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Writer's pictureDavid Selvey, DMin

You can make a difference giving in retirement!

Making a Difference with Your Required Minimum Distribution: Supporting the Haitian American Friendship Foundation


Couple giving in retirement

As you approach retirement, managing your finances involves making decisions that balance your needs with your desire to give back. If you’re 73 or older, the IRS requires you to start taking Required Minimum Distributions (RMDs) from your retirement accounts, such as IRAs and 401(k)s. While these distributions are necessary, they can also increase your taxable income. Fortunately, there’s a way to satisfy your RMD requirements while also making a positive impact: donating your RMD to the Haitian American Friendship Foundation (HAFF).

By using your RMD to support HAFF, you can contribute to life-changing programs in Haiti while potentially reducing your tax burden. Here’s how it works and why it’s a strategy worth considering.

1. Understanding RMDs and Their Tax Implications

RMDs are the minimum amounts that the IRS requires you to withdraw annually from your retirement accounts, starting at age 73. These withdrawals are considered taxable income, which means they can increase your tax liability if you don’t plan carefully.

For many retirees, RMDs can push them into a higher tax bracket or result in additional taxes on Social Security benefits. However, by making a Qualified Charitable Distribution (QCD), you can direct up to $100,000 per year from your IRA to a qualified charity like HAFF, satisfying your RMD requirements while also lowering your taxable income.

2. The Benefits of Making a QCD to HAFF

When you choose to make a QCD to HAFF, you’re not only fulfilling your RMD obligation but also doing so in a tax-efficient manner. Here’s how you can benefit:

• Lower Your Taxable Income: Because QCDs are excluded from your taxable income, they can help you reduce your overall tax liability. This can be especially advantageous if you’re concerned about the tax impact of your RMDs.

• Avoid the Limits on Charitable Deductions: Unlike other charitable contributions, Qualified Charitable Distributions are not subject to the 60% of AGI limit for cash donations. This allows you to give more generously without worrying about exceeding deduction limits.

• Simplify Your Giving: QCDs are straightforward to set up and can be made directly from your IRA to HAFF. This not only simplifies the giving process but also ensures that your donation has an immediate impact on our mission.

3. Supporting HAFF’s Mission Through Your RMD

When you direct your RMD to HAFF, you’re not just reducing your tax bill—you’re also making a tangible difference in the lives of people in Haiti. Your contribution helps us continue our vital work in education, community well-being, and spiritual growth in the Central Plateau.

HAFF is dedicated to providing quality education to children, empowering communities through engagement, and fostering spiritual well-being. Your RMD donation can help us maintain and expand our programs, ensuring that more children receive the education they need to succeed, more families have access to vital resources, and more communities can thrive.

4. How to Make a Qualified Charitable to HAFF

Making a QCD to HAFF is a simple process that can be completed in a few steps:

• Step 1: Contact your IRA custodian and inform them that you’d like to make a Qualified Charitable Distribution to the Haitian American Friendship Foundation. You’ll need to provide HAFF’s details, including our legal name and EIN. Contact us and we can help you.

• Step 2: Specify the amount you wish to donate, ensuring it doesn’t exceed your Required Minimum Distribution or the $100,000 annual limit for QCDs.

• Step 3: Request that the funds be transferred directly from your IRA to HAFF. It’s important that the distribution goes directly to the charity to qualify as a QCD.

• Step 4: Notify HAFF of your gift so we can properly acknowledge your donation and provide a receipt for your records.

5. Make a Lasting Impact with Your Retirement Funds

Your RMD doesn’t have to be just another line on your tax return—it can be a powerful tool for making a difference in the world. By directing your RMD to HAFF, you’re investing in the future of Haiti and helping us create lasting change in the communities we serve.

Whether you’re passionate about education, healthcare, or community well-being, your donation will have a direct and meaningful impact on the lives of people in Haiti. And by making a QCD, you can do so in a way that’s financially beneficial for you.

Conclusion

As you plan your retirement and consider how best to use your RMDs, donating to the Haitian American Friendship Foundation through a Qualified Charitable Distribution is a strategy worth exploring. It’s a win-win: you fulfill your RMD requirements, potentially reduce your tax liability, and contribute to a cause that’s making a real difference in Haiti.

If you’re interested in learning more about how your RMD can support HAFF, please reach out to your financial advisor or email us directly. Together, we can continue to build a brighter future for the people of Haiti.

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