Required Minimum Distributions (RMD) are mandatory withdrawals you must take each year from your qualified retirement account. If you recently turned 73, you are probably facing your first RMDs. If you’re already taking RMDs, the new year brings a new RMD amount.
RMDs can present a financial conundrum. Like other distributions from qualified retirement accounts, RMDs are taxable. Unlike other withdrawals, RMDs are mandatory even if you do not need or want the money this year. An RMD can also raise your Medicare premiums and increase taxes on your Social Security benefits. And it is wise to plan carefully for your RMDs early in the year because there is a 25% penalty tax if you fail to take them as required.
Fortunately, there is a way for you to support Baystate Health and avoid some of the taxes on your RMDs at the same time. It’s called a Qualified Charitable Distribution (QCD) from your IRA account. Unlike other withdrawals, there is no income tax on a QCD withdrawal and – even better – your QCD contribution to Baystate Health can reduce or eliminate the taxable amount of your RMD. Making a QCD contribution is simple. Just contact your IRA plan administrator and ask to make a QCD contribution to Baystate Health and they’ll take care of the rest.
Want to learn more? Contact us for a FREE QCD Guide. Reach out to Kylie Johnson at 413.794.7789 or
Kylie.Johnson@BaystateHealth.org.