Deferred gift annuity for retirement planning example

Jake and Donna, ages 55, are looking for ways to increase their retirement income. They have come to understand that a contribution to a gift annuity is not subject to the limitations of typical retirement plans. They can establish a gift annuity now and defer the annuity payments until they retire. They benefit from an immediate income tax deduction. Their gift will also provide for faculty workshops and seminars in the future.


Contribution amount $20,000.00
Immediate annuity rate (age 55) 4.7%
Deferred annuity rate (age 65) 8.5%
Annual annuity payments $ 1,700.00
Tax free income $ 605.20
Taxable income $1,094.80
Annuity to be paid in quarterly payments of $ 425.00
Charitable income tax deduction $ 4,915.40

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