Retirement Assets


Did you know, if you are 72½ or older, you can make charitable gifts directly from your IRA? Naming a charity as a beneficiary of a portion of your IRA or other retirement asset can be a tax-wise, simple way to make a legacy gift to United Way of Olmsted County.  You can use pre-tax basis retirement assets to fund your legacy gift while leaving other non-taxable assets to heirs. Naming beneficiaries for your retirement assets is done using a beneficiary form, not a will or trust. 

 


* April 2020 Update - Waiver of IRA RMDs - Since the 2020 RMD is calculated based on the December 31, 2019 value and the markets were at a higher level at that time, Congress determined it would be unfair to require IRA owners to sell securities in a down market in order to take their RMDs. Therefore, the 2020 RMD is not required to be distributed. The 2020 RMD waiver also applies to inherited IRAs. The RMD for IRA owners will resume in 2021.* 


DONOR BENEFITS

  • Counts towards minimum distribution requirements from IRAs. 
  • Allows you to give from pre-tax assets
  • Helps avoid limits on charitable deductions
  • Minimizes the effect of charitable giving on your cash flow since the gift is from your assets, not your checkbook
  • Further the impact and mission of United Way of Olmsted County

 


HOW TO MAKE A PLANNED GIFT THROUGH YOUR IRA
  • Contact your IRA plan administrator and indicate that you wish to make a direct distribution from your IRA to United Way of Olmsted County.
  • Request a check made payable to United Way of Olmsted County and indicate it is a distribution from your IRA account.
  • Provide United Way of Olmsted County's Federal Tax ID # 41-0695594
  • Your IRA funds will be directly transferred to United Way of Olmsted County to help continue our important work. 
  • Please note that IRA charitable rollover gifts do not qualify for a charitable deduction.
  • Please contact us if you wish for your gift to be used for a specific purpose.

 


EXAMPLE

Sarah Miller, a widow with no children who recently turned 72, will be required to start taking Minimum Required Distributions (MRD) from her $400,000 IRA. She estimates the MRD for this year will be a little over $15,000.

Sarah has never had much debt, and doesn’t even itemize her deductions. She has other assets that provide plenty of income for her needs and she doesn’t need the annual IRA distribution. She can direct his IRA custodial to transfer $15,000 directly from her IRA to the United Way of Olmsted County as a “Qualified Charitable Distribution” (commonly called a “Charitable IRA Rollover”). The $15,000 will count as his Minimum Required Distribution and will reduce her taxable income by $15,000, thus reducing her income taxes by about $6,000 the same amount as if she had taken a charitable deduction as part of itemized deductions. Sarah can do this every year going forward.

Sarah also knows that her entire IRA will be subject to income taxes, when withdrawn by her heirs, in this case nieces and nephews, so she decides to make the United Way of Olmsted County the beneficiary of her IRA and leave other non-taxable assets to her nieces and nephews.


 We are here to help! Contact Laken Jefferson at lakenj@uwolmsted.org or 507-528-4830 with questions or with your planned giving intention.