Do you gift?

[imoldernu]

What?
When?
Why?
To Whom?
Are your gifts reciprocated?

A subject that has been discussed in the past... time for an update.

A long time ago, with our immediate family, we mutually agreed that this was not necessary. For some occasions, a phone call, and maybe an invitation to go out for dinner together.

No less love, no less caring. If anything we're closer together, because there are no mistakes, no comparisons, and no pressure. It just works.

Only exception is for children under 10, and once in a while, when circumstances are right, a nominal amount of money... equally to the family members, but never as birthday, Christmas, anniversary etc. gifts.

How do you handle gifting?

 

[Teacher Terry]

There are no children in our family and if we get some I imagine then that we would give gifts. It slowly evolved that we stopped gift giving with family and friends. We take our kids out for a nice meal and they usually give us a gift card to movies or new restaurant. With friends sometimes it is just a card and sometimes I might take them out for a lunch or have them over for a meal. I really enjoy not having to buy a bunch of gifts and getting something I don't want, etc.

 

[ShokWaveRider]

Yes,
Money,
Birthdays, Christmas,
In Laws,
No

 

[mpeirce]

Christmas and birthdays we give to immediate family members. Also other family members if they are staying with us.

Siblings and their spouses? Nope, not really.

Nieces and nephews? Yes, until they graduate from HS. Then graduation gifts for HS and college. Wedding gift if we are invited to the wedding.

We discourage others from giving gifts to us.

 

[Music Lover]

Just for the kids. No one in my family buys gifts for anyone any time of year (including Christmas) if they are over 18.

 

[Souschef]

The major gifting we do is to take my RMD and divide it 4 ways among our children.

 

[RobbieB]

My girlfriend. I just get her stuff she needs.

 

[Bestwifeever]

Never give when you can regift. Preferably labelmakers.

 

[Hermit]

The major gifting we do is to take my RMD and divide it 4 ways among our children.

Did you forget the handsome amount you give to your Uncle Sam??

 

[Ted_Shepherd]

I make gifts in cash up to the maximum annual amount that avoids running up gift tax or estate tax. That is $14,000 per year per recipient (currently). Since the law unifies estate tax and gift tax, and the estate tax rate is 40% for anything over $5,430,000 (currently), getting that money out of my estate costs my heirs "only" $5,600 for each gift of $14,000. I do not forget Uncle Sam's exactions.

 

[Souschef]

There is a way around that limitation. You and your wife can each gift $14000,00.

 

[Alan]

What? Gifts and cash
When? Birthdays for all listed below, Christmas & birthdays for children.
Why? Family tradition - we many years agreed not to do gifts between adults except our own children
To Whom? our children and our nieces and nephews under age 18 (only 2 left under that age)
Are your gifts reciprocated? From our children yes, from nieces and nephews no. While our children were under 18 they received birthday gifts from their uncles and aunties

 

[Ted_Shepherd]

Might Marry my intended Heir

There is a way around that limitation. You and your wife can each gift $14000,00.

That works for married people but I'm unmarried. I could duck the estate tax altogether by marrying my intended heir. He's a generation younger than I am and no kin. So far as I know, bequests and gifts to a spouse are not subject to gift or estate tax.

 

[gayl]

What? - all kinds of stuff: money, merchandise, time, vacations
When? - birthdays, holidays, weddings if invited (non- immediate family)
Why? - bc it's fun
To Whom? - kids, spouses, grandkids
Are your gifts reciprocated? - always

 

[Sojourner]

I have long given my sibling's children both birthday gifts and Christmas gifts, and since I have no kids of my own, I've always been fairly generous with these gifts. Now these nieces and nephews are in their teens and a few are even in college. I expect I'll continue to do both birthday and Xmas gifts for each of them until they graduate from college, and after that... not sure. I don't want to appear like a Scrooge, but I suppose it only makes sense to scale back once they reach full adulthood.

As for other gifting, I give money or gift cards to immediate family for birthdays and Christmas, and they tend to get me things that I've mentioned I might like or would appreciate. It seems to work out pretty well for everyone.

 

[Cobra9777]

Between DW and myself, we use birthdays, Christmas, and our anniversary as an excuse to make a large-ish purchase that we might not otherwise make, like a new piece of furniture.

Between immediate family living in the area, we do small gifts for birthdays and Christmas. These are gifts or gift cards (rarely cash), and usually around $50 or less in value... sometimes larger at Christmas. Recipients include our in-laws, our 2 kids, and their spouses. Our granddaughter is inundated with gifts every time we see her, mostly clothes, books, or toys.

Family that live in other areas of the country get a 'happy birthday' message on Facebook and a Christmas card with photos.

Father's Day and Mother's Day usually involve a BBQ get-together at our house and similar or smaller gifts for all Dads and Moms, often just a card and a nice bottle of wine, flowers, or something similar.

We do gifts because it's fun and traditional in our family. We try to keep it small and fun.

 

[athena53]

Nope. Parents and siblings are all doing well and buy what they want when they want it, which isn't very often. A couple of siblings-in-law come from families where it's almost an obligation and they still try and find something to give my parents (age 85) for Christmas.


With DS and DDIL, we do a birthday dinner at a good restaurant (Lidia's in KC when they're here). Even with our 2-year old granddaughter, I've stuck to books and music CDs, plus a generous 529 account. They have a small house and DDIL's brother and his wife can't have children so they tend to go overboard with gifts for the granddaughter. We also do one-off things that mean more than "stuff"- renting an SUV and paying the expenses for all of us to drive to a family wedding, paying for one of the two tickets to bring DS, DDIL and the granddaughter to Myrtle Beach last Christmas to visit my parents. I also took DDIL shopping at Allen's when we were at the family wedding in Austin because I knew she loved good boots and told her to pick out a pair of Justin boots.

 

[SumDay]

I have finally convinced the family (adults) to stop buying gifts. It involves shipping and I just saw no point.

For the young ones, we put cash in their 529(c) accounts for birthdays and Christmas.

We give our adult kids cash for Christmas, and beg them to get us nothing, just come home some time during the year at the same time so we can all be together. They're good at the coming home, not so good at the "no gifts".

DH and I consider our vacations our gifts to one another for the year. Having recently downsized, we finally realized we don't need any additional cr*p.

 

[Walt34]

For the adults no, everyone already has everything they need/want within reason. But we, well mostly DW, gives lots to the grandnieces and grandnephews. She enjoys doing it, it is fun for her. When they're little it is mostly clothes and perhaps some toys, but the older they get it turns more to experiences. For example a couple of years ago I instigated going on a zipline canopy tour in Harper's Ferry, WV. The cost ended up being spread around with grandparents too and we all had fun.

 

[NW-Bound]

We do give money to young nieces and nephews under 18 for their birthday and Christmas. For the older, for HS and college graduation. Of course weddings of nieces and nephews call for larger cash gifts, usually $500.

We do not exchange or give gifts to adult relatives, except I may give my siblings something special from my travel, which is usually consumables like local food items or booze. I occasionally do the same for my nieces who live nearby in town and I see them often, and of course my children. These usually reciprocate when the occasion arises.

When my mother goes on a trip, I usually give her some spending money.

 

[Moemg]

I love to gift .I gift my So,my daughter,my SIL,my grandsons ,my sister and my SO,s grandchildren and DIL,s.Some reciprocate some do not but it does not matter .It is what I enjoy doing especially for my daughter and grandsons .Isn't that what money is to enjoy and spend how you want to ?

 

[Ted_Shepherd]

Structured Gifts to Demonstrate Retirement.

To demonstrate management of retirement assets, I have set up an account I'll call Demo. I retain ownership of Demo and give my intended beneficiary the right to look at it. I seeded Demo initially with a low-cost index fund (95%) and cash (5%). My gifts from this account to my intended beneficiary include part of that cash. More importantly, the cash gifts provide a continuing lesson in management of retirement assets.

Each month, I mark to market -- computing the total value of Demo. I then compute a monthly withdrawal: one four-hundredth of that total value. Doing this monthly, or twelve times a year, comes to a 3% annual withdrawal rate (12/400 = 3%). Withdrawing from the cash part of the account will not incur any income tax. I seeded it with after-tax money. The withdrawal goes to my intended beneficiary as a gift.

Once a year, the fund pays a dividend around 2%; that replenishes the cash in Demo to some extent. That dividend is taxable as income to Demo's owner. To approximate the loss due to income tax, I put only 80% of the dividend into Demo. The remaining 20% goes into an account from which I pay my income taxes.

Finally, once a year, after the 2% dividend comes in, I liquidate about 1% of Demo's fund holding, Actually, I compute the number of fund shares to sell to raise enough cash to return Demo to 5% cash. Again, to make realistic allowance for income taxes, I put only 80% of the realized capital gain into the cash component of Demo. All of the return of capital part of that sale also goes into Demo.

That's easy. There are just 14 transactions in this account annually -- monthly withdrawals and annual receipt of dividends and annual reblancing. The safe withdrawal studies that fix purchasing power of monthly withdrawal, commonly used a 4% annual rate, adjusted for inflation maybe. This disregards the effect of stock market performance. That is, a retired person may find it hard to stick to the original spending plan when the market is way down. Also, those studies assume that there is fixed interest short-term component of the retirement assets, paying decent interest, unlike today.

FIREcalc is not strictly comparable to this plan. It adjusts withdrawals to maintain purchasing power. Demo adjusts distributions according to market performance, predicting that corporate dividends grow at about the same rate (or better) as inflation over a period of years. FIREcalc concluded that the 3% withdrawal plan had no failures in a fifty-year plan.

Questions and comments are welcome.

 

[NW-Bound]

I love to gift .I gift my So,my daughter,my SIL,my grandsons ,my sister and my SO,s grandchildren and DIL,s.Some reciprocate some do not but it does not matter .It is what I enjoy doing especially for my daughter and grandsons .Isn't that what money is to enjoy and spend how you want to ?

In 2011, I helped my daughter buy her first home, and gave her the money to put 20% down. The townhome was on short sale, and she bought it at less than 40% of what the previous owner paid in 2008.

Today, the price has recovered to 80% of the previous high. This means it has doubled from what she paid.

Without my gift (my wife and I made separate gifts to double the amount allowed by the law), she would have missed out on that deal. I hope it taught her the lesson of buying when people are selling, and that one must have the cash reserve to take advantage of such occasions.

 

[cat wrangler]

Yes, we 'gift':

What? Cash
When? Birthdays and Christmas for our children. Weddings and High School/College graduations for nieces and nephews as well as our own children.
Why? Because we want to

Are your gifts reciprocated? Sometimes reciprocated, always acknowledged.

In my family, I am the youngest of 5 children. Four of us are doing well and buy what ever we want/need and we agreed long ago to not exchange gifts. The other one has a more challenging life, and we send her a gift for her birthday and Christmas as well as helping her as we can throughout the year.

 

[2017ish]

We do the occasional gift of wine from our cellar to friends who would appreciate--this is spur of the moment stuff and the initial purchase amounts per bottle would be less than $100 (although often some years ago). Other than that (and charity):

What? Cash/fund transfers
When? End of year some years; Also, another category is always in connection with coming together for extended family annual get-together
Why? They are 20 somethings, we are retiring soon; their marginal utility for money is quite high right now, and both we and they like having them in attendance for the annual gathering.
To Whom? our three kids (and, derivatively, to their long-time S.O.s)
Are your gifts reciprocated? Nope, at least not in kind. See "Why."

Even with no student loans and their relatively high incomes, generational arbitrage helps them a lot more than it disadvantages us, and we aren't talking huge sums of money. Same with the cost for them to attend the annual get-together. As long as they enjoy seeing grandparents/cousins and the like, it would be a shame to have monetary issues prevent it.

I suppose we should include cheap (but AFR compliant) loans for graduate school and weddings/houses in this category too? Getting 2% guaranteed or so is not bad for me, and paying it is a steal for them. Nonetheless, it is in some respects a gift, as we wouldn't do it for strangers.