Parsonage In Retirement


TEN's signature project is a unique "no taxes in, no taxes out" pension. 

All Orthodox day schools give parsonage to their limudei kodesh teachers. An increasing number give parsonage to their female Judaic teachers as well. 

Presently, schools make pre-tax contributions to teachers' retirement plans. However, when the teachers get the funds in retirement, they are taxable.  

Priests, ministers and pulpit rabbis have a much better deal. When they take out distributions from their pensions, they can take the appropriate amount as parsonage, tax free. 

To do so, the pension fund has to be set up as a 403(b)(9) plan, in keeping with IRS Code 414e, as opposed to a 401(k) or a regular 403(b) plan.

With life expectancy increasing rapidly, it is not unusual to live two decades or more as a retiree. The amount of money which a rebbe or a morah will save in taxes by getting parsonage in retirement is huge.         Read More