If you have a traditional IRA than I’m sure you know about the Required Minimum Distribution (RMD) that begins as age 73 – this withdrawal MUST be taken annually to avoid IRS penalties and comes out as taxable income.
This can be great if you need the additional funds, but it can also create some challenges if it pushes you into a higher tax bracket, especially if you receive Medicaid. This is where the Qualified Charitable Distribution (QCD) can help.
The QCD is more than just a financial strategy; it’s a tool that can help you express your values and achieve your charitable goals. With a QCD, you can send funds from your IRA directly to the ministries that resonate most with your heart and faith.
What sets this approach apart is the responsible stewardship of resources it offers. By using a QCD, you can fulfill your Required Minimum Distribution (RMD) while eliminating the impact to your taxable income a normal distribution would create. This means that more of your hard-earned assets can go toward making a positive impact on hurting families, rather than being allocated to taxes.
You can begin making Qualified Charitable Distributions from your IRA at age 70 ½, and you can distribute up to $105k annually. Leveraging the QCD before age 73 is a great way to draw down the balance of your IRA and reduce the amount of future RMDs.
To learn more about Qualified Charitable Distributions visit us at FocusOnTheFamily.com/planned-giving/ira-charitable-distribution/.
And feel free to reach out to Focus’ Planned Giving team with any questions at [email protected] or 800-782-8227.
Focus on the Family does not provide legal, tax, financial, or other professional advice. You should consult professional advisors concerning the legal, tax, or financial implications of your charitable activities.
