In today’s low interest rate environment, those depending on interest-bearing accounts for income have seen those dollars dwindle, often to critical levels. The good news is there are charitable vehicles available that, depending on one’s individual situation, can result in receiving a higher income stream (partially tax-free) and an immediate charitable deduction while still supporting your chosen charity or ministry.
One such vehicle is a charitable gift annuity (CGA). Consider Anna Annuity who just turned 80 and whose income has been negatively impacted by falling interest rates. A gift of $25,000 into a CGA could yield approximately 6.8% annually for the remainder of her life. In addition, not only would she receive an immediate charitable tax deduction but for approximately 9 years she also would receive at least a portion of her $1,700 annual income tax free. (This example is for illustration purposes only. Please consult with tax and financial professionals to determine your individual situation.)
Once a gift annuity is established, the payments remain fixed until the death of the annuitant.
And the “giving generously”?
When the annuitant dies or decides to discontinue receiving the payments, the remaining balance of the annuity goes to the annuitant’s chosen charity. In this way, a person who receives payments from a gift annuity also has the satisfaction of knowing that someday the annuity will benefit a cause or ministry which is dear to his or her heart.