Retirees Over 70½ Can Send $111,000 a Year From an IRA to Charity Tax-Free. The Average One Donates From Checking Instead.

It is called a Qualified Charitable Distribution, or QCD. The average retiree still writes a check from a bank account instead, and the tax cost of that habit is higher than most donors realize.

What a QCD Actually Does

A QCD lets IRA owners at least 70½ years old instruct their custodian to send money straight from the IRA to a qualifying 501(c)(3). The distribution never appears on the retiree’s Form 1040 as income.

For those already 73 or older and subject to required minimum distributions, the QCD also counts toward the RMD for the year. The $111,000 limit is per person and now indexed to inflation, up from $108,000 in 2025. A married couple with two IRAs can move roughly $222,000 per year this way.

The mechanism matters because keeping money out of adjusted gross income does more than shave a marginal tax bill. Lower AGI can reduce the taxable portion of Social Security benefits, cut Medicare IRMAA surcharges, and preserve deductions and credits that phase out at higher income levels. A retiree who takes the RMD as cash, deposits it in checking, and then writes a donation check gets none of those AGI benefits, even if the check is the same size as the QCD would have been.

Why the Checking Account Still Wins Out

The reason most donations still come from checking is the standard deduction. Roughly 90% of households no longer itemize, according to the Tax Policy Center, which means a check written to church, alma mater, or food bank produces no federal tax benefit at all.

On the Clark Howard Podcast, a listener named Chris described the problem in plain terms: “We donate about $5,000 every year and plan to continue doing so, but receive no tax benefit.” Clark noted that the higher standard deduction has “put in triggers where up to a certain amount charitable contributions were no longer deductible, that you got no benefit on your taxes.” His suggested workaround was bunching multiple years of gifts into a donor-advised fund.

QCDs sidestep that whole issue. A retiree who takes the standard deduction still captures the full tax value of a QCD because the money is excluded from income at the source. There is no itemization required and no need to bunch anything.

Who Actually Has the IRA Balance to Care

The tool is only useful if there is money in a traditional IRA to move. Fidelity’s Q3 2025 data show that the average IRA balance for Baby Boomers is $257,002, and the average 401(k) balance for participants aged 70 and older is $250,000. Boomers hold an average 401(k) of $267,900. Balances of that size do not put every retiree near the $111,000 QCD cap, but they easily support giving in the low four or five figures, which is where most retiree donations actually land.

Fixed-income pressure is also part of the picture. The 2026 Social Security cost-of-living adjustment was 2.8%, and the national personal saving rate fell to 2.8% in the second quarter of 2026, down from 5.0% a year earlier. Retirees who are already drawing down assets to cover spending have a stronger reason to route giving through a channel that lowers taxable income rather than one that does not.

The Practical Version

For a retiree already writing charitable checks and already taking an RMD, converting to a QCD is largely a paperwork change. Three specifics are worth knowing:

• The distribution must go directly from the IRA custodian to the charity. A check made out to the account holder and then endorsed to the charity does not qualify.
• QCDs apply to traditional IRAs, inherited IRAs, and inactive SEP or SIMPLE IRAs. They do not apply to 401(k)s, so a rollover from the workplace plan into an IRA is a common first step.
• Donor-advised funds, private foundations, and supporting organizations are excluded. The gift has to go to an operating charity.

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