Managing 401(k) Drops: Lemonade from Lemons

If you’ve been keeping an eye on your 401(k) or IRA lately, you’re not alone. With market ups and downs, many people are seeing their retirement balances fluctuate—sometimes more than they’d like. But there’s a silver lining: these accounts also represent one of the smartest tools you can use to create a meaningful, lasting impact.

Now is a great time to consider how you can turn part of your retirement plan into a legacy gift that benefits both your loved ones and your community. By naming the Branch County Community Foundation as a beneficiary of your IRA or 401(k), you can support causes you care about—while also making the most tax-efficient decisions for your heirs.

Retirement accounts like IRAs and 401(k)s are among the least tax-efficient assets to leave to family members. Here’s why:

• When your children or other heirs inherit these accounts, they must pay income tax on every dollar they withdraw.

• Thanks to the SECURE Act, they now have just 10 years to withdraw the full amount, which can lead to significant tax bills and push them into higher tax brackets.

  
  

But when you name a qualified charity like the Branch County Community Foundation as the beneficiary of your IRA, 100% of the account’s value goes directly to charity—tax-free. That means your dollars go further, making a bigger difference in the community you love.

Here’s a simple strategy to consider:

• Leave your IRA to the Branch County Community Foundation, where it will support local initiatives and lasting change.

• Leave appreciated stock or real estate to your heirs, who will benefit from a “step-up in basis” that can eliminate capital gains tax on the appreciation during your lifetime.

  
  

This approach helps you reduce the tax burden on your loved ones, while also helping your charitable goals go further.

Naming the Branch County Community Foundation as a beneficiary of your IRA is simple, powerful, and impactful. Whether you want to support education, the arts, youth programs, or any other cause close to your heart, we’ll ensure your gift is used exactly as you intend.

If you’d like help updating your beneficiary designations or have questions about how your gift can make a lasting impact, reach out to us today. We’re here to help you create a legacy that lifts our community for generations to come.