Five ways a gift annuity can benefit you

Have you considered the benefits of obtaining a charitable gift annuity with Catholic Development Foundation? Here are five points to consider: 

1. Attractive Rates. As an example, Mr. and Mrs. Smith, in their mid-80s, are receiving a modest income from their Certificate of Deposit. When the CD matures in two months, they plan to obtain a gift annuity through the Catholic Development Foundation and start receiving 7.5% percent.  

Many folks in their retirement years will be pleased when they compare their low investment rates with the current annuity rates offered by ABC Charity.   

2. Tax-Free Payments. Part of each annuity payment is tax- free. For example, Mrs. Jones, age 82, contributed a check for $25,000 toward a gift annuity. Every year, she will receive $2,000 (8%). Of this amount, $1,750 will be excluded from income taxes. The tax-free portion of the annuity payment is considered “return of principal” and continues through the annuitant’s estimated life expectancy. 

3. Income Tax Deduction. Because a charitable gift annuity is partly a gift and partly an investment in an annuity contract, the donor who itemizes is entitled to an income tax deduction for the gift portion of his or her annuity amount. 

In the case of Mrs. Jones mentioned earlier, her $25,000 gift annuity produced a charitable tax deduction of $14,000. 

The deduction is available for the tax year when the gift annuity is established. If it cannot be used entirely, the donor has up to five years to carry forward the unused amount. The tax advantages with the charitable deduction make the effective rate of the gift annuity even higher than the rate used to establish the annuity. 

4. Fixed, Regular Payments. It’s nice to be able to count on a specific amount of payment no matter what happens to the financial markets. Your annuity payments will remain the same every year. Since gift annuity payments are backed by the full assets of the Catholic Development Foundation, you have assurance that your check will be in the mail (or direct deposited) every payment date for the rest of your life. 

5. Personal Satisfaction. Perhaps the greatest benefit of a Catholic Development Foundation gift annuity is the personal fulfillment you receive by helping your choice of a Catholic program as well as yourself.  

There are additional reasons for obtaining a gift annuity with the Catholic Development Foundation. Some like the idea of reducing the size of their estate, thus lowering potential estate taxes. Others like the ease and simplicity of establishing a gift annuity. 

People with highly appreciated stock can also benefit from a gift annuity. They particularly like the partial bypass of capital gains they receive.  

If a charitable gift annuity is a plan you would like to know more about, I’d be happy to provide you with a personalized illustration. Simply fill out and return the coupon below. Contact me at (701) 356-7926 or [email protected].