What Donors Need to Know about SECURE 2.0

July 6, 2023

The SECURE 2.0 Act of 2022 has introduced significant changes to retirement savings and tax laws – presenting new opportunities for people looking to make philanthropic gifts from their retirement funds. In this blog post, we’ll explore how SECURE 2.0 makes it easier and more beneficial to make charitable contributions by focusing on three key incentives.

Delay your IRA’s Required Minimum Distributions

One of the key notable changes introduced by SECURE 2.0 is the increase in the required minimum distribution (RMD) age for IRAs. Previously set at 70½, RMDs now start at age 73.

This opportunity allows IRA owners to maintain their retirement funds for a longer period so they can continue growing those funds tax-deferred, potentially resulting in larger charitable contributions later on.

Make Bigger Qualified Charitable Distributions

Previously, individuals aged 70½ or older could make a qualified charitable distribution (QCD) of up to $100,000 from their IRA annually, free from federal income tax. Now, SECURE 2.0 indexes this annual limit to account for inflation – which means the limit will increase over time to keep pace with rising costs of living.

This ensures that donors can maximize their impact on qualified charities year-after-year while still reaping the tax benefits associated with QCDs.

Set Up a Charitable Gift That Also Provides You with Lifetime Income

SECURE 2.0 introduces an intriguing option for IRA owners looking to make a difference while retaining cash flow during their lifetime. Donors can now make a one-time QCD of up to $50,000 from their IRA to fund a split-interest entity such as a Charitable Remainder Unitrusts (CRUTs), Charitable Remainder Annuity Trusts (CRATs), or Charitable Gift Annuities (CGAs).

While a portion of the transferred amount goes directly to the charitable cause, the donor can receive up to 90% of the economic value of the gift over their lifetime. This arrangement allows you to make a gift to a qualified nonprofit organization, like Miami Jewish Health, and receive payments to boost your retirement income or provide a lifetime payment for you or your spouse.

SECURE 2.0 empowers individuals to make a bigger difference in the lives of others while maximizing the tax advantages associated with charitable giving. If you are considering using your retirement funds to support your charitable giving, it’s essential to consult with a financial advisor or tax professional to understand how these new changes can best align with your charitable goals.

If you’re interested in learning more about making a gift through your IRA or about including Miami Jewish Health in your estate plans, please contact Alison Grewe at agrewe@miamijewishhealth.org or 305-762-3842, and we can work with you to customize your gift. We also encourage you to view our collection of planned giving resources to learn more about beneficiary designations, charitable remainder trusts, and the many other ways you can support us.


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