Deferred-Payment Gift Annuity

Description

This type of gift might appeal to you if you want to support the Archdiocese, are 40 to 60 years old, have a high income, need to benefit now from a current tax deduction, and are interested in augmenting potential retirement income.

The deferred-payment gift annuity involves the current transfer of cash or marketable securities in exchange for which the Archdiocese agrees to pay the donor an annuity starting at a future date—usually at the donor’s retirement. The gift can consist of a single transfer, a series of transfers, or periodic transfers to the plan in high-income years.

You realize an immediate charitable deduction for the gift portion of each transfer to establish a deferred gift annuity. A portion of each annuity payment, when the payments begin, will be a tax-free return of principal over the life expectancy of the annuitant. When appreciated long-term capital-gain securities are transferred, any reportable capital gain is spread out over the donor’s life expectancy.

Gift Range: $10,000 or more

Example: A married couple, Michael and Lisa, both 55, wish to supplement their retirement income with deferred-payment gift annuities. After consulting with their own financial advisors and a member of our staff, they decide to contribute $25,000 each year for the next ten years to the Archdiocese’s gift-annuity program.

The tax and financial benefits of this arrangement to Michael and Lisa are as follows:

• Under the deferred-gift arrangement, Michael and Lisa are entitled to a charitable deduction for each annual contribution. While the deductions vary from year to year, the total charitable deduction over the ten-year period—based on current IRS mortality and interest assumptions—will be approximately $78,229 (about 31.2% of the amount they contribute over the ten-year period).
• Beginning in the year they both attain the age of 65, when retirement income becomes important, Michael and Lisa will receive $13,775 each year from their well-planned annuities. In addition, a portion of those payments will be excludable from their taxable income for their life expectancy.
• Unlike a qualified retirement plan, there are no upper limits to their contributions or other restrictive requirements on the design of the plan.

How It Works

1. Transfer cash or other property to the Archdiocese
2. The Archdiocese agrees to make payments for the life of one and up to two annuitants (payments are backed by our entire assets)
3. The balance of the transfer inures to the Archdiocese

Benefits

• Payments for life that are favorably taxed
• When gift is funded with cash, part of payment will be tax-free
• When gift is funded with appreciated property, part will be taxed as capital gain, part will be tax-free, and part will be taxed as ordinary income
• Federal income-tax deduction for a portion of your gift
• Gift will provide generous support for the Archdiocese

More Information

• Request an eBrochure: Request an eBrochure with more information about this gift.
• Request Calculation: Receive a personal calculation of this gift.

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