If I can make retirement contributions to both a Traditional IRA and to a church plan is there a reason to prefer one over the other?
Yes! Most ministers should likely be choosing a 403(b) church plan.
In addition to a Traditional IRA, a minister may choose to claim a contribution to another retirement plan, like a 403(b) church plan. However, before choosing to do so, it is important to understand the benefits and disadvantages of both a Traditional IRA and a 403(b) plan.
Contributions to a Traditional Individual Retirement Account are not employer plans that are deducted up front from a minister's pay (reported on Form W-2). Instead, these amounts are truly deducted on his personal tax return. The benefit of the IRA is that it can be funded after December 31st and still count against one's taxable income. Additionally, an IRA does not require church sponsorship and has lower fees to establish an account.
While there are several benefits of an IRA, there are also…