Deferred Gift Annuity: FAQs
How can this gift enhance my retirement savings?
A Deferred Gift Annuity provides lifetime annuity payments commencing at a future date. Because of this deferral, payments from deferred gift annuities are higher than from annuities whose payments begin immediately, and donors usually receive a larger charitable deduction than they would for an immediate-payment annuity. Many donors use deferred gift annuities as a source of supplemental retirement income. They often create their annuity with funds they had already set aside for retirement saving, and set their anticipated retirement as the date to begin receiving payments. An attractive option is to establish a series of deferred gift annuities over several years, all scheduled to begin payments upon the donor's retirement.
May I choose the start date for my annuity payments?
Yes, you may. Choose whatever date makes sense to you. And remember this: the longer you wait, the larger your payments will be.
Is it better to use gifts of cash or stock for my deferred gift annuity?
One is not necessarily better than the other. Both have distinct advantages. A gift of cash will produce a larger tax-free portion of the annuity. A gift of stock will reduce the donor’s capital gain tax and produce income that will likely be at a lower tax rate. Both assets produce an equal annuity rate and charitable income tax deduction.
Can I include my children as income beneficiaries of my gift annuity?
A charitable gift annuity can only be set up for one or two lives. This is typically a husband and wife, but it could be two siblings, or two friends, etc. For more flexible beneficiary choices, you could consider a charitable annuity trust or a charitable unitrust.
Next
- More detail on gifts of stock and deferred gift annuity.
- Contact us so we can assist you through every step.
