Charitable Gifts that
Save for RetirementA successful plastic surgeon came to his longtime financial adviser with a problem.
“My income taxes keep me from saving as much as I’d like for retirement,” he said. Already at the maximum of what he can contribute to his 401(k) plan, he was unsure how to increase other deductions. A loyal Medical College of Georgia alumnus, he felt the time was right to give back to his alma mater, but he was nervous about how to give and save at the same time.
This situation is hypothetical, but the circumstances are far from unique. Many high-income professionals utilize charitable interests for tax relief and supplementary retirement savings vehicles.
A retirement unitrust, also known as a charitable IRA, is a useful tool for those seeking to save for retirement while investing in the future of a charitable or educational institution.
A charitable IRA offers:
* an income tax deduction for part of the funds or property transferred to the trust, based on the donor’s age at the time of contribution and the amount of income retained.
* deferral of the bulk of the trust income until retirement. The principal typically grows quickly because the trust is tax-exempt.
* payment of substantial income after retirement, with the potential for some payments to be taxed favorably as long-term capital gain or tax-free principal.
* an important gift to ensure the future of health care and health science education in Georgia.
Stocks, mutual funds, property or other assets will enlarge a trust principal but will pay out very little income until retirement. The donor designates what the age of retirement will be when the trust is drafted. After retirement, the donor receives a negotiated percentage of the trust’s value in payments for life.
Professionals in the Medical College of Georgia Division of University Advancement are available to help faculty, alumni and friends of the institution with individual financial needs.
For more information on how to maximize your retirement savings and minimize your tax liability, give me a call or drop me an e-mail.
Sincerely,
Tony Duva
Associate Vice President
for Gift Giving
800-860-1113
aduva@mcg.edu
Options for Remembering MCG in Your Will
For more information, please contact Tony Duva at 800-869-1113 or aduva@mcg.edu.
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Information in this article is not intended as legal advice. For legal advice,
please consult an attorney.
Tax laws are subject to change.