Friday, November 30, 2018

Hey Fletch … When I first became a pastor, people advised me to opt out of Social Security. I had been in business for over 20 years and they said, “you already paid enough.” From what you talked about in your keynote at the Shepherds 360 Conference, I think I may have broken the law.

DRF—There are of plenty ideas out in the marketplace regarding opting out of Social Security. Dave Ramsey notes:

You can legally opt out of Social Security on religious grounds—but you need valid reasons. You can’t just say, “I want out because I want to do it myself.” You have to fill out a form (4361 Form) and state your specific biblical grounds for opting out. Just remember that this only applies to the income you receive as part of your vocational ministry …

If I were in your shoes and still serving as a church pastor, I’d opt out in a nanosecond.

Notice that Ramsey says you must have “specific biblical grounds for opting out.” This is based on IRS Form 4361. Line 7 of that form says:

I certify that I am conscientiously opposed to, or because of my religious principles I am opposed to, the acceptance (for services I perform as a minister, member of a religious order not under a vow of poverty, or Christian Science practitioner) of any public insurance that makes payments in the event of death, disability, old age, or retirement; or that makes payments toward the cost of, or provides services for, medical care. (Public insurance includes insurance systems established by the Social Security Act.)

If you opted out for financial reasons, or because you felt that “you paid enough,” then you have opted out incorrectly. However, there is no turning the clock back. The last window for pastors to re-enter happened more than a decade ago.

Pastors need to realize that opting out takes their church wages out of Social Security and Medicare. The medicare piece can become huge with the rising costs of medical insurance.

If you have biblical grounds for being conscientiously opposed to the acceptance of any public insurance, I would like to hear them. To date, few pastors have expressed them to me.