Americans are retiring in greater numbers than ever before. More than 4.1 million Americans will retire each year between 2024 and 2027 – that’s more than 11,200 people each day. Some in the financial planning industry have labeled this period the “Peak 65 Zone,” and it’s changing the way companies, churches, government agencies and pension plans are looking toward the future.
For the church, where it’s estimated 25 percent of current Protestant clergy will retire by 2030, this rate of retirements presents a leadership challenge. With seminary enrollment at half of what it was 30 years ago, fewer clergy are entering the ministry to fill the upswell in available pastoral positions.
Lee Hinson-Hasty, senior director of theological education funds development for the Presbyterian Foundation, has been following trends in clergy supply for more than a decade. While he doesn’t see a “perfect storm” developing in the decline of clergy supply, he does acknowledge the trends the church will have to overcome.
“The number of pastors serving in the PC(USA) has been declining, and retirement is only one of the factors,” says Hinson-Hasty. “We also have fewer congregations and positions, but the supply of ministers is dropping at a faster rate and that is accelerating. Many congregations are just finding it hard to find someone to preach next Sunday much less serve them full or even part-time.”
Retirement income
As of January 1, 2024, The Presbyterian Church (U.S.A.) Board of Pensions was distributing retirement funds to 10,148 retired clergy. Although the board recorded a small spike in retirements in 2020, likely attributable to the pandemic, John Matekovic, vice president for income security, does not anticipate a clergy and church employee retirement surge in the next few years.
“Our PC(USA) [defined benefit pension] plan seems to be running the course as predicted based on our current population,” he says, noting the population of PC(USA) retirees does not represent the general population.
As for the income these retirees receive, PC(USA) clergy who participated in congregation-funded Pastors’ Participation retirement plan were on par with, or fared slightly better than, the national average. The Bureau of Labor Statistics reported in 2021, the last year full data is available, that the national average income of those 65 or greater was $55,335, which includes distributions of investment income, retirement savings and an average monthly social security payment of $1,666.
The Board of Pensions reports that annual income for all retired clergy in January 2024, regardless of years of service, was estimated at $29,274. For ordained clergy who served in called positions for 25 or more years, the average annual pension income is slightly higher at $31,487. When accounting for an average monthly social security benefit of $1,767 in 2024, retired PC(USA) clergy will receive, on average, between $50,478 and $52,691 before accounting for income from other sources such as retirement savings, IRAs, personal investments or part-time work.
Income parity
It should be noted, some PC(USA) clergy receive more in retirement than they did during their working careers. Retirement credits – the portion of income that will be distributed as a lifetime monthly defined benefit – are accumulated at 1.25 percent of a participant’s salary for each year. For clergy who fall below the median denominational salary, their credits accrue at 1.25 percent of the median salary. Additionally, nearly annual experience apportionments from The Board of Pensions also add to these percentages of inflation.
Andrew Browne, executive vice president at The Board of Pensions, says his family has first-hand experience of this retirement salary parity. “For people who serve most or all of their career below median, [income parity] has meant a retirement benefit from the pension plan that meets or exceeds their final salary,” he says. “This was true for my grandfather, who received more in retirement, between the defined benefit pension and Social Security, than he ever earned in his working life.”
Another recipient of this income parity is Agnes Brady. She retired from First Presbyterian in Nitro, West Virginia, in August 2022. In her 40 years in ministry, she served smaller congregations around the U.S., as a hospice chaplain and as a mission co-worker in Zambia and Alaska.
Brady is in the process of moving from Nitro to the Presbyterian senior living community in St. Clairsville, Ohio, where she expects she’ll spend 45 percent of her income on housing and the facility’s basic services. She discovered in retirement that she’s a woodworker and is eager to pursue it in the coming years. She’s thankful to The Board of Pensions for the resources that will sustain her in this and other activities.
“Financially, I’m like a lot of folks who have lived at minimum salary,” says Brady. “I’m finding my total income is a little bit more in retirement than it was when I was working … I’ve done the pencil pushing and it should be doable without tapping into my IRA or any supplemental savings at this point, but there’s not going to be a lot of extra money.”
Health and wellness
In addition to retirement income benefits, The Board of Pensions began offering the Humana Group Medicare Advantage Plan on January 1, 2024. This transition from a Medicare supplement plan was received well by some retired clergy, while others found their current providers would not accept it.
While all the retirees interviewed for this article said they are satisfied with their retirement income benefit, opinion was split on whether they subscribed to The Board of Pensions Humana PPO or another Medicare supplemental plan. More than a third of retired clergy are enrolled in the board’s Medicare advantage plan, with a total of 8,150 enrolled, including retired clergy, spouses and survivors.
“We could not be more blessed in retirement, says Roberta Dodds Ingersoll, who retired from First Presbyterian Church of Libertyville, Illinois. She spent the first part of her career as a Christian educator before her ordination in 2003. As part of a retired clergy couple, and the child of a deceased Presbyterian clergyperson whose mother is still receiving death benefits, they are part of The Board of Pensions’ Humana Advantage plan. Dodds Ingersoll says she has trusted the decisions of the board her entire life.
“For the most part, we do have our health,” says Dodds Ingersoll, noting she and her husband split their year between summers in a north Chicago suburb and winters in Texas near grandchildren. They also participate in the Silver Sneakers health club benefit provided by the Humana plan. “Thanks to The Board of Pensions, we have our resources, and our family is a blessing to us, too.”
Kirk Perucca, who describes himself as “super Presbyterian,” enrolled in AARP’s Hartford Advantage Medicare supplemental plan following his retirement from Covenant Presbyterian Church in Kansas City, Missouri, in 2019. He says it was an economic decision when he retired and he’s recently received a second “no viable cancer” scan results from doctors following treatment for liver and bladder cancer.
“I’m very grateful – I’m just a guy who happened to be a minister,” says Perucca, reflecting on his 39 years in called ministry positions. “Deep down it’s been profound and significant, and it permeates who I am to this day.”
