Raytheon Employees and Retirees: A Reminder About the New Charitable Giving Rules
If you're a Raytheon employee approaching retirement or have already retired, the final months of the year are a good time to review your charitable giving plans. Several federal tax changes took effect in 2026, and they may affect the deductions you receive for contributions made before December 31.
For Raytheon employees and retirees, we believe the more important question is how charitable giving fits into your transition from a paycheck to retirement income. Your final working years may offer opportunities that won't be available once your salary ends. And after retirement, the best way to give may change as you begin receiving pension payments, taking withdrawals from retirement accounts, or making required minimum distributions.
There's also an opportunity that some longtime Raytheon employees may overlook: using appreciated RTX stock to support charities while reducing their exposure to a single company.
Charitable giving should begin with the organizations and causes that matter to you. But once you've decided to give, we want to make sure you're using the assets and strategies that make the most sense for your financial situation.
The New Charitable Deduction Floor Changes the Math
Beginning in 2026, taxpayers who itemize generally can deduct charitable contributions only to the extent that they exceed 0.5% of adjusted gross income, or AGI.
Suppose you and your spouse have $400,000 in adjusted gross income and contribute $10,000 to charity. Under the new rules, the first $2,000 of your contributions won't qualify for an itemized charitable deduction. That leaves $8,000 potentially deductible, assuming you meet the other applicable requirements.
For a household with $600,000 in adjusted gross income, the initial hurdle increases to $3,000. At $1 million, it rises to $5,000.
The important distinction is that the floor is based on your income, not the amount you give, and it applies every year.
This matters if you're in your peak earning years at Raytheon. Salary, incentive compensation, investment income, and other taxable income can increase your AGI and the amount of charitable giving that produces no itemized deduction.
It also means the timing of your contributions deserves more attention than it may have in previous years.
Your Final Working Years May Offer an Opportunity to Give More Efficiently
One of the most significant financial planning transitions for a Raytheon employee occurs when employment income ends and retirement income begins.
Depending on your circumstances, your final year of employment could include a full salary, incentive compensation, or other payments. Once you retire, your income may come from a combination of pension payments, Social Security, investment withdrawals, and retirement accounts.
Those changes can create opportunities to make larger charitable contributions in years when the deduction is particularly valuable.
One strategy we often evaluate is combining several years of charitable gifts into a single tax year. This is commonly called bunching.
Suppose your adjusted gross income is $600,000 and you typically donate $20,000 to charity each year. Under the new rules, the first $3,000 of contributions generally won't qualify for an itemized deduction each year.
Over three years, you would donate $60,000 but potentially lose $9,000 in deductions because the floor applies annually.
If you instead contribute the entire $60,000 in one year, the $3,000 floor applies only once. Assuming your income remains the same and you can use the full deduction, that leaves $57,000 potentially deductible rather than $51,000 over the three-year period.
At a 35% marginal tax rate, the difference could amount to $2,100 in federal tax savings.
For someone nearing retirement, however, we would take the analysis further. We would compare the benefit of making a larger gift during a high-income working year with the potential benefits of giving after retirement.
We'd also consider any planned Roth conversions, capital gains, or other taxable events. The best year to make a substantial charitable contribution isn't automatically the year you earn the most money.
A Donor-Advised Fund Can Help Bridge Your Working Years and Retirement
If combining several years of charitable contributions makes sense, you may not want to distribute all that money to individual charities immediately.
A donor-advised fund, or DAF, can provide flexibility.
You make a charitable contribution to the fund today and may qualify for a deduction in the year of the contribution. You can then recommend grants to your favorite charities over time.
For example, you could contribute $60,000 to a donor-advised fund during your final year at Raytheon and recommend grants of $20,000 annually over the following three years.
Your favorite organizations can continue receiving their usual support, while you may benefit from making a larger contribution during a higher-income year.
Assets in the fund can generally be invested while they await distribution, providing an opportunity for tax-free growth.
We particularly like evaluating donor-advised funds for employees approaching retirement who want to maintain their charitable commitments but expect their income to decline. They can also be useful for families who want to involve children or grandchildren in charitable decisions.
There are trade-offs. Contributions are irrevocable, the sponsoring organization has legal control over the assets, and administrative and investment expenses may apply.
But when the timing is right, a donor-advised fund can be an effective way to coordinate charitable giving with the transition into retirement.
Have Appreciated RTX Stock? Review It Before Donating Cash
If you've accumulated RTX shares during your career, you may have an opportunity to use those investments to support charitable organizations while reducing your exposure to a single company.
We generally prefer evaluating appreciated investments in a taxable brokerage account before using cash for a substantial charitable gift.
Suppose you own RTX shares worth $50,000 that you originally purchased for $15,000. Selling those shares could trigger capital gains taxes on the $35,000 gain.
If you donate eligible, long-term appreciated shares directly to a qualifying charity or donor-advised fund, you can generally avoid realizing that capital gain. You may also qualify for a charitable deduction based on the shares' fair market value, subject to the applicable limits and the new 2026 deduction floor.
For a longtime Raytheon employee, this strategy may be particularly attractive if a meaningful portion of your wealth is tied to RTX stock.
We don't like seeing a client's financial future depend too heavily on a single company, even one they know extremely well. If you're already planning to make a substantial charitable contribution, donating appreciated shares may allow you to support a cause you care about while reducing that concentration.
However, not every type of RTX-related asset qualifies for the same treatment.
Which RTX Assets Can You Donate?
The most attractive candidates are generally appreciated RTX shares that you own outright in a taxable brokerage account and have held for more than one year.
These might include shares you purchased yourself or shares you received through an equity compensation award that have since vested, been delivered to you, and satisfied the applicable holding period.
Other RTX-related assets require different treatment.
Vested restricted stock or RSU shares
Once restricted stock or restricted stock units have vested, the resulting shares have been delivered to you, and any applicable transfer restrictions have been satisfied, they may be eligible for donation.
However, the holding period generally begins when the shares become yours for tax purposes, not when the original award was granted.
If you donate shares before satisfying the long-term holding period, your charitable deduction may be limited.
Unvested restricted stock, RSUs, and performance share units
These generally aren't suitable for a direct charitable gift.
Until the applicable vesting and settlement requirements have been satisfied, you may not own transferable shares.
Once an award settles into shares you own outright, we can evaluate whether and when a donation makes sense.
Stock options and stock appreciation rights
These aren't the same as owning RTX shares. They may involve exercise requirements, ordinary income, or transfer restrictions.
If an award results in shares that you subsequently own, we can evaluate those shares separately.
RTX stock held in a workplace retirement plan
This is an important distinction.
RTX stock or employer-stock fund holdings inside an eligible workplace retirement plan aren't equivalent to RTX shares in your personal brokerage account.
You generally can't transfer those plan holdings directly to charity and receive the same tax treatment as a gift of personally owned, appreciated stock.
Distributions of employer stock may also involve special tax considerations, including potential net unrealized appreciation treatment.
For retirees who hold employer stock in a former employer's retirement plan, we believe those potential benefits should be evaluated before deciding whether to roll the assets into an IRA. A rollover can eliminate that particular planning opportunity.
RTX shares held in an IRA
These are retirement-account assets rather than personally held taxable shares.
For eligible IRA owners age 70½ or older, a qualified charitable distribution may be a more appropriate strategy. A QCD must be made directly from an eligible IRA to a qualifying charity and generally cannot be directed to a donor-advised fund.
Before donating RTX shares, we would confirm your cost basis, holding period, account registration, and any applicable trading or transfer restrictions.
The key is to evaluate the gift before selling any shares. Selling first and donating the cash can produce a very different tax result.
Higher-Income Households Face Another Deduction Limitation
The new charitable deduction floor isn't the only change affecting higher-income households.
Beginning in 2026, the federal tax benefit of itemized deductions is generally limited to 35% for taxpayers in the 37% bracket.
For 2026, that bracket begins at $640,600 of taxable income for single filers and $768,700 for married couples filing jointly.
When combined with the new deduction floor, the result can be surprising. A household with considerably less income may receive a larger tax benefit from the same charitable contribution than a household in the highest bracket.
Consider two married couples who each donate $10,000 to charity.
The first couple has $150,000 in adjusted gross income and is in the 22% federal tax bracket. Their charitable deduction is reduced by $750 under the new floor, leaving $9,250 potentially deductible. Assuming they itemize and can use the full deduction, their federal tax savings would be approximately $2,035.
The second couple has $1 million in adjusted gross income and is in the 37% bracket. Their deduction is reduced by the $5,000 floor. After accounting for the additional limitation on itemized deductions, their federal tax savings would be approximately $1,750.
Despite being in a substantially higher tax bracket, the second couple receives a smaller tax benefit from the same gift.
These are simplified examples, but they illustrate why we don't recommend making charitable contributions based solely on your marginal tax rate.
If you're anticipating an unusually high-income year at Raytheon, we should evaluate the actual deduction rather than assume every dollar of charitable giving will produce the maximum tax benefit.
Retired From Raytheon? Your IRA May Be the Better Source for Charitable Gifts
For retirees who are at least age 70½, qualified charitable distributions, or QCDs, deserve particular attention.
A QCD allows you to transfer money directly from an eligible IRA to a qualifying charity. When the requirements are satisfied, the distribution is generally excluded from your taxable income.
Once you're required to take minimum distributions, a QCD can also satisfy all or part of that obligation.
This matters because a QCD isn't subject to the new 0.5% charitable deduction floor or the additional limitation on itemized deductions for taxpayers in the highest bracket.
For a Raytheon retiree receiving pension income, Social Security benefits, or other retirement income, keeping a charitable distribution out of AGI can be particularly valuable.
Depending on your circumstances, it may also help manage the taxation of Social Security benefits or income-related Medicare premiums.
Consider a retiree who already plans to give $10,000 to charity and must take a required minimum distribution from an IRA.
Rather than taking the entire distribution into taxable income and then writing a check to charity, directing $10,000 from the IRA to an eligible charity may produce a better tax result.
Not every retirement account qualifies. A distribution taken directly from a former employer's workplace retirement plan generally isn't a QCD.
If you still have assets in a Raytheon retirement plan, it's worth reviewing your options before assuming those assets can be used for this strategy.
Any decision to roll money from a workplace plan into an IRA should account for fees, investment choices, tax considerations, creditor protection, and your broader retirement income needs. If the plan holds employer stock, potential net unrealized appreciation treatment should also be considered before making a rollover decision.
You cannot claim a separate charitable deduction for the same QCD, and donor-advised funds generally aren't eligible recipients.
For retirees who give regularly and don't need all their IRA distributions for living expenses, we believe QCDs should be among the first strategies considered when planning annual charitable gifts.
Don't Itemize? There's a New Deduction to Remember
Not every Raytheon retiree itemizes deductions. Once a mortgage is paid off and employment income has ended, taking the standard deduction may be the better choice.
Beginning in 2026, eligible taxpayers who take the standard deduction can deduct up to $1,000 in qualifying cash charitable contributions. Married couples filing jointly can deduct up to $2,000.
This deduction isn't subject to the new 0.5% charitable deduction floor.
Gifts to donor-advised funds don't qualify, and other restrictions apply. But for retirees who aren't eligible for QCDs or don't have an IRA suitable for that strategy, the new deduction may provide a useful tax benefit.
Before December 31, Coordinate Your Giving With Your Retirement Plan
For Raytheon employees and retirees, charitable giving is rarely an isolated financial decision.
If you're still working, we may want to evaluate whether a larger contribution makes sense before your salary ends. If you hold appreciated RTX shares, we should consider whether donating stock is preferable to giving cash. If you're already retired, the source of your charitable contribution may matter just as much as the amount.
And if you're approaching a year with a substantial Roth conversion, a large investment gain, or a change in retirement income, the timing of your gifts deserves additional attention.
Our recommendation is to review substantial charitable contributions before making them, particularly during the years surrounding retirement. A little coordination between your investment strategy, tax planning, and charitable intentions can make a meaningful difference.
The purpose, of course, is bigger than the deduction. We want you to enjoy the financial security you've worked to build at Raytheon while having the freedom to support the people and organizations that matter most to you.
If you're a Raytheon employee or retiree and would like to discuss your year-end charitable giving strategy, schedule a complimentary 15-minute call.
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