Kim Laughton, president of Schwab Charitable, discusses how donor-advised funds can benefit advisers as well as clients. She says advisers who make charitable planning a focus of their practices through donor-advised funds can deepen their relationships with clients.
This article offers five tips for year-end charitable giving, including avoiding giving cash, considering other sources for the donation such as IRA rollovers, using donor-advised funds, focusing on local charities, and scrutinizing the recipients to ensure donations are being used as promised. Access slides and a recording from Bob Keebler on how to integrate charitable remainder trusts into your overall charitable, tax and financial planning strategies.
Charitable donations to donor-advised funds increased last year as a result of tax planning for expected changes in the law, but clients are making such donations a part of their regular financial strategies. Schwab and Fidelity clients donated record amounts to charitable causes, and advisers were instrumental in generating those contributions. Clients gave to donor-advised funds recommended by advisers as well as donating appreciated stock.
For those who had planned to retire early but cannot afford to do so, some advisers say there's another option: a "practice retirement." Under the strategy, near-retirees stop funding their retirement but continue working. Meanwhile, they divert some of their savings into activities they planned to pursue in early retirement, such as travel. Because "practice" retirees can afford to delay Social Security benefits while still working, they will increase the income they receive later.
Some near-retirees and retirees can use home refinancing as a tool, getting rid of home debt faster in the current low-rate environment, experts say. In some cases, the amount that older Americans could save by refinancing is greater than what they would earn on an investment, advisers say.