Should Christians Tithe in Retirement? How to Keep Giving When the Paychecks Stop

For decades, many Christians give from each paycheck. Then retirement comes, and the paycheck stops. Income now arrives from Social Security, a pension, IRA withdrawals and maybe some part-time work. Questions follow quickly. Do I still tithe? On what? How do I give without running short?

This guide walks through the questions in plain language. It is not a theology ruling. Churches and believers hold different views on the tithe, and you should follow your own convictions.

In the Old Testament, the tithe (a tenth) was part of Israel's law (Leviticus 27:30, Malachi 3:10). In the New Testament, the emphasis is on generous, cheerful, proportional giving: "Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver" (2 Corinthians 9:7). Paul also encourages setting aside a sum "in keeping with your income" (1 Corinthians 16:2).

Many Christians use 10% as a starting point. Others give more or less. The common thread is that giving is intentional and comes from the heart.

Retirement does not end the call to generosity. But it changes three things:

1. Your income sources. Some are taxable, some are not, and some are withdrawals from savings you may have already given on.
2. Your income level. Some retirees live on less than they earned.
3. Your tools. Retirees have giving options that workers do not, especially after 70½.

Here are common approaches retirees take:

• Give on all income received. Social Security, pension and withdrawals combined.
• Give on new income only. Some people gave on their wages before contributing to a Roth or after-tax account, and choose not to give again on those dollars. Pre-tax 401(k) and IRA money is different, because that income was never given on when earned.
• Give a set amount. A fixed monthly gift that fits the budget, adjusted each year.

There is no single right answer. A plan simply helps you choose one on purpose.

Social Security benefits are income, and many Christians include them in their giving. Some reason that they gave on wages from which Social Security taxes were paid. Either way, it helps to know how much of your benefit is taxable, which depends on your other income.

This is the most common worry. A retirement income plan can help by:

• Showing your full monthly income and spending
• Putting giving in the budget as a line item, like housing or food
• Testing whether that level of giving holds up over a long retirement, with inflation
• Separating regular giving from one-time gifts

If the numbers are tight, generosity can take other forms too: time, skills, hospitality and service. In Mark 12:41-44, Jesus honored the widow's small gift because of the heart behind it.

Qualified charitable distributions (QCDs)

After age 70½, you can give directly from a traditional IRA to a qualified charity, such as many churches. Key points:

• The gift goes straight from the IRA custodian to the charity.
• It is generally not included in your taxable income.
• Once you reach RMD age, it can count toward your required minimum distribution.
• There is an annual limit, adjusted for inflation.
• Donor-advised funds and some other entities do not qualify.

For many retirees who take the standard deduction, a QCD can be a tax-efficient way to give. Confirm the details with your tax professional and make sure your church can receive it. (See Qualified Charitable Distributions: Giving from Your IRA.)

Gifts of appreciated stock

Giving shares that have grown in value, instead of selling them and giving cash, can avoid capital gains tax on the growth, and you may be able to deduct the gift if you itemize. Many churches can accept stock through a brokerage account.

Donor-advised funds

A donor-advised fund lets you make a larger gift in one year and recommend grants to churches and ministries over time. Some retirees "bunch" several years of giving into one year to itemize.

Giving through your estate

You can name your church or a ministry as a beneficiary of an IRA, life insurance or part of your estate. Retirement accounts can be efficient to leave to charity, because charities generally do not pay income tax on them.

1. Decide your approach (all income, new income, or a set amount).
2. Estimate your monthly income from all sources.
3. Set a giving amount and add it to your budget.
4. Choose the tool: cash, QCD, stock or donor-advised fund.
5. Talk with your spouse so you agree.
6. Review yearly as income, taxes and needs change.

If you feel guilty because you cannot give what you once did, remember that the New Testament emphasis is on a willing heart. Give what you can, plan carefully, and serve in other ways. That is faithful stewardship too.

Will Snodgrass, CFP®, helps Christian retirees build giving into their retirement income plan. Our office is in The Woodlands, Texas, and we work with Texas clients by video. Advisory services are available only where Will is properly registered or exempt from registration. Start with the Free Retirement Paycheck Readiness Scorecard at scorecard.matt25capital.com, or see Retirement Planning in The Woodlands and Christian Financial Advisor in Texas.

Related reading: How Faith-Based Retirement Income Planning Works | RMD Rules for Christian Retirees | The Parable of the Talents and Your Retirement