Where should my leftover retirement funds go?

Are you wondering how much you should leave to your kids, and how much you should leave to your church and the ministries God has put on your heart? You’re not alone. We get this question a lot at Orchard Alliance—probably because the Bible doesn’t answer it directly.

In his wisdom, I think God knew the answer would be different for everyone. 

One way to begin is by separating your assets into different categories. Some are taxed differently than others, and some have different purposes. In other words, some assets are better to give to family, and some are better to give to church and ministry. 

Here’s a simple example: Tax-deferred retirement funds like Traditional IRAs are taxed at the highest rate: ordinary income tax. With the exception of some special cases, if someone other than your spouse inherits your IRA, they will be required to spend that account within ten years and pay tax at their ordinary income rate. But if a church or qualified charity receives those funds, they are exempt from taxation and pay nothing. 

On the other hand, your family can inherit your after-tax assets, such as brokerage accounts and real estate, receive a “step up in basis,” and owe no taxes.

A simple rule of thumb is this: It’s usually best to leave the house to be liquidated and divided among your family, and leave your leftover retirement funds to church and ministry. 

Maybe it helps to consider how and why you saved and accumulated your retirement assets. Did you save those up with the purpose of giving them as an inheritance for your children? Probably not. You trusted in the Lord to help you save for a day when you might be unable to work for an income in old age. If God blessed the increase and there are still funds left when you go to Heaven, consider giving those funds to continue working for eternal impact. 

Since God has not instructed us specifically in this area, ultimately, it’s a decision between you and the Lord. As 2 Corinthians 9:7 states, “Each man should give what he has decided in his heart to give, not reluctantly nor under compulsion, for God loves a cheerful giver.”

We at Orchard Alliance are always praying for you in your journey of generosity and stewardship and are here to help along the way. May God richly bless you as you bring these decisions before Him.

Does this mean the reader's literal home, or are we using it in a figurative sense, to mean "everything you own other than retirement accounts"?