While discussing end-of-the-year strategies during the Q4 BTWM Virtual Lunch Webinar, Ryan O’Connell shared how some investors may be able to fulfill a requirement while making a big difference for their favorite nonprofit organization.
If you’re 73 or older, you are required to take a minimum distribution (RMD) from your retirement account. If you fail to take this distribution, the penalty is 50% of the required amount. If you have to take a distribution and don’t have an immediate need for the amount of money you will withdraw, consider making a direct gift from your IRA to a charity.
While writing a check to a charity is extremely difficult to write off for tax purposes, donating directly from your IRA allows the charity to receive a tax-free donation, maximizing the impact of your gift. This gift can also fulfill your RMD requirement, and you will not have to claim this distribution as income.
To discuss this strategy, schedule a call with your financial advisor before the end of the year.