Supercharge retirement giving with a donor-advised fund account.
by Denise Schuh Senior Manager, Donor and Advisor Solutions & Complex Assets
Scenario: Jane Donor is a 50-year-old business owner who contributes $30,000 in cash annually to a number of small charities. Jane usually writes a check because her charities are too small to be able to accept appreciated assets. Jane is concerned that her income will not allow her to sustain her level of annual giving after retirement.
Advisor’s Recommendation: Open a donor-advised fund account in the current year with appreciated illiquid assets valued at $100,000, and continue contributing $30,000 annually to the donor-advised account beginning the following year, until retirement at age 65. Jane will achieve greater tax savings because of the capital gains tax savings, and her excess funds will be invested for greater giving potential.¹
Outcome: For the same cost of contribution,² Jane will benefit her charities by an additional $321,567, with $61,567 more in tax savings than if she continues her current direct annual cash contributions. Moreover, if she stops contributions at age 65 in both scenarios, Jane can sustain the same level of annual giving from her donor-advised fund account for 11 more years.
Donor-Advised Fund for Retirement
About the Author:
Denise serves our most valued investment advisors and affluent clients as a primary point of contact for reviewing and accepting complex asset donations and onboarding large and sophisticated relationships. Prior to joining Schwab Charitable™, Denise served as a senior trust officer, providing estate and trust services for high-net-worth families in Wisconsin. She joined Charles Schwab & Co., Inc. as a High-Net-Worth Trust & Estate/Tax Specialist, a role in which she partnered with Financial Consultants to provide proactive estate, charitable giving, and tax-planning guidance to Schwab’s high-net-worth families. Denise holds a J.D. from Northern Illinois University of Law.