A gift annuity offers many advantages. First, and foremost, the payout rates for gift annuities are generally quite attractive to people in their 70s, 80s and 90s. The rates typically range from 6-9%. If a person, or couple, is currently experiencing a low return on their CDs, money market accounts, treasury notes, or bond funds, a gift annuity can be a nice alternative. The payout rates are determined by a person’s age, and once established are fixed for life.
Second, the donor receives a generous income tax deduction for the year in which they create a gift annuity. Often the tax deduction is 20-50% of the amount that they placed into the annuity.
And finally, depending upon how the gift annuity is funded, the donor can enjoy a significant portion of the income they receive from a gift annuity on a tax-free basis.
There are many forms of gift annuities. Some offer an immediate payout option, while others allow the donor to fund the agreement and get an income tax deduction now, but delay the beginning of payments until some point in the future of their choosing.
Call the Foundation if you are interested to learn more about gift annuities. A confidential illustration can be prepared specifically for you which will reveal what your payout rate would be, how large your income tax deduction amount would be, and what portion of your payments would be tax-free. There is no cost or obligation to inquire.