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A Birthday Surprise

A Birthday Surprise
While the Minnesota Historical Society focuses on collecting, preserving and sharing the stories of our state's rich history, some important information about the future also turns up in conversation.

Consider this exchange.

Last spring a long-time member and loyal supporter of the Society joined two of us for a relaxing chat over a midafternoon cup of coffee in the MHS Café. She was obviously enjoying her day at the History Center and proudly announced that it was her birthday; not just any old birthday, but one with special significance, she had turned 70.

She went on to explain that a week earlier her financial planner had asked her, "This birthday is a big one; are you ready?" A bit confused, she acknowledged it is an age to be proud of but didn't understand what she needed to prepare for. Aware of the importance of the ages 59½, 62 and 10 months, and 65 when it came to financial planning, she just didn't understand what would happen at 70? Her advisor alerted her, "It means you will turn 70½ this year so you must begin drawing from your IRA."

She shared with the two of us her surprise that she would be required to receive a minimum distribution which would add to her earned income for tax purposes. She explained that she neither needed nor wanted the extra income - not to mention the tax bill. She wanted to know if she had options.

"Well, there is an alternative," her advisor suggested. She learned that the federal government had extended an IRA rollover option for 2013 meaning she could donate up to $100,000 from her IRA to her favorite charity without tax consequences. All she would need to do was have the custodian of her IRA send the required distribution directly to her charity rather than to her.

Our eyes lit up because we knew that her "favorite charity" was the Minnesota Historical Society.

She decided then and there to donate her required distribution to MHS. Because she knew we were in a challenge campaign to raise endowment money for some special historic sites, she requested to designate half her mandatory IRA distribution to the Sibley Historic Site Endowment and half to the Historic Forestville Endowment, two of her favorite sites.

Of course we said we would honor her request.

Enthusiastically, she asked, "Will it count toward the challenge campaign?" In unison this time, the answer was "Absolutely!"

That special moment resulted in the Sibley Historic Site Endowment passing the halfway point in the campaign and established the Historic Forestville campaign on a firm footing.

This may be the final year for persons 70½ and older to have this rollover option granted by the IRS. If you find yourself thrust into this circumstance this year, consult with your financial advisor to determine if the IRA rollover can be used to your advantage.

And of course, contact a development officer at the Society any time for information about how your special gift may be used in support of your favorite MHS programs and projects.

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