Planning for retirement can be a daunting task, but it's essential to ensure that you're financially secure in your golden years.

One popular way to save for retirement is through an Individual Retirement Account (IRA), which allows you to invest funds that grow tax-free until you withdraw them during retirement. But did you know that you can also use your IRA to make a charitable donation?

If you have an IRA, a charitable rollover could make a big difference in your community. In January of this year, as part of the Secure Act 2.0, some of the IRA rules changed. For instance, the age at which you are required to make a minimum distribution (RMD) from your IRA increased from 70 ½ to 73 years old. Individuals older than 70 ½ can donate up to $100,000 to qualified charities directly from their IRA, while in the case of a married couple filing jointly, each may contribute up to $100,000 from their IRA. In addition, the annual IRA QCD (qualified charitable deduction) limit of $100,000 will be indexed for inflation, effective for tax years after 2023. And although this is good for charitable donors, there were no changes in QDC restrictions, and, unfortunately, QCDs continue to be ineligible for donation into donor advised funds (DAF). You are still able to put your QDCs into a scholarship fund or designated fund at the Community Foundation.

Charity jar

The January changes also include a one-time election for a QCD to a split-interest entity. This gives donors the ability to make a QCD of up to $50,000 to fund one of either a Charitable Remainder Unitrust (CRUT), Charitable Remainder Annuity Trust (CRAT), or Charitable Gift Annuity (CGA).

Utilizing your IRA to make charitable donations can be a smart way to give back to your community while also securing your retirement funds. With the recent changes in the law, it's important to stay informed about the rules and regulations surrounding charitable rollovers from an IRA. By doing so, you can ensure that your charitable giving strategy aligns with your financial goals and helps make a positive impact throughout the region. Reach out to your professional advisor or Cole Eason, THCF Vice-President of Advancement, if you need more information.