Gifts of Retirement Assets

Tax-qualified retirement plans and IRAs can be wonderful tools for accumulating savings for retirement.
There are some items to consider, however:

• When you withdraw the funds from your plan or IRA (not including Roth IRAs), the withdrawals are generally subject to income taxes, and sometimes penalties.
• If you pass the accounts on to others, they will still pay the income taxes and you may be hit with estate taxes also.
• Because retirement assets are subject to estate and generation-skipping taxes for transfers to non-spousal heirs, the combination of such transfer taxes and the income taxes can exceed 80%.

• Lifetime gifts that are withdrawn from a retirement plan may allow you to earn an income tax charitable deduction that could offset the income tax you would otherwise pay on the distribution.
• There are special tax advantages for charitable gifts of shares of employer stock distributed from a retirement plan.
• Heirs may prefer to receive other assets from your estate, because retirement plan assets are taxed.  The Foundation does not have to pay income taxes on your gift, which allows your money to go further.
• Distributions from a Roth IRA are generally not taxable, yet you may enjoy an income tax charitable deduction for the charitable gift.