Ways to Give

Questions About Retirement Plans

Doing More with Your Retirement Plans

To provide funds for retirement needs, many people use savings vehicles such as Individual Retirement Accounts (IRAs), 401(k)s and similar plans. These plans have proved to be a very popular way to help secure one's financial future and that of loved ones. These funds can also serve another important purpose—they can sometimes be a wise source of charitable gifts.

Read on for answers to commonly asked questions about gifts of retirement plan assets.

Answers to Frequently Asked Questions

What are the benefits of giving retirement plan assets?

How can I make charitable gifts from a retirement plan?

If you are over age 59½, retirement plan assets can be a convenient source for charitable giving. Making immediate gifts using funds from your IRA or similar retirement plan may result in little or no tax on the amounts donated.

Those who itemize deductions report the amount withdrawn and take what can be a completely offsetting charitable deduction. Check with your tax advisors for the specifics of your situation.

Those aged 70½ or older should consider the possibility of making tax-free charitable gifts directly from a qualifying IRA. Charitable distributions of various amounts may be directed to one or more charities but altogether they may not total more than $100,000 per person per year.

How much can I withdraw from retirement plans and give to charity?

What if I am required to take withdrawals that I do not need?

Consider using all or a portion of a required minimum withdrawal to fund charitable gifts. You may reduce or eliminate taxes that would otherwise be due on the amount withdrawn if you itemize your charitable gifts and other deductions.

In the case of an IRA, gifts totaling up to $100,000 per year may count toward one’s required withdrawal while not reportable for tax purposes.

Can I save taxes by leaving all or a portion of retirement assets to charity?

Yes. Funds remaining in your retirement accounts after your lifetime are considered part of your estate and could possibly be subject to state and/or federal taxes.

More importantly for most people, any retirement funds will also be subject to income tax when received by heirs.

You may wish to designate that charitable gifts be made from retirement funds and leave other assets to loved ones. This will ensure that no federal estate or income tax will ever be due on any remaining retirement fund balances.

Can I leave assets in my retirement plan to charity after I provide for my heirs?

Is it possible to make a charitable gift of remaining retirement funds while first providing an income for loved ones?

How do I make a charitable gift from what might remain in my retirement plan?

Conclusion

We will be pleased to provide you and your advisors with more information about ways to include charitable gifts as part of your retirement planning and other long-range goals.