When Golden Redbirds reach the age of 73, they face decisions about required minimum distributions (RMDs) with their Individual Retirement Accounts (IRAs). Among the various options available, one stands out for those who want to make a lasting impact at Illinois State—a qualified charitable distribution (QCD).
At the age of 73, the IRS requires withdrawals from qualified retirement accounts, including traditional IRAs and employer-sponsored 401(k)s. Failing to withdraw RMDs can result in a penalty, such as a substantial 25% excise tax. This requirement often raises questions about what to do with these mandatory withdrawals.
RMDs serve a range of purposes, from covering living expenses to making new investments, transferring wealth to loved ones, or donating to charities through qualified charitable distributions. QCDs allow a direct transfer from your IRA to a qualified charity of choice, including Illinois State University.
Donors may contribute up to $100,000 per individual or $200,000 for married couples filing jointly, provided both spouses have IRAs. Alumni and friends can benefit from this distribution method, which does not count against limits on charitable contributions and is not included in gross income.
The beauty of QCDs lies not only in their benefits for individuals but also in their potential to impact Illinois State University. When you choose to give back to ISU, you can direct your support to the specific area of the University that holds a special place in your heart. Whether it’s your college, program, a scholarship, or campus spaces, you have an opportunity to leave a legacy and shape the ISU experience for generations of Redbirds.
Illinois State University Foundation Board member Dan Kelley ’70 and his wife Pam Kelley use qualified charitable distributions to benefit the Illinois State University community.
“My wife Pam and I have made donations from my IRA’s required minimum distribution as a convenient way to donate a tax-free gift to the agriculture program and its students, the Mennonite College of Nursing, and to support student-athletes. If I take my RMD into my personal account, I must pay state and federal taxes on the distribution. By making a charitable donation, the recipient benefits, we get credit for a charitable gift, and income taxes are reduced,” said Kelley. “I encourage my fellow Golden Redbirds to consider supporting ISU by using proceeds from your RMD. Together we will not only sustain the University but move it to new heights!”
To learn more about tax-advantaged ways to support Illinois State University, visit Giveto.IllinoisState.edu.
