Should you give your money away now or later?

The Savings Game

Leaving a legacy or inheritance used to be thought of as something that happens after death. However, recent research indicates that more and more retirees are sharing the wealth during their lifetimes. There are sound reasons to do this, but there can be pitfalls as well, both for you and for family members.

According to a new survey by HSBC, more than 43 percent of U.S. retirees are currently supporting at least one other person. For one in 10, that includes an adult child.

For working-age adults, about one in four supports the idea of spending down their savings while alive, versus one in 10 who wants to sock away as much as possible for a bequest after death.

At the same time, the Boston College Center on Wealth and Philanthropy has documented a “strong trend” toward charitable “giving while living.” Its latest survey report anticipates nearly $27 trillion in giving to charity over the next half-century; of that, $20.6 trillion is expected to come from donors who are living, while only $6.3 trillion will come through estates and estate planning. Increasingly, very wealthy families are setting up estates, trusts and family foundations as they approach retirement age.

There are lots of reasons people would choose to give away money during their lifetimes. People are living longer and working longer. Part of the reward of so-called “semiretirement” is the ability to be generous with one’s earnings with family members or charities, and to see the fruits of one’s generosity at work in the world.

Some people choose to give money away over time to minimize potential estate taxes. The IRS allows you to write a check of $14,000 per person per year —