gift annuity
Want to support yourself and your favorite charity? Maybe a gift annuity is for you?What is a Gift Annuity?
A gift annuity is agreement struck between an individual and a qualifying charity. In exchange for a gift to the charity, the charity agrees to pay you and/or your beneficiaries a certain sum for a certain number of years. After the passing of you and/or your beneficiaries the remaining monies will often go the issuing charity?
Is this safe?
You gift annuity is only as secure as the charity that issues it. This is why people often go with long-established churches, universities, or non-profits when picking gift annuities. There's little chance that the St. Louis Cathedral, Harvard, or UNICEF will go under within our lifetimes.
What are the advantages of a gift annuity?
- Your gift to your favorite charity REALLY counts. Often the gift you put into an annuity, enable the organization to make even more money on your investment. And if you name the charity as your beneficiary, your gift keeps on giving, even after you've departed.
- The tax advantages are numerous. Not only do you receive an immediate tax deduction at the time you make the gift, a portion of the payment you receive is tax exempt, which means a higher return. Also gift annuities are not generally considered part of your estate or inheritance, so they aren't taxed as such.
- If your stocks have appreciated in value, they can often be used instead of cash to start your gift annuity.
What are some disadvantages of a gift annuity?
- Once again, a gift annuity is only as secure as to which it is given.
- Your favorite charity may not be qualified to receive gift annuities.
- The younger you are, the less this kind of annuity works for you. For example if you start your annuity at the age of 70, you'll get a higher interest rate on your payments, than if you start gift annuity at the age of 60. This makes a gift annuity less of an investment for those who are 55 or below.
Compare Gift Annuities to other types of ( ANNUITIES )