Happiness in Retirement

In this episode of the Happiness in Retirement Program, I delve into two powerful charitable giving strategies: Qualifying Charitable Donations (QCDs) and Donor Advised Funds (DAFs). We start by discussing the current tax landscape, particularly the impact of the 2017 Tax Cut and Jobs Act, which significantly increased the standard deduction and limited itemized deductions, leading to a decline in charitable giving.

I explain how QCDs allow individuals over 70 and a half to donate directly from their IRAs to charities, satisfying required minimum distributions (RMDs) without incurring taxes on the withdrawn amount. This strategy not only helps reduce taxable income but also maximizes the amount donated to charity.

Next, we explore DAFs, which offer flexibility for individuals of any age. By contributing to a DAF, you can receive an immediate tax deduction while deciding later which charities to support. This approach allows for strategic tax planning, especially in high-income years.

I also discuss how QCDs and DAFs can complement each other in a broader giving strategy, including tips on how to maximize tax benefits through bunching donations and combining Roth conversions with DAF contributions.

Throughout the episode, I emphasize the importance of consulting with financial and tax advisors to navigate these strategies effectively. I hope you find this information valuable as you consider your charitable giving options. Don't forget to subscribe and share this episode, and tune in next week for an intriguing discussion on Swedish death cleaning!