The SECURE Act and The SECURE Act 2.0
New legislation in 2020 and 2022 makes using an individual retirement account (IRA) an even more tax advantageous way to give. Please find below highlights from the legislation along with ways to use your IRA to support an area at Tufts that is important to you.
The SECURE Act 2.0
President Biden signed an omnibus spending bill on December 29, 2022 that included Secure 2.0, new retirement plan legislation that builds on the Secure Act that went into effect on January 1, 2020.
Qualified Charitable Distribution (QCD) Adjusted for Inflation: If you are at least 70 ½ you can make a qualified charitable distribution, up to $100,000, in 2023. The $100,000 limit is adjusted for inflation beginning in 2024.
- Giving Opportunity: Beginning in 2024, you can make larger gifts to Tufts through a QCD.
Funding a Gift That Pays Income: If you are at least 70 ½, you can make a one-time qualified charitable distribution, up to $50,000, to fund a charitable gift annuity or charitable remainder trust.
- Giving Opportunity: The retirement plan that you have built over your lifetime can now be used to create a gift that provides fixed income to yourself and/or a spouse and support an area of Tufts that is important to you. Visit our Charitable Gift Annuity page to learn more.
Required Minimum Distribution (RMD) Age Raised: The new law increases the age of the required minimum distribution to 73 in 2023 and 75 in 2033.
- Giving Opportunity: Beginning at age 70 ½ you can still make a qualified charitable distribution (QCD) from your IRA to public charities, like Tufts, and exclude the amount of the gift from your gross income for federal tax purposes. Once you turn 73 years old, the amount of your QCD may count toward your required minimum distribution (RMD).
The SECURE Act (2020)
The Setting Every Community Up for Retirement Enhancement Act (the SECURE Act) was part of a larger appropriations bill which went into effect on January 1, 2020 and included changes to rules governing retirement accounts.
Age Limitation Rules Repealed: If you have earned income, you can now contribute to a traditional IRA regardless of your age.
- Giving Opportunity: Using a retirement account to fulfill your charitable goals is a tax efficient way to make a lasting difference at Tufts. For many, retirement accounts may be one of the largest and most highly taxed assets they own, since they may be subject to both estate and income taxes if left to an individual other than a spouse. Tufts is a tax-exempt institution, so when you name the university as a beneficiary of your retirement plan, 100% of your gift will support Tufts.
“Stretch” IRA Eliminated: Most non-spouses who inherit an IRA must withdraw all funds from an inherited IRA within 10 years following the death of the account holder (previously, distributions could be “stretched” over the beneficiary’s life expectancy). This 10-year rule can result in a large tax bill, especially for those who inherit an IRA during their peak earning years.
- Giving Opportunity: A charitable remainder trust may offer a way to provide lifetime income to heirs. You create a testamentary charitable remainder trust that would be funded by your IRA at your passing. The trust pays income to the individuals you name in the trust, thereby, stretching out the distributions previously limited over a 10-year period.
The Gift Planning Office is prohibited from giving legal or financial advice, and nothing provided herein should be interpreted as such. We encourage you to consult with your own advisor when considering a gift to Tufts University.