If your IRA Needs a RMD, Consider a QCD to CUJF

This January, I celebrated my 70th birthday. It was memorable time with friends and family, and many of you from my Jewish community family.

Besides reaching another decade of my life, I’ve also reached the time of RMDs - Required Minimum Distributions. That’s the time in life when a portion of the money you saved pre-tax in an IRA during your working years must be withdrawn.

Accord to the IRS, “The RMD for each year is calculated by dividing the IRA account balance as of December 31 of the prior year by the applicable distribution period or life expectancy.” This does not apply to your Roth IRAs.

You generally must pay taxes on your RMD. And you learn, (contrary to what they told you in your 20’s and 30’s) that you may not be in a lower tax bracket than when you put the money aside for retirement.

Whether you need the money or not, you must take the distribution.

However, if you would like to use that distribution for a good cause (like CUJF), you can donate the distribution directly to a 501(c)3 organization (like CUJF) and the distribution is not considered income. It’s called a Qualified Charitable Distribution. It doesn’t affect your Adjusted Gross Income. If you take an RMD, put in in your bank account, then donate the money, it will be considered income and could put you in a higher tax bracket. The QCD must be made directly to the charity from your IRA fund.

As you know, many tax deductions are going away, and QCD can be a useful way to benefit both you and an organization that aids those in need, educates through scholarships, grants and special programs, and celebrates our Jewish culture and community (like CUJF).

Disclaimer:  I am not a tax specialist or financial planner.  For more information on how you might make a QCD to CUJF, contact your tax or financial advisor.

Information from the IRS is available here:  https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-distributions-withdrawals.

I’m planning to donate a portion of my RMD to CUJF.  I hope you will too!

Linda Bauer, Executive Director


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