As you approach or enter retirement, it’s natural to think about “giving back” – helping children or grandchildren get started, supporting a favorite charity, or leaving a meaningful legacy. Around the holiday season, those instincts often feel even stronger.

What many pre-retirees and new retirees don’t realize is that how you give can be just as important as how much you give. A bit of planning can help your generosity go further, reduce your tax bill, and keep your own retirement on steady footing.

Here are some practical ways to give charitably – and to loved ones – in tax-efficient ways. 

1.Start with Your Plan, Not the Tax Code 

Before jumping into specific strategies, it helps to zoom out and look at your overall picture. Ask yourself how much you can comfortably give without putting your own retirement income at risk, whether your top priority is helping family now, supporting charities during your lifetime, or leaving a legacy later, and whether there are upcoming “tax milestones” – such as retirement, starting Social Security, or required minimum distributions from retirement accounts – that might change your income. 

For many households, the early “go-go years” of retirement, roughly the first 5–10 years, are a time when income and spending are somewhat flexible. Coordinating gifts and charitable giving with your broader retirement income and tax plan can help those dollars work harder for everyone involved. 

2. Tax-Smart Gifts to Children and Grandchildren 

If helping family is a priority, you can be intentional about how you do it. One way is to use the annual gift tax exclusion. In 2025, you can give up to $19,000 per person without needing to file a federal gift tax return, and married couples can effectively double that by making “split” gifts. These gifts are usually not taxable to the recipient and can be a simple way to move wealth to the next generation over time. 

Another approach is to pay tuition or medical expenses directly to the school or medical provider. When done correctly, those payments generally do not count against the annual gift limit and can be a very tax-efficient way to help a grandchild through college or support a family member facing medical bills. 

You can also think beyond cash. Helping a working child fund a Roth IRA contribution, or seeding a modest, diversified investment account, may do more for their long-term security than a one-time gift that is quickly spent. Whatever approach you choose, it’s important that your giving fits within a plan that keeps your own retirement on track. 

3. Charitable Giving: Make the Rules Work for You

If charitable giving is part of your life, you have more options than simply writing a check. If you hold investments in a taxable account that have grown a lot over the years, you may be able to donate some of those appreciated shares directly to charity. In many cases, this lets you avoid capital gains tax you would owe if you sold the investment, while still potentially receiving a charitable deduction if you itemize. The charity receives the full value, and you can use the cash you might have donated to rebalance your portfolio.

For IRA owners age 70½ or older, Qualified Charitable Distributions (QCDs) offer another tool. AQCD lets you send money directly from your IRA to a qualified charity. Those dollars can count toward your required minimum distribution, but they are excluded from your taxable income if the rules are followed. This can help reduce the portion of Social Security that is taxable, keep you out of higher tax brackets, and potentially lower future Medicare premium surcharges tied to income. For 2025, individuals can generally direct up to $108,000 per year in QCDs across all charities, with additional one-time options (up to $53,000) to fund certain charitable gift arrangements. Because the rules are technical, it is wise to coordinate with your advisor and tax professional before taking action.

Many retirees now use the standard deduction instead of itemizing. In that case, it may make sense to “bunch” several years of charitable gifts into a single year. By grouping donations together, you may exceed the standard deduction that year, then go back to the standard deduction in other years.This can be done with direct gifts or through special charitable accounts designed for this purpose.

4. Coordinate Your Giving with Your Tax Brackets

Retirement often comes with shifting income patterns: wages stop, Social Security and pensions start, and RMDs eventually begin. That means there may be “sweet spots” where charitable gifts or larger family gifts are especially powerful from a tax standpoint. For example, once RMDs begin, you might rely more on QCDs to keep taxable income in check. In another year, it might make sense to gift appreciated securities when you already expect higher-than-usual capital gains, or to time a larger one-time gift in a year when your income is unusually high or unusually low.

A coordinated plan can help you support the people and causes you care about while smoothing out your tax picture over time. 

5. Avoid Common Pitfalls 

A few common mistakes we see include giving generously to family without a clear sense of how it will affect long-term retirement security, donating only from checking or savings when appreciated investments or IRAs might be more tax-efficient, and forgetting to align lifetime giving with your estate plan and beneficiary designations. Because retirement, tax, and estate planning all intersect here, it can be valuable to have your financial advisor, CPA, and estate-planning attorney working from the same page. 

6. Charitable Giving and Gifting Checklist

Before year-end, it may help to ask yourself a few simple questions: Have we estimated how much we can give this year without compromising our retirement income plan? Are we using the annual gift tax exclusion in a way that truly supports family where it matters most? Do we hold appreciated investments that might be better to donate than to sell? If we are 70½ or older, should QCDs from our IRA be part of our charitable strategy? Are our beneficiary designations and estate documents aligned with the legacy we want to leave?

Disclosures: This material is for informational purposes only and should not be considered investment advice. Past performance is no guarantee of future results. Investing involves risk, including the potential loss of principal.