Why Retirees Need To Stop Writing Checks To Charities

Since 2006, those age 70 ½ and older have had the opportunity to direct up to $100,000 of distributions annually from their IRAs to the charity of their choice. This is not a particularly well known rule for several reasons. At first blush, it looks like something that is only for the very rich—who can afford to give away $100,000 a year to charity? Secondly, the rule has always been in the tax code as a temporary provision, meaning that Congress had to reinstate it periodically after it lapsed. This reinstatement often took place at the very end of the year, making it hard to count on for planning purposes. In fact, when it was reenacted this past December, most people had already completed the majority of their charitable contributions for the year. Retirement Risks: An eBook From Forbes Don’t risk your golden years. This book will help you plan around roadblocks that can derail your retirement. Now, the Consolidated Appropriations Act of 2016 has finally made the rule permanent. As such, it is time to take this planning opportunity seriously and pay more attention to the advantages it can provide. This rule can actually represent a valuable tax strategy for many retirees. To gain a tax advantage from this provision, retirees only have to meet three requirements: Have reached age 70 ½ Own a traditional IRA subject to the required minimum distribution rules Intend to make charitable contributions (of any size)