Charitable Giving Strategies for High-Net-Worth Retirees

“We make a living by what we get, but we make a life by what we give.” -Winston Churchill

Reaching retirement can offer both personal flexibility and planning opportunities.  This may include appreciating what you’ve built and exploring ways to use your wealth for charitable purposes. Many high-net-worth retirees consider charitable giving strategies that are potentially tax-efficient, organized, and aligned with family and legacy goals.

Certain charitable strategies may help reduce taxes, create structure for giving, and support long-term legacy planning.

Explore Tax-Efficient Giving Options

Some strategies allow you to make a meaningful impact now while reducing your taxable income.

• Qualified Charitable Distributions (QCDs): If you are age 70½ or older, you can direct up to $105,000 per year (2024 limit, indexed for inflation) from your IRA to qualified charities. A QCD counts toward your required minimum distribution (RMD) but is excluded from taxable income. This strategy is especially valuable if you do not itemize deductions.
• Donor-Advised Funds (DAFs): Often called “charitable checking accounts,” DAFs allow you to make a single charitable contribution, potentially during a high-income year, and claim an immediate deduction. You can then distribute gifts to charities over time. This approach may simplify tax documentation, consolidate multiple contributions into one receipt, and allow invested funds to grow tax-free for future giving.
• Gifting Appreciated Securities: Donate stocks, mutual funds, or other appreciated assets directly to a charity or into a DAF to avoid capital gains taxes while claiming a deduction for the fair market value of the gift. For retirees holding highly appreciated or concentrated positions, this strategy may support charitable goals and contribute to portfolio diversification.

These approaches may allow for “front-loading” charitable giving during retirement years when income or RMDs could result in higher tax brackets.

Create an Ongoing Giving Vehicle

Other strategies extend your giving across many years or multiple generations. These options may help create structure, provide income, and foster family engagement in philanthropy.

• Donor-Advised Funds (DAFs): Beyond their tax advantages, DAFs also serve as a simple, low-maintenance alternative to a private foundation. You can name family members as successor advisors, involve children or grandchildren in recommending grants, and create a shared rhythm of giving. For many families, a DAF may serve as a central hub for their charitable efforts without the cost and complexity of running a foundation.
• Charitable Remainder Trusts (CRTs): A CRT allows you to contribute appreciated assets to a trust, receive an income stream for life or a term of years, and leave the remainder to charity. This structure may generate an immediate charitable deduction, defer capital gains, and convert assets into predictable income, all while supporting charitable causes.
• Charitable Lead Trusts (CLTs): With a CLT, the charity receives income for a set period, and your heirs inherit the remaining assets when the term ends. This approach may help reduce estate and gift taxes, making it a potentially useful tool for families focused on both wealth transfer and philanthropy.
• Private or Family Foundations: For those seeking more control, a private foundation can formalize your family’s charitable mission. It allows you to set grantmaking priorities, manage investments, and involve multiple generations in decision-making. While foundations require greater administrative oversight, they can bring family members together around shared values.

These vehicles may help transform giving from a series of one-time donations into a sustained, intentional part of your financial life.

Leave a Lasting Legacy

For many retirees, their ultimate goal is to ensure their generosity continues long after they’re gone. These strategies can help align your estate plan with the impact you hope to make.

• Bequests in Wills or Trusts: Naming a charity in your will or living trust is one of the simplest ways to give. You can designate a percentage of your estate, a specific amount, or particular assets. Bequests are flexible and revocable during your lifetime, allowing you to adjust as circumstances change.
• Beneficiary Designations: Retirement accounts such as IRAs, 401(k)s, or life insurance policies can also pass directly to charity. Because charities don’t pay income tax on distributions, leaving tax-deferred assets to charity and more tax-favored assets to family can help improve overall tax efficiency for your estate.
• Integrating Charitable Tools: Donor-advised funds and family foundations can also play a role in legacy planning. Naming your DAF as a charitable beneficiary or appointing successor advisors helps ensure that your giving priorities continue seamlessly, guided by those who know your values best.

Legacy giving can be about more than wealth; it may also reflect a desire to transfer purpose and values. By including charitable goals in your estate plan, you can strengthen your family’s connection to your values and your community.

Charitable giving may be a meaningful part of retirement for many individuals. Whether you want to maximize tax efficiency today, create an ongoing structure for giving, or ensure your legacy continues for future generations, the right strategy can help you make a meaningful difference.

If you are considering charitable giving as part of your retirement strategy, talk with your financial advisor. Together, you can explore a plan that reflects your values, supports your family, and aims to make a lasting impact.