Strategies for returning to work that will make the most of your charitable goals
Staff at Akron Community Foundation regularly talk with retirement-age donors and fundholders about the tax benefits of Qualified Charitable Distributions (QCDs) and leaving bequests of IRAs to a donor-advised fund. Philanthropy is something that people from all generations can get involved in, but it can mean so much more for retirees and those gearing up for retirement.
A Pew Research study claims that 10,000 people in the United States are turning 65 every day. While 65 may be the "traditional" retirement age in this country, it's becoming a less common milestone. While the pandemic did not impact retirement ages as much as some experts predicted, some who did retire now actually regret it. Some retirees are even considering returning to work! While many retirees are seeking work for financial reasons, two of the top six reasons to go back to work are boredom or loneliness.
For those who have reached retirement age, continuing or returning to work can provide many opportunities that tie into philanthropy. For example:
- You can still contribute to your IRAs and reap the benefits of an employer-sponsored 401(k) plan.
- You can use your extra income to contribute to a donor-advised fund at the community foundation, making you eligible for an income tax deduction and removing assets from your taxable income.
- As you take advantage of the opportunity to get more involved with the causes you care about in your free time, you can update your estate plan to leave additional bequests to a fund of Akron Community Foundation that will continue to support your favorite causes after you're gone.
- If you are 70 ½ or older, you can take advantage of a Qualified Charitable Distribution, which allows you to direct up to $100,000 annually from your IRA to a qualified charity, and even more in future years as the $100,000 cap is indexed for inflation. Plus, if you have reached the age when you are required to take distributions from your IRAs, QCDs will offset those Required Minimum Distributions (RMDs).
If you've retired for good, remember that many of the organizations you care about could likely use your help, not only financially as a donor, but as a volunteer, board member or community advocate.
To discuss your charitable goals for retirement or returning to work, please reach out to our team at Akron Community Foundation. Your professional skills and civic commitment are truly valuable for improving the quality of life in our community.
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This content is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.