Charitable Gift Annuity
A Stephens College Charitable Gift Annuity gives you a way to provide for you and your family's financial future with a dependable, guaranteed lifetime income. Charitable Gift Annuities typically enjoy a higher rate of return than most conservative investments and are never subject to market fluctuations. In addition, part of your annuity income is tax-free.
A gift annuity can be established with a gift of cash, appreciated stock or other assets. Gift annuties are a simple contract which guarantees that we will pay you a fixed income for the rest of your life or the lives of both you and your spouse (or another beneficiary that you designate). The rate of the annuity is based on your age (or ages for a two-life annuity).
Stephens College can offer gift annuities in the following states: Alaska, Arizona, Colorado, Connecticut, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, North Carolina, South Carolina, Texas, Utah, Vermont, Virginia and West Virginia.
Benefits of Charitable Gift Annuities:
- Attractive Rates: Stephens uses the rates recommended by the American Council on Gift Annutiies. Currently the rate for a 70 year old person is 5.8%. The older you are, the higher the rate we can offer. Rates are slightly lower when the annuity is for two people.
- Regular Payments: When you establish your gift annuity, you decide how often you want to receive your payments. While most annuitants (the person receiving the payments) receive their checks or direct deposits every quarter, some choose semiannual or annual payments. Those who qualify can select a monthly payment plan.
- Income for Life: The amount of your payments will be locked in at the time you establish your gift annuity. Your payment will never vary based on the performance of the market. These fixed payments will continue for as long as you live.
- Tax savings: When you establish a gift annuity, you receive an immediate charitable deduction based on the present value of the remainder interest. If you fund the gift annuity with appreciated assets, like stock or real estate, you can avoid much of the capital gains tax. If the capital gains is more than the IRS permits you to deduct in one year, you can spread the remainder over the rest of your life. What's more, a portion of your annuity payment each year during your life expectancy is completely tax-free.
Susan, age 70, recently retired from her career. She wants to make a cash gift to Stephens, but is worried about her financial security now that she is not working. Susan decides to establish a charitable gift annuity so that she will receive a lifetime income while still making a gift to Stephens. Susan uses $50,000 to fund her annuity. Based on her age, Susan's annuity rate is 6.1%.
With a $50,000 annuity, Susan will receive $3,050 of annual income. Of this amount, $1,891 is tax-free each year, so Susan only has to pay income tax on $1,159 of her annuity. At the time she funds the annuity, Susan also receives a charitable deduction of $19,940, the present value of the remainder interest.
