Why IRA Giving Became the Tax-Wise Solution for Andy and Jinny
Over the course of their married life, Andy and Jinny have intentionally worked to establish priorities and practices of generosity.
“When it comes to money, married couples aren’t always on the same page,” quips Jinny.
“Sometimes one of us had a greater call to generosity than the other, but we would talk that through, pray about it and God would give us one heart and one mind.”
But Andy and Jinny have always found unity on two core principles: living below their means and stewarding the resources God has given them well.
Throughout their many years of Christian service (Andy as a pastor and Jinny in nonprofit leadership), they had front-row seats to many fine examples of sacrificial giving.
“I saw amazing evidence of generosity from people who chose to live simpler lifestyles than what they could have,” remarks Jinny. “It was because of their role as stewards; giving was very important in their lives.”
Likewise, Andy and Jinny have demonstrated their hearts for giving through ongoing support to their local church and ministries that serve the needs of children and college students in Jesus’ name.
Now into their retirement years, they have found a new tax-wise way to accomplish their charitable goals – giving to their favorite ministries from their IRAs.
Andy and Jinny have saved for retirement with traditional IRAs, in addition to other strategies. Starting at age 70 ½, each of them must withdraw a required minimum distribution each year. By making a qualified charitable distribution to their church and other charities, they satisfy this distribution requirement AND provide ongoing support to the ministries close to their hearts.
“We know our annual retirement income from various sources, including how much we are required to take out of our IRA accounts,” comments Jinny. “So for each calendar year, we can project our ‘live and give’ budgets. We know how much to give to support our church and other charities. It’s a way to practice first fruits on the front-end of every year.”
What’s more, by giving from their IRAs, they reduce their taxable income. This is a significant tax savings for anyone over the age 70 ½, regardless of whether they itemize deductions on their tax return.
“Say a person gives $50 a week to their church. Rather than take that money out of their IRA as income and then write a check, why not make a direct qualified charitable distribution instead?” she asks. “It would be to their advantage.”
For Andy and Jinny, this means they are no longer cutting weekly checks to their church, but their level of support remains consistent with their charitable values.
“It’s going to feel different giving this way,” says Jinny. “But the impact will be the same – maybe even greater.”