“I just ran through my top 15 donors and only one of them is NOT a Baby Boomer!” That was what Pastor Shane Bishop recently said to me while I sat in his office. Shane has been my friend and client since early 2000. His church, Christ Church, has exploded in growth and was named by Outreach Magazine as one of the top 100 fastest growing churches in America this year. Yet he recognized he has a problem. Do you?
How many of your top 15 donors are Baby Boomers? If you are the typical church nearly every one of your top donors is a Baby Boomer. The average U.S. donor is 64 years of age putting them squarely in the Boomer range of those aged 54 to 72. 41% of all charitable giving comes from Baby Boomers. Thus, like Shane Bishop, you have a problem looming as Baby Boomers are nearing retirement.
I started thinking, writing and speaking about the coming impact to the Church of Baby Boomers as far back as 2014. In fact I spoke at a conference at Christ Church in February of that year on Responding to the New Normal. A large section of that talk was on the various generations and how they would impact giving to the Church. In 2014 every Baby Boomer had just passed the 50 year age mark. Retirement was on the horizon.
To illustrate how this would impact a church I went to Google to search out what the average Boomer teacher in Shane Bishop’s county would make at retirement. Shane’s church is just over the river from Saint Louis in Illinois. Here is what I found…
- A teacher in that area with 30 years of service and age 55 makes $88,499 a year in salary.
- If she gives a 10% tithe of her income that is $8,850 to your church.
- With 30 years of service at 55 years of age she can retire and will draw monthly for life 75% of her top pay at retirement resulting in a yearly income of $66,374
- She still faithfully gives her 10% tithe, but her yearly gift to your church is now $6,637.
25% loss in donations is what you can expect. By the way, Illinois pays better than most states. On average your typical retiree can expect a 30% reduction in income. That reduction will get passed down to you. If for nowhere else, trickledown economics works in the Church!
All of this is based upon a huge assumption that Boomers will be retiring at the same age as their parents. My research into this is showing that assumption might not hold true.
Right now the average age for retirement of men is 64 compared to 62 to women. Yet as a result of multiple factors many Boomers are facing challenging days ahead financially. This is changing their views on what age to retire at.
Here are a few facts from the Wall Street Journal about the plight of Boomers…
- 40% of households headed by people aged 55 through 70 lack sufficient resources to maintain their living standard in retirement.
- Households with 401K investments and at least one worker aged 55 through 64 had a median $135K in tax advantaged retirement accounts in 2016. For a couple aged 62 and 65 today that would produce about $600 a month in annual income for life.
- The percentage of families with any debt headed by people 55 or older has risen steadily for more than two decades, to 68% in 2016 from 54% in 1992.
- Americans aged 60 through 69 had about $2 trillion in debt in 2017 an 11% increase per capita from 2004.
- $168 billion in outstanding car loans in 2017 is the amount Baby Boomers owe
- 6 times as much student loan debt in 2017 as they did in 2004.
Here is a quote from the WSJ article that sums up Boomers potential future well…
“Individuals will find themselves staying on the job past 70 or taking menial jobs as senior citizens. They’ll have to rely more on children for funding, pressuring younger generations, too.”
Your church could potentially be 5 to 10 years away from a significant decrease in giving. It is coming whether you like it or not. It is coming even if Boomers work longer. The question is what are you going to do about it? I have a twofold recommendation for your Boomer segment strategy.
First, let’s shoot straight with them. Most Boomers are totally ignorant of how little their savings will generate income into the future for them. Use your influence to communicate to them the need to prepare NOW for the retirement that is looming. These people were and are your backbone of support. Don’t abandon them!
Find a way to make them aware of the potential crisis that can be avoided with good planning. While it might be over the top for you I did read a post with a headline that said, “15 Retirement Statistics That Will Scare the Crap Out of You.” As a Boomer it sure got my attention.
Next let’s get them out of debt. DEBT is the most corrosive element that can rot retirement. Boomers need to start making it a vital target to get rid of all debt by the date they want to retire.
If you are not running a debt reduction program like Financial Peace I would immediately begin taking steps to do so. The sad reality is that Boomers are taking on more debt at a time when they should be eliminating all debt.
Finally, let’s encourage them to leave a legacy gift through their estate. It is said that less than 10% of churches in America have any estate plans in place. Would it surprise you that less than 10% of bequests go to churches? We missed the last generation’s wealth due to this lack of estate planning. Let’s not miss this generation. There are multiply firms and agencies that you can turn to for help in this arena. The seed you plant today will leave a legacy behind for future generations.
The bottom line is that this WILL happen. The question is, are you preparing today for that time?
Mark Brooks – The Stewardship Coach