As you plan for retirement, it’s natural to think about both your financial security and the legacy you’d like to leave behind. One powerful way to achieve both is through a Qualified Charitable Distribution (QCD) from your IRA, which allows retirees to support their favorite causes while also potentially reducing their tax burden. Here’s what you need to know about this tax-savvy strategy.
What is a Qualified Charitable Distribution (QCD)?
A Qualified Charitable Distribution allows individuals aged 70½ and older to donate up to $100,000 per year directly from their IRA to a qualified charity. QCDs can satisfy all or part of the Required Minimum Distribution (RMD) for those aged 73 and older. By donating directly, you can avoid having the distribution added to your taxable income, which may help reduce your overall tax bill and prevent you from moving into a higher tax bracket.
How Does a QCD Benefit You?
- Reduces Taxable Income: QCDs can lower your adjusted gross income, potentially reducing taxes on Social Security benefits and other income sources.
- Satisfies RMD: For those required to take RMDs, QCDs offer a way to fulfill these requirements while helping the causes you care about.
- No Itemization Needed: Unlike other charitable deductions, QCDs don’t require you to itemize deductions, so even if you take the standard deduction, you can still benefit.
Key Requirements for QCDs
- Age Limit: You must be 70½ or older to make a QCD, though RMDs start at age 73.
- IRA Only: QCDs can only be made from an IRA, not from other retirement accounts like a 401(k).
- Charity Eligibility: The recipient must be a qualified 501(c)(3) organization. Private foundations and donor-advised funds are not eligible for QCDs.
Why Consider QCDs in Your Retirement Plan?
Using QCDs can be a smart way to manage your income and taxes while making a meaningful impact. For some retirees, QCDs offer a tax-efficient means of supporting a legacy of giving without complicating your financial plan.
Giving Through Your IRA
Utilizing the Qualified Charitable Distribution to support charities has become an increasingly popular means of supporting philanthropy in the United States. 501(c)(3) charitable organizations rely upon private support to advance their missions. Without this support, American life would look very different as many of these worthy charitable organizations address societal issues in ways that are vastly more effective than similar government resources.
Among these worthy organizations, the AMAC Foundation stands as an important cause that benefits from private support and for which the QCD applies. Contact the AMAC Foundation at [email protected] or call 888-750-2622 today if you are interested in making a gift to advance its mission through a QCD.
Already set up to send qualified distributions? Feel free to have them mailed to:
AMAC Foundation
2130 Tally Rd. Suite 100
Leesburg, FL 34748
Partner with RoseMark Advisors for Tailored Guidance
At RoseMark Advisors, we understand that every financial decision in retirement matters. Whether you’re interested in QCDs or have questions about the best strategies to meet your goals, our team of experienced advisors can help you make informed, tax-efficient choices. Let us be your trusted partner on this journey, guiding you toward a fulfilling and financially sound retirement.
Ready to learn more about QCDs and other retirement strategies?
Contact RoseMark Advisors today to speak with a financial advisor. We’re here to provide personalized advice that aligns with your values, goals, and unique needs. Together, let’s make your retirement years both rewarding and impactful. Call us today at (888) 407-8193 or send an email to [email protected].
I have been using QCD’s for the last five years and while the primary objectives get accomplished (i.e. the charity gets the money and I reduce taxable income associated with RMD’s), the charities don’t seem to be able to deal with this method of contribution very well. In spite of making sure that the checks going to the agencies designate my wife and I as the contributors (using the exact same names as previous direct contributions and mail solicitations used), they don’t seem to able to connect the dots. We are constantly receiving snail mail asking why we haven’t contributed and wasting paper and postage. Frustrating!
Thank you very much for this information. It truly helps those of us that are not knowledgeable in these areas.