EPISODE #073

CHARITABLE REMAINDER TRUST: WHY YOU SHOULD HAVE IT

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The 19 Sources of Retirement Income: Charitable Remainder Trust

In this episode, John continues his series on the 19 Sources of Retirement Income. He explains why you might consider using a Charitable Remainder Trust to lower your taxes and boost your income in retirement.

John has lectured extensively on financial planning. He is also the author of 5 Ways Your Wealth is Under Attack and It’s Your Wealth – Keep It.”

Don’t miss John’s key points:

  • This is how a charitable remainder trust works:
    • You take a highly appreciated asset or property that you own and gift it to a charitable remainder trust.
      • You get an immediate tax deduction, reducing your taxable income for that year.
    • The trustee sells the asset and pays no capital gain tax on the sale.
    • The trustee reinvests the proceeds of the sale into income-producing assets.  Then pays you income for a fixed term, or for your lifetime. (You will pay taxes on that income.)
    • When you die, or at the end of the term, the remainder of the money in the trust goes to a charity you choose.
  • This is especially useful if you end up in a higher tax bracket in retirement than when you were working—which many people do.

Plus:

  • Because of the tax benefits, you will get more income from a charitable remainder trust than from the same amount of money invested in a traditional income-producing vehicle.
  • Since a charitable remainder trust does not pass any money to your heirs, you will want to use a different vehicle for that, such as a life insurance death benefit.
  • This trust can be part of a strategy that gives a portion of your estate to your favorite charity, preserves your enjoyment of retirement by dramatically increasing your income, and still passes your money to your children.

For more on incorporating the charitable remainder trust into your retirement strategy, listen here. Then download our 19 Sources of Retirement Income and find out more ways to increase your retirement income. You’ll also find other great resources on our website such as our my book, 5 Ways Your Wealth is Under Attack. You can also preorder my new book It’s Your Wealth, Keep It. If you are new to Smallwood Wealth, schedule a Wealth Curve Conversation by clicking this link.

You can also connect with us on social media, or call us at (800) 797-1000. Set up a free, no-obligation 30-minute phone call with a qualified advisor.

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