How Did We Get to Where We Are?
The relationship between Social Security and those serving in ministry has been a difficult and confusing one. Should ministers opt out of Social Security or not? Until 1951, those serving in nonprofit organizations were not allowed to participate in the government sponsored program.
In that year things changed, and ministers were given the option of entering the Social Security system. Unfortunately, ministers were treated differently from one denomination to another. Some were considered employees, while many denominations lobbied Congress that their ministers were self-employed, as were those among independent congregations. The Social Security Administration concluded that ONLY those whose denominations considered and treated them as employees could opt into the program.
In 1955, the government decided to allow all ministers to enter Social Security if they wished, but the ministers would be forced to pay the full self-employment tax themselves. In 1968 regulations changed once again, and ministers were required to enter Social Security. The full self-employment tax was considered difficult for someone living on a minister’s salary by many. Congress voted to allow ministers (and only ministers) who oppose public insurance to opt out of Social Security, if they do so in during their first two years of ministry.1
In the Blue Corner voices are heard, “Do NOT Opt-Out.”
Some contend ministers should remain in Social Security, because it is the only honest and ethical position that can be made. Recently, this topic of discussion arose on Facebook. One minister wrote, “When I was a Senior in Bible College our Ministries Professor showed us the form to opt out of Social Security. He told us, You can opt out if you want but if you do you are a liar!” To call the discussion that ensued emotional would be an understatement.
Russell Moore, President of the Ethics & Religious Liberty Commission of the Southern Baptist Convention, has written that ministers should remain in the Social Security system because it is based upon taxation rather than voluntary contributions.2 Since Jesus commanded, “Give to Caesar what belongs to Caesar” and Social Security taxes are not immoral, ministers should not seek exemption. Moore continues, “If the ‘opt out’ provision were revoked, would you willingly go to prison rather than pay the tax?” If the answer is no, then you are not a conscientious objector to Social Security.3
GuideStone Financial Resources, has published a guideline based more upon pragmatic reasons to remain in Social Security. They contend that opting out of Social Security results in ministers surrendering federal retirement benefits, subsidized Medicare, potential disability benefits, and survivor benefits for loved ones. Their advice is succinct, “You can’t afford to opt out of Social Security.”4
In the Red Corner voices cry, “Get Out!”
In 2016, The StartCHURCH Advisor wrote, “Begin Saving 15.3% On Your Taxes Today!”5 The author believes those deciding to remain in Social Security do so based upon two pieces of bad advice. First, most ministers will not surrender retirement benefits because, “The majority of ministers entering ministry today…have worked more than 10 years in a secular job.”6 The second piece of bad advice is, “Most ministers are not conscientiously opposed to Social Security.”7 Since the exemption created for Social Security is solely for ministerial earnings, if a minister believes the church should be responsible for the welfare of those in ministry then they are indeed conscientious objectors to public insurance.
None other than Dave Ramsey joins the chorus of those advising ministers to opt out of Social Security. The daveramsey.com Blog has a specific post addressing this issue. Ministers are encouraged to keep up with the facts and take personal responsibility for their decision. They are encouraged to discuss this with a tax professional and to pick up a copy of Publication 517 from the IRS. Still these words are in bold type, “If Dave were wearing your shoes, he’d opt out in a nanosecond.”8
Read Widely Respond Wisely
We close with words that we issue often! Considering whether or not to remain in Social Security is a serious decision with wide reaching ramifications. It is a decision that ONLY you can make. No advisor will have to live with the consequences of your decision. You may think that Social Security and Medicare are poorly run. You may be convinced they will not be available when you retire. These convictions are of no value in this decision, because no minister may opt out for those reasons!
The Christian Churches Pension Plan nor its staff offers advice on what an individual should decide. We do encourage ministry personnel to read all of these resources mentioned…and more! Read carefully and decide carefully. Perhaps these words from the Dave Ramsey Blog are an appropriate challenge with which to close. “Just be aware that if you don’t put any money into Social Security as you work, then you won’t be able to draw any money out when you retire. If you opt out, then you will receive zero Social Security or Medicare benefits from any ministerial income.”9
1 Tennyson, Mack. Ministers, Social Security, and honesty. March 1988. ministrymagazine.org
2 Moore, Russell. Is It Okay for Me to Opt Out of Social Security? My Response. February 15, 2010. russellmoore.com.
3 Moore, ibid.
4 Social Security Considerations: Why Opting Out Is Not the Answer. GuideStone Financial Resources.
5 Rivera, Raul. 4 Reasons Why Ministers Should Opt-Out of Social Security. September 15, 2017. startchurch.com
6 StartCHURCH Advisor. ibid.
7 StartCHURCH Advisor. ibid.
8 Should Ministers Opt Out Of Social Security? https://www.daveramsey.com/blog/should-ministers-opt-out-of-social-security.
9 Dave Ramsey Blog. ibid.