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Retirement Assets

One of the simplest and most "tax wise" ways to make a gift to Southeastern Illinois College is through your IRA, 401(k), 401(b) or other qualified retirement plan. You can name SIC as the direct or contingent beneficiary of all or a percentage of your plan. A simple fund agreement between you and the College will ensure that Southeastern uses the money according to your wishes.

There are two major benefits to using retirement assets to fund a charitable gift. First, you will avoid federal estate taxes on the value of the assets that pass to SIC. In addition, heirs are subject to income taxes when they receive distributions from retirement plans. Designating SIC as beneficiary bypasses these taxes.

Example:

Pam has a 401(k). She does not want to leave the funds to her family members because she knows they will have to pay income tax on any distributions from the 401(k). Pam decides to name Southeastern Illinois College as the beneficiary of her 401(k). Upon her death, the funds in the account will transfer to SIC. She will avoid paying estate taxes on the value of the account and make a generous gift to SIC in the process.