Couple Transforms Retirement Savings into Educational Blessings
It’s common to protect your retirement savings to ensure your money lasts, but what if you used the funds now to bless others and save on taxes? Maureen and Dan Habel have found immense joy in using their Individual Retirement Accounts (IRAs) to support students, like Isabella, at St. Anne Catholic School in Santa Ana, as well as providing additional tuition assistance through The Orange Catholic Foundation (OCF).
“It’s not just the classroom. It’s seeing the kids at Mass, their preparation, their enthusiasm. For people in our age group, it’s another chance to support Catholic education into another generation. It’s beyond your family,” said Maureen, a retired nurse and parishioner of Holy Family Catholic Church in Seal Beach. She and Dan, married for 49 years, credit their Catholic education to shaping who they are today. “We have money in the bank. We’re in good health. Our kids are doing fine. Are we just lucky? It’s the Catholic education that we had; the values instilled,” shared Dan, a retired Human Resource Manager.
After much reminiscing, the couple felt a tug to care for the souls of other children whose families may not be able to cover the cost of a Catholic education. Following a suggestion from Rev. Jim Hartnett, Pastor Emeritus at Holy Family, they reached out to the Catholic schools in Orange County’s most vulnerable neighborhoods and connected with Sr. Teresa Lynch, principal of St. Anne Catholic School.
Maureen chuckled while recalling their first visit to St. Anne, “Dan says to me ‘Well, if we kind of like what we see, how much do you think we should donate? I’m thinking maybe 50 bucks.’ And I said, stop the car. I am not going all this way for 50 bucks. You can add some zeros to it.”
Over the years, the Habels have served on the St. Anne School Board, sponsored academic improvement reward programs and contributed tuition funds at OCF’s Conference on Business & Ethics. Most recently, they’ve utilized their Required Minimum Distributions (RMDs) from their IRAs to make a significant impact. Dan explained, “What do you do with it? You buy another coat, go out to dinner, or take a cruise. We believe in Catholic education, so we direct the money to that, and we don’t have to pay taxes on it.”
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When the Habels contribute directly from one of their IRAs, they avoid the income taxes they would have owed if they had withdrawn the funds first and then made the contribution. This strategy, called a Qualified Charitable Distribution (QCD), is available to individuals over 70 ½ and fulfills the RMD requirements for those 73 or older.
Dan and Maureen emphasized how this strategy has helped them lift more of the financial burden off parents, forever changing the lives of the next generation. It’s also been a way for them to express gratitude for their God-given blessings.
By January 1, Maureen and Dan are informed of the amount they need to withdraw from their retirement accounts for the year. Dan prefers to contribute portions of his RMD throughout the year to St. Anne School, helping where it's most needed, while Maureen contributes a larger sum in the fall, ensuring guaranteed tuition assistance.
“For (St. Anne) School in particular, the principal knows that she can count on a certain amount of money from us. So, when she is working with the parents on tuition assistance, she can count on that money,” explained Maureen. They encourage others to consider this simple process, stating, “You don’t have to be a billionaire to have an RMD,” and “When you think about the future of the church, you really need to think about who is coming behind us.”
Click here to view and download The Orange Catholic Foundation’s IRA Charitable Rollover Instructions. If you have any questions or want additional information, OCF is ready to serve you and help you become the cheerful giver described in 2 Corinthians 9:7. You can reach the Philanthropy Team at (714)282-3021 or info@OrangeCatholicFoundation.org.
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Note: The Orange Catholic Foundation does not provide tax, legal or accounting advice. This content was produced for informational purposes only. Always consult a tax professional for guidance.
