Deferred Annuity Can Boost Retirement Income

You can secure fixed payments for life when you make a contribution to your favorite charitable organizations.

If you wish, with a gift annuity plan, your payments can start right away. But instead of receiving an immediate payment, you might want to defer it until a later date, such as when you retire.

How It Works

You make the contribution now, securing a current income tax charitable deduction, and we agree to pay you fixed payments for life starting at any date you select. This is especially advantageous if your tax bracket is higher now than it will be later. In addition, the annual payment rate is considerably higher when the payments begin.

For many people, tax reform curtailed the tax benefits of IRAs, 401(k) plans and other retirement plans. The deferred payment gift annuity is a good way to make up for the loss of the future funds you may need.

Example: Dick and Caroline are both age 45. They transfer $2,000 annually to a series of joint and survivor gift annuities, arranging for payments to start when they reach age 65. Dick and Caroline are in a 25 percent tax bracket, and they itemize their deductions. The first year they deducted $4941 of the $2,000 transferred, an income tax savings of $124. The amount of their deduction varies slightly each year thereafter. Based on then-current rates, they would receive $3,844 each year (partly tax free) beginning at age 65, a rate of 9.6 percent on their contribution totaling $40,000.

Caveat: Deferred gift annuity rates are subject to change depending on the donor's birth date and the date of the gift.

Count the Advantages

The most important advantage you gain from a deferred gift annuity is the opportunity to make a major contribution to us while still meeting your personal financial needs.

Count the other benefits:

• You can supplement future retirement funds with a known dollar amount.
• Your contributions are unlimited, unlike those for qualified pension plans.
• You can secure a substantial income tax charitable deduction immediately.
• You can receive secure payments that are partly tax free.
• You free yourself of investment cares on amounts you contribute.
  

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.

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