We Need to Talk About Your Retirement 'Spending'

Smaller gifts to help loved ones get their financial footing can have a bigger impact than larger ones via inheritance later on. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_improvingfinances&utm_content=49543&elqTrackId=2beac467c8094cc38009a692b8b75b36&elq=67832a2a0744465086150ca741636a6f&elqaid=49543&elqat=1&elqCampaignId=24717) [Improving Your Finances] Improving Your Finances with [Christine Benz]( [Christine Benz] I spend a lot of time talking to retirees about their spending plans. Many of them proudly tell me that they're spending far less than the 3%-4% initial withdrawal amounts that are often bandied about in the context of safe spending rates. They tell me they've been good savers, they're frugal, they don't need more. Underspending seems to be part of their identities. What they seem to underrate, however, is that an extra portfolio withdrawal doesn't have to be used on their own spending. Instead, they could use the money to help loved ones find their financial footing. To illustrate, [I shared a story]( of how an early financial gift from my parents helped much more than the larger inheritance I eventually received. My piece was about gifting to loved ones, but ongoing charitable contributions can also be a great source of satisfaction in retirement. They can yield a tax break in some cases, as tax and IRA guru Ed Slott and I discussed [in this video]( on year-end charitable giving strategies. With most taxpayers not itemizing deductions, the [qualified charitable distribution]( or QCD, stands out as a wonderful giving strategy for people who are age 70.5 and above. Donor-advised funds are also a great idea for people of any age who want to give to charity. Amy Arnott discussed their pros and cons [in this article]( and she has delved into some of the major ones: [Vanguard Charitable Endowment]( [Schwab Charitable Fund]( and [Fidelity Charitable Gift Fund](. I'm still on the fence about donor-advised funds for my own plan—their fees mean that I wouldn't want the funds to linger in the account—but Amy's series has helped me decide which one I would use if I did. Finally, I've long admired the work of syndicated columnist Scott Burns, who's been writing about retirement and portfolio planning for The Dallas Morning News and other publications for years. Jeff Ptak and I were thrilled to have a chance to [chat with him recently for our podcast](. We covered what higher yields mean for retirement portfolios, safe spending rates, and working longer, among other topics. With warm regards, Christine Benz [We Need to Talk About Your Retirement ‘Spending’]( Big inheritances can be a sign of underconsumption and suboptimal planning. [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] [Yes, RMDs Can Improve Your Portfolio]( Required minimum distribution-related tax bills hurt, but surgical pruning of problem positions can help you raise cash and reduce risk. [Read More]( [Year-End Charitable-Giving Strategies]( Tax- and retirement-planning expert Ed Slott delves into qualified charitable distributions and donating appreciated securities. [Watch Now]( [3 Tax-Friendly Charitable-Giving Strategies for Retirees]( Consider these ideas before filing your taxes. [Read More]( [Pros and Cons of Donor-Advised Funds]( Donors benefit from an immediate tax deduction, tax-free growth, and investment flexibility. [Read More]( [How Vanguard’s Charitable Endowment Program Stacks Up]( It’s arguably the best donor-advised fund affiliated with an asset-management firm for donors who plan to maintain higher account balances. [Read More]( [How Fidelity’s Charitable Gift Fund Stacks Up]( Examining the administrative fees and underlying investment options for the biggest donor-advised fund in the U.S. [Read More]( [How Schwab Charitable Fund Stacks Up]( We unpack the fees and investment choices of America’s second-largest donor-advised fund. [Read More]( [Scott Burns: The Case for a Simple Retirement Plan]( The veteran retirement columnist reflects on a two-fund portfolio, safe spending rates, and the role of home equity in retirement cash flows. [Listen Here]( Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2023 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602