Charitable giving plays an important role in many financial plans. However, many people tend to approach charitable giving as a quick exercise they think about once a year. In reality, it requires thoughtful planning, especially if you’re making larger charitable gifts, to ensure your wishes for your money both now and in the future are secure.
Philanthropy can not only give you great personal satisfaction, it may provide an opportunity for a current income tax deduction, capital gains tax avoidance, and/or possible reduction in the amount of taxes your estate may owe when you die. There are many ways to give to charity. You can make gifts during your lifetime or at your death. You can make gifts outright or use a trust (Charitable Lead or Remainder Trusts). You can name a charity as a beneficiary in your will, or designate a charity as a beneficiary of your retirement plan or life insurance. Or, if your gift is substantial, you can establish a private foundation, community foundation or donor-advised fund. Charitable giving becomes part of the broader financial planning process.
Understanding your goals and having a plan helps answer the questions about how much to give, which charities you want to support and what assets you’ll donate. Giving away cash might reduce income taxes but may also affect your liquidity. If you give away a significant portion of your investment assets, you may want to re-balance your portfolio to be sure you are still on track for retirement.
The CIG Wealth Management team can help you plan ahead and integrate your philanthropic wishes into a holistic wealth management plan. Schedule a complimentary consultation with the professionals at CIG Capital Advisors to assess your charitable giving strategy and its place within your overall retirement plan.