By Jackie Jacobs
It is quite possible you can make a charitable gift and actually increase your retirement income. Take for example Minnie Horowitz (not a real person). She is 80 years old, and receives retirement income from various sources, including certificates of deposit. One of her CDs is maturing and she’s hesitant to take out another one because of the low rates.
Then Mrs. Horowitz learns about charitable gift annuities. At her age, she can obtain a one-life charitable gift annuity that would pay her an annual rate of 6.8 percent.
What’s more, because a gift annuity is irrevocable, she would receive an income tax charitable deduction for a portion of her contribution. An added benefit is that her favorite charity could eventually benefit from the gift. Mrs. Horowitz could have the satisfaction of helping a worthy cause she cares about.
After talking with her advisor, Mrs. Horowitz decides to obtain a charitable gift annuity for $25,000. Because the rate is so much better than what she was receiving before, her retirement income will increase. For the rest of her life she will receive annual payments from her favorite charity for $1,700.
Charitable gift annuities are popular with many seniors. In fact, some of them like their annuities so well they obtain additional ones as the years go by. The older a person is, the higher the rates. At age 90, a person receives a top rate of 9 percent.
Gift annuities, with deferred payment schedules, can also make sense for younger donors. For example, a 40-year-0ld person who creates a charitable gift annuity with payments to begin at age 65 will receive an annuity rate of 10.3 percent. Further, an income tax charitable deduction is available when the annuity is created, making this not only an excellent supplemental retirement plan, but a current source of tax relief as well.
If you want to learn more about our gift annuity program, and the benefits you can receive, contact me at 614-338-2365 or email@example.com.
Article appears as originally published in the Ohio Jewish Chronicle, Thursday May 25, 2017.
Jackie Jacobs is the Chief Executive Officer of the Columbus Jewish Foundation, the Central Ohio Jewish community’s planned giving and endowment headquarters.