Charitable Gift Annuity Rate Calculator
Understanding Charitable Gift Annuities
A Charitable Gift Annuity (CGA) is a special contract between you and a qualified public charity. In exchange for a transfer of assets (like cash or securities) to the charity, you receive a fixed, guaranteed income for life. It's a wonderful way to support a cause you care about while also securing a reliable income stream for yourself or a loved one.
How it Works
When you establish a CGA, you transfer assets to the charity. The charity then promises to pay you (and potentially a second beneficiary) a fixed amount for the rest of your life. The amount of your annual payment is determined by several factors, primarily the age(s) of the beneficiary (or beneficiaries) and the size of the gift.
Key Benefits of a CGA:
- Income for Life: Receive fixed payments for as long as you live.
- Tax Benefits: You may be able to receive a charitable income tax deduction in the year you make the gift. A portion of your annuity payments may also be tax-free.
- Support Your Favorite Charity: The remainder of the assets passes to the charity to further its mission after the annuity payments have ended.
- Simplicity: CGAs are relatively straightforward to set up compared to some other planned giving arrangements.
Factors Influencing Annuity Rates:
The "rate" of a CGA refers to the annual percentage of your gift that you will receive as income. These rates are not set by the market or by individual charities but are based on established actuarial tables that consider the life expectancy of the annuitant. The older the annuitant, the higher the payout rate will generally be, reflecting the shorter expected period of payments.
The Gift Amount is crucial as the annuity payment is a percentage of this initial gift. A larger gift will result in larger absolute dollar payments, even if the percentage rate is the same.
Using the Calculator
This Charitable Gift Annuity Rate Calculator provides an estimated rate based on the age of the primary annuitant and the amount of the gift. Please note that these are illustrative rates. Actual rates can vary slightly between charities, and the final terms will be outlined in the specific gift annuity agreement. It's always recommended to consult with the charity directly and consider speaking with a financial advisor or tax professional before making a commitment.