I’ll spare you the suspense and give you the solution up front: a Charitable Gift Annuity in one form or another. The following situations are some of the ways Gift Annuities can be used to accomplish some of your goals (The side benefit is that at the same time you are accomplishing your financial goals, you can also be accomplishing your charitable goals).
Situation One: You desire more income than savings accounts and CDs currently pay.
Gift Annuity payments for seniors may be two or three times higher than CD rates. For example, the Gift Annuity payment for a single age 70 is 6.5% and for a couple age 70 it is 5.9%.
Situation Two: You want a tax deduction now but you don’t want the income until later.
Funding a Deferred Gift Annuity now results in an immediate tax deduction while delaying payout until later, perhaps at retirement. Payout can typically be delayed 5, 10 or 20 years. Depending on the length of the deferral period, the Deferred Gift Annuity rate may be 15, 20 or 25%.
Situation Three: You soon will be or are now supporting aging parents.
A Gift Annuity is a good source of supplemental support for aging parents. The donor receives a tax deduction and the recipient receives regular payments, some of which may be tax free.
Situation Four: You are concerned that a person to whom you want to leave part of your estate may spend it quickly on foolish things or bad habits.
Most parents would rather see their spendthrift adult children receive a steady income than a lump sum which may quickly disappear. A Gift Annuity funded from your estate for such a person can provide regular payments over their lifetime.
Situation Five: You have a number of Series EE saving bonds that are only paying about 4% and you desire an increase in income.
You can cash in the bonds and be taxed on the proceeds. However, you can immediately fund a Gift Annuity that may pay you more income, some of which will be tax free, and use the tax deduction to offset any taxes due as a result of cashing in the bonds.
These and other problems usually can be solved through the use of a Charitable Gift Annuity. If you want to see a detailed illustration of how a gift annuity might help you solve your problem, give me a call.
Ministry Advance is the CB Stewardship ministry.
Contact: Jerry Opp, Ministry Advance Foundation, P.O. Box 30029, Portland OR 97230, 503-405-1594.
