by Dianne Reitan, Major Gifts Officer
No doubt, it has been an emotional time as we wait for life to return to some sense of normalcy. As we ask the community to join us in Taking a Stand, you may be pondering ways you can support the Colorado Springs Philharmonic as we continue to pay our contracted musicians even through the remainder of the season.
Most of us rely on our 401ks and investments for retirement and a source of income during our golden years. While the volatility in the financial markets may give you pause, these two tips might be helpful in moving forward.
Tip One: Put the market in perspective.
Do you remember what the Dow Jones Industrial Average (DJIA) closing price was two years ago on April 6? Remarkably, it was 23,932 – similar numbers to the high we had on the same day this year (23,617). While the Dow Jones logged a 2,014-point drop in March — its largest in history — which equates to a 7.79% decline, the market drop really just erased the gains from the last few years. What a mental whiplash.
My husband wants to retire in a few years, so he watches the market like a hawk! Every day, without fail, he checks the financial indices, usually several times. Admittedly, I like to watch the market bounce up and down throughout the day as the human brokers and trading algorithms react to news. I find the market swings rather fascinating; my husband, on the other hand, does not find the volatility amusing.
But the perspective we both gained from this research helped us realize that in addition to our annual retirement contributions from the last two years, we have roughly the same amount invested now as we did two spring seasons ago. Of course, we wish the market didn’t zigzag so much.
Tip Two: This too shall pass, but while we’re here take some tax advantages.
Even with this volatility and the pandemic we are experiencing, which is just blip in the road, we will have great prosperity once again. Given this faith, as Americans, we don’t plan to change our support for charitable organizations or stop donating to causes we are passionate about. We are proud of our Colorado Springs community and we know the non-profit community needs our support now more than ever.
One way you could support the Philharmonic is through your IRA. In response to COVID-19, Congress passed the CARES Act suspending in 2020 the Required Minimum Distribution (RMD) for IRAs. The waiver includes RMDs for those who reached age 70½ and who would be required to take their first RMD by April 1 of 2020. This waiver also includes RMDs from inherited IRAs for 2020. Note: Combined with the SECURE Act that moved the commencement of RMDS for those who had not reached age 70½ before January 1, 2020, to age 72, this has effectively pushed the initial RMD back several years for those who turn 70½ in 2020.
Rather than NOT taking your RMD, consider Taking a Stand with a distribution to the Philharmonic, a qualified charitable withdrawal, that is paid directly from your IRA to us. While income tax is normally due on each traditional IRA distribution, the account owner does not need to pay taxes on the amount transferred to charity. Simply notify your investment advisor or custodian and let them know you would like to make a direct distribution from your IRA to The Colorado Springs Philharmonic, a registered 501(c)3 nonprofit organization, FIN 74-3091110. You can also make a check payable to the El Paso County Enterprise Zone for an extra deduction. For more information, call us. As always, we appreciate your support and we look forward to seeing you at a concert when it’s safe to be together again.