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Giving Back Once You Have Hit Retirement

Giving Back Once You Have Hit Retirement
September 29
18:24 2014

Once you have hit retirement age and have decided to take some time for yourself you might think that your days of giving back are over. However there are benefits to giving back once you have settled into your retirement routine. This can be a very rewarding feat for you while at the same time giving back to your community. This article will help you to explain how giving back during your retirement is not quite the same as giving back while you are still in the work force.

Donating Myths

When you start to research the different ways to give back while in retirement you should be aware that there are many different myths that are floating around. Some of these myths are regarding parts of the tax code that have expired and others are just urban myths that have been passed from generation to generation. However it is still important that you know exactly what these myths are and how to avoid them.

One of the most common myths is the belief that if you are still working that you can attach a dollar amount to your professional time. This would be how much you think your professional time is worth. Then once you have this figured out then you can donate your services to a non-profit organization. This would be like volunteering your time but you would use it as a tax deductible. Unfortunately this is only a myth and is very far away from the truth. Volunteering may be a rewarding experience but it is not tax deductible. However you should know that you could claim any charity related expenses such as mileage on your taxes so something is better than nothing.

IRA Deductions

It was once possible to donate funds fro your IRA to a charity cause. By doing this you could avoid the taxes on the IRA distribution. However it is no longer possible to do this and have the gift to the charity count toward the minimum distribution that was required. This is an option that has since expired and you can no longer count this as a tax deduction.

Employer Contributions

If you are still working with several years left before retirement you have the possibility of raising your retirement account. You can do this by simply adding more to your retirement account every month. This can be extremely helpful if your employer matches your contribution. This will help you to get the most out of your retirement future.

Use Your 401k Money Wisely

If you still want to be giving back once you have retired you can work and get a strategy in place as to where you should invest the money from your 401k. There are many plans that offer a social investment option. You will need to be sure that by giving back you will still meet the goals that you have set for long-term stability and income. Once you have completed that then it is possible that a portion of your 401k can be used to support anything from education to the environment or any other cause that you wish to support and help you to give back.

Planning your retirement takes many years of preparation. You need to take into account all of your financial commitments, which should also include any charities, that you wish to support. If you plan the proper way for many years before your retirement it is possible that even when you are on a fixed income that you will still be able to give back to the charity that you wish to. If you have any questions a financial planner will be able to assist you with making the preparations needed.

Image via Flickr.com

 

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