Retirement Plan Giving
For more information, please call our Resource Development Department at 303.285.5227.
IRAs, 401(k)s, and 403(b)s are examples of traditional qualified retirement plans, in which you can designate the Coalition as beneficiary. The funds in these plans enjoy tax deferral on both contributions and earnings during the participant's lifetime. This enables these funds to grow much more rapidly than savings or investments, which are currently taxed. However, if you name someone other than your legal spouse as beneficiary of your retirement plan assets, he or she may receive as little as 25 cents on the dollar after income and estate taxes are paid. If you name your spouse as your designated beneficiary, the estate tax is avoided because of the unlimited marital deduction and a spouse may rollover the funds tax-free to his or her own IRA, thereby avoiding income tax. However, the assets may then be taxed in the surviving spouse's estate. The withdrawals by the spouse are then taxed as received.
We encourage you to consult your attorney or tax advisor to learn about the various tax benefits and restrictions that may apply to your specific situation.
• Benefits of Designating a Charitable Beneficiary
You can designate the Coalition as a beneficiary to receive all or a stated percentage of your retirement account upon your death. Your estate will receive a charitable deduction for the value of the assets distributed to the Coalition, and since we are a tax-exempt not-for-profit, we pay no income tax on the distribution. Traditional retirement plans are one of the best assets to leave to charity because they can escape income and estate tax. If possible, leave other assets to family or loved ones.
• Charitable Gift During your Lifetime
While an IRA or traditional retirement account cannot be "rolled-over" tax-free to a charitable organization under current law, it is still possible to use these funds to make charitable gifts. If you make a gift to the Coalition using retirement account assets during your lifetime, the transfer is treated as a withdrawal, making the distribution subject to income tax. However, itemizing your deductions makes you eligible for an income tax charitable deduction, mitigating the tax burden.