Retirement plans were created by amendments to the Internal Revenue Code of 1954 (as amended) made by the Employee Retirement Income Security Act of 1974 (ERISA), which enacted (among other things) Internal Revenue Code sections 219 and 408 relating to IRAs. The expectation at the time was that at retirement, income would decrease and correspondingly the effective tax rate would decrease. As a result, with growth in the tax sheltered account and lower tax bracket, retirees would have more income. Most retirees have not seen an income tax reduction during retirement and the distribution that is mandated during the year that a retiree turns 70.5 can actually increase the retiree’s tax rate. Because the retirement plan balances are subject to income taxes as well as estate taxes at the death of the owner, a retiree’s beneficiaries may receive less than 20% of the value of the retirement account.
By naming Presbyterian College as the beneficiary of your retirement account, PC would receive the entire balance or the percentage indicated of the account. PC would not pay income taxes on the amount it receives. Your estate would receive an estate tax charitable deduction for the portion of the account passing to PC.
Benefits to you include:
- Qualifies for an estate tax charitable deduction.
- Provide a tax free gift to Presbyterian College
- You will provide generous support to Presbyterian College
*As with any financial decision, you should consult your CPA, attorney and other financial advisors.
For more information, please contact:
Ann Casey – Director of Advancement Services
Office: 864.833.8007 | email@example.com