But it can be foolish to take anything – even something that is part of wise stewardship, like saving for retirement – to an extreme, or to do it for the wrong reasons or in the wrong way.
In this blog, I stress the importance of saving and investing for retirement. Recently, I have had some conversations with friends about the Biblical perspective on saving for retirement. If we think some amount of saving is wise and good, how can we make sure we don’t become like the “rich fool” we read about in the Bible in Luke chapter 12?
Most of you are probably familiar with the parable – it’s found in Luke 12:13-21. Strangely, it seems to condemn saving for retirement, at least in principle. There are other passages in the Bible that suggest that it is wise to save for anticipated needs in the future, such as Proverbs 21:20: “In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.”
So on the one hand, it seems advisable to set enough money aside and to invest it wisely so that we can meet our anticipated needs in retirement. On the other, we are admonished not to store up riches for ourselves. What gives – how do we reconcile these seemingly contradictory perspectives?
The two extremes
Since the Bible seems to teach both, a balance can be found by avoiding the extremes of each of these views. It’s noteworthy that the Bible uses the words “foolish” and “fool” to describe both extremes on the savings spectrum.
First, it can be foolish to save nothing or too little, especially if we know we will have needs in the future as funds won’t be there when they’re needed. Failure to save is a chronic problem in our day, which can create significant problems in the future for both individuals and families. If we follow the example of the ant in Proverbs 6:6-11 – a self-starting, industrious creature that doesn’t need to be prodded – we will have food and provision of other necessities when we need them. The condition in verse 11 is the possible sad outcome (poverty) of those who don’t.
I like what blogger Tim Challies wrote in an article titled, “Financial Mistakes we Made and Avoided” about how he avoided the mistake of not saving anything at all by taking a careful, measured approach to saving starting when he was fairly young. He apparently has a goal in mind, and is patiently moving toward it:
I began moving very small amounts of money into an RRSP (the Canadian equivalent to a 401(k)) when I was only twenty and did so on the advice of a friend of my parents. Just a few dollars a month and a portion of each year’s tax rebate has added up over the years, and it has been slowly growing in a mutual fund. As income has increased, we have slowly nudged up our contributions and have learned to live without those amounts. While we are still far, far away from a reasonable retirement goal, we are further ahead than we would otherwise be, and that money has another thirty years to gain interest before we can even touch it. Impact: Moderate. Advice: It’s never too early to start.
But in the other extreme, saving can become hoarding, which is foolishness. Ecclesiastes 5:12 says, “…the abundance of a rich man permits him no sleep.” Why? Perhaps it’s because he worries about his wealth out of fear that he will lose it or that he does not have enough. Verse 13 goes on to say, “I have seen a grievous evil under the sun: wealth hoarded to the harm of its owner.” The hoarder saves more than he needs and holds on to it tightly because he is putting his faith and trust in his riches rather than God.
Hoarding is foolish because we are acting as an owner instead of a steward. That was the problem with the rich fool – he was consumed with himself. Also, he was only focused on this life, not the life to come. God was a non-factor. He thought he was clever, but God called him a fool and took his life the very same day.
How much should we save?
If it is foolish to save nothing or too little, then what amount of saving for retirement is Biblically wise and appropriate? Well, surprise surprise, the answers can be found in Scripture! As Jaime Munson wrote in Money: God or Gift,
We live in a world of unexpected car repairs, costly medical care, and long life expectancies. It would be foolish—and dangerous—to spend all our resources on day-to-day expenses. The lesson of the Rich Fool is not “don’t plan.” Rather, the Bible offers numerous guidelines for how to save for the future in a way that honors God.
These guidelines can help us practice wise retirement stewardship without becoming the “rich fool” in Luke 12.
If we make provision for ourselves in retirement, then we will not be consuming church resources away from those who have greater need, such as widows and orphans. Nor will we put an undue burden on our family or the government. Not saving for retirement violates those principles, especially if we fail to plan and expect that church, family, or the government to provide for us when we are older.
Although temporary dependence on others may arise out of necessity due to some unexpected life event, to deliberately place ourselves in a vulnerable position due to lack of planning or excessive consumption is irresponsible. If we work, save, and invest wisely, we are doing all we can not to be a burden on others, and are instead in a position to help others – a much better place to be, for sure.
Some amount of saving is wise, but the key to not becoming a ‘rich fool’ is to look at the whole of what the verses in Luke chapter 12 say. The problem with the rich fool was not just that he stored up riches for himself but also that he was not rich toward God. The real issue is not necessarily that he had stored up for himself, but his heart – his selfish attitude and a desire to create his surplus. In Luke 12:19 he says to himself, “You have plenty of grain laid up for many years. Take life easy; eat, drink and be merry.”
That attitude reflects much of the more popular contemporary views of retirement: You work hard for an extended period until you have enough money saved up so you can stop working and take it easy enjoying hobbies like golf, travel, and visiting family.
If we look closely, we’ll see that this cultural idea about retirement is exactly how the rich fool thought. He stored up enough wealth so he could take it easy and enjoy life – he was all about himself.
That is not the basis of Biblical retirement stewardship. If the only reason we plan is to store up wealth so that we can take life easy, we have missed the whole point of the Christian life. Our obligation to God is much greater than that. As Art Rainer writes in his new book, “The Money Challenge – 30 Days of Discovering God’s Design for You and Your Money“:
Certainly, we save to prepare ourselves for future events. But there is more. We save to give. We save so that we can live generously. We prepare for the future so that we don’t use an unnecessary amount of money and time on the inevitable. Setting aside money ends up freeing up future money and time that can be used to live generously.
Living out our lives in retirement as stewards of all that God has given us means a life of service and generosity. That is the main way we can balance appropriately saving for retirement while also being rich toward God. In fact, wisely storing up can help one to be rich toward God. Art Rainer describes it this way:
Because they do not think of themselves as owners, they don’t talk about “their” possessions. They know that any possession they hold is God’s, and it their responsibility to manage it well for God’s purposes. Their possessions are just tools to be used for generosity. They truly believe God did not design us to be hoarders, but conduits through which His generosity flows.
Those who have a heart to use their possessions to give and serve others in retirement are rich toward God. And even if we have saved, God must always remain our hope. We cannot put our trust in earthly wealth. You may remember the stock market crash of 2008 (I do!). Some people lost half of their savings or more. Our hope must be in the God who always provides for his people (in his way, of course). We do what we can, within limits, to provide for ourselves and our family, but we are ultimately completely dependent on God.
The good news here is that this is not an either/or choice, but rather a both/and one. We need to save to reach a reasonable retirement finish line while not neglecting our obligation to be rich towards God. Of course, this can be harder than it sounds, so here are some ways to help you find balance for yourself:
Set a retirement savings “finish line.” One way to do this is to set limits to financial security in retirement. In their excellent book, God and Money: How We Discovered True Riches at Harvard Business School, the authors, Baumer and Cortines, discuss the idea of a retirement savings “finish line:”
We have come to believe that saving for retirement is wise in the right context, but overly aggressive accumulation prioritizes personal comfort above our mandate to share the Gospel and the love of Christ with the world. We have decided that if we start getting ahead of pace on saving for an old-age retirement, we’ll scale back, allowing us to give more or save in other areas in the present.
What the exact retirement “finish line” should be for you is an individual matter. For the authors, it was around one million dollars in 2016 dollars (with inflation, the number would be somewhat higher 20 or 30 years from now). They put “financial independence” at an additional four million dollars, which they view as the “absolute upper limit” on wealth accumulation in their lives:
So long as we are north of one million dollars but south of four million, active and intentional stewardship will be required to guide the giving away or accumulation of funds. Above four million, we will “chop off” the top of our net worth. Below one million, we will strive to gain wealth as we make provision for our families. In between the two values, we will prayerfully consider our situation and make active decisions about whether or not to increase our personal wealth.
These numbers may seem rather high to you (they do to me). But keep in mind that the authors are successful Harvard MBA grads and relatively high-income earners (well into six figures) in their 30s who started saving for retirement early in life. One of them had a goal to retire in his 40s by saving very aggressively, but he changed his mind when he discovered what the Bible teaches about the “rich fool.”
Long before I read the “God and Money” book, I had tried to find the right balance by consistently giving more as a total percentage of my income than what I saved for retirement. For most of my working life, I saved just enough in my 401K to get the full employer match. That meant that my retirement savings didn’t grow as quickly when I was younger, but I was happy with a slow and steady approach. I still give more than I save, even as I am getting closer to retirement.
Different life circumstances may dictate different responses. Each will need to discern their calling and/or circumstances and set financial goals accordingly. For example, if you are well into your 50s and haven’t saved much at all for retirement, you may need to ratchet up your savings beyond your giving to make sure you have the basics covered later in life. If you’re close to retirement and have all you need, you could reduce your saving or stop it altogether and divert that money to more generous giving.
Increase your giving percentage as your income increases. Another way to find the right balance is to increase your giving as your income increases, even if you are increasing your savings at the same time. If you can keep your spending in check, you will be able to give more and save more as your income goes up. If you can increase your giving at a higher rate than you’re saving, then all the better. Art Rainer explains it this way in “The Money Challenge“:
…God lays out a pattern for proportional giving. This means that those who have less are giving less and those who have more are giving more…God asks his people to give in proporation to what he has given. There should be a relationship between the amount God gives you to steward and the amount we give to others.
If you are giving 6 percent and get a 10 percent raise due to a raise or promotion, consider increasing your giving to 10 to 12 percent and increasing your saving by 2 to 4 percent. If you intentionally set a “lifestyle limit” for spending in much the same way as you do a “retirement finish line” limit for saving, you will give yourself more margin relative to your ability to increase giving over your lifetime.
Cultivate heart attitudes of gratitude, contentment, and trust in God. There are other ways to be “rich toward God” that go beyond what we do with our money. They have to do with our heart attitudes toward what we have been given by God. It is thankfulness for whatever we have and the recognition that life does not consist in the abundance of our wealth. It is also about living a life that is not based on anxiousness or fear about the future and the need to create our security by accumulating more wealth than we need. We avoid covetousness and intentionally pursue a lower standard of living (relative to our income) and also lower levels of savings than our peers in the world because of our giving and trust in God, not money.
In short, if we strike a balance between this life and the life to come, we can avoid the foolishness of not saving at all and saving for the wrong reasons like the rich fool in Luke 12.
Retire to give, not to get
Being rich toward God in retirement is, as Jaime Munson wrote, “retiring to give – not to get.” He explains,
Faithfully saving money over the course of a lifetime and having the ability to quit your job is not a bad thing, provided your post-work years are spent worshiping Jesus (not comfort and ease). In fact, such a transition could be a great gift if the extra time is used to start a business that gives the proceeds away, invest in our families, serve our church, and help those God brings into our life.
The problem with the rich fool is that he treated his wealth as his own, not as a gift from God. So, when he died, he lost everything. If we save but also focus on others – by spending and giving in ways that honor God – we will grow rich toward Him. And when we die, we may lose a little remaining earthly wealth, but we will gain everything in eternity. (Col. 3:1-4)