If you are like many people, you are looking for a way to create funds and security for your future. If you own low-interest CDs or underperforming stocks, one idea is to transfer these assets to a qualified nonprofit organization in exchange for a charitable gift annuity. In return, the charity agrees to make payments for life to you, you and a loved one, or another person. Each payment is fixed, and the amount of each payment will depend on the age of the recipient. Payments can begin in the year the gift is made, be deferred until you retire or until a later age, depending on your personal goals. As a donor, you also receive a tax deduction for the net value of the gift.
The nonprofit charity benefits from any funds that remain after the donors’ lifetime. A charitable gift annuity is a way to leverage your generosity by helping a charity that is important to you, while producing tax savings and supplementing other retirement assets you may have, such as income-producing real estate, a 401(k) or an IRA.
Not every charitable organization is qualified to issue charitable gift annuities. Each state sets requirements, which must be met in order to issue them, along with requirements for annual public filings by the charity.
To learn more, check with a knowledgeable financial adviser. You can also call us to discuss how a charitable gift annuity may be appropriate for you and to receive more information, including an illustration.