Cashing in our 401(k)

After about a year of pinching every penny we could and living off of what little savings we had, the money ran out. We had completely drained our emergency fund (such as it was). Sure, our tax return that year had helped a lot, but it was not going to cover us for the remainder of the year. We needed more cash. Unfortunately, the only other cash we had on hand was a small 401(k) that I had contributed to with a previous employer.

During seminary, I had gotten a job with a London-based bank known as HSBC. They had an office in Chesapeake, VA, that included an internal debt collection department for their US credit card portfolio. I could spend a month of Sundays telling you stories about the people I talked to during that time. In fact, I used to joke that I learned more about the depravity of man from trying to collect on credit card debt than I ever learned in seminary.

Regardless, it really was a great job, and HSBC was a great company to work for at the time. One of the many reasons why I loved working there was the great 401(k) matching plan they had. We didn't have a lot of money to spare, but we contributed what we could in order to get some of the company's matching grant. Again, we couldn't contribute much, and by the time I left in 2007, our total balance in the 401(k) was around $8,000.

Well, that money was now needed elsewhere! I had to cash it in to make sure we would could pay our monthly bills . . . but it hurt me to do it.

First, it hurt my financial sense. This was our entire "nest egg" at the time. I was about to sacrifice it so that I wouldn't have to lose my home. That alone was difficult to take. Even worse, I had to pay a 10% penalty tax for taking it out early. I was just throwing money away, and I hated it.

But more than that, it hurt my pride. Was this what I had come to? Even as I did it, I knew it was only a band-aid. Eventually, that money would run out too . . . and what was I going to do then? This was the last line of defense, and I was crossing it.

Our situation was about to come to a head.




Are you struggling to understand the unique and challenging world of pastoral compensation? Are you maximizing the benefits that could be yours by simply being "wise as a serpent and innocent as a dove" when it comes to how you structure your pastoral pay? 

As a pastor, I get it. Not only can our compensation be confusing, but there are also so many different components that need to be balanced . . . it can be hard to put all the pieces together.

How to Not Be a Broke Pastor is written for pastors/ministers and is designed to make the complexities of clergy pay simple and easy to understand, and also to give you ideas as to how you can use your income to the greatest extent possible. We may not have entered the ministry to get rich, but that doesn't mean we should be broke. Let me help you understand and maximize the benefits of your compensation today.