Turning Retirement Income into Ministry Impact
When you reach a certain age, 73 for most of us, you have reached the point in your life where you must take a required minimum distribution from your individual retirement account(s) or IRA. For many of you, along with that distribution comes a tax on the proceeds. So, in some cases, you have to take income that you might not need and you have to pay more tax. The additional income could also throw you in a higher income tax bracket making the tax burden even worse.Â
The Charitable IRA Rollover (QCD) Solution
There is a way to take your required minimum distribution, skip the tax and make a meaningful gift to support your Moravian Passion (Church, Agency, Camp, etc.). This is called the Charitable IRA Rollover or Qualified Charitable Distribution (QCD).Â
It is easy to do. Simply instruct your retirement account custodian to send any amount (up to $108,000 per individual) to your Moravian entity. Because the church and our agencies are public charities there is no tax paid on the transfer. A portion or all your required minimum distribution is met, and the money goes straight to work for our church and our ministries that you hold dear. You do not get a charitable income tax deduction, but you avoid recognition of the income since it passes straight to the church from your retirement account.
Who Can Benefit and How to Begin
Even if you haven’t reached 73 yet, you can make a QCD at age 70.5. You do not have to take money out of your IRA, but your generosity will be appreciated, and the IRA gives you a tax-free way to give if you are at least 70.5.Â
There are many nuances to these rules, so please consult your tax or legal advisor for further information.
