Ep. 091 - How Much Should Christians Save for Retirement? Setting a Savings Finish Line

Episode Transcript

Austin
How do we know when we've saved enough for retirement? For Christians, this isn't just a financial question. It's a discipleship question. Today we'll explore how to prayerfully set a finish line for retirement savings and live with open hands to the Lord.

Spencer
Today we get to grapple with the question how much is enough for savings for the future? And it's one as stewards that oftentimes as we surfaced this topic, folks really haven't thought about. Because our culture would say, well, you should just save all that you can. You get down into the future and you'll have a lot. And at some point you'll have enough.
And if you save quicker, you'll have enough earlier, and then you'll have more choices. And all kinds of different things. But it's not really taken from a stewardship standpoint. And, you know, I think about one of the backpacking adventures that I had a few years ago with a friend who very, very experienced and guiding and leading people on trips, and he and his sons were going, and my son and I were going.
I knew nothing, and he prepared all of the food for this adventure. And one of the dinners that we were going to have was, an Italian dinner, and he had a jar of prego that he handed to me, that this was one of the things that I was to take on our four day backpacking adventure. Well, the third day we had a monsoon come upon us, and we decided instead of hiking eight miles, we were going to hike 12 miles and get out.
Well, we get out and I look in my backpack and there is that big jar of prego glass that we've never used. So I've carried this the entire trip, this extra couple of pounds, you know, worth of food the entire trip. And I think that's an analogy for sometimes what we see clients do in terms of the path of their savings.
Over time, they may be really trying to say very aggressively, they may save 15 or 20 or 25% of their income for years and years and years, or maybe even more for a period of time. And some of them are not even cognizant of kind of the amount of assets that they're accumulating over time and really thinking about, well, how much will I need for the future?
So it wouldn't be uncommon that sometimes we'll see folks that who by the time they're in their 50s, they've really saved enough sometimes even in their late 40s, they've saved enough for the future. If they just continue to work out, say, into their 60s. So what they're essentially doing in, in constraining their level of living and giving is they're they're taking on more and they have that heavier burden of the amount of resources that they're taking into the future, which, you know, what it would be amount to oftentimes would be that second or third barn, really, that they're having to continue to manage.
And, in some ways, they're having to grapple with, how do I use these resources down the road? And I can tell you and working with a lot of those folks, it's it's wonderful in some ways, but it's also more of a burden than maybe they needed to carry if they had been living and giving throughout those years, and particularly just giving throughout those years and saying, okay, as a steward, I don't I don't have to save, you know, 25%, 10% is enough.
I'm going to be able to release those funds and give them away and have the joy. You know, of that, too?

Austin
Absolutely. Well, and I think we come back here to Proverbs 30, verses eight and nine, and it says, remove from me falsehood and lie, and give me neither poverty nor riches. Feed me with food that is needful for me, lest I be full, and deny you, and say, who is the Lord? Or lest I be poor, and steal, and profane the name of my God.
This is such a helpful framing for me, I think. And you know, as we work with clients, there are people that don't have enough and there is an incredible amount of stress because they don't have enough. And there are people who have a surplus. And sometimes, just like the passage in Luke where we see the person that has the second, third or fourth barn who then wrestle with, I don't want to lose the second, third or fourth barn.
I think the reality is there's stress on either side that when we have enough, it allows us to continue to place our trust in the Lord and not in those resources that we've saved. And so it's really a duty and a practice and trust that God has provided enough for me, because we don't want to be on the side of the one who has more than enough.
And forget the Lord and say, who is the Lord? I don't need him, nor do we want to be the person that doesn't have enough and is inclined to steal or to manipulate to get what they need. And so we come back to these ideas of finish lines, just like you're saying, and and say, what is enough? I have to know what I need in the future.
And we also know that tomorrow is not promised. We look at James four, we look at Ecclesiastes and we know that our life is, is but a vapor we could pass tomorrow and never need the resources and never utilize them or we could outlive them. Yeah. Neither of those ends is a promise from the Lord. But we want to steward wisely and say, what is the most likely outcome?
And so today we really want to dive into that idea of how do I once I know that end goal, when I reach the end goal, how do I pursue generosity thereafter? And, you know, we've talked about this topic before. And for certain clients, that are that have enough resources saved aside, there may be ways to deploy that surplus wealth, not just to give, but to invest in believers around the world that are impacting the world for the Kingdom of God and still receive a rate of return.
And so we're going to just see that as an idea of how can we continue, even if we we like the idea of saving, but we want to invest in business because really business is a frontier missional opportunity here. So again, we come back. Why is it important? Unchecked accumulation can really harm our souls and the souls of those around us.
We ended last episode talking about the reality of if I continue to spend on more and more and more of my lifestyle, then my children are going to think it's okay to spend more and more and more on their lifestyle. If I accumulate millions upon millions and millions of dollars, that then pass to them and they don't know wisdom.
It can really damage their souls. And so really, we always have to start with James one five of praying for wisdom, seeking counsel from trusted believers, and aiming for finish lines that deepen our dependance on Christ and not my comfort and my separation from Christ. So what are maybe, just before we dive into how do we set a finish line?
What are some of those foundational financial planning. Finish the financial planning principles that we need to know and really have before us, before we dive in to finish lines?

Spencer
Well, we want to have an idea of really what the Biblical Council is. As a steward. You know, God doesn't say, well, you should just, give everything away, save nothing for the future. Instead, there's a lot more that the Lord says through the Bible about how that we manage these resources well. So one concept is margin.
We need a margin of safety. There. So, you know, any financial planning textbook, would say this and we would certainly say this is half, 3 to 6 months of living expenses on the sidelines. So you know, if you're spending $8,000 a month having somewhere between 24 and $48,000, that's readily accessible to you such that if you need to pay for a new HVAC unit or you have a car repair, that comes up unexpectedly or whatever it might be, that you're not caught between a rock and a hard spot.
So that would be one of those elements that would be independent of that. And then really planning for the future. We have to do this very open handedly as we put things before the Lord. But at some point, I think all of us recognize I'm not going to have the physical strength to do the job that maybe I was doing during my working years.
And even for folks who are a university professor that, you know, so much of what they do is, they think deeply and they help students think deeply. For instance, they can they'll continue potentially to be able to do that longer than, say, someone who is, you know, in a, in a much more manual, and demanding physical field, but their mind is going to slow down at some point, too.
So we look for that future point and we say, okay, what would be likely scenarios of how much I might need relative to other income streams that I might have, whether that Social Security or pension or other kinds of things like that. So we want to we want to look to the future, and we want to recognize that there are going to be some life changes, there's going to be some different seasons in all likelihood.
And we want to see a range of outcomes if we're on certain paths. So we wouldn't advise folks to save nothing necessarily, unless they looked at the future. And they say, well, Social Security income is going to provide, in all likelihood all that I need. And so if if they live on a fairly frugal budget and Social Security is going to be a really strong income stream for them, that might be a great path for a lot of other folks.
They say, okay, I need to save such that I've got some additional resources set aside to be able to supplement other kinds of income streams. Right?

Austin
Right. And we come back again. We look at Jesus in the sermon on the Mount and he says, do not lay up for yourselves treasures on earth, where moth and rust destroy, where thieves break in and steal. For where your treasure is, there your heart is also. But lay up for yourselves treasures in heaven. And so we want to think about this in if we have surplus wealth.
James five one through three talks about hoarding our unused wealth, and he says, come now, you rich, weep and howl for the miseries that are coming upon you. Your riches have rotted and your garments are moth eaten, your gold and silver are corroded, and their corrosion will be the evidence against you, and will eat your flesh like fire.
You have laid up treasure in the last days, and I think we see these two contrasting pictures from Jesus and James, where Jesus is seeding this thought of don't lay up for yourselves treasures on earth, but lay up for yourselves treasures in heaven. And then James comes in and he's like, you have all of these treasures that are becoming moth eaten and corroded, and it's evidence against your stewardship, in a lot of ways.
And so I think this is what we want to really try to avoid as believers is having these unused surplus of resources that are not being deployed, that are simply corroding either your soul or just sitting aside, not being deployed. Yeah.

Spencer
And I think we can see just very practically, when we have a lot of surplus that's just hanging out there that we have to manage, it takes more time to do that. It also introduces more choices that we shouldn't have. I mean, at the end of the day, if we have far too much in terms of wealth that we have access to, there are a lot of other relationships and that can be close friends, that can be, church relationships that can even be a spouse that start to feel even expendable.
They're you hate to say that, but if, the statistics are, a good guide of what's going on, even within the church, you know, we see people who have lots of funds. They have all these choices, you know, relationship wise that, folks that have a lower level of income, sometimes they don't experience that same level of choice with their friends, with their spouse, so on and so forth.
So it it, it can lead to, like, we've talked about, using resources for more of a luxury lifestyle or just, we can pamper ourselves more. I mean, even if we resist that word luxury. I mean, at the end of the day, I think all of us have to grapple with this. I'm reminded of, you know, doing camping trips now for ten years.
And this last year we saw that in the forecast. There was a monsoon coming. And so we we do the glamping experience this year. So we have a, an RV, come and be delivered to the spot where we were doing that camping for the first time. And the experience was different. It was fun. It was also more costly.
It required less in terms of flexibility for me. And so I grapple a little bit with, is that really a good pattern to have, or should we just be roughing this as a family as we do this? Because it kind of brings us back to that point where we have to depend upon the Lord. We have to go through some difficult things, and we kind of emerge saying, oh, you know, it was it was all right.

Austin
Yeah, absolutely. So, you know, over the next couple of episodes, we'll come to John Wesley in his sermon, Use of Money. And in that he suggests that Christians gain all they can, save all they can and give all they can. The context that he talks about this is really helpful. So even though Wesley commends his followers to gain all they can, he does so in a measured way, admonishing them not to do so.
That cost them their life and health and spiritual health. He says, don't do this in overwork. Don't work yourself to the bone so that you can make all of the money that you can. Nor are we to gain all we can through sinful trade, through ill gotten gain. We, he says, for to gain money, we must not lose our souls.
We don't want to seek that gain by harming our neighbor. If we ever get to any of these points where we are either investing in companies that are it, that are harming image bearers of God, that we are moving, overworking ourselves to gain all that we can. These are destructive principles, both for ourselves now and for ourselves in the future, for our souls.
And as he discusses saving, he commends folks again and thinking about both saving and spending, not to waste any part of so precious a talent merely and gratifying the desires of the flesh, the eye. Buy superfluous or expensive apparel, pictures, paintings, books to gratify the pride of life, to gain the admiration or praise of men. And I think that that just hits me in the gut a lot of the time, because there are so many of these categories of ways that we could spend money or save money for ourselves to enhance our lifestyle, to bring about my own comfort.
And Wesley says, hey, it's okay to make money. But let's be wise about how we're doing it. It's okay to save money, but we have to always do it hand in hand with wisdom. And so as we think about determining financial finish lines, as we really start grappling with, okay, Lord, I'm a steward, what does it mean to say I have enough with that, that nest egg to use common retirement language?
How do I know when that pile of savings is is enough? And I can start either deploying it to charitable giving or impact investing to have a kingdom impact in in a gospel centered way across the world, whether it's creating jobs or whether it is eliminating human trafficking or any myriad of things, hiring, people that are maybe disenfranchized there are plenty of ways, as we have looked now, that believers can invest in really incredible businesses and use their surplus wealth to have a kingdom impact.
And so when we think about how do we determine a savings finish line? So we want to say it's really critical to work with an advisor, work with a third party that maybe helps you kind of see, oh, these are all the variables that are at play. Some of those things are how many years do you have until you want to slow down work?
Just like we talked about with Jeff Hanan. Maybe it's not a full on cessation of work. It's a shift of one type of work to another. So maybe you're stopping paid work, but increasing your level of volunteer work, which may actually have a cost to it, you may be traveling to be able to serve and missions overseas.
And so how long until that change takes place? What's your expected longevity? What are inflation assumptions, investment return expectations, social security coverage? Do you have pension or other guaranteed income streams? Let's bring those all into a bigger picture to say, okay, now we know at 45, if you have $1 million and you plan to work until 65, you're probably going to be okay for somebody else.
It may be at 45. If they continue to work to 65, they may only need $500,000. There's an entire gray array of possible opportunities that are out there that we really need to start thinking about. So, Spencer, what do you what are some of those other key things that we need to think about as we're setting savings finish lines before we get into what happens once you hit that finish line?

Spencer
Well, we want to think about all the different things that we feel like God has laid on our hearts in terms of those goals. So we think about, is he laying on our hearts that we're going to be passing on some resources to our children? Now, typically what we want to do, whether it's child or grandchild or some other, family member or friend, we want to make that a specific goal that we're endeavoring to reach.
So there's a finish line for that as well. Too often we say, okay, well, I'm just going to save for the future. And if I have a lot more than I need in retirement, then I'll pass that on to family. Well, that that can also be harmful to the family, you know, for the amount of some, of resources that you might pass on to them.
So I think getting a clear view of what you feel like the Lord is calling you to kind of in each one of those seasons is really helpful. And then what it may look like in that season of transition. So for some folks, they say, really, I would love at 60 to make that transition, because what I'm doing right now is not as life giving as what I see could be in that next season where we serve other folks that they're saying, well, I'm going to be doing this as long as I have the mental capacity and the physical capacity.
And so they, they might, be working until they're 75 or 80, even at a reduced rate. So I think bringing all of those pieces into one consolidated view, one overarching plan, and having another person look at it and try to poke some holes, whether that's a a financial advisor that's a professional, or whether that's a really close friend that kind of knows their way around those things.
I think having someone that can speak into that, can bring us back to a place where maybe we're not, putting too much, towards the margin bucket or, maybe we're not putting too much in, in any one area, or maybe we're not putting too little in an area because there are folks that, you know, might expect that you're going to have a rate of return that's 15% or something going forward.
And we'd look at that and most people would look at that and say, okay, that's that's not wise to expect that particular, assumption.

Austin
Right? Yeah. So as we close today out, we want to say, okay, once you have hit those finish lines, let's say you hit it at 50 or 60 and you're continuing to work. What can you do at that point? Hey, this is a great time to say. All right, I'm going to stop saving to the four, okay. And all of those resources that are now going to come into my pocket, they're going to go right out of my pocket to kingdom courses.
Whether that is charitable giving increasing. You're giving a church increasing. You're giving to to missions. You want to say, hey, if you've hit the finish line, let's accelerate some of those giving opportunities. It may be helping family members with, down payments on houses. It may be other things that you do, but we want to start saying, don't just let the additional income expand your lifestyle.
If there are things that you have deferred for ten, 15, 20 years, if you have always wanted to do this one vacation, okay, maybe it's you do that once, but then really start saying, okay, how do I be a steward? And it really accelerates some of that giving. The other thing we can think about is if you are in categories where you can make impact investments, are there places where God has both driven you to to love a certain geographic sector or a business opportunity in a, missional impact place?
Maybe you're looking to invest in the business bean or businesswoman that is seeking a kingdom impact, and you may offer them a loan or buy into a portion of their business and have an equity share. The reality is, you're asking the question. Once you hit that finish line, what do I now do with that surplus in ways that don't just enhance my lifestyle, but enhance the kingdom of God?

Spencer
Well, and even if you pass on those resources, you've got some kind of a goal that you pass on resources to children, grandchildren. And now you've got an opportunity to do that a little bit earlier. That can be fantastic, because you can start to talk with them about stewardship and see how they're embracing that or not. If we wait until the end of our lives to make the bulk of our gifts, or maybe even all of our gifts, we really don't know how they're going to process things.
A steward, we've not equipped the next steward very well. Whereas if you know, when you are, you know, seven years old and you have the next steward is 35 and you're starting to give them resources annually, you can see, okay, did that just come in and then go out the door? You know, immediately with, things that maybe are not in line with your stewardship values.
They are or were they deployed in really good ways that align with, growing the kingdom of God?

Austin
Absolutely. So as we close out today, we just want to say this is a really complex number to get to. At the end of the day, if we walk through a financial planning scenario and it shows a 100% probability of success, we can look a client in the eye and say, we know that's not guaranteed, but we also know in all of the scenarios that we can look at, you are going to pass along resources to the next generation.
So how do we start really thinking about is this what you want to be doing? How do you honor the Lord with that surplus well? So clients, if you're at a place where you have surplus resources and want to really wrestle with, okay, what is that finish line and what do I do with these resources now? We would love to have that conversation with you.
As always, feel free to leave comments down below. We'll see you again next time. Take care! If you found this episode valuable, share it with a friend and subscribe on your favorite podcast platform so that you don't miss the next episode.

Disclosure
This content was provided by Second Half Stewardship. We're in Knoxville, Tennessee, and you can visit our website at www.SecondHalfStewardship.com. The information in this recording is intended for general, educational and informational purposes only, and should not be construed as investment advisory, financial planning, legal, tax, or other professional advice based on your specific situation. Please consult your professional advisor before taking any action based on its contents.