Should i pay tithes on social security

And although we are under the New Covenant of grace, tithing could at least be considered a very useful principle for developing the spiritual discipline of giving. However, those who are more aligned with number 2 would not be as likely to make such a distinction, and they may decide their level of giving based on how the Holy Spirit leads them. If you believe that the tithe is a Biblical command that is still in effect and tends to take a more formulaic approach to calculate what you will give by the way, many devout believers have that perspective, which I could argue is better than any alternate view that leads you to decide that it is OK not to give anything at all , then choosing how to tithe on your retirement income can be a little challenging.

When it comes to Social Security , there are two different scenarios to consider: those who are self-employed and those who work for an employer. You are self-employed. If you are self-employed and have tithed on your gross income for your entire working life and have also contributed the full amount to Social Security which you paid as a FICA tax , you paid both the employee and matching employer portions.

In , that amounts to When you retire, you expect to receive regular payments. Social Security is a trust fund that operates more like an insurance annuity. If you die young, you may not realize the full benefit of your contributions. If you live a long life, you could receive much more than what you put in.

If you have consistently tithed on your gross income i. You are an employee. Then, just as with the self-employed person, once you receive back everything you had contributed and tithed on , you would need to tithe on the full amount in the future. A caveat to both of the above scenarios would be if you tithed on your net income i. In that case, you should tithe on ALL your Social Security income since you did not tithe on it in the first place.

Each of these is a little different. Although they are increasingly rare, if you receive a pension, either as a lump sum or as a lifetime annuity, and did not contribute anything to it, then it should be treated as a new income stream in retirement that you have not tithed on. These are trickier. All annuities, regardless of type, are funded by either a lump sum payment immediate annuity or a series of payments over time deferred annuity.

Once you start receiving payments, it looks almost exactly like Social Security or a pension. If the money used to fund the annuity has already been tithed-on, you would only tithe on it once you have received back the full amount you paid. In addition to fixed income, many retirees have investments that generate dividend income money companies pay you for owning their stock. You already tithed on this money before you invested it.

Therefore, you are not expected to tithe on money that it earns. My opinion is that you should tithe based on personal conviction. I cannot say which is correct for you. Retirees often distribute from a retirement account. This is different than a taxable account with dividend income, as part of this account was likely withheld from their paychecks during their working years. Reference the image below: this person worked to earn wages, tithed on that wage, and paid tax on that wage.

Throughout your retirement, you will take money from your retirement account. Hopefully, you can just take Earnings. However, it is very possible that you will need to pull Original Contributions towards the end of your retirement. How should you view this income? This is easy to calculate and requires no record keeping. You already tithed on this money. You can review your statement to find out what your Original Contributions are, in order to calculate and tithe only on the Earnings.

Years later when your account might be down to your Original Contribution level, you stop tithing on the distributions. This is still fairly easy to calculate but will require a bit of record-keeping. Generally, when people tithe or make donations to charities, they give money that they already paid taxes on.

This becomes a big deal for retirees. This is called a Qualified Charitable Distribution. If you are of that age and tithe to the church from money in your checking account, you will NOT get this benefit. Talk to your custodian or financial advisor to get the right paperwork to make this happen. It is so worth it! Be sure to check out what the IRS says about properly reporting this on your taxes as well.

But what does tithing actually mean? Fun fact: The word tithe literally means tenth in Hebrew. Because the custom of tithing is biblical, many Christians and Jews practice it as part of their faith. Those gardening metaphors may have thrown you off, but what these verses are really saying is to give a portion specifically a tenth of whatever you make back to God. And firstfruits is just a biblical way of saying that you should give first —before you do anything else with your money.

The Bible explains that tithing is an important part of faith for those who follow God and that your tithe should be money you set aside first. This can look like giving a cash offering to your church above and beyond your normal tithe, giving money to a charity you support, giving to a friend in need, or giving your time and skills by volunteering. The Bible tells us that tithing is a way to show that we trust God with our lives and our finances.

Ready for a truth bomb? Instead, tithing is meant for our benefit because sacrificing a portion of our income reminds us to rely on God to meet our needs. Plus it makes us more aware of the needs of others too. In fact, supporting the needs of pastors and the work of the local church is one of the main purposes of tithing.

Tithing helps your local church actively be the church by helping others. Giving encourages a grateful and generous spirit and can help steer us away from being greedy or loving money too much. Plus, being outrageously generous is a blast! And guess what? In Matthew , Jesus warns against focusing too much on the rules of tithing without paying attention to the more important things like justice, mercy and faithfulness.

Bottom line?