Prioritizing philanthropy in retirement starts with strategy
In most respects, retirement is about slowing down. There is one area, however, where many of us don’t want to lose momentum, financially or otherwise: giving.
According to the National Philanthropic Trust, the average age of charitable donors in the US is 64 – and older donors, specifically those in the baby boom and silent generations, make larger gifts than their younger counterparts.1
There is a clear appetite for altruism in retirement, but retirement itself can become an obstacle in fulfilling the goal, if only psychologically.
“No longer having a steady income can make people believe they need to change the equation,” says Nicole Hisler, president of Raymond James Charitable. “If they’re giving $10,000 every year, for example, they may think without their previous income, ‘Oh, I better make it $5,000.’ But if giving is something they’re passionate about, something they want to be part of their lives in perpetuity, they can plan to ensure it stays a priority.”
Getting strategic, she says, is the key to helping ensure you can do more than keep on giving in retirement – you can maximize your impact.
After you’ve done your retirement planning, accounting for how you’ll live in the future, consider a parallel plan for how you’ll give.
Start by assessing your current charitable efforts, outlining the basics:
How much are you giving each year?
What causes are you giving to?
If you give to multiple causes, what percentage of your annual charitable dollars go to each?
Do you have a strategy in place or is your philanthropy more informal?
What giving vehicles, if any, are you using?
Then, look forward:
Do you have goals for growing or diversifying your giving in the future?
Do you have an interest in narrowing your focus over time?
How do you want to involve your loved ones?
How will those goals play into your estate plans?
These are key questions to incorporate into your overall financial planning conversation to begin mapping a strategy and selecting the charitable vehicles that align with your broader goals.
One of the key charitable strategies in retirement – and one you can implement right now if you own an IRA and are over 70 ½ – is taking qualified charitable distributions (QCDs).
In lieu of required minimum distributions (RMDs), IRA owners have the option to donate what they would have otherwise been required to withdraw – up to $108,000 in 2025 – to a charity, tax-free.
If you’re planning to forego RMDs by converting to a Roth IRA, however, there are still charitable opportunities. Converting will create a taxable event, but you can offset that income by making a direct gift or using it to establish a donor advised fund (DAF) – something you can’t do through a traditional IRA, since RMDs can’t be distributed to a DAF.
DAFs are essentially charitable investment accounts in which contributions grow untaxed and donors recommend grants to their causes of choice, typically without annual minimum distribution requirements.
According to Nicole, the flexibility of a DAF can be especially useful for people coming to charitable retirement planning with a little more lead time. “You can use those prime earning years to really build up a DAF, then wait to make gifts when the time is right. It can help preclude that anxiety about not having an income if there’s already an account earmarked for giving.”
A range of other charitable vehicles exist, each with their own balance of tax minimization and charitable impact.
Charitable lead trusts put the charity “first,” with contributions used to make tax-deduction-eligible donations for the term of the trust and any remaining balance distributed to the grantor or a named beneficiary.
Charitable remainder trusts make charities the ultimate beneficiaries while allowing the donor to use contributions to receive partial tax deductions and create an income stream for the term of the trust.
Charitable gift annuities are contracts between an individual and a charity wherein a sizable donation for the charity ensures a partial tax deduction and fixed lifetime income for the individual.
Pooled income funds combine the investment power of a pool of donors who make tax-free gifts, then receive an interest income for life with a preplanned charitable gift made on their death.
There is also always the option to take a more formal approach and launch your own private foundation or nonprofit, especially if you’re starting with a significant sum and anticipate a long retirement you can spend dedicated to the cause.
Regardless of the tool or tools that make the most sense for your goals, one thing to keep in mind in the near term are changes for 2026 and beyond ushered in by the One Big Beautiful Bill Act, which includes a new 0.5% floor for charitable deductions based on adjusted gross income (AGI). This means charitable donations below 0.5% of your AGI are not deductible. For example, at an AGI of $200,000 and gifting $10,000, the first $1,000 in donations would not be deductible, but anything over that amount – $9,000 in this case – would be.
Another approach for givers in or near retirement is to consider the unconventional and think beyond traditional donations like cash. This could mean illiquid assets like privately held shares or gold – even their own homes.
A retained life estate is an agreement that lets an individual donate a house to charity but stay on as a tenant for life. Ideal for people who intend to remain in their current residences, these arrangements allow donors to make a powerful gift, receive an immediate charitable tax deduction, and answer the sometimes-fraught question of who gets the house.
If you have other plans for your home, maybe some of the things in it could contribute to your charitable goals.
Collections, those passion assets that often make for a contentious or indifferent inheritance, can be powerful gifts. Note, however, that it’s not always possible to gift a collection directly and receive a tax deduction, so amateur curators may need to sell and donate the proceeds. Working with specialist appraisers or an art consultancy can help ensure you determine fair value and match you with buyers.
Whatever your goals for giving, Nicole says achieving them is all in the approach. “The biggest strategy is to think about this strategically in the first place. If charity is important to you, it is helpful to plan for it as early as possible, but even starting to be strategic about it right now can have a big impact.”
Donors are urged to consult their attorneys, accountants or tax advisors with respect to questions relating to the deductibility of various types of contributions to a donor advised fund for federal and state tax purposes. To learn more about the potential risks and benefits of donor advised funds, please contact your financial advisor.
Raymond James Charitable is the brand name for the Raymond James Charitable Endowment Fund, an independent non-profit organization with a donor advised fund program.
