Giving Smarter: Using Your IRA To Make The World A Better Place

You may be like several of our clients who enjoy making charitable gifts.

In the last few months, we’ve helped clients make generous donations to a number of programs benefitting colleges and universities, scholarship programs for working students, and international education organizations.

To all of you who have made donations or who have helped good causes through volunteer or other service, right on! You are in the front lines when it comes to making the world a better place.

But here’s something we want to share with all our friends out there. If you plan to donate to any charities, do it the extra smart way so your gift can go even farther and help more people.

One of the best ways to give is by donating directly from your IRA.

You can do this if you are over age 70½ and making Required Minimum Distributions (RMDs) from your IRA. Gifts can be of any denomination up to a total of $100,000.

These special IRA gifts – called Qualified Charitable Distributions or QCDs – are super tax smart because the money you withdraw and donate does not count as taxable income to you. (On the other hand, if you withdrew the funds from your IRA, then paid the tax and donated to charity, you would lose a chunk of the funds to taxes, and the charity would get less. That’s why we call QCDs super tax smart).

Let your financial advisor figure out the math. Here’s all you need to know:

If you are age 70 1/2 or older, and you plan to make charitable gifts, give the gifts directly from your IRA to get the most bang for your buck.

Special Planning Tip: We’re gearing up to complete Required Minimum Distributions (RMDs) for our clients. It’s not too late to use some of your RMD for charitable gifts. If you are interested, please let us know as soon as possible and we’ll do the work for you!

About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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