More Details on Gifts of Retirement Plans
Planning for retirement is critical to your financial well-being. If you are reading this section, chances are you planned well but you also know that life is unpredictable. The good news is that you can make a significant gift to your favorite Valley charity with retirement plan assets without adverse effects to your lifetime finances. In fact, leaving retirement plan assets to us can be one of the best financial decisions you can make. Here's why.
Traditional retirement plans such as Individual Retirement Accounts, 401(k) and 403(b) plans are funded with pre-tax dollars. The contributions and earnings that you make to this account are not subject to income tax. When you reach the age of 59½, you can take money out of your retirement account without penalty, but you do have to pay ordinary income tax on the distributions. If funds remain in the account after you pass away, be aware that your heirs may have to pay inheritance and estate taxes in addition to income taxes. Depending on the size of your estate, these combined taxes can be as much as 60% of the remaining account balance. Don't make this mistake! Leave your retirement plan assets to your favorite Valley charity. Whatever portion of the assets is left to charity will be exempt from income, inheritance, and estate taxes.
When planning to support your favorite Valley charity and leave assets to loved ones, make certain that you leave your pre-tax assets to qualified charities and your other assets to your loved ones. This strategy assures that your heirs pay less tax on the assets that they receive.
Contact your account custodian today and complete the beneficiary designation forms to maximize the tax savings, take care of your loved ones, and leave a legacy at your favorite Valley charity.
(Also referred to as Charitable IRA Rollover Gifts)
The Qualified Charitable Distribution is an excellent way to show your support for your favorite Valley charity and receive tax benefits in return. Whether you are planning your required minimum distribution (RMD) or not, consider making a gift from your traditional IRA to make the most of your charitable giving. You receive a tax benefit even if you take the standard deduction!
It’s important to consider your tax situation before deciding whether to make a charitable contribution from your IRA. Be sure to share this gift plan with your financial advisor.