The decision of a lifetime: 4 reasons you can’t afford to opt out of Social Security

By Don McLeod, CFP®

During the first two years of your ministry, you will make the decision of a lifetime — whether or not to opt out of Social Security.

This is a hot topic in ministry circles today, and everyone has a personal opinion on the matter.

But what does it really mean to opt out of Social Security? And should you?

This isn’t a choice that should be taken lightly. In fact, according to the IRS, this irrevocable decision should be made solely based on your theological beliefs. Under penalty of perjury, you must certify opposition to Social Security on the basis of religious principles to the acceptance of public insurance.

But in addition to the theological component, you need to consider the long-term financial impact of this decision and how it will affect your family.

For example, did you know that by opting out, you voluntarily forfeit:

• Federal retirement benefits?

• Subsidized Medicare when you reach age 65?

• Potential disability benefits?

• Survivor benefits for loved ones?

It’s important to make sure you are prepared to face the consequences accompanying your decision. So, let’s look at four reasons why you can’t afford to opt out of Social Security.

#1: You will have to save more for retirement.

Instead of saving the recommended 15 percent of your income, you will need to save more to make up for the loss of Social Security income. This means you will need to save more than 25 percent of your salary to cover this retirement income gap.

#2: You will have to pay for all medical costs.

Even though you will not be eligible for reduced-cost Medicare benefits, you may purchase health care — just at a much higher rate. Coverage for two to purchase a Medicare replacement plan would cost roughly $10,000 annually1 — becoming a large expense during retirement. 

#3: You will be ineligible for disability benefits.

Without another safety net, you will need to purchase disability insurance to help safeguard your family’s financial well-being should an accident occur that prevents you from returning to work. This coverage may cost between 1 percent and 3 percent of your salary, typically around $500–$1,500 annually.2

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#4: You will be ineligible for family survivor benefits.

Forfeiting access to survivor benefits for your spouse and/or children in the event of your death means you will need to purchase more term life insurance than the average person. On average, a minimum of eight to 10 times your salary3 is needed, particularly if there are school-aged children in the household. 

When it comes to opting out of Social Security, you can’t afford to make the wrong decision.

At GuideStone®, we specialize in helping ministers prepare for retirement. And in all my years of service, I can’t think of a single time when a minister has told me at retirement that he was thankful to have opted out of Social Security. Regrets are unfortunately much more common. Please think long and hard before making a choice you may regret.

For more information, visit the Social Security Administration’s website at You can also download a more in-depth version of this article at

Don McLeod, CFP®, serves as a Director of Church Retirement Solutions at GuideStone. Drawing on his previous experience as a minister on the staff of several large churches, McLeod regularly speaks across the country on how to create effective and impactful retirement plans for churches, including retirement planning for ministers and staff, distribution considerations and ministerial tax issues. 

1 The Official U.S. Government Site for Medicare, Part A costs, accessed February 2, 2016,

2 Council for Disability Awareness: A Guide to Protecting Your Income with Disability Insurance,

3 Personal Finance: How much life insurance do you need?, accessed February 2, 2016,


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