My dad, a stunt pilot who built his own airplanes, had a motto for building aircrafts, “prior planning prevents poor results.” He didn’t die in a plane crash—so you could say he followed his own advice, at least when it came to flying.
I encourage that same strategy when it comes to managing your assets—prior financial planning prevents poor results. If you start saving for your retirement when you’re young, you don’t have to worry about it when you retire. If you were like me and waited a few years past “young” that is ok too. Regardless of when you begin, careful planning is the best way to take care of your future. You cannot get where you want to go until you figure out what that is and make plans to get there.
The most common way people put money aside for retirement is through Individual Retirement Accounts (IRA). Many of you already know that an IRA allows you to save before-tax dollars—meaning you don’t pay taxes on the income until you start withdrawing it from your account. The idea is that you pay taxes on those dollars at retirement when you are expected to be in a lower tax bracket, rather than when you are earning the most.
Sometimes, people plan so well they don’t need the income from their IRA, like a Ranch donor who recently called me. He was nearing the magic age of 70 ½, when the “required minimum distribution” rules kick in. This year, he and his wife, are required to take a percentage out of their IRA and therefore pay taxes. Because the IRA distribution will be added to the couple’s annual income, it could also put them into a higher tax bracket.
These long-time supporters wondered if would benefit them to donate their distribution to our ministry. We talked about the IRA rollover. This allows them to transfer the dollars directly to a qualifying nonprofit, like Dakota Boys and Girls Ranch. This means they wouldn’t be required to pay taxes on the amount rolled over, and it would not be added to their annual income. For them, the most important aspect of this gift is that the money they worked so hard to earn would now help our children find healing and have a better life.
If you are ready to start mapping out goals for your future, you don’t have to do it alone. The first step is to organize and catalogue your assets. We have a free “wills guide” that walks you through the process. Just click on the estate planning guide at https://dakotaranch.giftlegacy.com/.
The next step is to think at what you want to achieve. Do you want to give to charity, ensure you are covered for your retirement, leave an inheritance for your children? Figure out what you want, and then you are ready to start the planning process.
I have years of experience talking to people about their estates, and would be honored to help you start the process. I cannot give legal advice, but I can show you your options. We can see how to make the most of what you have. Often people are surprised that they can live well and leave an inheritance for both loved ones and charities. Special gifting strategies can redirect dollars from the government (through taxes) to causes you believe in. Your IRA assets alone can be distributed in a number of different ways.
Finalizing the details is the last step. For IRA designation you simply need to contact your plan administrator for rollovers and beneficiary designation. For more complex strategies, I recommend working with your most trusted financial advisor. You may be surprised what you can do with careful planning.
As you know, we could not do this critical ministry for our children without your prayers and ongoing support.
Thank you and God bless!
Senior Development Officer
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