The Power of Your Portfolio: IRA Gifts

Did you know your IRA can be a powerful tool for charitable giving? While many people focus on cash donations, your IRA holds significant potential to support causes you care about. If you are passionate about honoring the dignity of older adults and people with disabilities, giving to the mission of CICOA can change many lives right here in your local community. Let’s explore the benefits of giving to the CICOA Foundation from your IRA.

The power of the IRA gift

You may share some of the same thoughts from other donors I have had conversations with over the years – my cash is in short supply or I worry I won’t have enough cash.

Cash makes up a small portion of most people’s financial picture (only 7% of the average person’s net worth). Your IRA, however, is a valuable asset that can be strategically used for charitable giving without depleting your cash reserves. By donating directly from your IRA, you can make a significant impact on the lives of older adults and people with disabilities served by the CICOA Foundation.

Consider the tax advantages of IRA gifts

You can give to a qualified charity from your IRA anytime during your lifetime.

• For those under 70 ½: If you donate to charity from your IRA before reaching the required minimum distribution (RMD) age, it’s considered income. Carefully consider your financial situation before making such a donation.
• For those 70 ½ and over: Enjoy the benefits of a qualified charitable distribution (QCD). This allows you to donate up to $100,000 directly to charity without paying income taxes on the distribution. It’s a fantastic way to reduce your tax burden while supporting a worthy cause.

Helpful tax tips:

• The first IRA distribution is often the largest for most individuals, so plan wisely.
• Consider the funds you will need for your purposes, but a mix of charitable gifts from the IRA will lessen the tax implications.
• Work with your financial planner and tax advisor to transfer the funds properly. Don’t lose the tax advantage by transferring it to your checking account first, as this will have to be declared as income.

Include IRAs in your estate giving plans

Avoid the double tax bite: Leaving an IRA to heirs can result in both income and potentially inheritance taxes. The general rule of thumb is “IRAs to charity; cash and appreciated assets to family.” Donating a portion of your IRA to charity can help mitigate this “double tax bite.”

Maximize your impact with these options to strategically incorporate charitable giving from an IRA into your estate plan:

• Designate all your IRA directly to a nonprofit cause that matters to you.
• Split your IRA between heirs and charity.
• Establish a charitable remainder trust in your will. The trust will provide a noncharitable beneficiary with a fixed annuity, with the remainder going to charity.

See this article on tax advantages for IRA gifts for more detailed information.

Consult with a financial planner and tax advisor to determine the best approach for your individual situation.

Making This a Part of Your Plan

Donating from your IRA is often as simple as a conversation with your broker or IRA provider. They can guide you through the process, including setting up a QCD if you qualify. There are options in giving, and the IRA distribution provides another way that both the donor and the charity can benefit. By strategically utilizing your IRA for charitable giving, you can maximize your impact while achieving your financial goals.

Ready to Make a Difference?

Donating from your IRA is another powerful tool to support the CICOA Foundation’s mission. We encourage you to explore this option and unlock the full potential of your portfolio for positive change. Contact us today to learn more about how you can make a difference through your IRA.

Have questions? Contact me today!

Phone: (317) 803-6062
Email: sgerber@cicoa.org

Together, let’s build a brighter future for older adults and people with disabilities in Indianapolis!

Disclaimer: This guide is for informational purposes only. Always consult your tax, legal, or accounting advisors before engaging in any transaction.