Retirement marks a significant milestone – a time in your life when you can spend more time relaxing and traveling than working.
It’s also a unique opportunity to find purpose and fulfillment in new and meaningful ways and to explore what brings you joy and a sense of accomplishment following your career.
You – like many San Diegans – may find yourself turning to philanthropy when you reach retirement.
“For some retirees, charity is as important to their identity as an extra vacation or home upgrade,” shared Lorenzo Sanchez, CFP, partner and senior wealth advisor at Pathview Wealth Advisors.
Philanthropy is a natural way to engage in activities that align with your values and interests and to give back to the community that supported you throughout your life.
It’s also a way to make a positive impact and reap personal rewards, from emotional and social benefits to financial advantages.
Emotional & Social Benefits
As you transition into retirement, staying active and engaged becomes increasingly important. Philanthropy offers a meaningful way to remain connected to your community and find personal fulfillment during this new chapter of your life.
The most common emotional and social benefits of retirement philanthropy are:
- Sense of Purpose and Fulfillment: One of the most profound benefits of charitable giving is the sense of purpose it provides. After years of professional work, you may seek meaningful activities with a sense of accomplishment. Supporting charitable causes can fill this void and provide a deep sense of fulfillment that comes from knowing you are making a difference.
- Strengthening Community Ties: Charitable giving helps retirees stay connected with their community. By contributing to local causes, you can see the direct impact of your generosity. This engagement fosters a sense of belonging and strengthens your ties to San Diego, creating a vibrant region that benefits everyone.
- Enhanced Social Connections: Philanthropy often involves interaction with others, whether through volunteering, attending charity events or participating in fundraising activities. These social interactions can offset feelings of isolation and loneliness, which are common in retirement, and help build new friendships and networks.
With over 10,000 nonprofit organizations in San Diego County, charitable opportunities are plentiful.
Bill Geppert, for example, has been a mainstay in San Diego’s nonprofit community. He serves on multiple boards, gives through his donor-advised fund (DAF) at San Diego Foundation (SDF) and helps with numerous charitable projects.
Years ago, during his Cox Communications retirement party, two of Bill’s closest friends challenged him to cycle from San Francisco back to San Diego to raise money for a nonprofit organization close to Bill’s heart – Challenged Athletes Foundation.
Bill and his wife Amy have helped the Challenged Athletes Foundation grow its impact to support those with physical challenges so they can pursue active lifestyles through physical fitness and competitive athletics.
Photo Credit: Challenged Athletes Foundation
“What these amazing athletes achieve and mentally push through is so much more than what I will ever accomplish,” expressed Bill. “Meeting and getting to know these incredible and inspiring people pushed me through many days when the hill seemed too steep, or my legs were too tired to carry on.”
Bill and his wife Amy quickly accepted the cycling challenge. And the rest, as they say, is history.
Not all retirees can cycle across the country for causes they care about, but they can make an impact in their own way and enjoy the social and emotional benefits.
If you’re not sure where to begin your philanthropy, take the time to research nonprofit organizations that align with your interests. Look for reputable charities with a proven track record of impact and financial transparency. Websites like Charity Navigator and Candid (previously GuideStar) are excellent resources for nonprofit research.
Or, download our Nonprofit Giving Guide to discover 25 local, grassroots nonprofits making a difference.
Financial Benefits
While the emotional rewards of charitable giving are crucial to a fulfilling lifestyle in your golden years, there are also financial advantages that can enhance your retirement experience, including:
- Tax Advantages: Charitable giving during retirement provides significant tax benefits. Donations to qualified organizations are tax-deductible, which can lower your taxable income and reduce your overall tax burden. One standout strategy for retirees is using the Qualified Charitable Distribution (QCD) from IRAs, allowing individuals aged 70½ or older to donate up to $100,000 annually without counting the distribution as taxable income. This can be an effective way to meet required minimum distributions (RMDs) while supporting your favorite charities in San Diego.
- Avoiding Capital Gains Tax: Donating appreciated assets, such as stocks, mutual funds or real estate, directly to charity or fund at a community foundation can help avoid capital gains tax. This means you can donate the full market value of the asset without paying taxes on the appreciation, maximizing the dollars and impact of your gift.
- Estate Planning Benefits: Incorporating charitable giving into your estate plan offers additional financial advantages. Charitable bequests, charitable remainder trusts (CRTs), and donor-advised funds (DAFs) are tools that can help manage your estate more efficiently, reduce estate taxes, and ensure your philanthropic goals are met during or after your lifetime.
By leveraging the financial benefits of charitable giving, you can maximize the impact of your donations while enjoying tax savings and effective estate planning. These financial strategies make philanthropy a smart and rewarding component of your retirement plan.
