The superpowers of your IRA—no cape required

Alumni and friends of all ages harness the power of their IRAs to strengthen Wheaton’s future.

Your IRA is more than a retirement account. With a few smart moves, this powerful financial tool can amplify your charitable giving to Wheaton, provide lifetime income for you or your loved ones and offer valuable tax benefits for both you and your heirs.

Many people assume that leaving their IRA to family or heirs can be a great way to pass on wealth. But there’s a catch: inheriting an IRA can create a significant tax burden for your heirs, perhaps placing them in a higher tax bracket. Distributions from inherited IRAs are generally taxed as ordinary income, which can reduce the amount your family actually receives.

There are smarter ways to leave a lasting legacy and reduce taxes—give all or a portion of your IRA to a qualified charity—like Wheaton.

You can also use your IRA to fund a Charitable Gift Annuity (CGA), which provides fixed lifetime payments for you or your spouse. Cheryl Caswell ’71 recently used this smart philanthropy strategy and was thrilled to support scholarships for deserving Wheaton students while receiving a steady income for life.

Here’s how it works.

Giving through your IRA at any age

Consider naming Wheaton, or any qualified charity, as a full or partial beneficiary of your IRA by giving a percentage or a fixed amount.

  • Your heirs won’t owe income taxes on the portion left to the charitable organization but would be taxed significantly on the portion left to them.
  • If Wheaton receives your IRA upon your death, there is no income tax on that transfer.
  • Leave a legacy at the college to support future Wheaton students.

Giving through your IRA at age 70 1/2

You can start withdrawing your IRA funds at age 59 ½ without incurring penalties, but you will be charged ordinary income tax on your withdrawal.

However, once you reach 70 ½, the IRS allows you to make a Qualified Charitable Distribution (QCD), which is a direct transfer from your IRA custodian to a qualified charity.

  • As of 2025, the QCD provision allows you to transfer up to $108,000 in total from all your IRAs to one or more charities of your choice each year.
  • QCDs are tax-free transfers from your IRA to a qualified charity. You will not have the ability to take a charitable deduction on this gift.  
  • For 2025, you can use a QCD—up to $54,000—to establish a CGA. Using a QCD to fund a CGA can only be done once during your lifetime and can benefit only you or your spouse.
  • If you choose to use a QCD to fund a CGA, you will not be taxed on the money withdrawn from your IRA. You will not receive an income tax charitable deduction for any portion of your gift. Also, the payments from your QCD-funded CGA will be fully taxable as ordinary income.

Giving through your IRA at age 73 and up

You must take a Required Minimum Distribution (RMD) from your IRA starting at age 73. These distributions are fully taxable as income.

It is essential to know the difference between a QCD and an RMD: an RMD is a must while a QCD involves a choice.

  • Making a QCD can satisfy your RMD and help you avoid large tax bills.
  • You can continue using your QCD to give up to $108,000 per year directly to charities—including Wheaton—without paying taxes on the distribution.
  • You can still exercise the one-time option to utilize your QCD—up to $54,000—to fund a CGA, if you have not already done so in your lifetime.
  • Efficient use of QCDs and RMDs maximizes your philanthropic impact while minimizing tax consequences for both you and your heirs.
  • There is no obligation to match your QCD amount with your RMD amount. You can choose to do a QCD for any amount you wish—up to $108,000 in 2025—but the amount you choose isn’t necessarily tied to your RMD.
    • Example 1: Kevin’s RMD is $75,000—below the 2025 permitted QCD amount of $108,000. Kevin plans to use a QCD of $75,000 to satisfy his RMD and make a gift directly to Wheaton from his IRA. He will not be taxed on his Wheaton gift.
    • Example 2: Melissa’s RMD is $125,000—above the 2025 permitted QCD amount of $108,000. Melissa plans to use $108,000 of her QCD to make a gift directly to Wheaton from her IRA, fulfilling all but $17,000 of her RMD. She will not be taxed on her $108,000 gift. She plans to take the remaining $17,000 of her RMD as ordinary income. Melissa will be taxed only on the $17,000.

Learn more about the power of your IRA and how to establish a life income gift from an IRA on our planned giving website. Or contact the Office of Planned Giving.

Note: Wheaton does not provide legal or tax advice, and the information provided is general in nature and should not be considered legal or tax advice. Consult with an attorney or tax professional regarding your specific legal or tax situation.