission starts with a plan for retirement income, one that doesn’t require daily vigilance on your part to keep it going. A good retirement income plan integrates investment income, pension income, and Social Security benefits. It also incorporates a plan for minimizing taxes and reducing risk and is integrated into a well-defined and well-organized estate plan.
A quality retirement income plan aims to provide inflation-adjusted income throughout your retirement with the least amount of hassle, risk, and tax. A solid retirement income plan needs to be established prior to serving your mission.
You need answers to some of these questions:
- What will you do about health insurance during your mission, especially if you’re younger than 65 and not yet eligible for Medicare?
- How much will your mission cost?
- What is the most tax-efficient way to pay for your mission?
- Should you start your Social Security now or wait until after your mission?
- What is your retirement income plan?
Four things a mission makes possible
Most retirees assume a mission is an expense to absorb. In our experience it is closer to the opposite, a stretch of low-income, low-cost years that unlocks moves you cannot make at home.
It usually costs less than staying home
“Serving a mission is often more affordable than you think, and often cheaper than staying at home in retirement.”
Health coverage before Medicare
“We have had many retirees use this opportunity to retire earlier, have adequate health insurance, and serve missions.”
A window to delay Social Security
“A senior mission has such a low cost of living that you may have a golden opportunity to delay and receive a higher payment.”
A clear-cut year for a Roth conversion
“For senior missionaries, this presents a unique opportunity because we have a good grasp on what your tax bracket will be and when, making the decision more clear-cut.”
Paying for it tax-efficiently
The housing portion of a senior mission is paid to the church, which makes it eligible to be funded through a Qualified Charitable Distribution or a Donor-Advised Fund. That opens up a question worth asking early: can you pay for part of your mission now, while you are in your highest-earning years, take the deduction then, and draw on those funds during your service?
- Qualified Charitable Distributions
- Tax-free transfers straight from your IRA to a qualified charity, which also count toward satisfying your required minimum distributions.
- Donor-Advised Funds
- Front-load several years of giving into one high-income year for the deduction, then draw on that fund to support your causes later.
The concepts we discuss are not meant solely for the LDS population because all denominations are subject to the same IRS rules and regulations.
Watch the full webinar
Scott M. Peterson leads this webinar and is joined by his team of Certified Financial Planners™. They will each discuss different financial considerations for anyone considering serving a senior mission.
The full series
We have covered this subject in depth. Each session stands on its own.
Get your house in order first.
Bring us your call, your timeline and your accounts. We will build the income plan that runs while you serve.