Supporting Vermont Adaptive Through My IRA Charitable Rollover

When you turn 70½, you are required to withdraw what is called the “Required Minimum Distribution” from your IRAs and other retirement accounts.

For most people, of course, these withdrawals fund their living expenses in retirement. It’s what they live on, along with Social Security and other forms of income.

Some individuals, however, do not actually need the assets from their retirement funds for their living expenses. And for many of those individuals, taking the funds out of their retirement assets is actually a financial burden, because they have to pay income taxes on the money they take out.

One solution through the years has been for individuals to take their required minimum distribution and then contribute that amount to charities such as Vermont Adaptive Ski and Sports. However, some individuals’ ability to claim charitable deductions “phases out” if their income is high, so they cannot actually claim 100% of their charitable deductions. Other retirees do not itemize their deductions, so they can’t claim charitable deductions at all. For people in these circumstances, taking their required minimum distributions from their retirement funds and then donating the funds is actually costly, because they only get some or even none of the charitable deduction.

But now Congress has authorized that individuals can designate up to $100,000 of their required minimum distribution to go directly from their IRAs to charities such as Vermont Adaptive Ski & Sports. When people do that, those funds do not count as income that they will owe taxes on. The funds go right to the cause you care about – and the donors avoid paying income taxes on that amount!

For more information, call or write Erin Fernandez, Executive Director, at director@vermontadaptive.org or (802) 786-4991 ext. 21.