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Vol. 1 Issue 4

Charitable Giving Using Your Retirement Assets

 

Did you know you can make a difference for ASHRAE by giving funds from your qualified retirement plan? 

 

Your retirement plan is designed to benefit you during your retirement. However, you may name beneficiaries for your plan such as family, relatives and friends. A charity may also be named as the beneficiary. This is among the easiest and most tax-wise ways to give.

 

Most retirement plans are income tax-deferred, which means that you are required to pay income tax when the funds are distributed. This means that every dollar your heirs receive from retirement accounts would be subject to income tax (unless they are your spouse or the distribution derives from a Roth IRA). Depending on the size of the estate, retirement funds, like other estate assets, may be subject to estate tax as well. However, distributions from retirement accounts to a charity such as ASHRAE would be subject neither to income nor estate tax.


Besides tax savings, a gift of retirement assets has other advantages:

  • It is easy to arrange. You merely request a Beneficiary Designation Form from your plan administrator.
  • You can designate ASHRAE as beneficiary of whatever percentage you choose. If you have otherwise provided for heirs, you could leave the entire balance to ASHRAE.
  • The gift is revocable. You retain full control of your retirement funds should you need them, and you can change beneficiaries at any time.

Gifts of retirement assets during your lifetime.

If you are over 59 ½ years of age, you might also consider an outright gift from your IRA or 401(k) or 403(b) plan. While the withdrawal would be a taxable event, your charitable deduction would most likely offset the taxable income.

For more information on how you can use your IRA, 401K or other qualified retirement plan to create a lasting legacy with ASHRAE click here. 

 

 

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