Leadership
- Managing your finances in retirement: What to do now to prepare
By Rev. James R. Cook, CFP®, RICP® You might have heard retirement referred to as “the golden years.” Some people view retirement as a chapter in life when they can spend more time with family, on leisure travel, or starting a new hobby. Some retirees engage in activities they’ve always wanted to do but never had time to pursue while working. Managing your finances in retirement is crucial to ensure a comfortable and financially secure life after you stop working so your golden years can truly be golden. Here are some key steps and considerations you can look at now to help you manage your finances effectively later during retirement. 1. Assess your financial position Before you embark on your retirement journey, it’s crucial to take stock of your financial situation. Evaluate your sources of income, including pensions, Social Security, investments, and any part-time work you might engage in. Create a comprehensive list of your expenses, categorizing them into essential (housing, healthcare, groceries) and discretionary (travel, hobbies) categories. This assessment will provide a clear understanding of your financial inflows and outflows. 2. Create a realistic retirement budget Once you have a clear picture of your finances, create a realistic budget that aligns with your retirement goals. Strive to strike a balance between meeting essential needs and enjoying leisure activities. The 4-percent rule is a commonly used guideline that suggests withdrawing 4 percent of your initial retirement portfolio annually, adjusting for inflation. However, your unique circumstances might necessitate a different approach, so it’s crucial to tailor your budget to your needs. 3. Social Security planning Understand when you become eligible for Social Security benefits and how different claiming strategies can impact your monthly benefit amount. Delaying your benefits can result in larger monthly payments, so consider your individual circumstances before deciding. The minimum age to start claiming your Social Security income is 62. However, if you do not need the income and can afford to delay your benefits until your full retirement age, postponement might be beneficial. Claiming benefits before full retirement age will reduce your Social Security income. Keep in mind that full retirement age varies based on your birth year. Be sure to check the social security website to verify your full retirement age (https://www.ssa.gov/prepare/plan-retirement). 4. Plan for healthcare costs As you age, healthcare expenses are likely to increase. It’s essential to plan for medical costs, including insurance premiums, deductibles, and potential long-term care expenses. Medicare is a fundamental component of healthcare in retirement, and you need to research it and enroll in it at the appropriate time. However, Medicare doesn’t cover all your needs, so it’s important to consider supplemental health insurance (make sure you understand the differences between Medigap and Medicare Advantage) and long-term care insurance to cover potential gaps in coverage. Budgeting for healthcare costs will prevent unexpected financial strain down the road. 5. Manage debt wisely Entering retirement with substantial debt can impede your financial freedom. Strive to pay off high-interest debts before retiring, as interest payments can erode your savings over time. Credit card and other outstanding debts should be strategically managed to ensure that your retirement income isn’t disproportionately consumed by repayments. Some steps to take to manage your debt include: • List all your creditors (except your mortgage creditor), the amount owed to each, the interest rates, and monthly minimum payments. • Re-order your debts according to which you want to eliminate first. • Now attack debt no. 1, repaying as much (more than the minimum) as you can each month until it’s gone while paying minimums on the rest. Then attack debt No. 2. Keep going until all your debts are gone. The key to success: don’t build up new debts while paying off the old ones! 6. Emergency fund Maintain an emergency fund to cover unexpected expenses, such as medical bills or home repairs. Having a safety net can help prevent you from dipping into retirement accounts prematurely. Most experts recommend having enough saved to cover your living expenses for three to six months. Be sure to consider both fixed and variable expenses when determining how much you need to save. Emergencies can happen at any time, so you need to be able to access your funds quickly. A savings or money market account with low fees and a low minimum balance requirement is the perfect place for your emergency funds. You should also try to find an account with a competitive interest rate so that your money can grow over time. Always keep your emergency fund separate from any accounts that you use daily. This practice makes it clear that one account is for spending and one account is for saving. And definitely don’t put your emergency funds into high-risk investments, such as the stock market; you need to know your money is going to be there when you need it. 7. Lifestyle adjustments Be prepared to adjust your lifestyle if necessary. If your expenses exceed your income, you might need to cut back on discretionary spending or explore part-time work opportunities. 8. Tax strategy Understand how different types of retirement income are taxed and develop a tax-efficient withdrawal strategy. Depending on your situation, it might be advantageous to withdraw from different accounts in a specific order to minimize your tax liability. Make sure to speak to your financial planner and tax professional for guidance. 9. Investment strategy Review and adjust your investment portfolio based on your risk tolerance, time horizon, and financial goals. While you might want to reduce risk as you age, it’s important to maintain a diversified, balanced portfolio that still provides growth potential to outpace inflation, because inflation can erode the purchasing power of your retirement savings over time. Diversification can help mitigate risks and maintain steady returns. A diversified mix of stocks, bonds, real estate, and other assets can help you weather market fluctuations while preserving your retirement savings. Diversifying involves investing in assets that respond differently to the markets. When stocks Read More >
Risk Management
- Property protection + peace of mind
PHLYSense can prevent a problem from becoming a catastrophe Church Executive: We’ve talked about PHLYSense in the magazine before. For anyone who might just be hearing the term, what is PHLYSense? Peter Kim: Simply put, PHLYSense is a property protection solution that provides building owners and occupants with monitoring and alerts for adverse conditions. PHLYSense has two main parts. The first involves sensors that monitor ambient temperature and the presence of water. Each sensor is compact and fits into the palm of your hand. Sensors are commonly placed in areas vulnerable to heat, low temperatures, or water — IT server rooms for high-temperature alerts, for example. Or, for water alerts, in vestibules or a under kitchen sink, areas next to hot water heaters or boilers, spaces near sump pumps, or even areas where water leaks or plumbing backups have been a problem before. The second part of the system is the monitoring and the alert infrastructure. This includes an online dashboard (or you can use a phone app) where you can see the status of all the sensors across one location or multiple locations. In the event of an alert — high or low temperature or the presence of water — notifications are pushed out to the organization’s designated individuals via text, email or both. They can also receive phone calls. In this sense, PHLYSense gives churches the opportunity to take action before an issue becomes a catastrophe. PHLYSense is a trade name of Philadelphia Insurance Companies, and the technology is proprietary to Hartford Steam Boiler. They are a top-of-class partner company which provides us with hardware devices and back-end monitoring and support. Partnering in this way allows us to focus on what we do best, which is essentially taking the solution and getting it into our policyholders’ hands. CE: Is there a cost associated with getting PHLYSense? Peter Kim: No; PHLYSense is available to any PHLY policyholder for whom we provide buildings coverage. It doesn’t matter if it’s a little country church or a multisite megachurch: PHLYSense is a value-added service for all our policyholders with building property coverage from PHLY. We’re literally giving these away. CE: Maybe the best way to demonstrate the efficacy of PHLYSense is with real-life examples. I’m told there are a few recent “saves” in which these monitors played a key role. Tell me about those. Peter Kim: The two most recent saves come from nonprofits. The first nonprofit — which experienced a frozen pipe — owns and operates a set of group homes; the other had a leaking-pipe incident in its main office building. In the first incident, the group home was vacant at the time. One of the maintenance employees received a cold-temperature text alert on a Sunday. The area was experiencing a winter storm and the back door had blown open. The pipes froze just before the maintenance worker arrived; water was being released, but it was minimal. The employee was able to turn off the water, do some cleanup, and make a small repair. Interestingly, this same nonprofit signed up for PHLYSense in 2022 but opted to try in just a few of their homes as a trial. Shortly afterward, a similar freeze event occurred in one of their group homes without PHLYSense and caused more than $50,000 in damage. It wasn’t long before the client installed PHLYSense in every group home — more than 20 locations. The executive director wrote us a letter after that Sunday morning event. It reads, in part: Had we not had sensors in this home, I’m certain we would’ve been looking at another $50,000 or more in damage. I have peace of mind that we will be avoiding any further costly repairs due to water damage. In the second example — the non-profit headquarters office — this wasn’t the first time the client experienced water damage due to leaky pipes underneath the kitchen sink. That’s why a PHLYSense sensor was in place under that sink. A month after the first incident, during a recent three-day weekend, the under-the-sink sensor indicated another water release. The client had someone on site within 20 minutes, and the result was minimal water damage. Had they not caught it early, the water could have run for several days and caused a major disruption for the nonprofit. In another event at a church, a pipe leak in the ladies’ restroom occurred, alerting the sensor and resulting in a quick cleanup of the area. At another church, a drain line for the ice machine outside the church gym experienced a leak. The sensor alerted, saving the hardwood floors in the gym from damage — a potentially big expense. The list goes on. In every case, a church/organization avoided or minimized water loss and downtime and the disruption associated with it. PHLY won, too, because those claims were minimized. CE: Conversely, how often do you see claims in which a sensor monitoring system — like PHLYSense — could have averted a disaster? Peter Kim: We see it all the time; water loss events are consistently one of the top drivers for property claims with PHLY. As two general examples, we’ve recently had very large freeze events in the United States. In 2021, polar vortex attacks affected large parts of the country, but we saw an extremely large number of events occur in Texas, primarily due to power and heat outages. Then, in 2022, Winter Storm Elliott happened right around Christmas, again affecting large parts of the country, but especially the Southern states. Those two events showed a marked difference in the outcome between accounts who had PHLYSense and received alerts and were able to take quick action, and those who did not. In a very large sense, this provided definitive proof that PHLYSense works and, again, is to everyone’s benefit. CE: Why are churches such a good fit for the PHLYSense monitoring system? Peter Kim: Many churches have large gaps of time each week when their facilities aren’t in Read More >
Pastor-Friendly A/V
- 4 conferences, 1 event
CFX 2024 will focus on church AVL, church building projects, church safety, and facility stewardship — all under the same roof Church Executive: Who is the target audience for the educational offerings at CFX? And for new attendees, what kind of experience can they expect to have at the event? Stephanie Lippi: At CFX, our biggest desire is to create a community where people who hold similar roles in their churches can come together and learn from each other. They can grow their skills base and knowledge from other church leaders, as well as from companies that are really skilled in helping them overcome the different, specific challenges they face. The networking aspect is huge, also; because we cover a broad range of topics, we really encourage a church leadership team to attend — especially if they’re planning any sort of building project or upgrade in the next few years, whether it’s new construction or just upgrading their AVL technology. CFX is a really great opportunity for the people who are the influencers — the tech directors, the facilities managers, the safety directors, basically all the people using the equipment day in and day out and know what would be best for the space — to attend with the decision-makers — the pastors, the executive pastors, and anyone who approves the purchases. They can talk to the companies, together, to make the best decisions as they steward their funds and their buildings. CE: Likewise, for returning attendees, how might this year’s CFX Expo present a different experience? Lippi: In the past, we’ve had all sessions open to everybody. As a result, a lot of topics got covered, but not in depth. This year, we decided to take a more solutions-based approach by offering four conferences at one event. There are four big areas where we feel like churches really need the most support: one is tech arts, or worship production technology; the other three (Church Buildings, Church Safety, and Facility Stewardship) are focused on the ‘buildings side’ of the church, on the facilities themselves. We want to help people go deeper in their educational levels by covering more topics. We want to help attendees learn more in the areas of any church building project that they’re planning to do, and to help them maintain their facilities and plan for future maintenance repairs — those types of things. We also want to focus on church safety and security — how to create an environment where people feel safe when they show up, but also how to protect the people who are on the property seven days a week. CE: Related to this, are there enduring offerings that attendees can expect to enjoy again this year? Lippi: One of the things we started last year — with a lot of really great feedback — are the leadership collectives. This year, we have three offerings: one for pastors and executive pastors; one for facilities managers and safety directors; and one for worship and tech leaders. The goal of these collectives is to give people an opportunity to come and sit with people who have similar roles to theirs. They can discuss some of the biggest leadership challenges they’re dealing with in their roles and then brainstorm solutions through the course of the conference. In the end, they’ll write out an action plan to take home and implement in their churches. Moving forward, they’ll also have a new collective of people who can provide support throughout the year as they stay connected. Additionally, our networking reception on Tuesday evening has a new format. We’re working with some of our exhibitors to provide larger prize giveaways than we’ve offered in the past. CE: As you mentioned, the Expo’s new format offers “multiple church-oriented conferences under one roof.” Can you expand on that? Lippi: We really landed on four areas (Church AVL, Church Building Projects, Church Safety, and Facility Stewardship) because those are the ones for which we’re getting the most requests for help. That’s why we have separate conferences; attendees can register for an all-access pass and attend any session that’s happening at the Expo. But we also wanted to narrow it down for attendees so that it feels more personalized, like, OK, church safety: that’s my realm, and that’s what I most want to focus on. That person might purchase a pass to attend the church safety conference, and that’s all he or she would have access to. It makes it easier for people to ‘choose their own adventure.’ Instead of a smorgasbord, we’re offering attendees a seven-course meal. CE: For attendees of the Church Safety track, what takeaways can they expect to gain? Lippi: The aim of the church safety conference is to provide a holistic approach to safety. Acts or threats of violence are a big focus for churches right now. We have an amazing general session speaker who will be sharing a lot about how to prevent and prepare for an active shooter situation. But there’s a lot more to church safety than this; a holistic safety approach includes understanding the emotional and spiritual elements of church safety, along with how to budget for safety. For example, are church leaders aware that there are grants available? If so, how do they prepare to write the grant? A holistic safety approach includes the physical safety aspect, as well as preparing to respond to medical emergencies and natural disasters, and even just making sure that a church is providing a safe place. This is especially critical if a church has a daycare or school on its property, or even just ensuring a church is using safe practices in its kids and youth ministries. CE: Same question regarding the Church Building track — what takeaways can attendees anticipate? Lippi: We have some really great sponsors who will discuss different design ideas for both indoor and outdoor spaces where churches can engage their communities. Some will be talking about multi-site expansion — how to Read More >
Mission & Travel
- Holy Land journeys: A disciple-making tool or Christian vacation?
Walking in the footsteps of Jesus in the land of the Bible is the ultimate hands-on disciple-making experience for Christians — not just a vacation to a destination related to church. Educational Opportunities Tours (EO) President/CEO James Ridgway recently interviewed Rev. Tom Smith about how Holy Land journeys have changed lives and inspired the faith of people who traveled with him in the Holy Land. James Ridgway: How did your first Holy Land journey influence your life and ministry? Rev. Tom Smith: It’s safe to say that it began to affect me even before I returned home. But the immediately noticeable influence was the way that it affected my preaching and teaching. I found myself painting word pictures of a passage of Scripture as I would preach or teach. I would give little tidbits of what it means to go ‘up’ from Jericho or the winds affecting the Sea of Galilee as they funneled into that area. It was like I had an entirely new resource to add to my library as I prepared for a sermon or class. Ridgway: When did you decide to start taking groups to the Holy Land? How did the people respond? Smith: I went the first time without a group. But after returning, my excitement was obvious. I talked about it constantly. As soon as I was introduced to Educational Opportunities and learned of how I could ‘earn’ a trip, I decided to go back and take as many people as possible. As soon as I mentioned that I was putting a group together, people started signing up. A journey to the Holy Land is in the hearts of a lot of people — not as a vacation but as part of their faith development — so there was natural interest in participating. Folks were excited that they could travel with me because they trusted me as their pastor. Ridgway: Afterwards, what did you see in the lives of those who experienced the Holy Land? Smith: They were changed. They engaged with Scripture differently. They talked about the way they heard the sermons differently. They began to participate more readily in Sunday School, study groups or accountability groups. Many of them became more open and expressive of being leaders in the congregation. They have a renewed/revitalized faith, it seems. Ridgway: What other benefits come from the Holy Land journeys? Smith: One of the things was how close the group became. They bonded with each other as they shared the experience. They also bonded with me, as their pastor, differently. Instead of hearing me teach or preach a couple of hours per month, they spent 12 to 14 hours a day talking and experiencing this profoundly moving journey. We formed some truly lasting bonds. They also came back with a deeper understanding of the current issues facing people in the region. They experienced not just what the news media shared, but what they themselves saw. They could ‘put a face’ to it, and it opened doors/eyes in a way that nothing else could do. Ridgway: How does a pastor plan a journey to the Holy Land? Smith: There are two ways a pastor could begin this journey. First, they could participate in an EO Familiarization tour. After experiencing the Holy Land personally, they could start planning a group journey. Personal experience helps while recruiting a group. The second way is to jump right in and organize an EO Holy Land journey for their group by going to www.eo.travelwithus.com and reviewing the different itineraries offered and finding one that best suits what they and their folks would love to see. Then, they can reach out to the EO team to partner and build the journey that will help make disciples for Jesus Christ. The EO staff will provide all the tools necessary — including ongoing support — to build a life-changing tour for the congregation.