Many retirement advisers encourage you to consider what your number is—the annual income you want to have available in retirement. Identifying this number now can be extremely helpful as you make financial plans to meet that need. Each person’s number will vary based on their goals and lifestyle. How much will be enough to provide for your needs in future years? Are you fortunate enough to have more than enough?
Some financial experts make the case that since the future is unknown, your assets should only be distributed at your death. Others suggest that if you have more than enough now, you could transfer assets to family members or your favorite ministries and enjoy seeing them benefit from your generosity while you are living. There’s a variety of advice to consider.
If you’ve identified your number and determine that you have more than enough, you may find yourself ready and willing to give now. If that’s the case, what assets should you give? In practical terms, certain assets may provide greater benefit than others.
Consider assets that have appreciated in value. If they are gifted to family members during your lifetime, they retain your original cost basis and will be subject to capital gains tax on the appreciation when sold. However, if you transfer highly appreciated assets to charity, those assets will not be subject to the capital gains tax. The result can be an increase of 15–25 percent of the asset value when it’s given as a charitable gift rather than to a personal beneficiary.
There are rules and some limitations regarding charitable gifts of appreciated property. But when properly applied, generosity strategies can have a positive impact on your current gifts as well as the final distribution of your estate. If you’d like some advice or help in exploring your giving options, please email us at contactcenter@cdfcapital.org or call us at 888-540-7112.
