Gift of Retirement Plan Assets

Ways to GiveGift of Retirement Plan Assets

Do you have money saved in an employee retirement plan, IRA or tax-sheltered annuity?  If so, each of these retirement plan assets contain income that has yet to be taxed.  Although there are ways in which spouses (and, to a lesser extent, other heirs) can defer taxes on these assets when they delay the date they are to receive the funds, they, too, are subject to income tax when they make withdrawals which can be as high as 39.6%. Want to get the most value from these assets, protect your heirs from heavy taxes and make an impact to our organization?  Consider leaving us a portion of your retirement plan assets.

How it works:

If you die with retirement plan assets in your estate, those assets are subject to income taxes.  This can reduce the amount that normally would be passed to heirs, again, by as much as 39.6%.  In contrast, as a nonprofit organization, we are tax-exempt and eligible to receive the full amount and bypass any federal taxes.  Income taxes can be eliminated or reduced through a carefully planned charitable gift.  Consider these options:

  • Designate BBBSCM/MW as the primary beneficiary for a percentage (1% to 100%) of your retirement plan assets.
  • Designate a specific amount to be paid to BBBSCM/MW before the remainder is divided among family beneficiaries.
  •  Make us the contingent beneficiary to receive the balance only if your loved one, as primary beneficiary, doesn’t survive you.

IRA Charitable Rollover

Consider Using Your Traditional IRA to Make Your Charitable Gifts

In 2006 Congress made a change to the tax law that allows individuals age 70½+ to make charitable gifts directly from a traditional IRA account to a charity without incurring federal income tax on the withdrawal.   Many people have not heard about this option for making charitable gifts because it would expire every two years and need to be renewed by Congress.  H.R. 2029, the Protecting Americans from Tax Hikes Act of 2015, changed all that, making this provision a permanent, rather than temporary, part of the tax code (to the extent anything is permanent in the tax code).   The IRA Charitable Rollover provides you with an excellent opportunity to make a gift during your lifetime from an asset that would be subject to multiple levels of taxation if it remained in your taxable estate.

To qualify

  • You must be age 70½ or older at the time of gift.
  • Transfers must be made directly from a traditional IRA account by your IRA administrator to Big Brothers Big Sisters of Central Mass/Metrowest.  Note: funds that are withdrawn by you and then contributed do NOT qualify.  Gifts from 401k, 403b, SEP and other plans do NOT qualify.
  • Gifts must be outright.  Distributions to donor-advised funds or life-income arrangements such as charitable remainder trusts and charitable gift annuities are not allowed.

Benefits — qualified charitable distributions

  • Can total up to $100,000.
  • Are not included in your gross income for federal income tax purposes on your IRS Form 1040 (no charitable deduction is available, however).
  • Count towards your minimum required distribution for the year from your IRA.


Suppose John has $500,000 in an IRA and he wants to contribute $20,000 from that IRA to Big Brothers Big Sisters of Central Mass/Metrowest.  He can authorize the administrator of his IRA to transfer $20,000 to BBBSCM/MW and $5,000 to himself.  The $20,000 distributed to BBBSCM/MW will not be subject to federal tax and will be counted toward his annual minimum required distribution.  As you plan your minimum required distributions for this year, if you do not need the money the government is requiring you to take, consider using it for a charitable gift using the IRA Charitable Rollover.


If you think that a gift of retirement plan assets might be a good fit for you or if you want to learn more about this or other options for charitable giving, please contact Harold Pinkham, Director of Advancement, at 508-752-7868 ext: 12