Like her, you may depend upon income from certificates of deposit. If so, you wish interest rates were a lot higher than they are. You also may have been thinking about how to provide some kind of financial benefit to your church and/or other charitable causes, but do not feel you can give-up that income-producing CD.
I am happy to inform you the Kentucky Baptist Foundation offers you the same solution this woman has used. That solution is a charitable gift annuity (CGA). A CGA is an agreement between you and the Foundation under which, in exchange for your gift to the Foundation of cash or appreciated assets with a value of at least $5,000, the Foundation agrees to pay you a fixed amount each year for the rest of your life. The payout rate depends upon your age. The older you are, the higher the rate. Also, a CGA can be on one or two lives. It can be on the lives of a husband and wife, or a parent and a child. Not only is the payout partially tax-free, but also the gift is tax deducible. If you give appreciated assets, instead of cash, there likely will be capital gains tax savings. The portion of your gift not needed to make the lifetime annuity payments to you will be available at death for the cause(s) you designate in advance. You can specify for that remaining portion to be available to the charitable causes(s) outright or to be held by the Foundation in a permanent endowment fund with only the earnings, not the principal, being paid to the cause(s) in perpetuity. Anyone age 50 or older is eligible. The one-life rates range from 3.7% at age 50 to 9.0% at age 90+. Other rates are: 4.7% at 65; 5.8% at 75; 7.8% at 85.
As you anticipate the maturity of your CD, consider using it for a CGA, which will provide an income for life and a legacy beyond life. Laurie Valentine and I are awaiting your toll-free call.
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.