When planning for retirement, most people focus on saving and investing wisely. But knowing how and when to use your retirement funds can be just as important.

Retirement accounts come with specific rules. There are limits on how much you can contribute each year, and guidelines about when and how withdrawals, which are called distributions, can happen. For those with an IRA (Individual Retirement Account), there’s one option that can be especially beneficial: a Qualified Charitable Distribution (QCD).

A Qualified Charitable Distribution allows individuals age 70½ or older to donate directly from their IRA to one or more eligible charitable organizations. The benefit? The donated amount is not counted as taxable income, which can help lower your overall tax bill.

For many people, QCDs can also help satisfy their Required Minimum Distribution (RMD) – the amount the IRS requires certain retirement accounts to distribute each year. Because RMDs cannot be rolled over into another account with tax advantages, failing to take them can result in significant penalties. Using a QCD is one way to meet that requirement while supporting charitable causes that matter to you.

In other words, it’s a way to give back while potentially reducing your tax burden.

If you’re interested in making a Qualified Charitable Distribution to the Friends of Incourage Fund or another qualifying charitable fund through Incourage, we’d be happy to help guide you through the process. Contact us today to get started.

You can also learn more about retirement accounts and Qualified Charitable Distributions directly from the Internal Revenue Service at irs.gov.