In December 2022, Congress passed a new piece of legislation, the Secure 2.0 Act, which increased the age for RMDs from 70.5 to 73 years old. If you have an IRA, this allows you to leave funds in the market a little longer to compensate for what was a challenging year for many investors.

Another benefit of the Secure 2.0 Act is that, for the first time, individuals can make a one-time, tax-free qualifying charitable distribution from their IRA of up to $50,000 (couples can combine their contributions for up to $100,000). This distribution counts toward RMD and allows for lifetime income back to the donor in the form of a charitable gift annuity or a charitable remainder trust.

This benefits you as a contributor because this means you can receive consistent lifetime income back from your contribution at an annual rate of 5%. This provides you some peace of mind that you will receive regular income in your retirement years. It also allows you to make a meaningful gift from your IRA to support the nonprofit organization you care about.

If you are interested in setting up a charitable gift annuity or charitable remainder trust, it is important to reach out to the potential beneficiary of your IRA and determine if they are able to assist with this type of contribution. Additionally, you will need some time to finalize an agreement with the nonprofit organization and have your IRA custodian transfer the funds.

The Montana Community Foundation (MCF) can help you and your professional advisor with this process.

If you would like to know more about how you can make a charitable contribution from your IRA and receive life income, or have questions about gift planning, please contact us.

MCF is a statewide community foundation that cultivates permanent philanthropy across the state of Montana by acting as a bridge between donors and recipients.

We connect donors with charitable giving options to benefit the causes that matter to them and work with local community foundations and hundreds of nonprofit organizations. We pride ourselves on being their partner in understanding complex gifts and endowment management.