Most people think saving for retirement will only benefit them financially during their retirement years. This could not be further from the truth!
Retirement plans not only bring value during your retirement years but also can help you during your working years. Find out how this powerful tool can financially help you in retirement as expected — and right now!
Pay taxes later with tax-sheltered contributions.
If you choose to make tax-sheltered contributions to your retirement account, you're not paying taxes on the amount you contribute — or your employer's contributions — today. You won't pay a dime in taxes until you make withdrawals during retirement.
Lower your current income taxes now with tax-sheltered contributions.
When you set aside a tax-sheltered percentage of your paycheck in a retirement plan, you're reducing the amount of overall income that will be taxed at the end of the current year.
Claim housing allowance in retirement if you contributed tax-sheltered contributions while working as a minister.
If you are a retired minister, this may be the most important tax benefit available!
The IRS allows ordained, licensed or commissioned ministers who are retired to exclude some or all of their retirement income from a denominational pension board, such as GuideStone®, as housing allowance. Some rules and limits apply. Our participants can find out more in Ministerial Tax Issues and through our annual Ministers' Tax Guide for our participants.
Pay taxes now, but you may be eligible for tax-free, qualified withdrawals later if you choose Roth contributions.
Qualified withdrawals allow your investment earnings to be distributed tax-free. Plus, whenever you receive your retirement income, you've already paid taxes on Roth contributions, so this income will not count toward your taxable income in retirement years.
Lower your income taxes later by choosing Roth contributions now.
Roth contributions allow the control to be in your hands about when you pay the IRS. Paying them now in a lower tax bracket with expectations to move to a higher tax bracket will put tax dollars back into your pocket in the long run.
Claim the Saver's Credit for those who qualify to increase your tax refund. Your eligibility and the amount of Saver's Credit is based on the amount of your retirement contributions and your adjusted gross income.
As you can see, your employer's retirement plan gives you the unique opportunity to build future savings while also creating an effective tax savings strategy.
If you have more questions, please contact GuideStone at 1-888-98-GUIDE (1-888-984-8433) or a certified tax professional.
This educational information is not intended as legal or tax advice. Ministers or churches with specific legal or tax questions should consult a legal or tax advisor who understands ministerial tax issues.
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