<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=314834185700910&amp;ev=PageView&amp;noscript=1">

New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Learn More

How Rackspace Technology Retirees Can Take Advantage of the Helpful Tax Benefits Legacy IRA's Provide

image-table

Healthcare Provider Update: Offers health, dental, vision, life insurance, and HSAs, along with wellness programs and tuition reimbursement 9. As ACA premiums rise, Rackspaces top-tier benefits and employer contributions help employees avoid the financial burden of marketplace plans. Click here to learn more

Rackspace Technology employees working with advisors like (Advisor Name) from The Retirement Group, a division of Wealth Enhancement Group, can take advantage of tools like The Legacy IRA to increase their philanthropic impact and tax efficiency. These ''fulfill personal legacy aspirations while ensuring ongoing support of charities - a powerful example of the intersection of sound financial planning and meaningful giving.'

According to (Advisor Name), a division of Wealth Enhancement Group called the Retirement Group, Rackspace Technology professionals should look at The Legacy IRA as ''a vehicle for giving back while being prudent with money,'' said (Advisor Name). This meets their retirement and legacy goals and takes advantage of tax benefits, allowing them to ''take their impact far beyond their corporate careers into purpose-driven philanthropy.'

In this article we will discuss:

  • 1. Early Experiences in Philanthropy:  How formative years and upbringing shape lifetime attitudes toward charitable giving.
  • 2. Trends in Philanthropy Among Rackspace Technology Retirees Changing Trends:  Evolving financial environments and intergenerational wealth transfers drive the shift from traditional estate planning to purpose-driven legacy planning.
  • 3. Introduction & Benefits of Legacy IRAs:  The mechanics of Legacy IRAs under the SECURE 2.0 Act and how they marry philanthropy with financial and tax benefits for retirees.

This generosity often takes root in early life and shapes how adults experience charitable giving. My humble upbringing on a Wisconsin small farm taught me to give back. My parents always supported the church and community even with their modest means. Such formative experiences shaped my philanthropic endeavors. I believe in the cycle of generosity - that with each act of generosity we get something of great value back - new insights, memorable encounters or even money.

And the giving gives Rackspace Technology retirees a reason to live - and allows us to be thankful for our privileges. The current environment of massive intergenerational wealth transfers and the longevity economy is transforming the face of philanthropy. Like me, many Rackspace Technology retirees are rethinking traditional estate planning for more purposeful legacy planning. We're not distributing all of our wealth to our families - we're looking at ways to balance inheritance with significant charitable gifts.

A powerful instrument of the SECURE 2.0 Act of 2023 is the It allows middle-income Americans in particular to combine philanthropic intent with tax benefits and income generation. Hope this blog post will help financial advisors better serve clients in creating purpose-driven Legacy planning.

Evolution of the Legacy IRA.

With 2022 over, the 117th Congress of the United States was preparing a major financial shift: the SECURE 2.0 Act - the Consolidated Appropriations Act of 2023. Among its many provisions was an expanded charitable IRA rollover. It started in 2006 as a temporary measure allowing people 70 1/2 and older to take Qualified Charitable Distributions (QCDs) from their individual retirement account (IRA). The law now lets you rollover for life into a plan with lifetime income guarantees.

Learning About the Charitable Gift Annuity (CGA)

The Charitable Gift Annuity is part of the Legacy IRA. The contract is between an individual and a nonprofit organization called a CGA. For a donation, the nonprofit promises to pay a fixed income for life to the benefactor. The remainder is given to the chosen charity upon the death of the benefactor. Multiple factors, including the age of the contributor at the time of contribution, determine CGA payments. This arrangement provides donors with a regular income stream and guarantees that their preferred charities will continue to receive support indefinitely.

Study finds increasing numbers of Rackspace Technology retirees use their Individual Retirement Account (IRA) for charities. From 2021, anyone over 70 1/2 can send directly from their IRA up to USD 100,000 per year to a qualified charity. This helps Rackspace Technology retirees meet required minimum distribution (RMD) obligations and supports charities. For some, these strategies may offer a satisfying combination of financial planning and philanthropy when they retire from corporate roles.

The Legacy IRA is a twist on CGAs that have existed for some time now. Transfers to a CGA aren't deductible contributions. But they count toward the annual Required Minimum Distribution (RMD), and are especially useful for those 73 and older. This entire income is called ordinary income.

My Journey Into Legacy Planning.

I saw the potential in the Legacy IRA and I took advantage of that. Because I had a lot of tax-deferred retirement savings and other income sources, I had to take a large minimum distribution that put me in an upper tax bracket. I could have managed my tax liability better by putting USD 50,000 into a CGA. The CGA also has a fixed payout rate - in my case at age 76 it was 6.8% per year on the USD 50,000.

How to Set Up a Legacy IRA.

Identifying Charitable Causes: I picked organizations I had supported for years and knew would keep getting funding after my death. Choosing a CGA Administrator: My CGA Administrator was Community Foundation of Tampa Bay (CFTB). Their efficiency and history with me made them ideal business associates. Reviewing the Details: I evaluated the rollover details with Crescendo Interactive, Inc. Completing the Transfer: Bringing About the Transfer: A tax-free Qualified Charitable Distribution (QCD) of USD 50,000 from my Vanguard traditional IRA helped me save on taxes and create my legacy. Finalizing the Agreement: Conclusion of the Agreement: It was then that I committed to my chosen nonprofit organizations. This fund will ensure ongoing support of these organizations well beyond my death. Receiving the Benefits: A few weeks later, I started receiving CGA income, which made me feel more secure, and my Legacy IRA was set up.

The Role of Financial Advisors.

Financial advisors assist Rackspace Technology customers with Legacy IRA details. Tax benefits, lifetime income, and guarantee for clients 70 and a half and older.Consider your IRA like a mature fruit tree in your financial orchard. As this tree provides shade (tax savings) and produces fruit (returns), so too there is a way to feed the community (charities) without wasting RMDs. This not only ensures the health and longevity of the tree for Rackspace Technology professionals, but also benefits the land (tax benefits) and the ecosystem (charitable endeavors).

Added Fact:

New data from an ICI in 2023 study show that more and more Rackspace Technology retirees are looking for ways to take advantage of Legacy IRAs' tax advantages. It said retirees 70 and a half and older are increasingly using Legacy IRAs to fund charitable causes and also to manage their tax liability. This highlights the value of legacy IRAs as a flexible financial tool that allows retirees to leave a Legacy for charities while optimizing their financial plans and reducing their tax burden - a good option for the Rackspace Technology.

Added Analogy:

Think of Legacy IRAs as the gardens of your financial estate. Like a gardener tends to his plants, Rackspace Technology retirees can take advantage of legacy IRAs to plant a financial Legacy while saving taxes. As a garden produces a bumper crop when properly cared for, a legacy IRA can also provide a bumper financial Legacy for your chosen charities. As a garden design adds value to your property, a Legacy IRA adds value to your philanthropic contributions and tax-efficient financial planning. Think of Legacy IRAs as the ground for your financial garden - planting the seeds of charitable giving and tax benefits - and harvesting the rewards for you and your charitable beneficiaries.

Articles you may find interesting:

Loading...

Sources:

1. Upton, Suzie. 'Legacy IRA Act.'  American Heart Association , 2023,  www.heart.org .

2. Kitces, Michael. 'Legacy IRA Rollover To Charitable Gift Annuity.'  Kitces.com , 2023,  www.kitces.com .

3. 'The Legacy IRA Has Finally Arrived.'  Forbes , Jan. 2023,  www.forbes.com .

4. Upton, Suzie. 'Special Focus on Seniors and Charitable Giving.'  American Heart Association , 2023,  www.heart.org .

5. 'How Advisors Can Help Clients Benefit From Legacy IRAs.'  Morningstar , 2023,  www.morningstar.com .

What type of retirement savings plan does Rackspace Technology offer to its employees?

Rackspace Technology offers a 401(k) retirement savings plan to help employees save for their future.

Does Rackspace Technology match employee contributions to the 401(k) plan?

Yes, Rackspace Technology provides a matching contribution to employee 401(k) contributions, which helps boost retirement savings.

What is the maximum contribution limit for the Rackspace Technology 401(k) plan?

The maximum contribution limit for the Rackspace Technology 401(k) plan follows the IRS guidelines, which can change annually.

Can employees at Rackspace Technology choose how to invest their 401(k) contributions?

Yes, employees at Rackspace Technology can choose from a variety of investment options for their 401(k) contributions.

When can employees at Rackspace Technology start contributing to the 401(k) plan?

Employees at Rackspace Technology can start contributing to the 401(k) plan after completing their eligibility period as outlined in the plan documents.

Is there a vesting schedule for the Rackspace Technology 401(k) matching contributions?

Yes, Rackspace Technology has a vesting schedule for matching contributions, which determines when employees fully own those contributions.

How can Rackspace Technology employees access their 401(k) account information?

Rackspace Technology employees can access their 401(k) account information through the plan's online portal or by contacting the plan administrator.

Are there any fees associated with the Rackspace Technology 401(k) plan?

Yes, there may be fees associated with the Rackspace Technology 401(k) plan, which are disclosed in the plan documents and can vary based on investment options.

Can employees take loans against their 401(k) balance at Rackspace Technology?

Yes, Rackspace Technology allows employees to take loans against their 401(k) balance, subject to the terms and conditions of the plan.

What happens to my 401(k) account if I leave Rackspace Technology?

If you leave Rackspace Technology, you have several options for your 401(k) account, including rolling it over to another retirement account or cashing it out, subject to taxes and penalties.

New call-to-action

Additional Articles

Check Out Articles for Rackspace Technology employees

Loading...

For more information you can reach the plan administrator for Rackspace Technology at , ; or by calling them at .

*Please see disclaimer for more information

Relevant Articles

Check Out Articles for Rackspace Technology employees