Legacy IRA Act Provides New Gift Planning Opportunities
A new charitable tax law offers a gift planning opportunity that provides income for life while donating to charity. In light of the SECURE Act 2.0 passed in December 2022, Catholic Charities of Santa Clara County is excited to announce its expanded partnership with Catholic Charities USA, introducing Charitable Gift Annuities (CGAs).
A few details about the new Qualified Charitable Deduction (QCD) opportunity:
• It qualifies toward the required minimum distribution (RMD).
• Spouses can each contribute $50,000 from separate IRAs to establish a CGA.
• CGA payments are fully taxable—this is not typical.
• The CGA payout rate for an 80-year-old is 7.6%, and for a 75-year-old it is 6.6% (based on February 2023 rates).
Other changes for regular IRA QCD gifts to charity under the Legacy IRA Act:
• The current $100,000 annual limit ($200,000 for couples) is indexed for inflation beginning in 2024.
• The age for RMDs has increased from 72 to 73 in 2023 and is moving to age 75 by 2033.
Rising interest rates make CGAs even more attractive due to the increased
payout rate (based on the age of the beneficiary and other factors).
“We’ve seen individuals eager to diversify their retirement portfolio and make an impact,” according to Cecilia Bynum, Senior Director of Planned Giving at CCSCC. “The IRA to CGA conversion is popular as it seamlessly addresses these needs.”
Questions? Contact Cecilia at cbynum@ccscc.org or 408-325- 5248. For more on charitable giving, visit our website: ccscclegacy.org. Please remember to consult with a professional advisor for guidance specific to your situation.
