Retirement Plan Assets

Do you have money saved in an employee retirement plan, IRA or tax-sheltered annuity? Each of these plans contains income that has yet to be taxed. When a distribution is made from your retirement plan account, your beneficiaries will owe federal income tax. Consider leaving your loved ones less heavily taxed assets and leaving your retirement plan assets to Northwestern.

As a nonprofit organization, we are tax-exempt and will receive the full amount of what you designate to the University from your plan. You can take advantage of this gift opportunity in several ways:

Name Northwestern a beneficiary of your plan. All this requires is updating your beneficiary designation form through your plan administrator. You can designate Northwestern as the primary beneficiary for a percentage or specific amount. You can also make the University the contingent beneficiary so that Northwestern will receive the balance of your plan only if your primary beneficiary doesn’t survive you.

Set up a charitable gift annuity. If you are 70½ or older, you may now make a one-time election for a qualified charitable distribution of up to $53,000 (without being taxed) from your IRA to fund a life-income gift. This gift provides you (and a spouse, if you wish) with stable lifetime income that is unaffected by the markets. After your lifetime, the remainder of the gift annuity becomes your legacy at Northwestern. Some limitations apply, so contact us for more details and a personalized illustration at no obligation.

Fund a testamentary charitable remainder trust.  When you fund a charitable remainder trust with your heavily taxed retirement plan assets, the trust will receive the proceeds of your plan upon your death. The trust typically pays income to one or more named beneficiaries for life or for a set term of up to 20 years, after which the remaining assets in the trust would go to support Northwestern. This gift provides excellent tax and income benefits for you while supporting your family and Northwestern.

A donor-advised fund. When retirement plan assets pass to your heirs, they can be subject to federal income and estate taxes. This combined income and estate tax burden can be substantial, reducing the value of the intended gift. Instead, you can designate your donor-advised fund as the beneficiary of all or a portion of your retirement plan assets. Your fund receives the full amount of the gift and bypasses any federal taxes.