Is a Charitable Gift Annuity Right for You?
April 10, 2019

If you want to support one of your favorite ministries while also supplementing your retirement income, then a charitable gift annuity might be right for you.

Q: How does a charitable gift annuity work?

A: You make a gift of cash or securities to your favorite ministries through the Iowa United Methodist Foundation. In return, we pay you or another person you choose a fixed amount for life. After your lifetime(s), the remainder of your gift supports the charities you chose.

Q: How are payment amounts determined?

A: The annual rate of your payment is based on your age at the time of the gift. The older you are, the higher your gift annuity rate. Payment rates are locked in for the duration of the gift annuity. With the rate increase effective in July of 2018, now is a great time to make a gift.

 

Q: What are my tax benefits for making this type of donation?

A: You might qualify for an income tax charitable deduction (when you itemize) in the year you set up the gift annuity. In addition, each year a portion of your payment is income tax-free until you reach your anticipated life expectancy. Part of your payments may be taxed at a lower capital gains tax rate as well.

 

A Preview of Your Benefits:

For One Life
Age Rate Gift Annuity Payment Charitable Deduction*
65 5.1% $1,275 $8,810
70 5.6% $1,400 $9,985
75 6.2% $1,550 $11,423

 

For Two Lives
Ages Rate Gift Annuity Payment Charitable Deduction*
65/70 4.7% $1,175 $7,735
70/75 5.2% $1,300 $8,655
75/80 5.7% $1,425 $10,153
* Assumes a $25,000 gift. Based on annual payments and a 3.2 percent charitable midterm federal rate. Deductions vary based on income earned.

 

For more information about charitable gift annuities, email us at info@iumf.org, call us at 515-974-892, or consult your tax planning professional.