Year-End Planning: Charitable and Family Giving

This podcast discusses year-end planning strategies for charitable and family giving, including maximizing tax benefits and exploring opportunities to optimize financial plans. It highlights ways to leverage charitable contributions for tax reductions and explains the annual gift exclusion and lifetime gift exemption for family gifting, providing practical examples for retirement planning.

Charitable Giving

• 00:05:30 Charitable giving's tax impact is only relevant if itemizing deductions above the standard deduction. The primary motivation for giving is often fulfilling charitable intentions, with various methods like direct checks, appreciated stock donations, and qualified charitable distributions from IRAs.

• 00:12:34 Batching charitable donations into a single year can maximize tax benefits, especially during a Roth conversion or high-income year. Donor advised funds allow contributions to be deducted immediately, with grants distributed to charities in subsequent years, offering flexibility and tax advantages.

Family Giving

• 00:14:43 The annual gift exclusion allows individuals to gift up to $118,000 per person per year without tax implications. Married couples can combine their exclusions, allowing significant gifting to family members without tax reporting.

• 00:16:40 Unlimited educational and medical expense payments are permissible when paid directly to the institution, offering a strategy for supporting family members' needs. A resource titled 'Things to Consider Before the End of the Year' is available for a quick checklist of year-end planning opportunities.

Retirement Plan Feasibility

• 00:18:01 State tax policies can significantly impact retirement plan feasibility, especially for those with constrained resources and relying on pensions. The example highlights the importance of considering pension taxation in different states when making retirement location decisions.

Pie Cake Rebalancing

• 00:29:42 The podcast discusses the process of rebalancing the 'pie cake' approach to retirement planning, focusing on Layer 2 (the income floor) and Layer 3 (the upside portfolio). This annual process involves recalibrating spending assumptions, financial asset values, and feasibility in the third quarter to determine how much to replenish Layer 2.