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  • Writer's pictureMark Fonville, CFP®

Smart Giving: How to Tithe in Retirement without Financial Stress

Updated: Apr 15

Smart Giving: How to Tithe in Retirement without Financial Stress

If you’re pondering how to tithe in retirement, you’re facing the unique challenge of reconciling a cherished spiritual practice with a new chapter in your life; retirement.

This article offers tangible steps to sustain your tithing commitments while navigating fixed incomes, potential tax benefits, and life adjustments post-career.

Discover methods tailored to your retirement income sources and learn strategies to give thoughtfully without compromising your financial security.

And, be sure to download our free guide to help you determine if you can do a qualified charitable distribution.

Key Takeaways

  • Tithing in retirement is a personal and complex process that goes beyond fulfilling religious duties, involving considerations of how to sustain contributions and maintain a sense of community and purpose in one’s faith.

  • Retirees must navigate the complexity of calculating tithes from diverse income sources like Social Security, pensions, annuities, and investment gains, often requiring tailored calculations to accurately reflect income without retithing on the same earnings.

  • Tax strategies such as Qualified Charitable Distributions and utilizing tax deductions for charitable giving, as well as consulting with financial advisors, can increase tax efficiency and optimize tithing in retirement.

Understanding Tithing in Retirement

Tithing in retirement goes beyond fulfilling a religious obligation. It encompasses:

  • Living openhandedly

  • Collaborating with God’s work

  • Sustaining your contribution to your faith community

  • Evolving from active workers to mentors and supporters

  • Discovering fresh ways to contribute to church activities

  • Maintaining a sense of community and purpose

  • Demonstrating faithful giving that makes an impact

  • Living generously, as guided by your faith.

Retirees should consider their personal principles when deciding on the method of tithing. Some may prioritize simplicity, while others may focus on the discernment of tithing on growth versus principal. There isn’t a one-size-fits-all approach, but the essential act of giving remains the same.

Calculating Tithe on Various Retirement Income Sources

Calculating tithe in retirement can be a complex task, especially given the variety of income sources. From Social Security to pensions and annuities, from investment portfolios to capital gains, each income source requires a different method of calculation.

We will now explore some common methods to compute tithes on these diverse streams of retirement income, including lifetime fixed income sources and those from a retirement income stream, such as an investment account.

Social Security Income

In terms of Social Security benefits, retirees have various options for their tithe calculation. They could consider the total amount of Social Security benefits received post-retirement, not accounting for the contributions made during their employment years or the income from their employer’s pension plan pays. This method is straightforward, but it may not reflect the true amount of income that the retiree is receiving.

As an alternative, retirees can base their tithing calculation on their gross income during their earning years. This involves taking into account the 6.2% of their income that workers contribute to Social Security up to an annually determined earnings threshold.

This method may be more complex but provides a more accurate reflection of the retiree’s income for tithing purposes.

Pensions and Annuities

Pension payments present another unique challenge for calculating tithes in retirement. A key consideration is whether to include the entire amount or only the growth portion, especially for those pensions where there was a return of principal that correlates to contributions made during working years. This decision is crucial to avoid retithing on the same income.

With annuities, a similar dilemma arises. Retirees can calculate their tithe based on the entire payment received or just on the earnings segment, if the payment comprises both a return of principal and earnings.

These considerations highlight the complexity of tithing on retirement income but also underscore the importance of accurately reflecting one’s income in tithing calculations.

Investment Portfolio and Capital Gains

Investment gains and earnings from brokerage accounts also factor into the tithing equation for many retirees. Deciding whether to tithe on distributed earnings alone or include undistributed, potentially tax-free income is a decision each retiree must make for their investment accounts.

Dividends, interest, and capital gains that are reported on the tax return are components that retirees can choose to tithe on.

Interestingly, donating appreciated stock is a tax-efficient method for tithing. Churches or charities can sell these assets without paying capital gains tax, which would be levied on the retiree if they sold the asset themselves. This method not only allows retirees to tithe but also provides significant tax advantages.

Tax Implications and Strategies for Tithing in Retirement

Navigating the tax landscape while tithing in retirement can be challenging. Many retirees are unaware of the tax implications and strategies that can make their tithing more tax-efficient.

Gaining insight into the retirement income sources feature allows retirees to optimize their contributions to retirement accounts while reducing their federal and state taxes liability, ultimately increasing their after-tax income by learning how to pay payroll taxes efficiently.

Qualified Charitable Distributions

One such tax-efficient strategy is making Qualified Charitable Distributions (QCDs) directly from an IRA. For IRA owners aged 70½ or over, they can transfer up to $100,000 tax-free directly to a charity each year. For couples, each spouse can exclude up to $100,000 in QCDs, potentially totaling $200,000 per year.

QCDs help reduce taxable income for retirees as they are not counted as taxable income when paid directly to an eligible charity. They can also satisfy Required Minimum Distributions (RMDs) for those 72 and older, without increasing their taxable income. To execute a QCD, IRA owners need to liaise with their IRA trustee, like a financial advisor or custodian, to guarantee the transaction is correctly carried out.

Tax Deductions for Charitable Giving

Another strategy for tax-efficient tithing is leveraging tax deductions for charitable giving. Donor-Advised Funds (DAFs) allow retirees to contribute low cost basis stock and immediately receive a full tax deduction, with the option to distribute donations to charities incrementally. This strategy not only provides immediate tax benefits but also gives retirees the flexibility to allocate funds to charities over multiple years, making use of their tax withheld money.

The stacking method also provides a tax advantage by concentrating charitable contributions into certain years. By exceeding the standard deduction limit and itemizing in these years, retirees can reap greater tax benefits. This method requires a careful balance of tithes and tax savings but can be a powerful tool for supporting cherished causes while minimizing tax liability.

Consultation with Financial Advisors

Retirees can benefit from consulting with a financial advisor as it could uncover tax-deductible expenses linked to charitable giving that they might have otherwise overlooked. At Covenant Wealth Advisors, we can provide advice on the most tax-efficient methods of tithing in retirement, helping you navigate the complex landscape of retirement income and taxes.

Utilizing the services of a financial advisor helps ensure that retirees can maximize their tithes and minimize their tax liability simultaneously, while managing their brokerage investment accounts efficiently.

Adapting Your Tithe Based on Life Changes

Life in retirement can be unpredictable.

From reduced income to unexpected expenses like healthcare costs, life changes can affect a retiree’s financial situation and their ability to tithe. Adjusting tithing amounts or frequency may be necessary for some retirees with reduced income compared to their working years. Conversely, some retirees might be encouraged by their substantial retirement savings to give more generously than when they had a regular income.

Flexibility is paramount in navigating these changes. When it’s challenging to make ends meet, tithing solely on the growth portion of their income might be a more viable approach.

Above all, the heart posture towards giving is crucial. Retirees should aim for a willingness to sacrifice for the sake of the gospel, which might mean changing how they give.

Balancing Tithing with Other Financial Priorities

Balancing the act of tithing with the need to save for retirement is a critical aspect of Biblical stewardship. Biblical teachings stress the importance of using resources wisely, implying the need for a balance between generosity and saving.

A suggested method for achieving this balance is to match the percentage of income given to tithing with the percentage saved for retirement, adjusting both percentages as finances fluctuate.

To aid in this balancing act, retirees can consider tax-saving strategies, such as gifting to charitably inclined adult children. This strategy can yield tax benefits and simultaneously support charitable causes. With a careful balance of giving and saving, retirees can support their faith community while ensuring their financial stability.

Faith-Based Approach to Tithing in Retirement

Tithing in retirement is more than a financial decision—it’s a faith-based commitment. Believers are encouraged to repurpose their retirement years for God’s purposes, seeking the guidance of the Holy Spirit for how to live and give effectively in retirement.

Biblical teachings underline the importance of generosity and stewardship, advising believers to balance providing for themselves and their families with the desire to give and to use their resources for eternal purposes.

The primary focus of tithing in retirement should be on the individual’s heart and intention to give cheerfully, reflecting their faith, rather than strictly on percentages and calculations. It’s about demonstrating faith through financial stewardship, about giving not out of obligation, but out of gratitude and commitment to one’s faith.


Tithing in retirement is a testament of faith and a continuation of commitment to one’s beliefs. It is both a personal decision and a spiritual practice, reflecting an individual’s heart and intention to give cheerfully.

As we navigate the complexities of retirement income and taxes, remember that the primary focus of tithing is not the percentages and calculations, but the generosity of spirit that it represents.

Let’s continue to live openhandedly, collaborate with God’s work, and contribute to our faith community, even in our golden years.

Frequently Asked Questions

Do you pay tithes on 401k withdrawal?

You should pay tithing on the earnings when you withdraw funds from your 401(k), not the original deposited amount, assuming taxes and tithes have already been paid on the principal amount.

Can I tithe my time instead of money?

Yes, you can tithe your time by serving others, but it's also important to put your faith in God by tithing money, as 100% of our money belongs to Him and He asks for 10% back.

What is considered income for tithing?

The considered income for tithing is your taxable income. The key is to give 10% of your income with a generous heart.

What is the correct way to pay tithes?

The correct way to pay tithes is by giving 10% of any money you make, including bonuses or gifts, through cash, check, stocks, or bonds. This ensures the fulfillment of the tithe obligation in a flexible manner.

What is the traditional tithe percentage recommended by many churches?

Many churches recommend a traditional tithe percentage of 10%.


Disclosure: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond, Reston, and Williamsburg, VA. Registration of an investment advisor does not imply a certain level of skill or training. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Hypothetical examples are fictitious and are only used to illustrate a specific point of view. Diversification does not guarantee against risk of loss. While this guide attempts to be as comprehensive as possible but no article can cover all aspects of retirement planning. Be sure to consult an advisor for comprehensive advice.


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