Payments from Charitable Gift Annuities Are Worth More Than You Might Think

Friends who arrange charitable gift annuities do so primarily to assist our programs.  But donors understand that gift annuities let them magnify that assistance by providing a lifetime of quarterly payments to one or two persons (the donor and her husband, for example).

Single-life gift annuity payout rates range from 5% at age 60 to 9.5% at 90 and above. These rates are high because they represent a combination of both interest and return of principal – with the assurance that payments will continue regardless of how long recipients might live. But the rates don’t tell the whole story.  A large part of your gift annuity payments will be tax-free during your life expectancy.  Additionally, if you ‘itemize” you’ll enjoy income tax savings from a sizable charitable deduction.  The combination of these two benefits effectively increases the value of your payments.

We’d be pleased to provide a detailed illustration of the tax and financial benefits of a gift annuity for your particular situation, including two-life annuities.  Just call our office.

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