12 Things to do in 2013- Need More Retirement Income?

12 Things to do in 2013- Laurie Valentine #10

Have you determined you may need more income when you retire than will be provided by social security, IRA’s and your investments? A deferred payment charitable gift annuity may be the answer.

A charitable gift annuity is a gift arrangement whereby you make an irrevocable gift to a charity of your choice and retain the right for you (or you and one other person) to receive fixed, never-changing payments for the rest of your lives. At your death, whatever is left is paid to the charity. The future gift to charity is a charitable contribution for which an income tax deduction may be available.

A deferred payment gift annuity is set up and funded now, but the lifetime payments to you don’t start until a future date chosen by you.

The size of the payment you will receive is determined by the amount of your gift, your age at the time of the gift and how long your payments are deferred. Generally, the more time between the gift date and the first payment date the higher the payments to you will be.

You cannot outlive your payments, and the payment amount will not change regardless of changes in interest rates or the economy.

You can fund a deferred payment gift annuity with cash, stocks, bonds or other securities.

If you are 60 and plan to retire at age 70, your deferred payout rate is 7.0%. For every $10,000 you give now, you will receive $700 each year beginning at age 70, and the value of your charitable gift for income tax deduction purposes is 45% of the value of what you give.

For comparison, the immediate gift annuity rate for a 60 year old is 4.4%, the annual payment for every $10,000 given would be $440, and only 29% of the value of what you give is a “charitable gift” for deduction purposes.

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.