Charitable gift annuity for one life example
Betty, age 76, has a certificate of deposit which is paying about 4%. She would like more income in retirement years. She would also like to establish an endowed scholarship fund at George Fox in honor of her family. Her CD will be maturing soon and she will have $20,000 available to invest. She inquires about a charitable gift annuity.The recommended annuity rate for a one-life annuity to provide an income for her is 6.9%.
|Annual annuity payments||$ 1,380.00|
|Tax free income||$925.00|
|Annuity to be paid in quarterly payments of||$ 345.00|
|Charitable income tax deduction||$ 9,083.80|
After 12 years the entire annuity payments becomes taxable income.
With the gift annuity's combination of tax-free and ordinary income, it matches a traditional investment such as a CD or savings account that earns 9.5%.
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