IRAs and retirement plans, tax benefits of giving through IRAs, and potential improvements to QCDs
Greetings from [ABC Charity]!
Summer often gives us an opportunity to slow down and catch up on projects we've been meaning to tackle. Whether you're organizing family photos, checking in on financial goals, or simply taking stock of where life has taken you this year, it can also be an ideal time to think about how your charitable plans fit into your long-term financial picture.
For many supporters of [ABC Charity], retirement accounts have quietly become one of their largest assets. Years of saving, employer matching, and investment growth have helped IRAs and workplace retirement plans reach levels many people never imagined when they first began contributing. At the same time, charitable giving strategies involving these accounts have continued to evolve, creating new opportunities to support the causes you care about while making thoughtful financial decisions.
This month, we're exploring several aspects of the many ways retirement assets and charitable giving can work together to make an even greater impact—both during your lifetime and for generations to come.
Your retirement plans and IRAs keep growing: Is it time to think about giving?
Retirement accounts have grown dramatically over the past several decades, becoming one of the largest assets many families own. Discover why now may be a good time to consider how those growing balances fit into your charitable plans and the legacy you'd like to leave to [ABC Charity] and beyond.
Why IRAs make such amazing legacy gifts to charity
IRAs and other retirement accounts offer powerful tax advantages throughout life and can also become one of the most tax-efficient assets to leave to charity. Learn why many supporters choose retirement accounts as part of their legacy plans and how a simple beneficiary designation can make a lasting difference.
Qualified Charitable Distributions: What are they, and why do they keep getting better?
Qualified Charitable Distributions continue to be one of the most effective ways for many retirees to support the causes they love while potentially reducing income taxes. This article explains how QCDs work today and highlights exciting legislative proposals that could make these charitable gifts even more flexible in the future.
Thank you for being such an important part of the [ABC Charity] family. Your generosity strengthens our mission every day, and we are grateful for the opportunity to partner with you in changing lives today and creating a lasting legacy for tomorrow.
—Your friends at [ABC Charity]
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Your retirement plans and IRAs keep growing: Is it time to think about giving?
If you've been contributing to a 401(k), IRA, or other retirement plan for many years, you may be pleasantly surprised by how much those accounts have grown. Between decades of contributions, employer matching, investment growth, and the power of compounding, retirement accounts have become one of the largest assets many families own.
Recent research tells the story about "401(k) millionaires," along with record average balances across many retirement savings plans. While market fluctuations certainly occur, the long-term trend has been remarkable. Americans are accumulating more retirement savings than ever before, thanks in part to higher contribution limits, automatic enrollment in workplace retirement plans, and many years of disciplined investing.
Of course, retirement accounts are designed first and foremost to provide financial security throughout retirement. They represent years of hard work, careful planning, and wise saving. Yet as these accounts continue to grow, many people eventually discover that they may not need every dollar for their own lifetime expenses.
That realization often opens the door to an important question: What should happen to these assets if they are not ultimately needed for retirement?
For many supporters of [ABC Charity], the answer includes philanthropy.
Retirement assets can be remarkably flexible when it comes to charitable giving. Some donors choose to make charitable gifts during retirement. Others decide to leave a portion of their retirement accounts to favorite charities through beneficiary designations. Still others combine lifetime giving with future legacy plans that allow them to support the causes they love both now and for generations to come.
The important point is simply this: your retirement accounts deserve the same thoughtful attention as the rest of your financial plan. As your balances grow, your charitable opportunities may grow as well.
If it has been several years since you've reviewed your retirement accounts and your charitable plans, this may be an excellent time to do so. We encourage you to talk with your financial and tax advisors about how your retirement assets fit into your long-term goals. If charitable giving is part of your vision, we'd be honored to be part of that conversation.
Your generosity has already made a meaningful difference at [ABC Charity]. As your retirement savings continue to grow, you may discover even more opportunities to strengthen the mission you care about so deeply.
Why IRAs make such amazing legacy gifts to charity
Retirement accounts are among the most tax-advantaged assets many people will ever own. For years—sometimes decades—they benefit from tax-deferred growth, and in many cases, contributions may have generated valuable income tax deductions along the way.
Those tax advantages help explain why retirement accounts often grow into significant assets over time. But they also create an interesting planning opportunity when thinking about charitable giving.
Here's why.
When retirement assets—including 401(k) and similar employer plans and traditional IRAs—begin flowing out of the accounts, whether to the retiree, to a spouse, or to children, distributions are generally subject to ordinary income tax. Depending on the size of the account and the beneficiary's tax bracket, a meaningful portion of those assets may ultimately go toward paying taxes rather than benefiting loved ones.
Charities are different.
Because qualified charitable organizations do not pay income tax, all of the retirement assets left to [ABC Charity] through a beneficiary designation on an IRA or other eligible retirement account can be used entirely to advance [ABC Charity]’s mission. In many situations, this makes retirement accounts one of the most tax-efficient assets to leave to charity.
What’s more, many donors find that they may not even need to change their wills or trusts to make a meaningful gift to charity in their estates. A donor can simply complete a beneficiary designation naming [ABC Charity] to receive all—or a percentage—of an IRA or other retirement account upon their death. The process is often straightforward and can usually be updated simply by contacting the financial institution that administers the account, after consulting with tax and financial advisors.
Because of the tax benefits, some donors choose to leave retirement accounts to charity while passing other assets, such as appreciated investments or real estate, to family members. Others designate a percentage of their IRA to [ABC Charity] while the remainder passes to loved ones. There is no single right answer. The best approach depends on your family, your financial circumstances, and your charitable goals.
The important thing to remember is that beneficiary designations deserve periodic review. Life changes. Families grow. Financial situations evolve. A simple update can help ensure your retirement assets reflect both your current wishes and your long-term legacy.
If you've been thinking about including [ABC Charity] in your estate plans, retirement accounts are certainly worth discussing with your tax and estate planning advisors. We would also be delighted to answer questions about how beneficiary gifts work and how your future generosity can continue making a difference for years to come.
Thank you for believing in our mission and for considering how your legacy might help strengthen it for future generations.
Qualified Charitable Distributions: What are they, and why do they keep getting better?
One of the most powerful charitable giving tools available today is also one of the hardest to understand because of the technicality of the rules. It's called a Qualified Charitable Distribution, or QCD. You might have heard of it—and you might have dismissed it as “too complicated.” If so, you are not alone! Even the name itself—Qualified Charitable Distribution—sounds like a hassle.
But don’t let the complexity scare you away. QCDs can be extremely valuable in certain situations, and it is worth evaluating whether they might be useful to you. Here’s how it works:
If you are age 70 ½ or older, current law allows you to direct a “Qualified Charitable Distribution” from your traditional IRA directly to qualified charitable organizations such as [ABC Charity]. In 2026, the inflation-adjusted QCD limit is $111,000 per taxpayer.
For donors who are taking Required Minimum Distributions (RMDs), QCDs can satisfy all or part of the RMD while still keeping the amount out of taxable income.
So, rather than receiving an IRA distribution, paying tax on it, and then making a charitable gift, a QCD allows eligible donors to transfer funds directly from their IRA to charity. This can reduce adjusted gross income and, depending on the circumstances, may produce tax benefits beyond what an itemized charitable deduction alone could provide.
Even more encouraging, Congress continues to explore ways to expand these opportunities. For instance, bipartisan legislation has been introduced that would allow QCDs from employer-sponsored retirement plans such as 401(k)s and 403(b)s, rather than limiting them to traditional IRAs. While this legislation has not yet become law, it reflects growing recognition that charitable giving should remain accessible as retirement savings continue to evolve.
Many supporters of [ABC Charity] have discovered that Qualified Charitable Distributions are an excellent way to continue supporting the mission they love throughout retirement. If you are age 70 ½ or older and would like to learn more about making a Qualified Charitable Distribution to [ABC Charity], we'd be happy to work with you and your financial and tax advisors. Together, we can help ensure your generosity continues changing lives while making the most of the opportunities available under current law.
Thank you for considering this powerful way to invest in the future of [ABC Charity] and the people we serve.
This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.