Retirement planning is a vital part of financial stewardship, especially for clergy who often face unique challenges in managing income, housing allowances, and long-term savings. One of the most powerful tools available to clergy is the 403(b)(9) retirement plan—a tax-advantaged savings vehicle designed specifically for employees of churches, religious organizations, schools, and other nonprofits.

What Is a 403(b)(9) Plan?

A 403(b)(9) is similar to a 401(k), but it’s tailored for employees of tax-exempt organizations. It allows clergy to contribute a portion of their income into a retirement account, where it can grow tax-deferred until retirement. Contributions can be made on a pre-tax or Roth (after-tax) basis, depending on the plan options available.

1. Tax-Deferred Growth

Contributions to a traditional 403(b)(9) reduce taxable income in the year they are made, and the investments grow tax-deferred. This means clergy can potentially lower their current tax liability while building retirement savings.

2. Roth Option for Tax-Free Withdrawals

Many 403(b) plans offer a Roth option, allowing clergy to pay taxes now and enjoy tax-free withdrawals in retirement—ideal for those who expect to be in a higher tax bracket later.

3. Housing Allowance in Retirement

One of the most unique benefits for clergy is the ability to designate a portion of 403(b)(9) distributions as housing allowance in retirement. This can significantly reduce taxable income, even after retirement, if properly structured.

4. Higher Contribution Limits

403(b)(9) plans allow for generous contribution limits:

• Up to $23,000 annually (2025 limit), plus
• An additional $7,500 catch-up contribution for those age 50 and older
• Special 15-year service catch-up for long-term employees of qualifying organizations

5. Church Contributions

Churches and religious organizations can also contribute to a clergy member’s 403(b)(9), providing an additional layer of retirement support.

Common Misconceptions

• “I don’t make enough to save.” Even small, consistent contributions can grow significantly over time thanks to compound interest.
• “I’ll rely on Social Security.” Social Security alone is rarely sufficient for a comfortable retirement, especially for clergy who may have reduced earnings history due to housing allowance exclusions.

Getting Started

If you’re a clergy member and your church offers a 403(b)(9), consider enrolling as soon as possible. If your church doesn’t yet offer one, it may be worth initiating a conversation with leadership or a financial advisor who specializes in clergy finances.

The 403(b)(9) plan is more than just a retirement account—it’s a strategic opportunity for clergy to honor their calling while preparing wisely for the future. With its unique tax benefits and housing allowance provisions, it stands out as an exceptional tool for long-term financial well-being.

If you require more specific guidance tailored to your situation, we recommend reaching out directly to Pro Advisor Support. Their team can provide expert assistance and help address any questions.

Clergy Financial Resources
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Tel: (888) 421.0101

Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

For more information or if you need additional assistance, please use the contact information below.

Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421-0101
Fax: (888) 876-5101
Email: clientservices@clergyfinancial.com