It has been quite a rollercoaster year for the stock market. The old adage is “buy low and sell high” but what happens when you are forced to sell in a down market?
That’s the scenario many people are facing as they look to take a required minimum distribution (RMD) from their retirement plan. If you do not need to use your RMD for living expenses, you can contribute up to $100,000 from your IRA to a charitable organization such as Guilford College without increasing your taxable income or paying any additional tax. You could give $1,000, $10,000 or any amount up to $100,000.
It may sound complicated, but it’s actually simple:
- If you were age 70½ before Jan. 1, 2020, you are required to take minimum distributions. (Those born after June 30, 1949, must begin taking RMDs in the year you reach age 72.)
- To direct all or part of your RMD to a charitable organization, contact your IRA administrator and make sure the distribution goes directly to your charity of choice.
- You will not pay income tax on the distribution. Of course we hope that you will consider Guilford College as your charitable organization of choice. If you are planning to make such a contribution, please let us know so we can direct your gift in a way that is most meaningful to you.
To ensure that you meet the Dec. 31 distribution deadline, contact your IRA administrator today. If you have questions or would like more information, please contact Kim Berry, Associate Vice President, Advancement Operations, at kberry@guilford.edu or 336.316.2352.
This information is not intended as tax, legal or financial advice. Consult your personal financial adviser for information specific to your situation.