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Deferred Gift Annuity – A Deduction Now; Retirement Income Later
You can delay the beginning of payments from your gift annuity. The deferral gives you both a higher income rate and a larger charitable deduction than you could receive from an annuity paying you immediately. Many donors set payments to begin at a future date when they or their spouse will need additional income.
The deferred gift annuity is especially attractive if you are still in high-income years, and are looking for both tax deductions and additional income during retirement.
Example
You donate $10,000 of appreciated stock, originally purchased for $2,500 to a single life Gift Annuity with quarterly payments that are
deferred to age 65. Assume an IRS discount rate of 4.2%.
Annuitant
Age |
Age 40
|
Age 45
|
Age 50
|
Age 55 |
Immediate
rate |
4.3% |
4.8% |
5.1% |
|
Deferred
rate |
18% |
14.3% |
11.3% |
|
Annual
payment |
$1,800 |
$1,430 |
$1,130 |
|
Charitable
deduction |
$3,838 |
$3,909 |
$3,973 |
|
PLEASE NOTE: This example is for illustrative purposes only and is not intended
as legal or tax advice. Consult your legal and tax advisors prior to making
any material decisions based on this data.
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