We all have those specific organizations or causes we’re passionate about. Whatever that may be for you, charitable giving is a very popular way to show your support. Whether it’s setting aside a portion of your income each month or making annual donations, many of us are used to sacrificing some of our income in our working years. While giving in retirement may look a little different, there are several ways you can give both now and after you’re gone with your retirement income.
If you’re one of the lucky people who literally have more money than they know what to do with, you may want to consider donating your RMDs toward a charity or cause you care about. For those over the age of 70 ½, you can actually donate up to $100,000 of your IRA each tax year to a qualified 501(c)(3) before having to pay taxes on those assets. This type of distribution is known as a qualified charitable distributions and certain rules apply. Consider consulting a tax advisor regarding your specific situation.
If you thought your legacy plan was solely what you leave to your loved ones, think again. While this may seem counterintuitive to some, there is usually a tax benefit. By naming your organization of choice as a beneficiary, they can receive the entire amount you wish to give while usually lessening taxes to your estate.
There are a lot of ins and outs when it comes to charitable giving, taxes, and your legacy plan. Thankfully, you don’t have to plan all of this on your own! Working with experienced professionals can help you develop a plan that works for you. To discover more about preparing for retirement, contact one of our ARI financial educators today!