Required Minimum Distributions
Did you know? Once you turn 73, federal law generally requires you to begin withdrawing funds from certain retirement accounts—such as traditional IRAs, 401(k)s, or similar employer-sponsored plans. These withdrawals are called Required Minimum Distributions (RMDs).
For IRAs, RMDs can be aggregated, meaning you may take the total amount from one or multiple IRAs. However, employer-plan RMDs cannot be combined across different plans.
Failing to take your RMD can result in significant tax penalties—up to 25% of the amount not withdrawn by the deadline (reduced to 10% if corrected promptly). Your first RMD is typically due by April 1 of the year after you turn 73, and by December 31 each year thereafter. The IRS calculates your RMD based on your account balance at the end of the previous year and a life expectancy factor from the IRS Uniform Lifetime Table.
Qualified Charitable Distributions (QCDs) offer a tax-smart way to give. If you are age 70½ or older, you can transfer up to $100,000 per year directly from your IRA to a qualified charity—such as Holy Cross School—and this amount can count toward your RMD without increasing your taxable income.
Consult your financial advisor to ensure you meet your RMD requirements and explore the benefits of a QCD. Many alumni choose this option to make a meaningful impact.
It’s a smart, tax-wise way to give—and a powerful way to support the mission of Holy Cross School.