Individuals who hold an Individual Retirement Account (IRA) and are required to take a Required Minimum Distribution (RMD) must withdraw a minimum amount annually beginning at age 73, in accordance with current IRS regulations.
Because these retirement funds were generally contributed on a pretax basis, RMDs are normally subject to income tax. However, individuals who are age 70½ or older may choose to make a Qualified Charitable Distribution (QCD) by directing all or a portion of their IRA distribution directly to a qualified 501(c)(3) nonprofit organization, such as the Ladies of Charity USA.
A QCD offers a meaningful benefit: the amount donated is excluded from the individual’s taxable income and may be applied toward satisfying all or part of the individual’s RMD requirement. Any portion of the RMD not donated remains taxable.
According to U.S. News & World Report, Qualified Charitable Distributions may be made only from IRAs, not from 401(k)s or other employer-sponsored retirement plans. Individuals interested in this form of charitable giving may wish to consult their financial advisor about the possibility of rolling eligible retirement funds into an IRA.
Several members of the Ladies of Charity have already supported their local Associations through this method of giving. Anyone considering a Qualified Charitable Distribution is encouraged to seek guidance from their financial advisor to ensure the distribution and charitable contribution are properly arranged.
Thank you for your thoughtful consideration of this impactful way to support the mission of the Ladies of Charity.