Quick Summary: Year-end charitable giving can be a meaningful way to support the causes that matter to you while coordinating your retirement tax planning, required minimum distributions (RMDs), and long-term legacy goals. At The Whisler Agency, we help Central Illinois families consider charitable strategies within the context of a broader financial plan, working alongside their tax and legal professionals when appropriate.

For retirees, high-net-worth families, and charitably inclined households, the most effective giving decisions are often made before the final weeks of December. A thoughtful review can help ensure generosity fits comfortably within your income needs, investment strategy, and estate planning objectives.

Charitable Giving Starts With a Planning-First Perspective

We believe charitable giving should be connected to the complete financial picture—not handled as an isolated year-end transaction. Before choosing a giving method, we help clients revisit retirement income needs, anticipated tax exposure, RMD obligations, portfolio withdrawals, and the legacy they want to create for family and community.

This planning-first approach is especially valuable for retirees who are transitioning from accumulation to distribution. The source of a charitable gift may matter as much as the amount. Coordinating gifts with an income distribution plan in retirement may help preserve flexibility, support tax-efficient investing, and reduce the need for unplanned portfolio sales.

Qualified Charitable Distributions and RMD Planning

For eligible IRA owners age 70½ or older, a qualified charitable distribution (QCD) may be worth discussing. A QCD generally allows a direct transfer from an IRA to a qualifying charity, subject to annual limits and applicable rules. For individuals who must take RMDs, a properly executed QCD may count toward the year’s RMD while excluding the transferred amount from taxable income.

That distinction can be important. Rather than receiving an IRA distribution and then making a separate charitable contribution, an eligible client may be able to direct funds to charity from the IRA. Depending on the circumstances, this may be particularly useful for taxpayers who do not itemize deductions or who want to manage adjusted gross income. Lower adjusted gross income can potentially affect other retirement planning considerations, including Medicare premium surcharges and the taxation of Social Security benefits.

QCD rules are specific, and timing matters. The transfer generally must be made directly from the IRA custodian to the eligible charity, so we encourage clients to begin RMD and charitable giving conversations well before year-end.

Donor-Advised Funds for Intentional, Flexible Giving

A donor-advised fund can offer another way to organize charitable giving. With this approach, a donor makes an irrevocable contribution to a sponsoring organization, may be eligible for a charitable deduction in the year of the contribution if all requirements are met, and can recommend grants to qualified charities over time.

For families with a high-income year, a concentrated giving goal, or a desire to involve children and grandchildren in philanthropy, donor-advised funds may provide useful flexibility. They can also support a more deliberate legacy-planning conversation by creating a family framework for charitable decisions.

We help clients evaluate how a donor-advised fund may fit alongside portfolio management, asset location, retirement tax planning, and annual cash-flow needs. The appropriate strategy depends on the client’s charitable priorities, liquidity needs, tax situation, and time horizon.

Gifting Appreciated Assets May Support Tax Efficiency

Cash is not the only asset that can be used for charitable giving. In certain situations, gifting long-term appreciated securities directly to a qualified charity may be more tax-efficient than selling the investment, recognizing capital gains, and then donating cash. A properly structured gift of appreciated assets may allow the donor to support a charitable organization while avoiding capital-gains tax on the donated property.

This strategy requires coordination. We consider the investment’s cost basis, holding period, concentration within the portfolio, the charity’s ability to accept the asset, and the role the holding plays in a client’s overall risk profile. For high-net-worth families, charitable gifts can sometimes complement portfolio diversification and investment management decisions, but the gift should always align with the family’s goals and financial capacity.

Beneficiary Designations and Estate Planning Conversations

Year-end giving can also be a natural time to review beneficiary designations, trusts, wills, and charitable intentions within an estate and legacy plan. Retirement accounts, life insurance policies, and other assets may pass according to beneficiary designations rather than a will alone. Reviewing these details regularly can help ensure that charitable wishes and family priorities remain aligned.

For some families, naming a charity as beneficiary of all or part of a retirement account may be worth exploring because traditional retirement account assets can carry income-tax considerations for individual heirs. Other assets may be more appropriate for family beneficiaries. These decisions are highly personal and should be evaluated with qualified legal and tax professionals as part of a coordinated estate and legacy planning process.

Bringing Giving Into Your Retirement Tax Plan

At The Whisler Agency, we view charitable planning as one component of retirement tax planning in Peoria and throughout Central Illinois. We coordinate the conversation around RMD strategies, Roth conversion considerations, Social Security optimization, withdrawal sequencing, Medicare planning, and long-term income needs.

There is no universal charitable-giving strategy. A QCD may be appropriate for one retiree, while a donor-advised fund, appreciated asset gift, or beneficiary designation may better serve another household. In many cases, a combination of strategies may be considered over several years rather than solely in December.

Tax laws, contribution limits, eligibility requirements, and deduction rules can change, and tax treatment depends on individual circumstances. We do not provide tax or legal advice. Before implementing any charitable strategy, clients should consult their tax advisor and estate-planning attorney to review eligibility, documentation, timing, and the potential tax consequences.

Plan Before the Year Ends

Year-end is an important opportunity to align generosity with your financial priorities. Whether you are considering a qualified charitable distribution, a donor-advised fund, a gift of appreciated securities, or an estate-planning update, we can help you examine how charitable giving fits within your broader retirement income and legacy plan.

Schedule a year-end planning conversation with The Whisler Agency to review your charitable goals, RMD strategy, retirement tax planning, and the steps that may help support the people and organizations you value most.

This commentary was prepared by a 3rd party, Levitate, for Tim Whisler. It does not necessarily reflect the views of Foundations Investment Advisors, LLC (“Foundations”) and is provided for educational purposes only, and the contents are solely maintained by and the responsibility of the applicable 3rd party. The 3rd party content is subject to change at any time without notice, and does not represent an express or implied opinion or endorsement of any specific investment opportunity, investment strategy, or planning strategy. Foundations in no way deems reliable any statistical data or information obtained from or prepared by third-party sources in this commentary, nor does Foundations guarantee its accuracy or completeness. No legal or tax advice is provided or intended.