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Welcome to How to Retire on Time, a show that answers your retirement questions. Say goodbye to the oversimplified advice you've heard hundreds of times. This show is about getting into the nitty-gritty so you can make better decisions as you prepare for retirement. Text your questions to 913-363-1234 and we'll feature them on the show. Don't forget to grab a copy of the book, How to Retire on Time, or check out our resources by going to www.retireontime.com.
Welcome to How to Retire On Time, a show that answers your retirement questions. We're here to move past that oversimplified advice you've heard hundreds of times. Instead, we're gonna get into the nitty gritty here. Have some fun. As always, text your questions to (913) 363-1234.
Mike:And remember, this is just a show, not financial advice. David, what do we got today?
David:Hey, Mike. What are some smart ways to donate to charities?
Mike:Generally speaking, you've got donations coming from two buckets.
Mike:So I see people donating from their IRA or donating from their brokerage account, not really their Roth. Roth is is like the best account, so usually they're donating to also be tax efficient.
David:Okay.
Mike:Yeah. Okay? So with that, you need to understand you can't donate from your IRA unless you're at required minimum distribution age, and then you can donate up to a certain amount each year. From your brokerage account, there are many different ways you could structure charitable gifting, and you need to understand, is this a one off gift? Are you gifting to lower your taxes, and would it really make a difference, or would it not make a difference?
Mike:Are you looking to just you're selling something big and you're trying to offset some of the gains, then you might get into more multiyear gifting strategies like a charitable remainder trust and so on. So the answer is there's too many variables here to answer it correctly in my opinion. I don't wanna give oversimplified advice. I would say if it's a one off or you want a long term strategy, write down or articulate your charitable intent, whether it's kind of a whatever happens this year, we'll be open to it. Understand your adjusted gross income and modified adjusted gross income and where the charitable donations will come from, and then get with someone that understands taxes or can do tax projections on if you donate or not donate from the different buckets, from the different accounts, from the different investments, and how that might work to really just understand the tax implications of it.
David:Yeah. Is this a deduction? It's not a credit when you give
Mike:Not a credit. It's a deduction. So you're only getting 20¢ back on every dollar that you give if it's from a brokerage account, maybe, but you have to itemize. And are you gonna itemize? Are you not gonna itemize?
Mike:So you need to understand that. And even if you don't itemize, there is some part of it that can be taken off. There's some updates on the one big beautiful bill on how this was gonna be done. And then if you were to donate, we don't sell a stock. You could gift a stock to a charity and have them pay the capital gains.
Mike:There's so many variables here, and it all boils down to how is it going to affect your ten forty. So I would just encourage people, if you have charitable intent, which I hope that you do, don't give more than you can afford. But, yeah, dive into the details from a tax standpoint of here's how much I wanna gift this charity or this church. Where's the best place to pull it, and how do we make that transaction happen so it's favorable for your own taxable situation? That's all the time we've got for the show today.
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