Impact of SECURE Act 2.0 on Philanthropy

Building on the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 is a second version of the bill, known as SECURE Act 2.0, which was signed into law at the end of 2022. This new legislation introduces a variety of new rulings, some which may impact your charitable giving in retirement. Here are three key provisions and what you need to know:

1.    Wait longer to take distributions

Beginning in 2023, the age to begin taking a required minimum distribution (RMD) from your IRA raises from age 72 to 73. By 2033 the RMD withdrawal age will increase to 75. Note, this new law does not affect the age at which IRA owners are permitted to make qualified charitable distributions (QCD); this age remains at 70 ½ or older.

How this impacts me: For those approaching retirement age, the RMD age extension will allow the money in your IRA to grow an extra year tax-free. This added time could benefit you in challenging market times, allowing your nest egg to recover before mandatory withdrawals begin, potentially increasing the amount you would later consider for charitable donation.

2.     Lower your RMD and generate lifetime income

If you are 70 ½ or older, you can now take a one-time tax-free distribution from your IRA up to $50,000 and use the funds to form a charitable gift annuity . Couples may combine their distribution amounts to create a two-life annuity up to $100,000.

How this impacts me: A charitable gift annuity funded through your IRA will provide a lifetime income stream while counting towards your RMD in the year of your gift (for those age 73+). At the end of your life, the remaining value is donated to Orlando Health. Recently increased payout rates for charitable gift annuities make this an ideal time to take advantage of this new option and maximize your giving.

3.    Increase the maximum amount you gift to charity from your IRA

Making a gift directly to charity from your IRA has become a popular way for individuals who are 70 ½ or older to avoid paying income taxes and fulfill their RMD. Historically, the maximum amount you could distribute to charity has been $100,000 in any given year. Now, this amount will be annually adjusted for inflation beginning in 2024.

How this impacts me: By adjusting the capped IRA gift amount an on annual basis, you will be able to increase your giving and make an even greater impact at Orlando Health.

We encourage you to seek advice from your attorney or financial advisor regarding all the ways this bill may impact your future plans. Should you have any questions or concerns, please feel free to consult with our planned giving team. Our approach is to understand your unique situation and help facilitate philanthropic conversations with loved ones and your personal advisors in the community.

For more information about making a gift through your IRA or about including Orlando Health in your will or trust, please visit us at OrlandoHealthPlannedGiving.com or contact the Office of Planned Giving at (321) 843-9844.