I'm trying to figure out the optimal manner to donate the most money to charity. I currently donate all excess income to charity, minus the money I keep for emergencies. Donating to charity is important to me and I want to do my best to optimize it.

I also am currently putting as much into my 401K as my company matches. I'm still young and I have a pretty good paying job, over 100K with expectation of it raising steadily for awhile longer. I live very frugally and plan to work as long as possible before retirement, and so I suspect that just the matching contributions would be sufficient to cover my retirement needs. To be frank I know that there is a government safety net in place if I miscalculate my savings and, while I have no intent to use it, knowing that I have it means that I'm willing to gamble a little to maximize charitable donations.

However, I would still prefer to have a larger nest egg for retirement if possible. I'm wondering rather I can afford to donate more to my 401K without hurting my, long term, charitable contributions. In other words can I donate more money to my 401k now, and if I don't need it for retirement donate that excess to charity once retired without suffering any penalties or paying any extra taxes? I'm willing to use either type of 401K if one is optimal.

I currently have my own charitable fund, which works quite similar to a 401K for charity, so I can earn interest in the stock money via my charitable fund as well as a 401K could; in other words the potential profits I could earn from my 401k's investments do not factor into my consideration.

In a related note what happens if I die before I retire? If I want all my 401K retirement fund to go to charity can I make that happen if I get hit by a bus tomorrow, without suffering any tax penalties?

  • Would you be averse to maintaining a microlending fund? Personally I feel that microloans are one of the most significant developments in charitable giving in decades. If you maintained such an account then you would still have access to those funds in the event of an emergency.
    – Matthew
    Mar 30, 2015 at 17:22
  • 1
    I suggest you read this article. It presents a good case for retirement age solely as a function of savings rates. mrmoneymustache.com/2012/01/13/…
    – Matthew
    Mar 30, 2015 at 17:24
  • @Matthew I mostly support GiveWell, as I feel it's quite good at finding the most optimal and efficient charities to support.
    – dsollen
    Mar 30, 2015 at 17:29

1 Answer 1


Two things I would recommend doing:

I would save a minimum of 15% into retirement. By young I will assume that you are under 30. 15K/year + company match will grow into a sick amount of money by the time you are in your 60s. So you have a net worth that is north of 5 million. What kind of charitable giving can you do then? Answer: What ever you want! Also it could be quite a bit more then that.

Get a will. It will cost a little bit of money, but for someone like you it is important to have your wishes known.

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