Charitable Gift Annuities
As rate charts reveal, gift annuity rates are higher for
older individuals. As a result, gift annuities are generally most attractive to
persons in their retirement years.
If you are still employed and are planning for your retirement, you might
want to consider an option known as a deferred gift annuity as part of
your retirement planning. With a deferred gift annuity, you transfer funds to a
charitable interest today and receive an immediate income tax charitable
deduction while payments to you actually begin at a future date you specify.
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For example: George and Jane, both age 60, are in their peak earning
years and highest tax bracket. They plan to make charitable gifts
through their will. They are also concerned with assuring adequate
retirement income.
George and Jane decide to transfer $50,000 for a deferred gift annuity
agreement. They receive an income tax charitable deduction this year for
nearly $10,000, which helps offset income taxes immediately. When they reach
age 70, annual payments of 10% of the amount donated, or $5,000, will
begin, and will continue for as long as either of them lives.
George and Jane plan to create another deferred gift annuity each year with Junior Achievement
until
retirement. They are thus able to make substantial and much appreciated
charitable gifts while they help build their future economic security using
funds that they already planned to leave to charity.
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| Amount transferred to Junior Achievement |
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... $50,000 |
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| Annual payments beginning at age 70
for as long as either George or Jane lives |
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... $5,000
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| Immediate income tax charitable deduction |
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... $9,573
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