Scholarship Endowments

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She says that mission work truly warms her heart, and she has served on a multitude of missions, from Mexico to Guatemala, to the Ozark Mountains. Most recently, she was serving as Congregational Care Coordinator at St. Paul’s, visiting homebound and hospitalized members and assisting with worship services.

Burch will begin work toward her Master of Divinity at Candler this fall. She plans to become an ordained minister and help others find their calling, the same way that her church and mission work have helped her find hers.

“I have always felt a call to the ministry,” she says. “I believe being ordained will allow me to bring others closer to God through mission. I want to do for others what the church has done for me.”

Setting up an endowment at the United Methodist Foundation of Louisiana is easy. The staff handles all the paperwork and filing, and there is no cost to the donor, other than the initial gift.

There are a few things to consider before contacting the Foundation to set up an endowment. First, donors must decide how much money they want to donate. Anyone may add to the endowment at any time.

Next, donors must decide how they want the income to be used. They can choose a specific school, area of study, where the recipient is from and other criteria. However, the more specific the donor is with the criteria, the narrower the pool of qualified students becomes.

Peyton has periodically added to his endowment to help it grow more quickly. As assets grow, the income from the fund will be used to either provide multiple scholarships or increase the scholarship stipend. He hopes to increase the award amount in the future to provide more incentive for students to enroll. He says, “It’s rewarding to me to know I’m helping make a little difference in a student’s life.”

Meanwhile, Burch is excited to begin classes at Candler in August. “This scholarship will really help me afford the cost of living in Atlanta and the tuition, so I am thankful for your willingness to help students!” she claimed.

A scholarship endowment at the Foundation is a lasting gift that will benefit a student committed to the Methodist faith, who may need help answering God’s call. For more information on scholarship endowments, please contact us at information@umf.org or 225.346.1535

To learn more about applying for a Foundation scholarship, go to umf.org/ scholarships

Phone: (225) 346-1535

Email: information@umf.org

Web Addresses: www.umf.org www.umfgiving.org

Legacies Editor: Kelly Johannessen kellyj@umf.org

New RMD Rules for 2023

Dear Savvy Living,

What are the new rules on required minimum distributions from IRAs and 401(k)s? I will be 72 this year and want to be clear on what I am required to do.

Under the SECURE 2.0 Act signed into law in December 2022, there are several new rules that affect required minimum distributions (RMDs) from traditional Individual Retirement Accounts (IRAs), 401(k)s and other tax-deferred retirement accounts. These changes increase the RMD age and lower the penalty for failing to take a withdrawal.

New RMD Rules

As of January 1, 2023, the SECURE 2.0 Act increased the age for starting RMDs from 72 to 73. This is applicable if you’re turning 72 on or after 1/1/2023. In 2033, the starting age increases again to age 75. So, if you turn 72 in or after 2023, you can delay your RMDs one more year, allowing the funds in these accounts to grow tax-free longer.

At age 73, you must start taking annual RMDs from the taxdeferred retirement accounts you own and pay taxes on those withdrawals. Distributions are taxed as ordinary income based on your tax bracket.

There are, however, a few exceptions to the RMD requirement. Owners of Roth IRAs are not required to take a distribution unless the Roth IRA is inherited. Beginning in 2024, Roth RMDs will not be required for any Roth IRAs.

Also, if you participate in a workplace retirement plan, work beyond age 73 and do not own 5% or more of the company, you can delay RMDs from that plan until the year you retire. If you have other non-work-related accounts, such as a traditional IRA or a 401(k) from a previous employer, you are still required to take RMDs from those accounts after age 73, even if still working.

Deadlines and Penalties

Generally, you must take your distribution every year by December 31 in order to avoid penalties. You can choose to delay taking your first distribution until April 1 of the year following the year you turn 73. Be cautious when delaying the first distribution, as it may push you into a higher tax bracket since the next distribution is to be made by December 31 of the same year. You can always withdraw more than the required amount, but you should not take less. If you do not take out the minimum, you will be assessed with a 25% penalty on the amount that you failed to withdraw along with any income tax owed on it. This penalty drops to 10% if you take the necessary RMD by the end of the second year following the year it was due. Account owners should consult with their tax professionals for the required tax forms to be filed for the years in which the RMDs were required but not taken.

Distribution Amounts

Your RMD is calculated by dividing your tax-deferred retirement account balance as of December 31 of the previous year by an Internal Revenue Service (IRS) estimate of your life expectancy. A special rule applies if your spouse is the beneficiary and is more than 10 years younger than you.

IRA withdrawals must be calculated for each IRA you own, but you can withdraw the money from any IRA or combination of IRAs. 403(b) account totals may also be combined with IRAs for RMDs taken from any account or combination of accounts.

With 401(k) and 457(b) plans, however, you must calculate the RMD for each plan and withdraw the appropriate amount from each account. To calculate your RMD, you can use the worksheets on the IRS website, IRS.gov/ Retirement-Plans and click on “Required Minimum Distributions.” Alternatively, contact your IRA custodian or retirement-plan administrator who can do the calculations for you.

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