Want to feel good? – Consider a Qualified Charitable Distribution

Our planning discussions revolve around devising strategies to meet a client’s Required Minimum Distributions (RMDs). One such strategy we often assist clients with involves the utilization of a Qualified Charitable Distribution (QCD).

A QCD empowers individuals aged 70 ½ or older to donate directly to one or more charities from a taxable IRA, bypassing the need to take their required minimum distribution.

But why might this approach be advantageous?

1. Tax Savings: Channeling funds directly to the charity of your choice through a Qualified Charitable Distribution has the potential to reduce your overall tax liability, as the donated amount does not contribute to your taxable income for the year.

2. Fulfilling Required Minimum Distribution:

   A. Supporting Worthy Causes/Charities: QCDs enable you to contribute to charities close to your heart, offering a deeply rewarding experience supporting meaningful causes.

   B. Estate Planning: Decreasing your IRA balance through a QCD also diminishes the size of your retirement assets, which can benefit your heirs regarding estate planning.

   
   
   
   

LOMBARDI'S PLANNING CORNER

Michael Lombardi

May 1, 2024

1 min read