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This year-end donation move could reap big savings for retirees

Expert charitable distributions allow you to take your retirement savings and award it directly to charity.

The payoff: This strategy could result in big savings for retirees who are bound by to required minimum distributions or RMDs, according to Ed Slott, founder of Ed Slott & Co.

“This is something you definitely want to get done by year end,” Slott said.

Qualified charitable deployments, or QCDs, work best for retirees who must take money out of their retirement accounts and who also donate to charity.

Most people need to start their required reduced distributions, or RMDs, from their retirement accounts when they twist 70½. But take note: The last day to take those distributions this year is Friday, Dec. 29.

Measure than writing a check to charity and including your RMD as income on your imposts, you can donate the funds directly to charity.

The result is that your rectified gross income is lower, which reduces the likelihood that other furthers could be affected, Slott said. That includes more imposes on your Social Security income or higher Medicare premiums.

“By leeway to charity this way, you’re lowering your income and in effect getting a open-handed deduction,” Slott said. “If you give to charity already, give the but amount a better way and you’ll pay less tax.”

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