The Role of Charity in Your Retirement SHP Financial

Everyone wants to give back in one way or another. After you’ve spent your whole life working, you may find that in retirement, you want to give some money to charity. But if you are living off of income streams from sources like your retirement accounts and Social Security, you may be worried about finding a way to make charity work for your financial picture.

Most retirees take the standard deduction on their taxes as opposed to choosing to itemize.[1] But, as of the 2017 Tax Cuts and Jobs Act, the only way to benefit tax-wise from donations is to opt to itemize.[1] So, how can you make this system work for you if you don’t usually itemize? There are a few strategies that can help.

First, consider bunching your donations. What that means is you’d donate an amount that qualifies you for deductions that exceed your standard deduction level in a given year. This way, you will benefit more from itemizing than taking the standard deduction. If that donation amount adds up to more than you normally would consider giving, then think of it as bunching the donations you would have made over the next few years into one year. The idea is that you are making charitable donations all in one year that you were thinking of making over time in order to gain the tax advantage.[1] Of course, this means taking a break from donating in the following years.

Another option to consider is to set up a donor-advised fund. This will allow you to bunch your donations in a single year but then distribute them over a long period of time.[1] The benefit to this is that you can still gain the tax advantage of a large, itemized donation but can distribute your donations over more than just one year.[1]

The last strategy you might want to consider if you want to work donation into your financial picture is making gifts to your children, who then donate the money. This may allow your children to itemize their taxes and reduce their tax bracket beyond the standard deduction.[1]

There are tips, best practices, and pitfalls for almost any financial strategy you consider. Even something as simple as giving money to people who need it can be a complicated process. If you’re looking for a guide to help you navigate these complexities, Click HERE to reach out to one of our financial professionals today at SHP Financial for a complimentary review of your situation.



This article is designed to provide general information on the subjects covered.  Pursuant to IRS Circular 230, it is not intended to provide specific legal or tax advice and cannot be used to avoid penalties or to promote, market, or recommend any tax plan or arrangement.  You are encouraged to consult your personal tax advisor or attorney.

The content presented is for informational purposes only and is not intended as offering financial, tax, or legal advice, and should not be considered a solicitation for the purchase or sale of any security. Some of the informational content presented was prepared and provided by tMedia, LLC, while other content presented may be from outside sources believed to be providing accurate information. Regardless of source no representations or warranties as to the completeness or accuracy of any information presented is implied. tMedia, LLC is not affiliated with the Advisor, Advisor’s RIA, Broker-Dealer, or any state or SEC registered investment advisory firm. Before making any decisions you should consult a tax or legal professional to discuss your personal situation.Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor. Insurance sales are offered through SHP Financial, LLC. These are separate entities, Matthew Chapman Peck, CFP®, CIMA®, Derek Louis Gregoire, and Keith Winslow Ellis Jr. are independent licensed insurance agents, and Owners/Partners of an insurance agency, SHP Financial, LLC.. In addition, other supervised persons of SHP Wealth Management, LLC. are independent licensed insurance agents of SHP Financial, LLC. No statements made shall constitute tax, legal or accounting advice. You should consult your own legal or tax professional before investing. Both SHP Wealth Management, LLC. and SHP Financial, LLC. will offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product.
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