Planning Options for Your Stage in Life

Retirement planning strategies for your career years

Retirement goals and strategies can change significantly throughout a career. Fortunately, there are easy options for making meaningful gifts while retaining the flexibility to adjust to changes.

One of the simplest ways to merge gift planning and retirement planning is by naming a nonprofit like Indiana University as the beneficiary of a retirement plan, life insurance policy, bank account, or other financial account. You have the flexibility to designate IU as the primary beneficiary, a secondary or contingent beneficiary, or a partial beneficiary, making the process simple and reassuring.

To control the distribution of your assets after death and provide for loved ones, it is vital to use a will and/or living trust. These estate planning tools are also comfortable, convenient ways to shape your philanthropic legacy. It is easy to add a charitable gift at the time of creation or to change an existing will or living trust.

If you haven’t yet created one or both of these documents, now is a good time to consult an attorney and get the process started. If your will or trust is already in place, remember to review it regularly. Your attorney can help you ensure that your long-term planning goals are still being met. Your attorney can also help you include or increase a charitable gift to support Indiana University’s mission.

The later career years sometimes present the opportunity to make a gift that supports a nonprofit today while providing you with immediate tax benefits and future income. If you receive unexpected taxable income—for example, a sizable bonus or inheritance—consider the benefits of a deferred charitable gift annuity (CGA).

Example

Sara, a corporate executive, receives a $50,000 bonus. She would like to find an effective way to use the money for future retirement security while paying as little current tax as possible. Sara learns that a deferred annuity could help her meet her current tax and charitable goals while providing a new income stream in retirement.

She uses her $50,000 bonus to set up a gift annuity with Indiana University, and she defers the start of annuity payments for ten years. Her annual payout will begin at age 65, and, because of the deferral, the payment rate is higher than it would have been for an immediate annuity. The gift portion qualifies for an immediate charitable deduction if Sara itemizes—a deduction that is also higher than if she had chosen to begin payments right away.

A final word

There are many ways to give, no matter where you are in life. Strategic planning can help you be more effective in your philanthropy. We would be pleased to help you and your advisors explore options for making an important impact in a way that fits your current situation and goals. Contact us to get started.

All examples are for illustrative purposes. Contact us for current rates and tax information.