--- title: This 401(k) Proposal Could Give Retirees an Easier Way to Donate to Charity description: A bipartisan bill would let retirees donate directly from 401(k)s without rolling funds into IRAs first. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 501 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ editors: - name: Katherine Peach role: Associate Editor url: https://money.com/author/katherine-peach/ bio: Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!) Katherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others. Katherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa. education: University of Maryland, Baltimore County at_money_since: 2025 articles: 14 covers: - Retirement - Banking - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Federal Reserve Rate Cuts - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Shopping - Taxes published: '2026-05-21T18:57:42.000Z' modified: '2026-05-21T18:57:42.000Z' section: Retirement tags: - News - Retirement word_count: 548 canonical: https://money.com/401k-charity-donation-bill/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Photo-illustration of a hand giving coins](https://img.money.com/2026/05/News-Charitable-Giving-Expand-401k.jpg) A bipartisan group of lawmakers wants to make it easier for retirees to donate to their favorite causes directly from their nest eggs. The proposal, dubbed the [Charity Parity Act](https://beyer.house.gov/uploadedfiles/charity_parity_act_text.pdf), seeks to expand existing rules to allow older Americans to donate using funds from their 401(k)s or similar employer-sponsored retirement plans. Currently, retirement account-related donations, known as qualified charity distributions, can be made only via [taxable individual retirement accounts (IRAs)](https://money.com/what-is-an-ira/). So if retirees would like to use their retirement savings for a donation, they must first roll the funds over into an IRA, triggering fees and paperwork. “This legislation makes charitable giving more accessible and equitable for retirees,” Mark Schoeberl, an executive vice president at the nonprofit American Heart Association, or AHA, said in a [news release](https://www.coons.senate.gov/news/press-releases/senators-coons-cramer-introduce-charity-parity-act-to-eliminate-tax-penalties-on-charitable-donations-from-employer-sponsored-retirement-plans/). The AHA is one of a spate of nonprofit organizations that support the change. Other backers include the American Retirement Association, the American Cancer Society, the United Way, the Salvation Army and more. ## Building on SECURE 2.0 The [SECURE 2.0 Act](https://money.com/this-401k-change-afford-retirement/), passed in 2022, enacted major retirement savings reforms that make it easier for millions of workers to save for retirement while giving retirees more flexibility with their savings. The plan made two key changes that affect qualified charity distributions: First, it set the annual charity distribution limit to adjust based on inflation. For 2026, the limit is $111,000. The second relevant change was to the age at which retirement savers are required to take out mandatory distributions from their retirement accounts. These mandatory withdrawals are called required minimum distributions, or RMDs, and they generally start at age 73 (unless the saver is still working). In 2033, the RMD age is moving up to 75. RMDs are particularly relevant to [charitable donations](https://money.com/charitable-donation-tax-deduction-receipts/) from retirement accounts because those donations can satisfy the RMD rule and help retirees avoid, in some cases, a major tax bill. For instance, if a retiree is required to take a $20,000 distribution from their IRA, that money is normally considered taxable income, which could push them into a higher tax bracket, hike Medicare premiums or trigger increased Social Security taxes. Instead, some wealthier retirees whose basic needs are already met by other income sources choose to donate the RMD money to a qualifying charity to skirt the tax bill while helping a cause they care about. For now, that strategy works only for RMDs coming from IRAs, but the SECURE 2.0 changes helped supercharge the tax-efficient donation method nonetheless. In 2024, qualified charitable giving through IRAs increased 56%, [data shows](https://www.nonprofits.freewill.com/resources/reports?topic=QCDs), and another 47% the following year. The bipartisan Charity Parity proposal intends to build on that momentum by extending those rules to 401(k) plans — and it’s got major support, including two co-sponsoring senators who sit on the Senate Finance Committee. Still, the proposal is far from guaranteed, and it's not clear when the bill will make its way through the House and Senate committees and come up for a vote. But it’s got supporters excited. According to [Brian Graff](https://www.coons.senate.gov/news/press-releases/senators-coons-cramer-introduce-charity-parity-act-to-eliminate-tax-penalties-on-charitable-donations-from-employer-sponsored-retirement-plans/), CEO of the American Retirement Association, the proposal “builds on the success of SECURE 2.0 by ensuring retirement savers are treated fairly, regardless of where they hold their assets.” “By reducing administrative burdens,” he added, “this legislation can help encourage greater charitable giving while strengthening retirement security.” ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/401k-charity-donation-bill/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Retirement", "item": "https://money.com/retirement/" }, { "@type": "ListItem", "position": 3, "name": "401(k)", "item": "https://money.com/401k/" }, { "@type": "ListItem", "position": 4, "name": "This 401(k) Proposal Could Give Retirees an Easier Way to Donate to Charity" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/401k-charity-donation-bill/#webpage", "url": "https://money.com/401k-charity-donation-bill/", "name": "This 401(k) Proposal Could Give Retirees an Easier Way to Donate to Charity", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2026-05-21T18:57:42.000Z", "mainEntity": { "@id": "https://money.com/401k-charity-donation-bill/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/401k-charity-donation-bill/#breadcrumb" }, "dateModified": "2026-05-21T18:57:42.000Z" }, { "@type": "NewsArticle", "headline": "This 401(k) Proposal Could Give Retirees an Easier Way to Donate to Charity", "articleSection": "Retirement", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2026/05/News-Charitable-Giving-Expand-401k.jpg", "width": 2880, "height": 1920, "caption": "News-Charitable-Giving-Expand-401k" } ], "author": [ { "@type": "Person", "name": "Adam Hardy", "url": "https://money.com/author/adam-hardy/", "@id": "https://money.com/author/adam-hardy/#author", "description": "Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. 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