A gift annuity is an agreement between you and our organization under which we agree to pay you fixed payments for your life (and/or the life of your chosen beneficiary). The amount of the annuity is based on the age of the annuitant(s) and the amount of the gift.
The gift annuity is a very popular life income plan. It requires only a modest contribution, and you can fund it with cash or marketable securities. You can receive an immediate income tax charitable deduction for the gift (subject to AGI limitations), spread out any capital gains tax liability, and often increase your spendable income. What’s more, part of your annuity payments may be federal income tax free, which increases your effective return. As a donor you can select the payment intervals (usually semi-annually or annually) and name your beneficiaries (usually yourself and/or another).
Middle-aged professionals, particularly those who regularly max out their annual retirement plan contributions, may want to consider the deferred gift annuity. Under this arrangement, you receive your income tax deduction now during your high income years and postpone your annuity payments until later (usually after retirement) when you may be in a lower tax bracket. In doing so, you can supplement your retirement income and make a substantial gift that can leave a lasting legacy. Your payments are greater than with a regular gift annuity as well.
