Each year, traditional IRA owners aged 73 and older must take a required minimum distribution (RMD). In nearly all cases, the RMD is calculated using the Uniform Lifetime Table. Under the Uniform Lifetime Table, distributions generally commence at age 73 at approximately 3.8% and increase each year based on the age of the IRA owner. The RMD must be taken by December 31 each year.

Many traditional IRA owners with larger balances take their RMD during the months of October, November and December. Because many individuals with larger IRAs do not need IRA distributions throughout the year to pay for living expenses, they often delay an RMD until the end of the year. This allows the IRA balance to benefit from additional tax-free growth during the year.

Fortunately, the IRA charitable rollover will count towards the donor's RMD. Although RMDs are not required until age 73, the IRA charitable rollover can be used by any donor once they reach age 70½. The IRS term for an IRA charitable rollover is a qualified charitable distribution (QCD) which is also the term commonly used by IRA custodians.

There are five donor profiles for IRA charitable rollover gifts. The first are the convenience donors who find it a simple method for an end of year gift. The second is the generous donor who wants to give more than the 60% of adjusted gross income (AGI) deduction limit for cash gifts. The third is a major donor who may be a generous individual looking for a favorable opportunity to make a major gift. The fourth donor is the Social Security recipient looking to reduce taxes with an IRA charitable rollover gift. Finally, a donor who takes the standard deduction can also benefit from an IRA charitable rollover gift.

Convenience Donor

Many IRA owners wait until the final months of the year to take their IRA withdrawals. As the individual approaches the end of the year, he or she will need to make decisions related to their RMD. If an IRA owner is actively making gifts to charity during the year, then using a QCD is a good opportunity to make a gift.

Convenience donors may contact their IRA custodians to arrange for an IRA charitable rollover. There is no charitable income tax deduction, but also no inclusion in federal taxable income. It is a simple and convenient way to help their favorite charity.

Generous Donor

Some generous individuals already donate up to 60% of their AGI which is the maximum limit allowed by the IRS for deduction of cash gifts each year. Any gifts over this limit may be carried forward and deducted over the following five years. Some generous donors may also have a large IRA and live at a moderate expense level and may not need their entire IRA.

If there is a desire to give more, they can give up to 60% of adjusted gross income from their cash assets and make "over and above" gifts from an IRA. Some generous donors may in effect give nearly 100% of their income per year through this method. Since the IRA charitable rollover is not included in taxable income, it will have no impact on their regular income and other charitable gifts.

Major Donor

As the rules have continually become more favorable for IRAs and required withdrawals have been reduced, IRAs balances are likely to keep growing. There are occasional market dips, but the long-term trend is positive and IRAs will continue to increase in value.

For many professionals and business owners, the IRA may become most of the estate. In these cases, it may be desirable to do "asset balancing" to keep future RMDs at manageable levels. To accomplish this goal, the major donor can give up to the maximum QCD amount in 2025 of $108,000 from his or her IRA. This has the advantage of "balancing" the estate assets.

In addition, there may be income tax benefits. If the donor were to take the IRA distribution into his or her own personal income, there are several types of exemptions that are phased out at higher income levels. Thus, it may be preferable to make the gift directly from an IRA rather than making a charitable gift from regular income.

Social Security Donor

Social Security is subject to two levels of taxation. For donors who have income in excess of the first level, 50% of Social Security is taxed. For donors with income in excess of the second level, up to 85% of Social Security income may be subject to tax.

Withdrawing any amount from an IRA will potentially cause the amount of the donor’s social security benefits that are taxable to increase from 50% to 85%. Even if the withdrawn amount is given to charity and then deducted, there may still be increased tax on the donor’s income. Thus, by making the transfer directly to charity, many Social Security recipients will save income taxes.

Standard Deduction Donor

Many seniors do not have a mortgage and have medical deductions that are less than 7.5% of AGI. Thus, they may not have a sufficient level of deductions to itemize and choose instead to use the standard deduction.

If a donor withdraws $1,000 from his or her IRA and then gives it to charity, there is $1,000 of increased income with no offsetting charitable deduction, since the standard deduction is taken. Therefore, it may be preferable for all donors who take a standard deduction to make IRA charitable rollover gifts directly to charity and avoid the additional income tax on their RMD.

Published April 25, 2025

I plan to apply for my Social Security retirement benefits later this year. Where should I seek assistance?

The Social Security Administration (SSA) is currently undergoing significant staffing reductions. Reduced staffing will cause longer processing times and may make it more difficult to obtain in-person assistance. Here is how you can best navigate the SSA as it downsizes its workforce.

Use SSA.gov Website for Online Services

Most SSA requests and questions can be handled online. To get started, go to SSA.gov/onlineservices where you can create an online “my Social Security” account. This account allows you to view your latest statement and earnings history, apply for retirement, disability and Medicare benefits, check the status of an application or appeal, request a replacement Social Security card (in most areas) and print a benefit verification letter. The SSA’s website also has a wealth of information and includes answers to frequently asked questions that you can access at SSA.gov/faqs.

Phone Assistance

If you cannot conduct your Social Security business online or need extra help, you can receive assistance over the phone by calling your nearby field office (see SSA.gov/locator for contact information) or by calling the SSA national number at 800-772-1213 (TTY 800-325-0778) between 8:00 a.m. and 7:00 p.m. local time, Monday through Friday. When you call, there are many automated service options that you can use 24 hours a day without waiting. If you need to speak to a representative, waiting times are typically shorter early in the morning (between 8 a.m. and 10 a.m.) or later in the afternoon (between 4 p.m. and 7 p.m.). You may also experience shorter waiting times later in the week (Wednesday to Friday) and later in the month.

If you need to visit your nearby SSA office, it is best to call ahead and make an appointment as walk-ins often have much longer waiting times. To make an appointment call 800-772-1213 or contact your local SSA office.

Planning and Patience

When communicating with the SSA, it is important to be patient and prepare in advance. With the SSA staff reductions, delays and longer waiting times will be inevitable. If you are planning to start drawing your Social Security benefits soon, it is best to apply as early as possible. You can apply for benefits up to four months before you expect to receive benefits. Applying as early as possible can help ensure the benefits are available when needed.

Keep in mind that the SSA recently announced that new applicants who cannot properly verify their identity over the agency’s “my Social Security” online service will be required to visit an SSA field office in person to complete the verification process. The verification procedures could add additional time for those applying for benefits. This change will also apply to unverified existing recipients who want to change their direct deposit information.

If you have concerns regarding staffing reductions, you may reach out to your Congressional representatives to communicate the importance of safeguarding and prioritizing Social Security. To find your Congress members’ contact information, go to Congress.gov/members/find-your-member.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of “The Savvy Senior” book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.

Published May 2, 2025

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During tax season, fraudsters use the latest strategies to steal identities. With the tax filing season in full swing, taxpayers need to remain vigilant for strategies that may involve text messages, emails, phone calls or potential unemployment fraud.