IRA management at Covenant Trust
When you open an IRA, or transfer or rollover an existing IRA, 401(k) or other financial assets, your funds will be invested in best-in-class funds based on your risk tolerance, investment goals and time horizon. In addition, we’ll monitor and process your required minimum distributions when the time comes.
As trustee of your IRA(s), Covenant Trust provides professional investment of IRA assets. We act as a fiduciary for you, with the obligation to invest your money in best-in-class funds and to act only in your best interest.
Covenant Trust is prudent in its investment approach. Our objective is to seek positive, long‐term results at a risk level appropriate to your objectives. We are committed to servicing each account with individualized attention. Based on your goals, needs and risk profile, a portfolio allocation for your managed IRA is tailored for your particular situation.
There are two types of IRAs: Traditional and Roth. While both offer flexibility and valuable tax benefits, they have different requirements to open the account. Covenant Trust also accepts funds rolled over from a Qualified Plan such as a 401(k) or 403(b), or a transfer from an existing IRA. Check out these resources to learn more.
Learn about Traditional IRA
Learn about Roth IRA
Explore the differences between a Roth & Traditional IRA
Moving money between IRAs & retirement plans
Taking IRA distributions
Options for inherited IRAs
Learn about SEP, Simple IRAs and Individual Plans
Using QCDs as a tool for giving
A qualified charitable distribution (QCD) allows an IRA holder to send a donation directly to a public charity, and not have the distribution included on your tax return as ordinary income. A QCD allows individual taxpayers 70½ years of age or older to donate up to $100,000 per year to eligible charities including colleges, universities, independent private schools and ministries from their traditional IRA tax-free.* This donation goes straight from the IRA to the charity.
For traditional IRA owners who must take a required minimum distribution (RMD) from their IRA each year, the QCD provision is an opportunity to meet the RMD requirement while minimizing the effect on their taxable income.
A qualified charitable distribution is a great way to positively affect your tax situation while also helping you achieve your charitable goals. Give us a call, we’d happy to show you how.
*Qualified charitable distributions are not available for 401(k) or Roth IRA accounts.
QCD quick facts
WHO
- Any traditional-IRA holder age 70 ½ or older
- Even a day younger disqualifies the QCD
WHAT
- Distributions made to qualified 501(c)3 charities
- Cannot be used for Donor-Advised Fund contributions
- Cannot go to Private (Grant Making) Foundations
- Cannot go to 509(a) (3) Organizations or a “supporting organization”
- IRS rules prohibit the donor from receiving any non-deductible benefits (i.e., membership costs must be made as a personal contribution)
HOW
- Donation is made directly to charity
- It does not go to owner as ordinary income
- Distribution is reported on tax form 1099R
- Must advise tax preparer of the charitable contribution and have supporting documentation
- View our QCD Receipt Letter sample