We did some of these from one of my IRA accounts just in case. As it happens, I’m still doing RMD in the right amount without these, but this account is sort of discretionary, so a good way to do our larger Charitable Donations.
@shawbridge Double check if your donor advised fund is eligible, ours at Schwab is not.
Thanks. Will do.
I had pulled this from the Fidelity website, but I wonder if it only applies to donations after death:
Although designating any qualified charity as a beneficiary usually allows an estate to claim a charitable contribution deduction, utilizing a donor-advised fund program—such as the Fidelity Charitable Giving Account—to name a public charity as the beneficiary of a tax-deferred retirement account (such as an IRA or a 401(k)) gives clients and heirs greater flexibility.
Upon death, your IRA assets can fund the donor-advised fund. Donations can then be distributed to charities immediately or over time through an endowed giving program. Or you can let a trusted friend or family member make decisions about donations from your donor-advised fund—a designated account successor can make grant recommendations over time to the charities they would like to support.
Alternatively, you can use your assets to provide multiple heirs with a fund to support their individual charitable giving by specifying that the IRA assets be allocated across multiple donor-advised funds. In this case, each individual will have their own Giving Account, creating a legacy of giving that can stretch far into the future.
Our Donor Advised Fund has grown nicely over the years. We also decided to make fewer larger contributions as opposed to many small. Also mostly do it anonymously so as not to be bombarded by more asks. (Salvation Army, I’m looking at you 
.)
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@aMacMom, on the subject of anonymity in giving, the Jewish scholar Maimonedes laid out eight levels of Tzedakah, which is often translated in English as charity. The way we use the word charity implies an act of generosity and benevolence in which the better off give to needy. The act of charity is optional and we applaud the giver for his or her generosity. But charity is not an accurate translation for tzedakah. The Hebrew root of the word Tzedakah comes from the Hebrew word for righteousness, justice and fairness. Tzedakah is an act of righteousness, justice and fairness. In Judaism, giving to the poor is not an act of optional generosity, it is a required act of justice and righteousness, the performance of an obligation, giving the poor their due.
According to Maimonedes, the lowest levels of tzedakah are giving grudgingly or less than one should. The second, third and fourth best levels of tzedakah relate to anonymity. The second level is when the donor and the recipient are both anonymous.
Incidentally, the highest level of tzedakah involves helping someone avoid poverty by teaching them a skill, making them a loan, helping them find a job, or start a business. We have tried to give in areas that help prevent poverty in the first place (e.g., literacy). I’d like to find a way to combine my skillset and my money to do more of the above, but my pro bono work has often been in other areas.
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We on’y use our IRA for our larger donations. We still send smaller ones to a number of other places.
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Since we are on the subject of charitable donations and tax-advantaged ways to give them, I’m just throwing out a reminder that one can also give appreciated stock.
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In some ways now, sometimes it is important in some instances to not give anonymously - in order to stimulate those in the community to be spurred into also giving.
During one’s lifetime, faith-family-friends – trying to keep our thoughts aligned to have enough in retirement funds and keep up with the resources and time on those areas of importance.
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That’s a good reminder. I think stock donation is how some of our church members do their giving.
Another idea is to send that stock to DAF (Donor Advisor Fund) for future charitable giving. Unless it’s a big donation putting you way above standard deduction, there won’t be a charitable gift tax write-off. But you’ll avoid paying taxes on the gains, and the proceeds will grow tax free. You have to be absolutely sure you’ll never want the fund yourself/heir because funds can only be used for charitable giving. (Same for the beneficiaries who inherit the DAF). Before retirement, we created a DAF from an appreciated investment. I now do my monthly church donations via DAF autopay. (If you want to create DAF, consult your financial advisor as situations may vary.)
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And, you can combine them: I’m pretty sure you can give appreciated stock to a DAF in the same way as you can with a charity.
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Yes, thanks - that’s what I meant. Edited to clarify.
I can’t find that other retirement thread so I hope this is the right one to post in. DH’s company may be doing a round of layoffs/offering packages. DH is symbolically waving his hands wildly hoping he’ll get a package or at least offered in a first round of voluntary separations. Unfortunately, they have lost a lot of their contractors and his right hand man lives overseas and will be required by his country’s regulations to retire in August. So unfortunately, they have lost a lot of people in his department and he is considered critical. This worries me in that I am fearful he won’t get a package offered to him. One way or the other this is most likely his retirement year. It would just be nice if it would come with a little sweet benefit. I know many others are fearing a layoff, but we are so hopeful that this opportunity might come our way. We are forever grateful that we are in this position. Does anyone have any suggestions for how one might increase their chances of getting a package offered? Our concern is that his boss won’t want him to leave and his boss will probably want a package himself.
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I am no expert on layoffs but I think the best way to get a package is to be easily replaceable. But, I would ask @blossom. This is her area of expertise, I would think.
My plan is to retire in a year or two. I have purposely groomed a person to take over. He is about ready and he will get a promotion when it happens. He is very aware of my plan. I know my firm will be cutting resources in the next 3 years (I have seen the target) and my cost is on the high side, so I will raise my hand when the time comes.
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That’s really awful.
Is there normally a limit (assuming the facility isn’t sold) to how much rates increase? Costs do go up. What is the typical contractual language for handling increases? In general - not with a change in ownership as was laid out in the article.
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We talked earlier about RMDs. Given my age, I would need to start taking RMDs at 73, but I expect that I will still be working. But, according to this article,
There’s an exception for workplace retirement plans: If you are still working and own no more than 5% of the business sponsoring your plan, you can hold off taking RMDs from that plan until you retire—no matter what age you are.
If I sold the company that employs me to ShawWife, our dynasty trust or to the kids, I wonder whether this would obviate the requirement to take RMDs as long as I was working? (The company has almost no value as it pays a variety of expenses, a salary to me, and then a bonus that roughly zeroes out profits, so it is a company that makes essentially zero profit each year).
If the answer is yes, would I want to do so. While I am working, I am in a high tax bracket so the incremental tax rate is very high. I could wait to withdraw until I stop working and get the benefit of tax-free accumulation, but my RMDs would be even higher when I ultimately decided to take them. Plus, if there is money left in the 401k after ShawWife and I pass, our kids would have to pay estate tax (at least in Massachusetts). My current plan was to draw down my 401k and let money accumulate in the Trust outside of the estate. How much is the tax-free deferral worth relative to the potential estate tax liability?
Taking RMDs Can Be Tricky. Here’s the Right Way.
People 73 and older generally must take distributions from tax-deferred retirement accounts or face hefty penalties.
Read in Barron’s: Taking RMDs Can Be Tricky. Here’s the Right Way.
Shared from Apple News
H started taking RMD at age 73-last year. Since all his retirements were rollover to a designated IRA or SEP plan in the same investment company- they figure out how much per year. It’s really been easy to do as H then transfers it into a regular investment account within the same company. The above situation sounds complicated. Each year H’s amount will increase- so there’s that issue. While he is still actively investing and trading on his own- our quarterlies are somewhat unpredictable year to year. But, we always do the safe harbor (110%).
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I think that’s a really good question. I know a family that picked this kind of arrangement for elderly parents, feeling secure that after the hefty buy-in there was enough income left to cover monthly fees. But over possibly many years, they might not be able to keep up.
I would have trouble handing over half a million to a company and not own the condo. Having a handyman/woman on speed dial would be helpful.
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