Charitable Gift Annuity Versus a Savings Account

It used to be that a savings account could be counted on for reasonable earnings, and you would not have to give your savings much attention. These days, however, you may be looking for other options that produce a higher rate of return.

Charitable life income plans, including the charitable gift annuity, could be the solution. Depending on your age, you can receive a payout rate that is substantially higher than that of noncharitable plans that provide life payments; an important consideration in these days of economic uncertainty.

Compare a charitable gift annuity and a savings account and see the differences. In our example, the amount under consideration is $5,000, and the age of the donor/investor is 70.

Your cash flow is further enhanced because you are allowed an income tax charitable deduction. In our example, the deduction allowed the year in which the gift is made is $1,889. Although the annuity payout rate is 6.5 percent, this additional tax benefit produces an effective rate of return on the net cost of the gift of 7.2 percent.

Please contact Mary Ludwig, Development Director at 712-732-5127, for more information.

The information on this site is not intended as legal, tax or investment advice. For such advice, please consult an attorney, tax professional or investment professional.

Copyright © The Stelter Company, All Right Reserved.

Essentials

Ways to Give

What to Give

Reading Room

Glossary of Terms

Q&A

Goals & Gifts

Bequest Language