Over 60 million taxpayers in the United States own an individual retirement account1 (IRA).
Starting at age 72, IRA owners are required to take money out of their account each year (a “required minimum distribution” or RMD). RMDs are taxable income, so if they are not necessary for your everyday expenses, they could become more of a burden, increasing your taxes, or even bumping you into a higher tax bracket2. This could have a negative impact on your Social Security or Medicare benefits. Further still, if you do not meet the required minimum, you could be subject to a massive 50-percent penalty on the amount that is not withdrawn.
This all might seem like a lose-lose situation. But starting at age 70½, IRA owners can donate up to $100,000 each year straight from their IRA to the American Legion Auxiliary Foundation, a 501(c)(3) organization. The money will not be taxed, will not count as income, and will satisfy part or all of your RMD when you turn 72 years old. This option is not only an incredible tax advantage, but it can also change the lives of veterans across the country – and every penny will be directed to support your charitable goals.
Plus, you will get to see your gift in action – helping veterans in need heal through art therapy, supporting the creation of a new veterans homeless shelter, or even supporting a young woman’s opportunity for leadership growth and government knowledge.
As always, at any age you can designate the ALA Foundation as a beneficiary on your IRA and it will pass to us tax-free after your lifetime. But why not get started now while saving money in taxes?
Reach out to your retirement provider today to make a gift and make an impact on veterans, military, and their families.
Here are a few helpful tips to get you started:
In the spirit of Service, Not Self, the mission of the American Legion Auxiliary is to support The American Legion and to honor the sacrifice of those who serve by enhancing the lives of our veterans, military, and their families, both at home and abroad. For God and Country, we advocate for veterans, educate our citizens, mentor youth, and promote patriotism, good citizenship, peace and security.