Giving with Retirement Accounts

Individual Retirement Accounts (IRAs) are intended to support your lifestyle during retirement. If these funds are not needed for your everyday living expenses, you can use these funds to support your charitable giving.

IRAs – Lifetime Giving

After age 59 ½, you can take a taxable distribution from your IRA without penalty. You can use that in any way including contributing the distribution to charity. If you itemize your charitable deductions, then donating your IRA distribution should provide you with a charitable deduction that offsets your income.

There is also a way to transfer a gift from your IRA to charity without it being counted in your income or being taxed. This is called the “qualified charitable distribution” (QCD), more commonly known as the Charitable IRA Rollover.

For your gift to qualify as a Charitable IRA Rollover:

• You must be 70 ½ or older at the time of your gift.

• The transfer must go directly from your IRA to charity.

• Your total annual IRA gift(s) cannot exceed $100,000.

• Your gift must be outright. You are prohibited from making Charitable IRA Rollover gifts to donor-advised funds or life-income vehicles such as charitable gift annuities or charitable remainder trusts.

Key benefits of a Charitable IRA Rollover:

• It is an easy and convenient way to make a gift from what might be one of your major assets.

• It may allow you to sustain or even increase your giving as your cash-flow changes in retirement.

• It is an exclusion from your gross income, i.e., a tax-free rollover.

• It can count toward your required minimum distribution if completed by 12/31.

Making your gift is easy:

• At least two weeks before December 31 of this year, contact your IRA custodian and ask that your distribution be made as a charitable rollover to CNYCF.

• Ask them to include your name and your address to ensure that we can promptly and accurately credit your gift to you and allocate it according to your wishes.

• Please contact Tom Griffith, director of gift planning, at tgriffith@cnycf.org or 315-422-9538 to let us know about your gift and how you would like it to be used.

IRAs – Estate Giving

You may also consider making CNYCF a beneficiary of your IRA.

Key benefits:

• Tax efficiency is maximized because there is no estate or income tax assessed on your gifted IRA assets.

  • 100 percent of your IRA assets go to a charitable purpose that is important to you.
  • By transferring your IRA to CNYCF directly upon your death, your estate may claim a charitable estate tax deduction. 

• It is easy to name CNYCF as the beneficiary of your IRA. 

  • To designate CNYCF as a beneficiary of your IRA, simply contact your plan custodian who will provide you with the IRA beneficiary designation forms to make this bequest.
  • Our information for completing this form is “Central New York Community Foundation, Inc., EIN 15-0626910, 431 E. Fayette Street, Suite 100, Syracuse, NY 13202”.
  • Contact Tom Griffith, director of gift planning, at tgriffith@cnycf.org or 315-422-9538 to let us know about your planned gift and how you would like it used.

Retirement Accounts other than Individual Retirement Accounts (IRAs)

401(k), 403(b) and 457 plans are examples of retirement accounts that are not IRAs. Distributions from these accounts to make charitable gifts will increase your taxable income for the year the gift is made, but may be offset by a charitable deduction. Unlike IRAs, charitable rollovers are not available for these accounts. However, similar to IRAs, you can designate CNYCF as beneficiary of your retirement accounts and the same benefits discussed above apply for beneficiary gifts to charity.

Notes

Retirement accounts come in two forms: Traditional (pre-tax accounts) and Roth (after-tax accounts). All of the discussion above regarding giving with retirement accounts applies to Traditional accounts rather than Roth accounts. The Roth election changes the tax benefits of using these accounts for charitable giving.

Any use of your financial or estate plans for giving to the Community Foundation should be reviewed with your professional advisor(s) to ensure the best choice is being made for your overall situation.

Learn More: