Give From Your IRA and Receive a Lifetime of Payments

Donors over 70½ can receive a lifetime of payments in return for a contribution to Bentley from their IRA account. This gift plan combines a charitable gift annuity and a Qualified Charitable Distribution from an IRA. Let’s see how it works.

Charitable Gift Annuity — A charitable gift annuity is a simple contract between you and Bentley promising to pay you a fixed amount of money each year for life. The amount Bentley can agree to pay you depends upon your age at the time of your gift and does not change for the rest of your lifetime. Bentley invests and manages your contribution, and your payments are backed by the university’s financial resources.

Qualified Charitable Distribution — A QCD is a charitable contribution directly from your IRA to Bentley. You can make a QCD if you are at least age 70½. Unlike other distributions from your retirement accounts, you pay no income tax on a QCD, although there is no charitable deduction for your contribution. However, your QCD contribution counts toward your Required Minimum Distribution from your IRA without creating taxable income for you.

Charitable Rollover Gift Annuity — Donors who are age 70½ or older can make a QCD in exchange for a charitable gift annuity. There are some rules and limitations:

• You can exercise this option only once during your lifetime
• There is an aggregate limit of $53,000 for 2024
• The entire payment you receive from your charitable gift annuity will be subject to income tax
• You can include your spouse as a recipient of the annuity payment
• There is no income tax deduction for this contribution, although there is no tax on the QCD either

Example

For example, consider Alan, a 75-year-old who would like to make a special contribution to support Bentley. Alan has substantial assets in his IRA, and he is facing a Required Minimum Distribution this year. Alan knows that his Required Minimum Distribution will increase his income tax. Instead, Alan chooses to make a $53,000 QCD to Bentley in exchange for a charitable gift annuity which will pay him $3,710 (7%) per year for the rest of his lifetime.  Alan has the option of including payments for his wife, who is age 72, as a joint recipient, in which case the annuity payment would be $2,850 (5.7%) for their lifetimes.

Alan understands that he is allowed to make this election only one time, but he is looking forward to securing a stream of payments for his lifetime, and perhaps his wife’s, while reducing his Required Minimum Distribution and making a generous contribution to Bentley.

We would be happy to work with you and your advisors to help determine whether this new option is right for you.