Board Manuals Updated for 2023

With each New Year comes new rules, new regulations and new contribution limits. Therefore, all the Benefits Board’s free educational manuals have been updated to take into consideration all relevant changes for 2023. You can access the latest version of each manual from the Benefits Board website. The topics covered are:

  • Church Construction and Financing Manual
  • Ministers’ Retirement Plan Document Summary
  • Church Treasurer’s Manual
  • Minister’s Compensation Manual
  • Church Budgeting Manual
  • Tax Information Manual
  • The Church as a Taxpayer Manual
  • Church Loan Fund Policy Manual
  • Preparing Tax Returns for Clergy Manual (ECFA)
  • Reporting Procedures for Congregation Manual (ECFA)

All manuals are available without cost and may be used by the local church and church officials to address the everyday issues most churches face. Please forward any questions or comments about the manuals to info@benefitsboard.com.

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Posted in 01 - January 2023 | Leave a comment

Are You Prepared for the New Year?

As we begin a new year, we must carefully evaluate whether we are financially prepared for what lies ahead in 2023. Although there were some warning signs a year ago, no one predicted that we would see the financial trauma that the markets experienced in 2022. Interestingly enough, the first trading day of the year was extremely positive – and ended up being the high point for 2022. From that day forward, the markets struggled to keep from having a massive meltdown.
 
When the stock markets closed for 2022, we had experienced the worst year for all market indexes since the Great Recession in 2008. For the year, the Dow was down 8.8%, the S&P 500 was down 19.4%, and the tech heavy NASDAQ index was down 33.1%.
 
Some of the high-flying stocks from previous years reversed course and led the downward trend. A once safe haven stock, Apple, lost 27%, while previous soaring Tesla finished the year off 65%.
 
While the stock markets were experiencing their worst year in more than a decade, mortgage rates were increasing at the largest annual rate on record. A 30-year mortgage started the year at 3.1% but ended 2022 at over 6.4%. On a $350,000 home, that increase in mortgage rates cost the average homeowner $695 a month.
 
Fueled by government stimulus during the Covid pandemic and additional supply chain disruptions, inflation reached the highest level in over 40 years, topping out at 9.1% in June 2022. By November, the Federal Reserve’s massive efforts to bring inflation under control were working to a limited extent and inflation had dropped to 7.1%. However, inflation remains a concern, and many economists predict that seeing further substantial gains in reducing inflation in 2023 will be difficult.
 
With rising prices in fuel, food, and other essential items, the consumer faced a difficult 2022. The hope is that 2023 will bring a much-needed recovery.
 
On the positive side, the Board of Directors of the Ministers’ Retirement Plan set the projected payout on the Trustees’ Fund at 4.00% for 2023. Since the financial crisis in 2008, the board has adhered to the projection of 4.00% return on the Trustees’ Fund. In some years, when the markets have performed better than expected, the board has been able to provide an interest rate bonus to participants in the Trustees’ Fund. Over the 40-year history of the Trustees’ Fund, the average rate has been 6.65%.
 
While it is impossible to predict how the stock markets will perform in 2023, most prognosticators are suggesting that it is going to be another trying year for the markets. It seems as though we may be in a cycle where the return of your money is more important than what return you get on your money. Safety seems to be paramount in investing at this point.
 
Of course, if you have many years before retirement, there are going to potentially be some great buying opportunities in the next 12 months. Buying stocks while they are depressed is certainly a way to build your portfolio, assuming we have recovery in the years ahead. On the other hand, those who are nearing retirement should begin to look at the safety of their portfolio and reduce the risk that they are taking in their investment strategy.
 
As we often say, there is no perfect investment strategy that applies to everyone. Each person, based upon age, risk tolerance, and a variety of other factors, will have different investment strategies and goals.
 
As we begin this new year, my hope is that you will evaluate your retirement contributions and your investment goals in hopes of reaching your preferred future. The staff at the Benefits Board stands ready to assist you in any way possible towards that end.
 
On a lighter note, my hope and resolution for you is that our lives are as great as our Facebook posts make them look. Blessings for a great 2023!!

Posted in 01 - January 2023, 2023, Uncategorized | Leave a comment

IRS Announces 2023 Standard Mileage Rate

The Internal Revenue Service recently issued the revised standard mileage rate which is used to calculate the deductible costs of operating an automobile for business purposes during 2023.
Beginning January 1, 2023, the standard mileage rate for the use of a car for business purposes is 65.5 cents per mile for business miles driven – an increase of 3 cents per mile over the 2022 mid-year adjusted rate. The standard mileage rate is based on an annual study of the fixed and variable costs of operating an automobile.

Churches that follow an accountable reimbursement plan should use the new rate to budget expenses for 2023.

Posted in 01 - January 2023, 2023 | Leave a comment

Claiming Your Social Security Benefits

NOTE: The following article is provided by Victor Boltniew, MBA, CRPC, IAR. For over 28 years, Victor has helped retirees in the Cleveland, TN area determine when they should start receiving their Social Security benefits. Victor has provided this article as a service to the participants in the Ministers’ Retirement Plan, managed by the Church of God Benefits Board, Inc.

For your long-term financial welfare, it is critically important when you choose to start collecting Social Security retirement benefits. For a majority of retirees, Social Security benefits provide most of their retirement income. According to the National Institute for Retirement Security, 40.2% of retirees live only on Social Security, while a recent Gallup survey showed that for 57% of retirees, a majority of their income comes from Social Security. Even if you have contributed to the Ministers’ Retirement Plan a good portion of your ministry, Social Security could still make up between 40 to 60 % of your retirement income. Therefore, when you elect to start collecting Social Security benefits is an important financial decision. 

The question is always asked, should I collect Social Security as early as possible so I don’t miss out on any benefits if I die early? For retirees born after 1954, a person that starts drawing benefits when they turn 62 will draw less than 56% of what they would if they waited to start Social Security benefits at age 70. The percentage is slightly higher for those born prior to 1954. For couples in which one spouse will live to age 90 and will file on their spouses’ work record, taking Social Security at age 62 could mean between $100,000 and $200,000 less in lifetime benefits (based on a 62-year-old drawing a $1,000 per month). The estimated loss does not include cost of living adjustments on the higher amounts. For example, in 2023 it might be the difference between having an 8.7% cost of living adjustment on $12,000 a year versus $21,120 a year.

I am repeatedly asked to do a break-even analysis on whether a person should draw earlier or wait until they are 70 years of age. Some people are concerned about what Social Security benefits they may lose out on if they get their eternal reward early. If you are single, you may want to consider drawing early! The issue isn’t if you die early and collect your eternal inheritance. It is whether you tarry and stay as an ambassador longer than you or your spouse expected. Usually, if there is one spouse that is going to draw a substantially higher amount and one is expected to live beyond 82, the higher earner should delay drawing Social Security benefits as long as possible, but not past the age of 70. Software is available to show you options and can help you determine when the lower earner should begin drawing.

One mistake often made is filing for benefits prior to full retirement age, continuing to work or going back to work without informing the Social Security Administration, and exceeding the earnings limit. If this occurs, the Social Security Administration will send an overpayment notice, wanting excess benefits repaid because the worker exceeded the annual earnings limit. If you take Social Security benefits prior to your full retirement age, you are required to pay back $1 for every $2 of earnings over the earnings limit. Once you reach full retirement age, you can make as much as you desire and draw your full Social Security benefits, without limitations.

There is also a misconception that a spouse can file for benefits on your Social Security work record prior to you filing for benefits. In reality, the worker must file before anyone can file a claim on their record (spouse or a dependent child). The only exception to this rule is an ex-spouse who is at least 62 and who was married to the worker for 10 years, is currently unmarried, and who has been divorced from the worker for at least 2 years before filing the claim for benefits.

In this limited space, I have only been able to address some of the bigger issues that arise concerning claiming Social Security benefits. If you have more questions concerning your specific situation, you may email me at Victor@retirewithvictor.com. (Please note that a fee may be charged for detailed analysis.)

I am at your service and would love to help you with your Social Security questions.  

Victor Boltniew, MBA, CRPC, IAR

Posted in Social Security | Leave a comment

IRS Changes Mileage Rate 

In an unusual, but expected, move, the Internal Revenue Service recently announced that they are raising the allowed reimbursement rate used for calculating business miles in private vehicles. Effective July 1, 2022, the new mileage rate will be 62.5 cents a mile, up from 58.5 cents a mile. 

The IRS also announced that the moving costs and medical expenses rate would increase from 18 cents a mile to 22 cents a mile.

The changes are a reflection of higher fuel costs and the current inflationary impact on automobile travel. Although it has occurred a few times, it is highly unusual for the IRS to make such a mid-year change.  

“With gasoline prices now well over $5.00 per gallon on average nationwide, the IRS recognized that employees were in desperate need of relief. This increase to 62.5 cents per mile will hopefully make up some of the difference of the increased costs of a pastor or church employee using their vehicle for church business purposes,” stated Art Rhodes, President and CEO of the Church of God Benefits Board, Inc. While recognizing that not all churches can pay the higher mileage amount, Rhodes went on to encourage churches to make this change, if possible, beginning July 1. Church budgets may need to be modified to cover these, and a host of other, increased costs.

Additional information about business expense reimbursement can be found in the Church Treasurer’s Manual and the Minister’s Compensation Manual, both available without cost at www.benefitsboard.com

Posted in Uncategorized | Leave a comment

Public Service Loan Forgiveness (PSLF) for Ministers and Church Employees

New legislation passed in July 2021 extended the Public Service Loan Forgiveness to the student loans of ministers and other employees of non-profit, faith-based entities, including churches.  Therefore, under the Public Service Loan Forgiveness (PSLF) Program, ministers and church employees are afforded the opportunity to qualify for student loan forgiveness after reaching certain qualification levels, generally after making payments for 10 years. 

The Church of God Benefits Board, in partnership with the Church Benefits Association and Church Pension Group, hosted a webinar last month highlighting the qualifications of the PSLF program and how ministers and church employees can apply for student loan forgiveness under the program.  For those who were unable to attend, or for anyone who would like to watch the presentation again, a recording of the webinar is now available via our website.  To access, click on the Resource tab, then Public Service Loan Forgiveness.  Additional information, including the PowerPoint presentation and a resource list on the PSLF program, are available on our site. 

Should you have any questions regarding the PSLF Program, you can visit the government’s website directly at https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service.

Posted in Uncategorized | Leave a comment

IRS Announces 2022 Standard Mileage Rate 

The Internal Revenue Service recently issued the revised standard mileage rate which is used to calculate the deductible costs of operating an automobile for business purposes during 2022. 

Beginning January 1, 2022, the standard mileage rate for the use of a car for business purposes will be 58.5 cents per mile for business miles driven – an increase of 2.5 cents per mile over the 2021 rate. The standard mileage rate is based on an annual study of the fixed and variable costs of operating an automobile.

Churches that follow an accountable reimbursement plan should use the new rate to budget expenses for 2022.

Posted in Uncategorized | Leave a comment

Board Manuals Updated for 2022 

With each New Year comes new rules, new regulations, and new contribution limits. Therefore, all of the Benefits Board’s free educational manuals have been updated to take into consideration all relevant changes for 2022. You can access the latest version of each manual from the Benefits Board website. The topics covered are:

  • Church Construction and Financing Manual
  • Ministers’ Retirement Plan Document Summary
  • Church Treasurer’s Manual
  • Minister’s Compensation Manual
  • Church Budgeting Manual
  • Tax Information Manual
  • The Church as a Taxpayer Manual
  • Church Loan Fund Policy Manual
  • Church and Nonprofit Tax and Financial Guide (ECFA)
  • Minister’s Tax and Financial Guide (ECFA)

All manuals are available without cost and may be used by the local church and church officials to address the everyday issues faced by most churches. Please forward any questions or comments about the manuals to info@benefitsboard.com.

Posted in Uncategorized | Leave a comment

Board Grants Year-End “Bonus” to Participants

In the recent meeting of the Board of Directors of the Church of God Benefits Board, the entity charged with managing the Ministers’ Retirement Plan, action was taken to grant a special year-end interest allocation to all participants in the Trustees’ Fund. The Board has taken similar action in 2017 and in 2019.
 
Because earnings in the Trustees’ Fund were better than anticipated in 2021, this one-time allocation of interest was approved by the board to be distributed in late December. Each participant with an investment in the Trustees’ Fund will receive a special interest allocation on a pro-rata basis. The allocation is expected to amount to over 2.27% of the participant’s investment in the Trustees’ Fund. For example, a participant with $1,000 in the Trustees’ Fund will have approximately $22.72 in interest added to their account while a person with $100,000 in the Trustees’ Fund will receive approximately $2,272. The pro-rata amount that each person receives will be based solely on the amount that person has invested in the Trustees’ Fund – and will not take into consideration the balances in the equity investments.
 
With the additional interest of 2.27%, the effective rate for the Trustees’ Fund in 2021 will exceed 6.27%.  
 
In making this announcement of the special year-end interest allocation, Board Chairman Mark Walker also announced that the return on the Trustees’ Fund for 2022 will continue to be at four (4%) percent. In a time when fixed return rates remain at a historical low, the Board determined that it was extremely fortunate that the Ministers’ Retirement Plan can continue to pay at a rate that greatly exceeds the market rate. While the Board has projected the rate for the Trustees’ Fund to remain at four percent in 2022, it is possible that the rate could change based upon market conditions.
 
Since the retirement plan is a non-profit entity, all earnings, outside of an allowable reserve, must be passed on to participants. With earnings greater than expected in 2021, the one-time allocation announced today (Dec. 27, 2021) became the fastest and most economical way to make those additional earnings available to participants.
 
Chairman Walker also announced that the board is still offering an incentive bonus for new participants who join the plan. For any new participant, the plan will match dollar-for-dollar the contributions made in the first calendar year the participant is in the retirement plan, up to $500 per participant.
 
Participants are reminded that they may invest in three other options besides the Trustees’ Fund. The other options are all based upon stock funds and fluctuate with the stock market. Your ability to withstand volatility should be taken into consideration before making any investment selection. Further, you should always remember that past performance is not a guarantee of future performance. To learn more about the Ministers’ Retirement Plan, please visit our website at www.benefitsboard.com.

Posted in Uncategorized | 2 Comments

Final Instructions

If you passed away today, would your family know how to access all your important accounts, files, insurance policies, and even social media accounts?

The current pandemic has contributed to hundreds of thousands of deaths of people who would have most likely lived much longer lives. Many of those unexpected deaths have left surviving family members struggling to put all the pieces together afterwards, not knowing financial details or the last wishes of the deceased person.

It has been said that people are dying every day who have never died before!! While that comment is made jokingly, many people have died over the last year without having adequate time to plan for their deaths, leaving family members with no idea about their wishes or desires concerning funeral arrangements or financial affairs. To help families be more prepared, we have developed a document, entitled “A Letter of Final Instructions to my Family,” that can be used by anyone to offer guidance to their loved ones after the person’s death or incapacity. The document allows the person to provide funeral/burial wishes, bank and savings account information, retirement and investment account information, real and personal property details, password information for social media accounts, as well as a host of additional information.

The eleven-page “letter” can be printed out and filled in, or it can be filled in directly by typing into the document on your computer. While this “Letter of Final Instructions” is critically important, it does not take the place of other legal documents that every person should have in place. Those legal documents, among possibly others, include:

  • Last Will and Testament
  • Durable Power of Attorney, and
  • Living Will / Healthcare Directive

Every person, regardless of age, should have all three of these documents completed and in a safe place. Further, at least every three years, you should review these legal documents and make sure that they still clearly carry out your current wishes. If not, they should be updated by your personal attorney. Because of the complexities of state laws, if you move from one state to another, your legal documents should be reviewed to make sure that they are still applicable.

However, in addition to these documents that you will need legal assistance to draft, you should fill out the “Letter of Final Instructions” that you can access on our website. As you will see, this letter provides details on information and accounts that are generally not addressed in the legal documents. Nevertheless, the information that you include in the “letter” will certainly make for a better transition for your family if something unexpected happens to you or if you become incapacitated.

While our hope is that you will live a long and fruitful life, you need to be prepared if God has different plans for you. Having the updated legal documents mentioned above, along with an updated “Letter of Final Instructions” to your family, will certainly make your transition from this life to Glory much easier on those you leave behind. So, take a few minutes and complete the “letter” – and then make sure that your next of kin knows where you filed the document so they can access it if something happens to you. It is the least that you can do for your family.

Posted in Uncategorized | Leave a comment