Secure Act 2.0 and Its Impact on Charitable Giving

Mar. 1, 2023 null

2023 brings with it a few new laws that may provide a reason to revisit your charitable giving strategy to maximize your support of the causes you care about today and in the future.

Known collectively as “Secure 2.0,” these laws may affect your saving and your giving. They may even make it easier for you to make a difference for the causes you care about. Here are three important things included in Secure 2.0 that you should know about.

1. Increases the required minimum distribution (RMD) age

The new law increases the age retirees must begin taking taxable withdrawals to 73 in 2023 and 75 by 2033, up from the previous 72. It does not, however, increase the age when an IRA owner can take a qualified charitable distribution (QCD). That remains at 70½.
What charitable solution could this provide me?
Hundreds of funds at the Community Foundation are eligible to receive QCDs including agency funds, designated funds, field-of-interest funds, and scholarship funds. Donor-advised funds, however, still do not qualify.

2. Adjusts for inflation the $100,000 annual limit on direct gifts to qualified charities from your IRA

If you are 70½ or older you may know about a popular gift option, called the IRA Charitable Rollover, that allows you to make a gift directly from your IRA to a qualified charity without paying income taxes on the distribution. Historically, the amount you could give was capped at $100,000 per year. This figure will now be adjusted annually for inflation beginning in 2024.

What charitable solution could this provide me?

This will allow you to not only increase your giving, but also ensure that your giving keeps pace with inflation. And you can make an impact—and see that impact—now rather than after your lifetime.  

3. Allows for a distribution from your IRA to fund a life-income gift

If you are 70½ or older, you can make a one-time election for a qualified charitable distribution of up to $50,000 (without being taxed) from your IRA to fund a life-income gift such as a charitable gift annuity (CGA) or charitable remainder trust (CRT).
What charitable solution could this provide me?

These types of life-income gifts allow you to make a gift to a qualified charitable organization and receive lifetime payments to boost your retirement income or provide a lifetime payment for you or your spouse. CGAs and CRTs can work in tandem with various Community Foundation funds.

We are grateful for your continued dedication to supporting our community through charitable giving. Please contact our team to discuss how to maximize your charitable gifts now and in the future.