Making your gift from retirement funds can offer significant tax and planning advantages by withdrawing funds yourself and taking an offsetting deduction in the same tax year, or by making a qualified charitable distribution. Either method counts toward distribution requirements (RMD) and removes assets from the estate.

There is no set limit for withdrawing money from a retirement account, recognizing for income tax, and taking an offsetting deduction beyond the IRS deduction limitation of 60% of adjusted gross income. Gifts made using retirement funds that the donor has recognized for tax can be used to establish a charitable gift annuity or charitable trust. See Create Income Now for information on gifts that provide income benefits.

Qualified charitable distributions (IRA charitable rollovers) bypass recognition for income tax of up to $100,000 per year from an IRA, which may be attractive to non-itemizers. See sample letters you can download to instruct your IRA administrator and notify Princeton.

The SECURE Act (Setting Every Community Up for Retirement Enhancement Act), in effect as of Jan. 1, 2020, changes rules on funding retirement savings.

Donors should consult with their tax advisors to understand how retirement funds may be used for charitable giving for their situation.

Gifts from your Individual Retirement Account can be given to an eligible charitable organization, like Princeton.

Up to $100,000 of the gift is excluded from your gross income for tax purposes. These gifts also apply to your required minimum distribution.

How it works:

1. You make a distribution directly from an IRA to Princeton by December 31.
2. The distribution counts toward your required minimum distribution.

Are you eligible?

• You are at least 70½ years of age
• The distribution must otherwise be included in gross income
• The distribution must otherwise be fully deductible as a charitable contribution.

Benefits:

• Up to $100,000 is removed from your gross income for income tax purposes.*
• The distribution counts toward your required minimum distribution.

Could a charitable distribution from an IRA work for you?

Please contact us.

*Certain IRS limitations apply. The information presented is not intended as legal or financial advice. Please consult your own professional advisors to discuss your specific situation.

The SECURE Act (Setting Every Community Up for Retirement Enhancement Act), in effect as of Jan. 1, 2020, changes rules on funding retirement savings.

Previously, most retirees were required to take a Required Minimum Distribution (RMD) from their retirement accounts at age 70½. The new beginning date for RMDs will be age 72. (However, if you reached age 70½ by the end of 2019, your RMD beginning date is set, and the SECURE Act does not change the requirement date for you.)

It is important to note that the SECURE Act does not change the age at which you can make a Qualified Charitable Distribution (QCD) from your IRA, which remains at age 70½.

The SECURE Act also removed certain provisions for beneficiaries of IRAs and defined contribution plans like 401(k)s. Most IRA beneficiaries will now have to distribute their entire inherited retirement account within 10 years of the year of death of the owner. In some cases, it might make sense to leave your IRA to a charity and purchase life insurance for your children or create a charitable remainder trust to maximize legacy benefits.

Speak to a qualified professional about these new rules and your financial and retirement situation.

Our legal name is: Trustees of Princeton University
Our tax ID number is: 21-0634501
Our address and contact information for estates and trusts is:
Gift Planning
Princeton University
100 Overlook Center, Suite 300
Princeton, NJ 08540
609.258.6318