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Giving From Your Retirement Plan: The Details

Your retirement fund can be taxed up to 80% if passed on to heirs, yet it’s tax-free to charity. Often, between paying taxes and receiving a deduction, using a lifetime withdrawal to make a gift to charity is a “wash” for tax purposes.

Is this gift right for you?

A gift from your retirement account is for you if…

  • You hold a 401(k), IRA, or other retirement plan.
  • You prefer to make a gift to us through your estate plan.
  • You want to balance your giving between providing for your family and for us.
  • You want to ensure the most efficient distribution of the assets in your estate.

If the largest asset in your estate is your retirement plan, such as a 401(k), IRA, or Keogh, you may be surprised to learn that the IRS will impose income tax on the remaining balance in the account if you designate it to a beneficiary other than your spouse.

This tax is in addition to the estate tax that may be imposed on the account. For estates fully subject to the estate tax, the result can be that up to 70 percent of the value of your retirement plan will be consumed in taxes before your child, relative or friend receives it.

There is a sensible charitable alternative:

Name THE ASSOCIATED as the beneficiary of your retirement plan, then use other assets not subject to income tax to make gifts to your heirs. THE ASSOCIATED, as a qualified 501 (c)(3), won't pay income tax on our distribution and your heirs will receive their share of your estate without the burden of extra taxes.

Please contact us so that we can assist you through every step of the process.

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THE ASSOCIATED
101 W. Mt. Royal Avenue
Baltimore MD 21201
410-369-9228 | Fax: 410-837-1342
Email: mfriedman@associated.org