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Charitable Gift Annuity – The gift that gives
back guaranteed income
Different types of CGAs
There are two basic types of CGAs and they each meet
different needs:
Immediate Payment
With this type of gift annuity, your payments begin
as soon as the contract takes effect. For example, if quarterly payments
are elected, payments begin at the end of the quarter in which you make
your gift. Recommended age is 65 or older.
Deferred Payment
This option allows younger donors and annuitants to
defer the start of payments until they have reached retirement age. Like
an immediate payment gift annuity, you can take a charitable deduction
in the year you make your gift. Because payments are deferred, however,
you or your designated annuitants will receive substantially higher income
payments later. This type of gift works best for income beneficiaries
between the ages of 40 and 60. See Deferred
Gift Annuities.
What are the advantages?
- Guaranteed fixed income for life
- Rates of return up to 10% for single
life (slightly less for two lives)
- Charitable income tax deduction for
a portion of your gift
- Tax-advantaged income (your payments
will be part tax-free under most circumstances)
- Reduced capital gains tax (you pay
capital gains tax only on the gain attributed to your retained income
interest)
- Potential reduction of estate tax liability
Example
You donate $10,000 of appreciated stock, originally purchased for $2,500, to a Single-Life Gift Annuity with quarterly payments that begin
immediately. Assume IRS discount rate of 4.2%.
Annuitant
Age at Gift |
Age 65
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Age 70
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Age 75 |
Age 80 |
Age 85
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Annuity
rate |
5.7% |
6.1% |
6.7% |
7.6% |
8.9% |
Annual
payment |
$570 |
$610 |
$670 |
$760 |
$890 |
Charitable
deduction |
$3,455 |
$3,988 |
$4,484 |
$4,961 |
$5,408 |
PLEASE NOTE: These examples are for illustrative purposes
only and are not intended as legal or tax advice. Consult your own legal
and tax advisors prior to making any material decisions based on this data.
Send me a Personal Illustration!
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For more information
E-mail
us, complete the Personal Illustration
form, or call us at (727) 864-8229 so that we can assist
you.
Judi Schraer
Director of Gift Planning
Eckerd College
4200 54th Avenue South
St. Petersburg, FL 33711
(727) 864-8229
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