IRA Three Ways
An IRA is an excellent vehicle for accumulating assets for use during retirement. But, you may be surprised to learn that it is not an ideal way to pass an inheritance to your family and friends.
When you leave your retirement plan assets to loved ones, distributions will be subject to income taxes. A better alternative for family members is to pass on income tax-free inheritances, such as real estate, cash, and life insurance. Then, use retirement plan assets to support charities like Bates, which receive these assets free of taxes.
Depending on your age, you can arrange for gifts now, later, and even arrange a gift that spreads out the current tax implications of your retirement distributions within your lifetime. In other words, you can use your IRA three ways to have an impact through your giving to Bates.
- The IRA Qualified Charitable Distribution (IRA QCD) allows individuals who are 70 ½ years or older to direct distributions from their IRA account to qualified domestic charities each tax year up to an annual limit. Through calendar year 2024, the annual QCD limit for an outright gift is $105,000.
- You can fund a gift that pays you income through your retirement account. Donors can now establish a gift annuity with a one-time distribution from their IRA, up to $53,000. There are some quirks, so contact us with questions.
- Name Bates as a beneficiary by asking your plan administrator for a change-of-beneficiary form. Fill it out, adding Bates as a beneficiary (or partial beneficiary), and return it. That’s it! The assets pass to Bates estate tax–free, so 100 percent of your gift can support students and programs.