STRATEGY #6: Offset a Roth IRA conversion With anticipated increases to future tax rates, 6
a lot of people are evaluating the possibility of converting a traditional IRA to a Roth IRA — paying the income tax burden now to receive tax-free withdrawals in retirement. According to Moraczewski, this can present an opportunity to accelerate charitable contributions into 2021 as a way of offsetting the additional taxable income. “If you were planning to make charitable contributions over time anyway, you can make them now to reduce that tax burden,” says Moraczewski. “It’s also a situation to consider using a donor-advised fund, for example, making a $25,000 contribution this year and then giving away $5,000 each year for the next five years.” How financial professionals can help No matter which strategy you choose, the counsel of a financial planner, wealth advisor or estate planning attorney can help you make the most of your philanthropic efforts. “It’s really a matter of ensuring you’re getting a benefit for what you already want to do,” says Moraczewski. “In estate planning, we often see clients name family members or other individuals as beneficiaries of retirement
Other ways to give back W hile donations are an important part of the charitable equation, offering your time and skills to a nonprofit can offer rewards beyond dollars and cents. First and foremost, identifying a charity that matches your personal interests will motivate you in helping them achieve their goals. Understanding your own goals is part of success, too. Are you interested in being a general helper, learning new skills and meeting new friends — or do you aspire to handle more leadership- intensive projects such as fundraising, grant writing or event planning? The final key is to make a commitment that you can keep. Be honest with yourself and the charity about your availability, the skills you can contribute and the tasks that are most (and least) appealing to you. Even as a volunteer, being reliable and having a business mindset will help your favorite nonprofit succeed!
“Charitable planning is one of the few areas where there really are win-win situations.” Amy Moraczewski Senior Wealth Planner
accounts, while funding charitable bequests from other assets. A financial professional can advise on how to restructure bequests and complete beneficiary designations — saving your heirs’ tax dollars while satisfying your charitable goals.” Likewise, a financial professional can help facilitate the transactions noted above, such as
donating stock to charity or making IRA distributions directly to a charity. They are familiar with the required forms and can remove the burden from you in executing the transfer properly. “Our goal is to look at your entire situation holistically and see how things can work together,” Moraczewski says. “Charitable planning is one of the few areas where there really are win-win situations, an opportunity to maximize benefits for you, your heirs and the organizations you support.”
4
IN YOUR CORNER ISSUE 9 | 2021
Made with FlippingBook flipbook maker