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 savings, 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. Both assets produce an equal annuity rate and charitable income tax deduction.
Next: More details on Deferred Gift Annuities.
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