QCD- Giving with a Purpose

Hey this is Jim Graham from the masculine dirty podcast where we explore relationship instead a religion every week their chosen Truth Network podcast is starting in just a few seconds to enjoy it. Sure, but most of all, thank you for listening you for choosing The Truth Podcast Network. This is the Truth Network welcome to finishing well brought to you by Cardinal guy.com certified financial planner belonged to Schild, best-selling author and financial planner helping families finish well for over 40 years of finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes.

Now let's get started with finishing well, finishing well is a general discussion and education issues facing retirees.com are no advisors on Schild CFP some insurance this show does not offer investment products or investment advice is welcome to finishing well works. I decided that you joining us today here with my good friend and financial planner Hans Schild, certified financial planner actually and today show is actually one of my favorite topics were to talk about qualified charitable distributions which essentially is giving right and part of finishing well if that's the idea is wow God has been giving to us all is you know, ever since we were born and now we get a chance to give it in so many different ways. I love the idea that in Hebrew the letter gizmo which is that G sound guy got it has to do with the rich person running after to give the poor person money and and so when King David wrote 119 Psalm you may know, and it's acrostic and so when he was talking about this gimbal.

One of the verses that he says is I'm a stranger in the earth. Hide not your rules are your good deeds from me and so it's a fascinating thing when you think about it that when you're a stranger you don't, you need a map you need to know exactly how to do things and so today show, by all means is when it comes to giving. Sometimes we need a map to make sure that we take full advantage of everything that God would have us do with the gift and that's what this show is about so you can feel the GN gimbal was more or is this afternoon depending on your listening and so Hans take it from here. What is a cute CD KQED qualified charitable and unit with enemy you can give money directly from your IRA to the church or missions or any other qualified chair. You can give away your IRA money and it doesn't show up text may show up on your W-2 or 1099 but it's not can make it into the tax calculation so it like it deductible contribution, which is especially important to people who give to the church openly out of there just regular money that they have in savings or other Social Security check whether leaving their IRA money all locked up. They don't pay taxes on it. People learn about this thing. They can actually give more to the church, even if they get the same is can work better form taxable services for people that are over 70, but the show itself right might be for people that are in their 50s and 60s because it's it's really relevant that we all are familiar with this right well for a couple reasons. One is part of retirement plan you charitable giving for people that are charitably inclined, you don't plan to give away money or retirement, then I guess is no need to plan for most of the Christians that were talking to you know both give a lot of money and then they have a desire to give even more. And they don't want to do it so much that they keep from themselves and they don't want to shortcut their future but yet they have a desire to give more and I think that's one of the things that I know I want talk about first is to get into the rules of how you do this second partnership phenomena go over those quite clearly and I know these things real well with the rules don't really apply until we really get talking about the why are you doing you're doing this because you want to give money to this particular charity and you like to get more money and you'd like to see it work and that's not fair that I guess you can switch to another station on the radio because the rule to do this when you're not even sure if you want to do in the first place. So for people in their 50s and 60s.

Before doing a retirement plan were looking to the future the very least we can plan for this case you can't make a cute CD into your 70 1/2 year over 70 so then you can start eating them every year for the rest your life and your spouse can do the same thing. So if you're 64, 65, and were doing a retirement plan. Then we can plan for Q CDs out of your IRA when you turn 70 and when you're 71 volatile walk so it's a planning issue that a lot of people in their 40s 50s 60s.

Their parents are still alive and they're getting up there in years, and they start to help their parents with them and their parents are ready for finishing well and just a lot of people in their 70s and 80s I got a big fat IRA.

Now that they've been protecting just taken the minimum distribution and absent other savings they do their donating out the other savings. So when they pass away. They leave this IRA to their children and their children end up with the text so I advise for somebody in her 50s who has a mother or father or both, that are in their 70s and 80s that have an IRA balance that we may sit down and talk to them about giving directly from the IRA as a cute CD their savings, or some other savings or doing year-by-year can have a great tax effect of the parents is going to have a great estate tax effect for the children who are nearing the money to write. So my understanding to just run us through the numbers for second, is it say that in my case you know when I turn 70 have 70 1/2. I normally give $15,000 a year to the church. So if I had taken that $15,000 now out of my income at a party pay tax on that $15,000 before ever gave it to the church right. However, if I knew it probably will rest up for second that you're doing and you been giving it every year.

Then you think, turn it into your account you been thinking you're getting a tax deduction for but yet for three years when they change the tax code a few years ago. Your accountant has been put down $26,000 as the standard deduction on your tax return, you get any tax benefit from it, even though you think you write right so you're essentially paying tax on this money and an even value. Given the way you still essentially paid income tax on correct.

So if I had a IRA that I'm in a make a distribution out of anyway. And again, we can say that one rule, as we know it has to be the first distribution of year.

If you do this to CD. If we gave the money right and we knew that it was $15,000 coming right out of the chute, then immediately write out. I just got $15,000 out of my IRA and didn't pay a penny tax on it right exactly so therefore you could say you'd still have the $15,000 already paid tax money is still evident in your possession, because you didn't give it away to give the money way out of the IRA.

So because of that because you got a tax benefit. Some people are going to decide now that I realize how easy it is. If they got a three for $500,000 IRA. They're going to say will maybe working to give more than 50 and were to just make this decision every year but were not can have this tax bill, and from required minimum distributions and that's exactly what it is and is just amazing to me how few people really know about. It's it's it's absolutely beautiful thing in and Unitas want to add that when we talk about the rich people giving to the poor people with those of us who know Jesus that were rich spiritually right and so is not part of the what were doing were given to the churches is were trying to give that wealth which we have spiritually to those who don't have an in being able to give to our you know your your individual church and and and those kind of things of this to me is just like wow you know what are the tax brackets these days for somebody that's make an 80 $90,000 year conflict 30%. Well I get married and the bracket pretty much in the low 20s and then they get up into the 30s pretty quickly when you get up over 100 grand to say that it's 20, 20%, well if you got $10,000 that you were given and obviously you know there's another $2000 that you had as a result of not paying that tax right what what what was sure and so needed.

It effectively allows you to take make tax-deductible contributions from your IRA or tax-free nontaxable and yet still claim the $26,000 standard deduction for a married couple over $0.65 like you get the credit for the giving. On the one side of the tax return, then you're not paying taxes for the income where the income came out of the IRA and by the way these count his RMD as required minimum distributions if you don't like the tax in your RMD's. You could just do your RMD every year as a cute CD house after using two acronyms required minimum distribution and qualified charitable distribution rights so we have some clients that do that that I can think of a lady and she gets a lot of meet. Heather's discussion around the hundred thousand dollars a year maximum that the most any one person can give out of their IRA and I can remember sitting in her office, two different times and giving somewhere between 40 and 45,000 doing a cute CD and just doing it. Make sure it's done right and having a discussion. Well, if you wanted to give 100,000 which she gives a lot of money separately from the RMD and I was trying to impress upon her with give all hundred thousand must move all your giving over here under this and then you just hang onto that other money that your giving out the after-tax money so it this makes real very much financial planning, tax planning sends and then the most important part about it is charity.

And God wins exactly as God is given and now he's given us an opportunity to leverage that and so you know today show qualified charitable distributions of courses in the Hansson's book the complete cardinal guide to planning for living in retirement, which is there a cardinal guide.com, which now sponsors a show for us and in you can get that book easily by just emailing Hans which is right there cardinal guide.com and of course there's a video that even has a board that shows more details on this key CD that's there it Hans is YouTube channel which is is Hans what is it cardinal advisors to word and the advisors in ORS ADV ISO seven nurses YouTube channels even video all the stuff is out there to get the details. But like I said the beginning to show you were asking God to give some Apple. We got Hans writer to help us get a cardinal guide.com and we come back and a few more the details of how all this Hans and I would love to take our show on the road to your church and Sunday school Christian or civic group. Here's a chance for you to advance the kingdom through financial resources and leveraging Hans expertise and qualified charitable contributions veterans aid and attendance IRA Social Security care and long-term care. Just go to cardinal guide.com and contact Tom to schedule a live recording of finishing well at your church, Sunday school or civic group. Contact time to cardinal guide.that's cardinal guide.com welcome back to finishing well with five financial planner Hans Schild today show is on qualified charitable distributions and, you know, I know that's a mouthful of obviously that's it it it's made for great topic is its ways that God is is is allowed us to be able to leverage is much as our as possible for our money, for the kingdom and so Hans I guess we can start out with a little bit of an explanation about that again. We started on the last show the last segment of the show we wanted to get into the why we did it we really wanted to talk about why are we doing why we need to learn why we doing a key CD that we covered that. I just now my go to the rule. What I want to say and positioning the rules. This is a short summary that I put together so I can talk intelligently about rules when you get what I pulled this from it's probably 10 to 1215 pages long. IRS taxable stuff I want tell people is silly.

Try this at home. You need to go to a competent financial professional you need to check with your financial professional. Do you know TCD's work. If you ever done any and because it's possible for them to make a mistake onto you break one rule the cue CD gets disallowed to have protection first rule you got. Be 70 1/2 years, but I have a number of people on my YouTube channel to make comments and when I'm telling him about TCD. I have people come in and correct me on a number and sell at 70 1/2 anymore half that �72 know I try to answer more likely but not 72 70 1/2 so that the secure act change the start date for required minimum distributions to 72 so you don't have to do a required minimum distribution until age 72 that you can do it you CD starting with old age, which is 70 and so that has remained the same thing could really slip into PCVs before you really get to real RMD required him to successfully get 1/72 rule is the cue CD needs to be done from IRA not from a 401(k) or 403B or some other point needs to be from an IRA out you're interested in doing these, you got a 401(k) we can roll a 401(k) over to an IRA or just enough to do if you CD and then make you CD from the IRA so but it needs come from an IRA.

The cue CD must be the first distribution of the year and this is one of people get caught on. So let's say you're here and this is a man I want to do the test sounds great. Let's go on one of her questions. I'm an ass uses August have you distributed any money out of your IRA so far this year. If you have it wasn't a cue CD, then guess what you can do if you CD for 2021 so all your cue CD distributions need to be the first money coming out of your IRA for this tax year. So in other words, we need to be doing this in January so that you don't get caught up on Merrill next one is if you have several IRAs and they're all in your name and they're all traditional IRAs. We all have required minimum distributions are RMD's. You can take you CD out of one.

You don't have to apportion this to all your IRAs and some people like that because they just maybe want to leave alone some of the funds that are doing well.

For whatever reason, you can take the money out of one of the men it really counts against several hundred thousand dollars per year maximum per person.

This lady I was talking about earlier in the show. Her husband has quite a bit of money as well. So he would have about $200,000 in any given year, he can do is if you CD she does as well for most of our clients is not really a problem and then the next one is it needs to be a direct transfer the money needs to go directly from the IRA to the chair can't come to you and then you give it to the chair if you do it that way, you can end up paying tax on okay yeah II got it let you know.

Again, this is why we don't try this at home. I'm guessing that there's some issues there but again the big benefit. Obviously is as we talked about in the example earlier, you know, it's literally thousands of dollars in tax that you can leverage back to the charity that you want to get to because you didn't have to pay the money intact. Yeah, I mean what I just think of it that I client from Raleigh 19 years that I was out calling on him with one of our salespeople way down East as we say here almost coasting a small town and was in a stable and he's grumbling about minimum distributions have undertaken. You really don't need the money to live and you got about 270 grand in his IRA still. He was 77, 78 times he's probably in his early 80s now and every year we help them with you. CD TCD is up to about 10 grand 11 or 12 grand and what he does. Just takes his required minimum distribution and whatever that amount as he rounded up to the next thousand just to make sure retiring math errors and a dozen TCD so that IRA is just sitting there and it's always giving to the church is giving to the church is increased.

He doesn't really need the money and the IRA live. They live just fine author to Social Security check young people. A lot of people in their 80s and the small town in North Carolina.

They just don't spend a lot and where they have savings, is his plan is to leave his savings to his children, no purse to his wife. He goes first, and then she should be in the same situation. Maybe only one Social Security check, but now they live on and then the money that they inherit.

The kid is going to be the nonqualified things the kids not have to pay tax on his plan. With this IRA is to have it be empty by the time that he and his wife passed away at the annual things go to church is happy to be yeah and so that's you know here clearly is that some people talk about 40 or $50,000 that other people write that they're doing TCD's is little of thousand 1500 sure me and I have plenty of people that have no $90,000 in their IRA and their 75 years old and they live up here there, you know, just that IRA sitting there that you CD on a $90,000 IRA for 74-year-old is really going to be about 3800 box so a lot of them. I see you doing only the minimum distribution for your TCD then you pass away and you still have a balance there now to make the church or beneficiary that one way to cure, but I think you'd be wiser to do if you CD forward to doing it for 4000 and then go ahead and take out another 6 to 10,000, and just stick it in the bank to pay taxes on. And then because your income is low enough and then now you just have some money that you can leave your kids or you can spend on something when you're older, have savings account and you know I have a task. So there's a Lotta people under withdrawing from their IRAs and their they're just not taken enough, and then we get in and you find givers with most Christians are. Once they find out about that. We have a promise of your churches and love that thousand dollars of thousand dollars you CD and I do plenty of those for people as well.

I want to reiterate which sediment characteristics seems how cool is it that right. Her income is so low that she can make a distribution over the minimum distribution just simply put the money in the bank never pay tax on it and so like you said when winched. She moves on her. Whatever happens, the money when never paid any tax on it, but if she left it in the IRA and then all of a sudden somebody inherits his big whopper of $80,000 or whatever. Then the taxes due on it right right in and they want the money.

Maybe they're making $50,000 at a job and then 80 get added on top of the 50 number that actually got an income of 130 until once the IRA is gone where you should start planning for this we would skim on my heart was lacking. For most people is a retirement distribution. And even if your 75 or 80 is not too late to get in touch with me will look at all your savings including your IRA and put together a plan for distribution in the charity get so much.

You get so much tech person gets so much and then your children get so much at the end really that complicated, so that's what we do. So social really a plan for the rest of your retirement and put your giving right into that and then let's make it tax-advantaged. Right in somewhere.

You know I think about the gentleman was grumbling about this required minimum distribution well. Boy, thank goodness that that happened because it can open his eyes to the fact that he's got into this thing out are always going to have a problem for his inheritance right yet he is given more.

I don't think they were given 10 grand a year in security.

I think it was more like three or 45 before he discovered the QCD and so he he like � giving and he reduces tech out. I would document the beginning God wins. I mean, and in the church winds and and ultimately so many more people get to know about Jesus and and and and what a beautiful thing this really really is and so if you need to know more about is obviously a mean you can hear his just like David said, give me a roadmap to do this well you're listening to finishing well today you could contact on the Cardinal guide.com he would love to help you at war's book the complete cargo guide planning for living retirement in all these things all these resources, you know that that are there for you to take full advantage of of the resources you work so hard for right on and everything love what I do and the people in the office and so wonderful. Thank you so much for list and spend time with us today. I'm finishing well thank you Hans you finishing well is a general discussion and education of the issues facing retirees Cardinal guide.com Cardinal advisors upon trial CFP some insurance this show does not offer investment products more investment advice.

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