Supplemental Referred to in the Chapter
Social Security explainedResource 3.1 from page 53 - Download PDF
Social Security is the Federal government’s own defined benefit pension plan. Nearly all American workers contribute to this plan through a system of taxes. Upon retirement (or certain other defined situations), individuals receive a regular check, the amount varying based on the number of years worked and the total contributed. For many, the government uses a system of employer paid payroll taxes and matching payroll deductions to make contributions. For others, most notably pastors, the individuals pay their own contributions through what are known as self-employment taxes.
Other Supplemental Material
What are compounding returns or compounding interest?Resource 3.2 - Download PDF
- Compounding interest is every investor’s best friend. Suppose you invest $100 in a fund with a fixed 5% annual return. After one year, the investor will have 5% of the $100 added to his or her account. Here, that’s $5. That means, at the start of year two, the investor will actually have $105. In year two, the investor again gets 5%, but this time instead of 5% of $100, the investor receive 5% of $105 or $5.25 meaning the fund grows to $110.25. In year three, the investor receives 5% of $110.25 or $5.51, bringing the balance to nearly $116. For doing nothing more than leaving the money in place, the investor received almost $16 in 3 years.
- If, instead of $100, the amounts are increased to $10,000, the investor begins to build $500 in year one, and $525 in year two. Unfortunately, finding that sort of return isn't so simple. Only fixed income investments, produce a set rate of return. Currently, fixed income investments bring low rates of return. Most investors opt to invest in funds that purchase shares of stock in companies or a mix of stocks and other investments. The returns are not fixed and far from certain, but generally, over many years should still show a compounding return.
Questions for Reflection and Discussion
- Vile Practices attempts to work through a tension between Jesus’ call to “consider the lilies,” to live in the present moment and our contemporary need to live after we stop earning a living. How do you navigate that tension? Specifically, how do you ensure that saving for retirement doesn’t become an idol that prevents generosity in the present?
- How do you imagine your retirement? Is it shaped by the activities of ministry? Is it shaped by rest and renewal? What do you imagine the costs of those activities to be? How are you accounting for them now?
- No one can ever know until they live it, but what do you anticipate your spiritual vocation, you “call” to be after retirement? What ways are you preparing yourself for that vocation now?
Case Study 3.3 - coming soon