Charitable giving is a personal choice you make throughout your lifetime. It feels good to be generous with the resources entrusted to your care. And making a plan for your charitable donations can be even more empowering.
The good news with charitable giving is that you have several options to choose from:
- You may want to model generosity with your family now—and benefit from certain tax advantages too.
- Perhaps you are planning ahead to make gifts in the future, either during retirement or after your death.
- You might consider using your charitable giving in such a way that allows you to receive income in retirement and provide for charities you support long after you have passed away.
Whatever your charitable goals, they can help enhance your broader financial goals for retirement and legacy planning. Learn more about your options for giving now and giving later.
Strategically using charitable giving while you’re living
There may be tax advantages to donating money to causes you care about, but in most cases that’s not your top priority. What inspires you to give now is more likely to be a desire to share your passion for giving with your children or grandchildren. Perhaps you want to make a gift to an organization or cause that has had a particular impact on your life—whether it’s a college you attended or for medical research to cure the disease that took your loved one. No matter what your intent, there are ways to offer support now.
A donor-advised fund is an account established for giving
When you open a
Donor-advised funds are
The versatility of donor-advised funds is another reason they are so popular. You have the flexibility to change your mind about which charities to support. You can support several charities with small or large gifts, during your lifetime and after you have passed away.
Qualified charitable distributions from your IRA fulfill required minimum distributions
Once you reach your required beginning date (RBD), your income could increase as you begin withdrawing money from your IRAs and 401(k). They’re called
One way to help reduce or eliminate the taxes you might pay on those dollars is called a
You must be 70½ to complete a QCD, and only money from a
Qualified charitable distributions could be more beneficial than ever since the tax laws changed a few years ago and increased the standard deduction. As of 2023, a lifetime limit of $50,000 applies to a QCD and beginning 2024 they will allow increases for inflation. You may not exceed that standard deduction with your usual annual gifts to charity. So, to get the tax advantage, a QCD might be a good option for you.
Gifts of stock and mutual funds can provide tax-efficiency
Charitable giving later in life or at death
You may not be in a position now to make the type or size of the gift you dream of making. Fortunately, there are several ways you might plan to give later in your lifetime or even after your death.
Charitable remainder and charitable lead trusts are intended specifically for the purposes of giving.
A charitable remainder trust helps provide retirement income
A unitrust to support multiple charitable gifts.
An annuity trust to make a one-time gift.
An annuity trust is similar, but you fund it with a one-time gift of cash, publicly-traded securities or mutual funds. You then can receive ongoing fixed-income payments during your lifetime.
A charitable lead trust supports a charity during your lifetime.
A charitable lead trust provides support to a charity for a period you choose, and the remaining proceeds go to your family or others upon your death. You may think of it as the opposite of a charitable remainder trust in that you support the charity first and then your loved ones, rather than receiving income before supporting charities.
Charitable gift annuities help create a retirement income stream
Charitable giving after your death
There are many reasons to delay charitable giving until after you die. Anonymity may be important to you. You may want to help spare your loved ones from the significant tax consequences of inheriting your assets. Many charitable giving options allow you to retain this type of control even after your death, while potentially increasing the impact of your gifts to the charities and causes you care about.
Make a charity a beneficiary
Gift life insurance proceeds
Real estate gifts may help reduce the size of your estate
You can also give a
Offset potential tax increases with charitable giving
If your income tax situation—both today and in the future—plays a role in your charitable decisions, the time is now to begin planning. Current tax rates are some of the lowest since the government started taxing workers more than a hundred years ago. But no one can predict what will happen with income taxes in the future or how they may be affected by laws related to charitable giving.
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Work with a financial advisor on a charitable giving plan
Simply put, encouraging clients to give generously is essential to our purpose at Thrivent. The tools and strategies discussed here serve as suggestions.
Our experienced financial advisors can listen to your hopes and dreams and offer recommendations that will complement your goals.