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Planned Giving: Good news if you are 70 ½ years old (or greater)

Someone once said, "Getting old is like climbing a mountain; you get a little out of breath, but the view is much better!" 

It turns out there are a lot of benefits to aging, too many to go into for this article about planned giving, so we will stick to the main topic. A key benefit of aging with respect to your charitable giving is that you can indulge your philanthropic inclinations. Rules governing your retirement account make that possible. 

For starters, there are two important acronyms to remember as you consider a gift to the Preserve from your retirement account: 

• QDC - Qualified Charitable Distribution  

• RMD - Required Minimum Distribution 

Here are three wonderful benefits to making these distributions. 

  1. If you have reached the age of 70½, you can make a QDC as a gift from your retirement account directly to the Preserve without the amount of the distribution being treated as taxable income—effectively making the distribution a deductible gift.

  2. If you are at least 73 years old, you must take a RMD from your qualified retirement plan. Such a gift reduces the amount of the RMD that otherwise would be taxable income.

  3. A distribution from a retirement plan to the Preserve vs to yourself does not increase the portion of your Social Security benefits that are taxable.

Read more here and check with your financial advisor about your eligibility to make these types of distributions. 

photo by Kari Heistad

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