QCDs: A Great Way to Give Yourself (and the Charities You Love) a Gift This Year

Why you should consider using your annual IRA distribution to make a qualified charitable distribution.

Hands holding one-hundred dollar bills
(Image credit: Getty Images)

If you’re 72 or older and have a traditional IRA, you probably know the drill: Every year, you must withdraw a minimum dollar amount from your retirement account. These required minimum distributions, or RMDs, were waived for 2020 due to the coronavirus pandemic, but they’re back for 2021. The amount of your RMD depends on several factors, including your age, life expectancy and account balance, and will vary each year. The withdrawal percentage generally starts around 4% of your account balance and can be as high as 53%. Failing to withdraw your RMD by the applicable deadline can result in a steep penalty: 50% of the amount you neglected to withdraw.

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Allison L. Lee, Esq.
Attorney-at-Law, Director Trusts & Estate Content, FreeWill

Allison L. Lee is the Attorney-at-Law, Director Trusts & Estate Content for FreeWill, a mission-based public benefit corporation that partners with nonprofits to provide a simple, intuitive and efficient online self-help platform to create wills and other estate planning documents free of cost. Through its work democratizing access to these tools, FreeWill has helped raise billions for charity. Prior to joining FreeWill, Allison spent more than a decade in private practice.