Retirement planning is an important discussion topic during client meetings every year. In recent months, though, you may have observed an uptick in clients’ questions about their plans for retirement related to:
–Required minimum distributions (“RMDs”) from qualified retirement plans, including questions prompted by media coverage of pending legislation known as SECURE 2.0;
–Stability of retirement investments, a topic that is widely covered in mainstream financial news; and
–Rising interest rates and what that means for retirement, which is also a frequent topic in the media, along with inflation’s impact on retirees.
Against this backdrop, the issues become particularly complex for philanthropic clients. Here are answers to questions you may be asking:
What’s going on with updates to the charitable giving components proposed in the SECURE 2.0 Act?
Right now, SECURE 2.0 includes a provision that would index the $100,000 Qualified Charitable Distribution (“QCD”) allowance for inflation and also expand the technique to allow for a one-time transfer of $50,000 to a charitable remainder trust or other split-interest vehicle. But those enhancements are not the law, yet. Overall, the legislation appears to stand a good chance of becoming law. Still, a lot can happen as the House and Senate reconcile their respective bills before the legislation heads to President Biden for signature.
What should I be telling my clients about the potential changes to the Qualified Charitable Distribution rules? Or should I say nothing?
For clients who are seriously considering a QCD, it may be worth mentioning these potential enhancements. But in general, it’s usually more confusing than helpful to bring up pending legislation, no matter how exciting. Instead, consider placing your focus on the QCD rules as they currently stand. The QCD already is a strong planning tool.
When should I reach out to the Community Foundation for help with QCDs?
The answer is. . . anytime! The Community Foundation can help establish a qualifying fund to receive your client’s Qualified Charitable Distribution, regardless of whether the SECURE 2.0 enhancements become law. Please don’t hesitate to call on us anytime we can be of assistance.