What’s your giving plan?

A critical part of a good financial plan is understanding your cash flow needs, now and in the future. How much income do you need to live the life you want?

Making ends meet can be tough, especially early in life: dealing with student debt, purchasing a home, starting a family, not to mention tackling any consumer debt that might have piled up along the way. But with a sound spending and savings plan, some will find that as debts are paid off and the kids leave home, their income actually exceeds their needs. With good incomes and a financial plan that illustrates how much they need to put away to achieve their retirement goals, it’s quite possible they will find they have enough not only for themselves, but to share with others and give back to society.

Now, there’s a different kind of planning challenge! How do you give efficiently and with maximum impact to the causes that are important to you? Enter Planned Giving.

Planned Giving is a method of supporting charities that enables philanthropic individuals to make significant gifts during their lifetime or at death as part of their overall financial and/or estate plan.

With Planned Giving, there are many options available to the donor. The simplest option, and the one practiced by many Canadians, is giving money to a charity on a regular basis – per pay cheque, monthly, or annually. The donor gets a receipt and can claim the donation at tax time.

For donors who don’t want to give away large sums of money before they know for certain they won’t need it, a bequest of money or property in their Will accomplishes the same thing on a larger scale. There can be significant tax benefits to bequests, especially if the donated property is chosen carefully. For example, non-registered securities that have appreciated in value or fully taxable RRSP accounts.

As the size of the intended gift grows, more complex and sophisticated Planned Giving strategies become viable, including charitable gift annuities, life insurance, charitable trusts, and donor advised funds or even full-fledged foundations. If you are considering a significant gift, either during your lifetime or after you pass on, speak with your financial planner and work with a lawyer who specializes in Wills and Estates to make sure your donation is made efficiently and accomplishes the goals that are important to you.

A comment in closing: Whether you are already wealthy or working your way there, there is no better way to feel rich, financially and in spirit, than to give to others right now. It makes you appreciate what you have so much more when you share it with another person. Once you decide to make giving a part of your Life Plan, a Money Coach can help you make it part of your Financial Plan.

Noel D’Souza is a Money Coach and Financial Planner with a passion for helping Canadians get the most out of their money… and their life!