Planned Gifts with Annuities
Considerations and Benefits
There is a guaranteed, fixed income for life.
- The amount of the annuity payment is determined by two factors: the age of the donor and the size of the donor's gift. The older the donor... the higher the payout rate.
- There are substantial income tax savings.
- There is an income tax charitable deduction for the value of the gift during the year the annuity is established. If the income tax deduction exceeds the allowable amount of the donor's adjusted gross income, the excess can be carried over for up to five years.
- In a deferred, charitable gift annuity, the income tax deduction is based on the annuitant's age at the time the payments begin, usually resulting in a larger deduction. The deduction is taken in the year that the annuity is established.
- There are possible savings on capital gains taxes and gift and estate taxes.
- Another beneficiary may receive the annuity for life as the donor's survivor.
- Funds may be added to the charitable gift annuity each year.
- Perhaps the greatest benefit is the personal satisfaction... the pleasure of knowing a gift will ultimately serve and benefit society.
Who Might Be Interested?
- Donors who can afford to make an outright gift but are concerned about future income needs and want something they can "count on".
- Donors who simply want to replace a fixed income (such as income from a Certificate of Deposit) and make a future charitable contribution at the same time.
- Donors with low-yield appreciated assets who want higher current income without incurring long-term capital gains taxes.
- Younger donors who want to use one or more deferred payment gift annuities as a source of retirement income.
- Donors who wish to provide financial assistance to a relative or someone else.
- Donors who want a fixed income, have a modest amount to contribute, and like the simplicity of a charitable gift annuity.