Building on the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, the SECURE Act 2.0 passed by Congress in December 2022 contains many positive changes for those nearing or in retirement. Here’s how you may be able to utilize some of the new law’s provisions:
- Individuals age 70½ and older may give up to $50,000 from their IRA to a charitable remainder unitrust, charitable remainder annuity trust, or charitable gift annuity.
- Distributions to create life income gifts count toward an individual’s required minimum distribution (RMD). Gifts must be made directly from the donor’s IRA in a single year.
- Spouses can contribute up to $50,000 each from their respective IRAs for a combined total of $100,000 in a charitable remainder trust or gift annuity.
- While this type of gift will not generate a tax deduction, it also will not be counted as income until paid out over time in future years.
- The age one must start taking RMDs from their IRA increases from age 72 to 73.
- Effective in 2024, a new provision will allow the maximum contribution amount to increase based on the inflation rate.
What is a Charitable Gift Annuity?
- Established with a minimum gift of $25,000
- Provides fixed lifetime payments to you and/or another person
- A portion of the payment is tax free*
- Charitable income tax deduction in the year the gift is made**
- Creates a significant gift to Washington University
- View sample gift annuity payout rates
*Income from CGAs funded by IRA rollovers is fully taxable.
**For regular life income gifts. Under the SECURE Act, gifts from an IRA to establish a life income gift are not eligible for a tax deduction.
What is a Charitable Remainder Unitrust?
- Established with a minimum gift of $50,000; can add to the trust at any time
- Charitable income tax deduction in the year the gift is made*
- Fixed-rate payments for life or a term of years to you or another named beneficiary
- Income payments based on fair market value of the trust revalued annually
- Significant gift to WashU when trust terminates
We encourage you to consult with your financial planner on how these changes might benefit your retirement planning and charitable goals. The Office of Planned Giving team is available to discuss ways to utilize the law’s new provisions to make an impactful gift to Washington University.