Give Your IRA a Vacation
Last year Congress gave your IRA a much-needed vacation. No one had to make a required minimum distribution (RMD) from their IRAs. You may be one of those who enjoyed giving your required minimum distribution a year-long break.
Everyone loves a vacation, so why not give your RMD another year off?
Make a Required Minimum Distribution Work for You
Last year as part of special legislation, Congress said there would be no RMDs in 2020. This year, the RMD is back for everyone 72 years and older. Most people do not like taking money from their IRA. They have saved for years, and they would prefer to let it grow. Worse yet, when you take the RMD, you pay income tax on that distribution.
The IRA Charitable Rollover Is an Annual Vacation for Your IRA
While you still must distribute money from your IRA if you are 72 or older, you can do it in a tax-advantaged way. Contact your IRA administrator and ask them to make the distribution directly to a Granite United Way cause you care about. When you do:
- You do not pay income tax on the distribution (but you also receive no income tax deduction)
- You receive gift acknowledgment for the full amount of the distribution
- You satisfy your RMD up to $100,000
- If you and your spouse have your own IRA, both of you can use the IRA charitable rollover
Without the IRA charitable rollover:
- You take money from your IRA
- You pay income tax
- You have tax consequences instantly
With the IRA charitable rollover
- You support a mission that is important to you
- You do not pay income tax on the gift
- You have peace of mind instantly
It is important you do not take the distribution yourself. You can transfer up to $100,000 directly from your IRA to charity each year. Your spouse can do the same if he or she has an IRA. If you don’t have an IRA but have another retirement account, ask us how you can still make the IRA charitable rollover work for you.
This information is not intended as tax, legal or financial advice. Gift results may vary. Contact your personal financial advisor for information specific to your situation.
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