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The SECURE Act, Baystate Health and You

January 30, 2020
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What is the SECURE Act?

The Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law on Dec. 20, 2019. With significant changes that went into effect Jan. 1, 2020, the SECURE Act may have an immediate and dramatic effect on your tax planning, retirement planning, and estate planning.

If you are nearing or in retirement, or a saver or investor in your 50s or 60s, you are wise to find out how the SECURE Act may impact you and your beneficiaries so you can take appropriate action as needed. If you want to make a difference for lifesaving and life-enhancing care by supporting Baystate Health Foundation, the good news is that there are many ways charitable gifts can work with your financial and estate plans to help you achieve your goals.

The SECURE Act: What Might Impact You

  1. The required minimum distribution (RMD) age changed. If you were born July 1, 1949, or later, you now have until age 72 to start withdrawing money from traditional IRAs and employer tax-deferred accounts such as 401(k)s, 403(b)s, and 457s. This means you have additional time to grow the funds in your accounts before you have to start withdrawing from them.

  2. Working later means you can contribute more. If you are still earning income at age 70 ½ and beyond, you can now continue to contribute to a traditional IRA. Previously only Roth IRAs could be funded after age 70 ½. This allows you to save more and grow your retirement funds.

  3. Leaving IRAs to heirs just got more expensive. Prior to the SECURE Act, beneficiaries of your IRA or 401(k) could “stretch” distributions over their lifetimes. This allowed for money in the account to grow tax-free for decades. While the SECURE Act preserved this option for spouses, most non-spousal beneficiaries, such as children or grandchildren, now only have 10 years to withdraw the entire amount and pay all of the account’s required tax. Basically this means that inheriting an IRA now comes with fewer advantages and a larger, accelerated tax bill.

Charitable Solutions: IRA Distributions that May Reduce Your Taxes and Help You Give Back

  1. Making current gifts from a Charitable IRA Rollover (Qualified Charitable Distribution) Now Makes Even More Sense
    If you’re 70½ or older, you can still make a tax-free gift from your IRA to a qualified charitable organization such as Baystate Health Foundation. You can transfer any amount up to $100,000 per year (up to $200,000 per couple) directly to a qualified charitable organization without paying income tax on the distribution. The transfer generates neither taxable income nor a tax deduction, so you benefit even if you do not itemize your deductions. Plus, you have the joy of giving back to support what matters most to you at Baystate Health.

    Benefits of an IRA Charitable Rollover (QCD) Gift Made at age 70 ½ versus 72

    If you have not reached age 72 and aren’t required to take your RMD under the SECURE act, there are reasons to consider an IRA Charitable Rollover Gift (QCD) at 70½. First, increases in the standard deduction mean far fewer taxpayers are able to itemize their income tax charitable deductions. If you don’t itemize, a QCD offers all the benefits of an income tax charitable deduction. You can’t claim a deduction for your QCD, but your QCD is not included in your income. The QCD is a tax-free gift. Another reason to consider a QCD at 70½ is to reduce the balance in your IRA to lower future RMDs. You may be in a position where you don’t want or need the income from your IRA. Higher income from an RMD can increase Medicare premiums and other tax issues. With a QCD at 70½ you can make a difference for the area of Baystate Health that matters most to you.

  2. Save Lives with an IRA Beneficiary Designation
    At any age, you can do what many others have already done: make Baystate Health Foundation a percentage beneficiary of your retirement accounts. As a non-profit, we can put the full value of your gift to work tax-free for a hospital or area you wish to impact. We can help you create a legacy out of highly-taxed assets while leaving more favorable assets to your heirs.

  3. Establish a Life Income Gift in your Estate Plan to Benefit Your Heirs and Baystate Health
    For some, a charitable life income gift may be a solution to provide lifetime income for your loved ones. Designate some or all of the assets remaining when your IRA, 401(k), 403(b) or other qualified retirement plan ends to fund a charitable remainder trust or charitable gift annuity. Both arrangements can provide payments to family members or other loved ones for the rest of their lives, preserving retirement plan assets and reducing taxes. Passing assets to us through a life income plan allows you to provide income to your loved ones after you are gone and then provide support to Baystate Health.

Start Planning Now

Giving the significance of these SECURE Act rule changes, proactive planning will help you make adjustments, avoid potential pitfalls, and keep you on track to achieve your intended goals. There are many other retirement and charitable planning ideas resulting from the SECURE Act and elsewhere that we can discuss as you consider how to reduce taxes while maximizing the benefits of your retirement accounts for your beneficiaries and charities of choice. We are happy to work with your financial and legal advisors to help you find the best course of action to achieve your goals and make a meaningful impact for lifesaving and life-enhancing care.

Want to learn more about these tax-saving charitable giving ideas and how you can make an impact for Baystate Health? Please contact Kylie Johnson at or 413-794-7789 to explore options.

Please note that this information should not be considered legal, accounting, or other professional advice. Please consult your professional advisor.