If you have been taking a Required Minimum Distribution (RMD) from your IRA each year, please read on. An intriguing new opportunity has arrived in 2023 as part of the SECURE Act.
Background: If you are age 70-½ or older, you may re-direct funds coming out of your IRA (your RMD) to charitable causes. These are called QCDs or Qualified Charitable Distributions. You simply ask your IRA custodian to send your RMD funds to your favorite charity rather than taking the income yourself. Two tax-wise reasons to deflect these funds to charity are that (1) this fulfills a gift to charity that you wish to make and (2) it reduces your taxable income. Plus, you are donating funds you’ve already saved up, so you don’t feel the pinch in your checkbook.
What’s new for 2023: If you have a large RMD to re-invest or donate, this new opportunity may suit you nicely. Starting in 2023, instead of giving your QCD directly to charity, you may use up to $50,000 of your RMD to fund a charitable account that will provide you with income for the rest of your life. Basically, the funds come out of your IRA and are placed in a charitable vehicle that generates a fixed income based on your age. At the end of your life, the funds remaining go to the charity you have named, such as Way to Grow. This is currently a one-time opportunity.
Way to Grow would be delighted to be your named beneficiary for a future gift, so our work to support children and families can thrive in the future. Of course, those who make a planned gift provision for Way to Grow are eligible for membership in our Shine Legacy Society. For more information, please give us a call at (612) 874-4740 and we will be pleased to walk you through the details. We would love to hear from you!
