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A new year has brought more than just resolutions. It’s brought new laws and other changes that may affect your giving decisions. And with any economic change, you may be looking at your finances and wondering how you will be impacted.

The new laws include retirement changes, known collectively as “Secure 2.0,” that may affect your saving and your giving. They may even make it easier for you to make a difference at organizations you care about.

Some important things Secure 2.0 does that involve charitable giving:

  1. Increases the required minimum distribution (RMD) age

    Secure 2.0 increases the age retirees must begin taking taxable withdrawals to 73 in 2023 and 75 by 2033, up from the previous 72. It does not, however, increase the age an IRA owner can make a qualified charitable distribution. That age remains at 70½.

    How does this affect me?
    Simply put, the extension of the RMD age gives you more time to save. You will enjoy additional tax-free growth. It also can be significant if you do not want to begin withdrawing retirement funds during an unsettled economic climate, giving you more time for your stock portfolio to recover.

  2. Adjusts for inflation the $100,000 annual limit on direct gifts to qualified charities from your IRA

    Are you 70½ or older? If so, you may know about a popular gift option that allows you to make a gift directly from your IRA to a qualified charity without paying income taxes on the distribution. Historically, the amount you could give was capped at $100,000 per year. This figure will now be adjusted annually for inflation beginning in 2024.

    How does this affect me?
    This allows you to not only increase your giving but also ensure your giving keeps pace with inflation. And you can make an impact—and see that impact—now rather than after your lifetime.

  3. Allows for a distribution from your IRA to fund a life-income gift

    If you are 70½ or older, you can make a one-time election for a qualified charitable distribution of up to $50,000 (without being taxed) from your IRA to fund a life-income gift such as a charitable gift annuity, charitable remainder unitrust or charitable remainder annuity trust.

    How does this affect me?
    These types of life-income gifts allow you to make a gift to a qualified charitable organization and receive lifetime payments to boost your retirement income, or provide a lifetime payment for you or your spouse.

Let’s Talk!

We can help answer any additional questions you might have about how the new retirement laws affect your charitable giving. Contact Kim Collins at 646-362-3116 or kcollins@bowery.org to have a conversation about your legacy.

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