NEW LAW: No Required Minimum Distributions in 2020!
As a part of the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), Congress has temporarily eliminated most required minimum distributions (“RMD”) from most retirement plans during 2020. Check with your financial advisor to see how this might affect you. Even without an RMD, a QCD remains a great way to make tax advantageous contributions. Learn more about the CARES Act.
How Brigham and Women's Hospital can help you plan for a secure retirement
There are many aspects of planning that go into ensuring a secure retirement, including having both financial and estate plans in place. You likely have various types of assets that carry different tax implications both during and after your lifetime. Some assets are heavily taxed and don’t make the best gifts to heirs, while other assets can fund your charitable giving and may even increase your income in retirement. Choosing which assets to give to charity and the assets to give to loved ones can make a significant difference in maximizing the impact of your estate. The Brigham offers opportunities for your charitable support that are beneficial to you in retirement and ultimately help the patients and communities we serve.
If you are 70 ½ or older you can make a tax-free gift from your IRA to the Brigham today. These gifts are called qualified charitable distributions (QCDs) and cannot exceed $100,000 per person each year. When you transfer your gift directly from a traditional or Roth IRA account to the Brigham, your gift will not be counted as taxable income.
IMPORTANT TAX CHANGES FOR 2020:
- The SECURE Act raised the age at which individuals must take their required minimum distribution (RMD) to 72 or older.
- Due to the pandemic and economic crisis, RMD requirements have now been suspended for 2020.
- If your IRA has a significant balance, you may still want to make a QCD to spend down the amount subject to RMD beginning in 2021.
To learn more about tax changes that impact your charitable giving click here.
Naming the Brigham as a beneficiary of all or part of your retirement accounts is a tax-saving way to support the future of medicine. In most cases, you likely paid no taxes on income contributed to retirement plans such as IRAs or employer sponsored qualified retirement plans.* Therefore, distributions from these retirement accounts are often subject to income taxes when made to individuals, such as loved ones. Since the Brigham is a tax-exempt organization, we will not pay taxes on these charitable gifts ensuring that the full remaining value of your retirement account is maximized to improve the future of medicine.
How to name Brigham and Women's Hospital as a beneficiary of your retirement account:
- Contact the financial plan administrator of your retirement account and request a beneficiary designation form.
- In some cases, you may be able to simply complete an online form to change your account beneficiaries.
- With a qualified retirement plan such as a 401(k), your spouse may be required to sign the form if the spouse is not the primary beneficiary. This may also be the case with some IRA accounts in community property states.
- Consult with your planning professionals to ensure you follow state and federal regulations.
* Some IRA accounts and qualified retirement plans may have after-tax contributions that are not subject to income taxes when distributions are made. Professional advisors should be consulted to determine the tax ramifications of your retirement plan when considering a gift from these assets.
When the steady paycheck stops, retirees may look to other sources to replace decreased income. For those who wish to support the hospital and receive guaranteed income, Brigham and Women's Hospital offers gift arrangements that will pay income for life.
The most common of these is the charitable gift annuity. If you have appreciated securities that you have owned for at least one year that pay a low or no dividend, you can transfer the stock to the Brigham in exchange for a charitable gift annuity that likely will pay you substantially more income. Many retirees use the Brigham gift annuity program to supplement their income when medical and living expenses might be greater than predicted. An added benefit is an income tax charitable deduction and in most cases a portion of the gift annuity payments are tax-free for a period of time.
If you are approaching retirement and do not need more income yet, consider a deferred payment gift annuity to help the Brigham. You can decide when you want the payments to begin resulting in higher monthly payments.
Always consult your advisor
We encourage you to consult your advisor when considering a gift to Brigham and Women's Hospital either during your lifetime or from your estate. We welcome the opportunity to help as desired by you and/or your advisors.