Charitable Gift Annuities
Maximizing Income While Serving the Poor or Homeless
Why gift annuities?
• Guarantees the participant income for life.
• Gives significant support to the participants’ charity of choice.
• Provides some tax advantages and deductions.
• Safe and financially stable.
Understanding Gift Annuities
There are three different types of CGA’s: Single – Life Gift Annuities, Two – Life Gift Annuities, and Deferred Annuities. Although there are three different types of annuities, all three have the same foundational benefit of a guaranteed income for life.
• Only pays to one participant
• Payments terminate at the death of the participant
• Payments made to first participant initially
• Payments made to second participant at the point of death of the first participant
• Payment is allowed to be delayed until specified date made by participant
• Higher annuity payments
• May be Single-Life or Two-Life Annuity
Mark and Katherine were both 75 years old, retired, and troubled by the drop in their income as a result of lower interest rates on their fixed-income investments (CDs, bonds, and money market funds). Still, they wanted to support charities through financial giving and planned to do so through their will.
Then they learned about a CGA with City Union Mission. They started a CGA by funding it with a $25,000 check. They received an immediate tax deduction for a portion of that gift, and based on their age and life expectancy, they received fixed periodic payments of $1,250 per year for life (5.0% of $25,000). About 80% of each payment was tax-free.
Even better, their CGA worked in tandem with their Giving Fund (donor-advised fund) with us. Money from the CGA went into their Giving Fund, from which they could recommend gifts to their church and favorite charities – even after their death.
• They received $1,250 per year in fixed, periodic payments – partially tax-free – for the rest of their lives.
• During Mark and Katherine’s life and even upon their death, money from the CGA went to their church and favorite charities.
If you have questions or would like more information, please call Lauren at (816) 329-1459.