Home » News » Why It’s Smart to Name a Charity as the Beneficiary of Your Retirement Plan

Why It’s Smart to Name a Charity as the Beneficiary of Your Retirement Plan


Are you looking for a straightforward way to support charities through your estate but also reduce the tax impact on your heirs? If so, look no further than your retirement accounts, such as an IRA, 401k or 403b. There is often a substantial tax benefit to leaving a gift to charity out of your IRA rather than through your will.

Why? Because in most cases withdrawals from traditional IRAs or other tax-deferred retirement account are subject to ordinary income-tax rates. That means that any of your heirs who would inherit those accounts would have to pay taxes on withdrawals.

However, these heirs would not pay income tax on most other assets that they would receive through your will or trust. For this reason, many people choose to support their favorite charities through their retirement accounts and to support their heirs through other non-retirement assets.

For more information on tax-efficient ways to include TFAS and other charities in your estate, please contact Ed Turner at eturner@TFAS.org or 202-986-0384, or visit www.TFAS.org/Legacy.

The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results.


Recent Posts


Liberty + Leadership News: Jan. 16, 2020

Meet the two Venezuelan exiles warning college students against socialism. A TFAS alumnus reflects on the fall of communism in Central Europe 30 years ago. Plus: TFAS is searching for high school leaders to apply for our summer 2020 economic and leadership…

Searching for High School Leaders to Study Economics and Leadership at Prestigious College Campuses this Summer

Are you a current high school sophomore or junior interested in learning the economic way of thinking? Do you know any eager young students looking to further their education and develop essential leadership skills? TFAS is now accepting applications for our…

Meet the Two Venezuelan Exiles Warning College Students Against Socialism

This article by Jennifer Kabbany, Novak ’02, originally appeared in The College Fix. You can find the original article here. ‘Venezuela: My Story … Your Future?’ When Jorge Galicia and Andrés Guilarte tell college students socialism is no utopia,…