by Brooke Gullion, AVP/Operations – FLMI, ALMI, ACS
If you’re age 73 or older, you’re likely familiar with the IRS Required Minimum Distributions (RMDs) that must be processed from your IRA(s) each year. Many choose to satisfy this requirement through an annual payment, often by direct deposit or in the form of a physical check. While this method is widely used, it’s not the only available option.
Just as a single acorn holds the potential to grow into a vast grove, there are other alternatives that offer you the opportunity to invest in your family’s future and cultivate a lasting legacy for generations to come. Here are some meaningful and strategic options to consider:
SHARE SEEDS WITH THE LESS FORTUNATE THROUGH A QUALIFIED CHARITABLE DISTRIBUTION (QCD)
You can elect to have your RMD withdrawn and sent to a charitable organization of your choice.
o It is the owner’s responsibility to ensure that the organization qualifies under IRS guidelines. This is a great opportunity to bless an organization near and dear to your heart.
o To be considered a qualified distribution, the funds must be sent directly to the organization. The letter accompanying the check will advise them that you made the donation and you will receive a copy of this letter.
o Be sure to consult a qualified tax advisor regarding the possible tax benefit of a QCD.
PLANT SEEDS OF GENERATIONAL WEALTH
Wealth Transfer to a Life Certificate
Use your RMD to fund a new or existing life certificate for yourself or an immediate family member – such as a grandparent, parent, sibling, spouse, child, grandchild or great-grandchild. Available life certificates include:
- Just for Kids (JFK) term life certificate
- Single Premium Whole Life certificate
- Other available premium paying life certificate options
✔ If there is an existing life certificate, confirm that the certificate will accept an additional premium or deposit of the net RMD amount.
Make a Deposit or Contribution to an AnnuityYou can also use your RMD to fund a new or existing annuity such as:
A Deposit into a Non-Qualified Annuity
✔ If there is an existing annuity, confirm that the certificate will accept an additional deposit of the net RMD amount.
A Tax Year Contribution to a Traditional or Roth IRA
To make a contribution, you must have earned income and may contribute the lesser of:
(1) the current IRS annual limit or
(2) 100% of your earned income.
✔ If there is an existing annuity, confirm that the certificate will accept an additional deposit of the net RMD amount.
Not all options are available to every IRA holder. We recommend you consult a qualified tax advisor to determine which option is best for you. If you have any questions or if we can be of further assistance, please do not hesitate to contact our office via email at mscen@cliu.com or phone at 210-828-9921 or 1-800-262-2548.
