Transcription
Utilize housing allowance. This is the only slide in the presentation that is only for ministers. So, if you are a credential holder uh that's listening in, this is something that is significant enough that I do want to be sure you fully understand.
As a minister, when you participate in your retirement plan through your denomination—in this case, the Assemblies of God, if you're an AG Minister—um, you are entitled, when you withdraw in retirement, to allocate all or a portion of your distributions as a housing allowance. This would result in tax-free distributions. That is very significant for our pastors, and it truly does help you to maximize your dollars to get a longer length of time out of your money because it's less money going to the government and more money staying in your pocket. So I, I always bring this up because it surprises me how many of even our ministers—they understand housing allowance as it relates to their current job at their current ministry, but they were not aware that this can continue on even after they're no longer working, but they still have credentials. Uh, Church of God, Presbyterians, Lutherans, most of the other Southern Baptists, most of the other major established church denominations have this exact same benefit for their ministers. So it is a nice uh rule that the IRS allows for our clergy, and we want to be sure that you are fully aware of how to take advantage of that.
So that is uh three best strategies. We covered three of the worst strategies. Again, there are a lot more strategies that we hope to uh address on other webinars.
If you are a minister not accredited um through AG but on staff at an AG church and making contributions to a 403(b), uh, do I get the same advantage for tax-free housing withdrawals? Yeah, that's a great question. Um, there's no easy answer. Uh, one component of the answer to that question is: even though you're a non-AG credentialed minister—if I'm—if I'm saying, if you are a minister not credentialed through AG—yes. So the first question is: even though you're may not be an AG minister, but you hold credentials with another organization, do your day-to-day responsibilities at that ministry or at that employer constitute the definition of ministry? Are you providing the sacraments? Are you doing those types of things? So that's one component to that. Um, the second component is: is even if you are um, uh, there is a legal precedent that more or less says that even though you don't hold it with the AG, that that is still ministry income that you're deferring as a credential holder, that it would be eligible for housing. Currently, the way we're administering the plan, very similar to other church groups, other church denominations, is it's very difficult to get proof of that. So a lot of it, the burden lies on you as you take it out to prove that you are credentialed and that you were credentialed at the time you deferred the money. So that's one of those things that we can assist you with on a more personal basis. But I guess I would say, depending on how you answer the different layers of that, there could be a way that yes, you could still utilize that housing allowance even as a non-AG minister.