Charitable Giving Strategies in Retirement and Beyond

Webinar Transcript

Welcome and Introductions

I’m Fran Toler, and I’m here with my colleague, Guli Fager, CFP® from Toler Financial Group.

Why Charitable Giving Matters

One of the most satisfying conversations I have as a financial advisor is helping clients identify what is most meaningful to them in their family and community. Charitable giving is often an important part of that conversation. It helps people connect their money to their values.

Money can mean many things: basic survival, comfort, the ability to support family, and the ability to be generous in the community. That final layer—feeling secure enough to give meaningfully—is often especially rewarding, and it is what we’re excited to explore with you today.

About Our Firm

Guli and I are both financial advisors. Our firm provides fee-based financial planning, socially responsible investing, and independent insurance analysis. We help people build charitable giving strategies that fit within the broader question of financial security: Do you have enough for yourself? Do you have enough for your family? How generous can you afford to be?

One of the most exciting moments in financial planning is when people realize they can afford to be generous. That realization can be transformative.

Giving During Retirement

Assessing Financial Readiness to Give

Guli: One of the first things we help clients think through is their financial stability. Clients often ask in December how much they can afford to give. A useful starting point is to look at whether more money is accumulating in checking over the course of the year than they are spending. If so, that may indicate they have more than they need for living expenses and may be in a position to give.

Many clients already give monthly through checking accounts or credit cards to organizations they care about. It can also be helpful to choose a giving target—for example, a percentage of income or a percentage of net worth. Then, throughout the year, they can decide where they want that money to go.

We also help clients identify organizations doing work they care about that would truly benefit from modest to medium-sized gifts. Many of our clients are not giving on the scale of billionaires, but a gift of $25,000 or $50,000 can be enormously meaningful for a smaller organization. We can help clients find local groups where their contributions will have a real impact.

Tax efficiency is usually not the main motivation for charitable giving, but it is something we can help clients navigate. There have been recent changes to the tax rules that affect charitable giving, and we want people to understand how to make the most of any benefits available.

We also encourage people to talk with their financial advisor or tax professional well before year-end. Once charitable giving involves investment accounts, retirement distributions, or mailed checks that must clear before December 31, timing matters.

Standard Giving and Bunching Contributions

Guli: Most people are used to giving by writing checks or making online donations, often monthly or toward the end of the year. Since the Tax Cuts and Jobs Act significantly increased the standard deduction, many people no longer itemize deductions. As a result, charitable giving that once provided a tax benefit often no longer does.

Starting in 2026, individuals who do not itemize will be able to deduct up to $1,000, and married couples filing jointly up to $2,000, without itemizing. That is a helpful change for many households.

For people who want to give larger amounts, one strategy is to “bunch” charitable contributions. Instead of giving $5,000 each year for three years, someone could give $15,000 in one year, which may push them over the itemization threshold and allow them to take advantage of deductions in that year. A tax professional can help coordinate this with other deductible expenses.

Another useful option is a donor-advised fund. A donor-advised fund allows someone to make a charitable contribution in one tax year, receive the deduction at that time, and then recommend grants to nonprofit organizations over time. This can work especially well for people who want to bunch several years of charitable giving into one year to reduce taxable income, while still distributing gifts gradually. It can also be an efficient way to donate appreciated securities, potentially avoiding capital gains tax while supporting multiple charities from one account.

Giving Appreciated Stock

Fran: One strong strategy is to give appreciated stock, mutual funds, or ETFs from a non-retirement account. If the investment has grown substantially, selling it could trigger capital gains tax. Donating the investment directly to charity avoids that tax.

For example, imagine a client who bought a stock decades ago for $600 and now it is worth $250,000. Selling it would trigger a large tax bill. Instead, she could donate portions of the stock over a period of years. The charity receives the value, and the capital gains tax disappears. This can be a powerful strategy for people who want to be generous while also managing taxes efficiently.

Qualified Charitable Distributions (QCDs)

Fran: Another strategy is what we think of as a “supercharged” giving option: the qualified charitable distribution, or QCD. This strategy is available to people who are at least 70½ years old and who have tax-deferred retirement accounts such as traditional IRAs, 401(k)s, 403(b)s, SEP IRAs, SIMPLE IRAs, or similar plans. It does not apply to Roth accounts.

A QCD is a charitable gift that goes directly from a traditional IRA to a qualified charity. Because money withdrawn from a traditional retirement account is normally taxable as ordinary income, a QCD avoids that tax entirely.

This can be especially helpful for people taking required minimum distributions (RMDs). Suppose someone is required to withdraw $32,000 from their IRA in a year, but they do not need all of that money for living expenses. If they would like to donate $20,000 to charity, they can direct that amount from the IRA to several charities through QCDs. That $20,000 counts toward their RMD, but it does not count as taxable income to them. They would only need to withdraw and pay tax on the remaining $12,000.

This strategy often requires coordination between a financial advisor and a tax advisor, but it can be extremely valuable. It also needs to be done in advance—this is not a last-minute December 29 strategy.

Planned Giving and Estate Planning

How Assets Transfer at Death

Guli: It is important for people to understand how their assets actually transfer when they die. Many people assume everything passes through a will, but that is often not the case.

Some assets pass by title. If an asset such as a house, car, or bank account is jointly owned, ownership usually passes automatically to the surviving owner. If it is owned by only one person, it may have to go through probate.

Other assets pass by beneficiary designation. This includes retirement accounts, life insurance policies, and accounts with transfer-on-death designations. These assets generally do not pass through the estate. Instead, they go directly to the named beneficiary.

That means it is essential to keep beneficiary forms up to date. If a retirement account names two children as beneficiaries and not the third, the institution will follow that form exactly. It will not rely on verbal instructions or assumptions.

Finally, some assets do pass by will, such as individually owned real estate, personal property, and bank accounts without beneficiaries. But for many households, the will governs only a portion of total wealth.

Using IRAs for Charitable Bequests

Fran: One of the most effective ways to include charitable giving in an estate plan is through retirement account beneficiary designations—especially IRAs. Instead of directing charitable gifts through a will, many clients can leave their will focused on loved ones and direct some or all of their charitable giving through IRA beneficiaries.

This is especially advantageous because inherited IRA money is taxable to human beneficiaries, but not to charities. If an IRA passes to a charity, the taxes effectively disappear. This makes IRA dollars particularly efficient assets to leave to nonprofit organizations.

It is also easy to adjust IRA beneficiaries over time. If charitable priorities change, a person can update the beneficiary designation without rewriting an entire estate plan.

Charities do not need to be the only beneficiaries. For example, a spouse can be named as the primary beneficiary and a charity as the contingent beneficiary, offering flexibility while preserving charitable intent.

Beneficiaries on retirement accounts are often overlooked in estate planning, so we encourage people to review them every few years as part of a broader financial planning process.

Planning for Later Life

Guli: In addition to estate planning, we encourage people to think ahead about housing and care needs later in life. Many people delay decisions about where they want to live or how they will get support as they age. But these decisions are easier to make well before a crisis occurs.

If someone wants to age in place, they may need home modifications such as grab bars, stair assistance, or other accommodations. Those changes need to happen before an injury or decline makes them urgent.

Sometimes people delay these decisions because they want to preserve assets for children or grandchildren. But in some cases, that can increase the likelihood that those same family members will eventually need to provide care. Planning ahead can help people make thoughtful, balanced decisions.

We also encourage people to think about where they would give if they had to give away a significant amount—say $100,000. That question can help clarify charitable values and identify the organizations they want to support most meaningfully.

Giving Inherited Wealth Tax-Efficiently

Audience Question: Is there a way to contribute inherited wealth and avoid the tax burden?

Fran: Yes, absolutely. Strategies such as giving directly from an IRA through QCDs, naming charities as IRA beneficiaries, and donating appreciated stock can all reduce or eliminate taxes that would otherwise apply. These are some of the most powerful tools for tax-efficient charitable giving.

How Much Wealth Is Needed to Work with a Financial Advisor?

Audience Question: How wealthy does someone need to be to work with a financial advisor? Many of us do not have inherited wealth or seven-figure savings.

Guli: There is no single dollar threshold that determines whether working with a financial advisor is worthwhile. It depends on the kinds of decisions you need help making and whether you want a professional partner in that process.

Some people manage retirement finances comfortably on their own. Others prefer to work with someone they trust. We work with clients across a broad spectrum of assets. Some have relatively modest retirement savings but also have pensions, Social Security, or home equity that significantly shape their planning decisions.

For many people, especially if they do not have children or others they expect to help them later in life, it can be very valuable to have a trusted advisor on their team.

Required Minimum Distributions Explained

Audience Question: Can you explain how required minimum distributions work?

Fran: Required minimum distributions, or RMDs, apply to most non-Roth retirement accounts. For people born before 1960, RMDs generally begin at age 73. For people born in 1960 or later, they begin at age 75.

Each year, the government requires account holders to withdraw a minimum amount from those accounts and pay tax on it. The amount is based on the account balance as of December 31 of the previous year and a life expectancy factor tied to age.

As a rough guideline, the RMD percentage at age 73 is about 4%. So if someone has a $200,000 IRA, their RMD might be around $8,000. If they also have a $400,000 Thrift Savings Plan, that account might have an RMD of around $16,000.

Guli: The key detail is that the amount is based on the prior year-end balance, not a random estimate. And if someone wants to reduce the tax impact, making charitable gifts directly from the IRA through a QCD is the primary way to do that.

FAQ: How Financial Advisors Can Help with Charitable Giving

What can a financial advisor help me think through when I want to give charitably?
A financial advisor can help you clarify your charitable goals, decide how much you can give without putting your own financial security at risk, and choose a giving approach that aligns with your values, your timeline, and your overall financial plan.

How can a financial advisor help make charitable giving more tax-efficient?
An advisor can help identify which assets may be the most effective to give, such as appreciated securities, retirement account distributions, or contributions to a donor-advised fund. They can also help you think about timing, including whether it makes sense to bunch multiple years of giving into one tax year.

Do financial advisors coordinate charitable giving with tax and estate planning?
Yes. Charitable giving often works best when it is coordinated with your tax professional and estate planning attorney. A financial advisor can help make sure your giving strategy fits with beneficiary designations, retirement account planning, required minimum distributions, and your broader legacy goals.

Can a financial advisor help me decide whether to use a donor-advised fund, appreciated stock, or a qualified charitable distribution?
Absolutely. Different giving tools work best in different situations. A financial advisor can help you compare the tradeoffs based on your age, income, assets, tax situation, and charitable priorities, and then work with you to implement the strategy in a timely way.

Can a financial advisor help me build a long-term charitable giving plan?
Yes. In addition to helping with one-time gifts, an advisor can help you create a sustainable plan for annual giving, larger gifts, family conversations about philanthropy, and legacy giving through your estate or beneficiary designations.