A lot of people, especially many ultra wealthy individuals and couples, enjoy sharing their fortunes with charitable causes. In fact, some of the biggest donors in the United States are also some of the country’s wealthiest individuals, including Bill and Melinda Gates (Microsoft), Warren Buffet (Berkshire Hathaway) and Mark Zuckerberg (Facebook). While many of the nation’s richest people may get ridiculed for their wealth, how they spend it and for the small percentage of taxes they pay on their income, the truth is, many of these individuals give away millions, or even billions to charitable causes.
Giving Even After Retirement
Many people who are wealthy, while not in the same class as these individuals, still want to continue giving to charity even after they retire and stop collecting a paycheck. This might seem like a difficult proposition, but there are some simple methods to accomplish this task. One such way to provide enough money for you in retirement, as well as for charitable giving, is to open a donor-advised fund, which are often funded with stock shares. Essentially, this allows you to create two buckets of funds: one for donations and another for spending needs. More than half of these funds are used to allow people the opportunity to continue donating to charities even after they retire.
Grow Charitable Giving Funds Without Taxes
There are several large firms that are the greatest holders of these donor-advised funds, including Schwab Charitable, Fidelity Charitable and Vanguard, but you can also set one up through many community foundations, as well. No matter where you set one up the tax benefits don’t change. When you create one of these funds you get to deduct the amount you contribute to the fund in the year that you make the contribution. After that, you are allowed to determine when the grants go to operating charities under your own terms. In addition, the money set aside for charity gets to grow tax-free while sitting in the fund, which increases the amount of money you have available for giving. That is a win-win situation. Your available funds for charitable giving grow without increasing your tax bill.
GROCO Can Help You Set Up the Right Account
If you have reached the age of retirement and you still enjoy giving to charity, you can have the funds to do it even without a steady income. By examining all of your options for retirement and financial planning, including a donor-advised fund, you can set up the perfect way to still give to charity and enjoy the tax benefits at the same time. Planning for retirement can be tricky, especially for those who have more income. It’s important to set up the right kind of account so you have enough for living expenses while still being able to donate. At GROCO, we understand taxes and financial planning for retirement. There are many options to choose from, which is why it’s a good idea to sit down with an experienced financial team that has your best interest in mind. Please contact one of our offices in California by calling 1-877-CPA-2006, or contact us online