Gift Annuity Calculator
Estimate your potential annual income from a charitable gift annuity.
Understanding Charitable Gift Annuities
A charitable gift annuity (CGA) is a special arrangement between you and a qualified charity. You make a donation of cash or appreciated property to the charity, and in return, the charity promises to pay you, or another designated person, a fixed, lifetime income. This income is paid at least annually. CGAs offer a unique way to support a cause you care about while also providing yourself with a reliable income stream.
How it Works:
When you establish a CGA, you transfer assets to the charity. In exchange, the charity provides you with a contract guaranteeing a fixed payment for life (or for the lives of two people). The amount of this payment is determined by several factors:
- The amount of your gift: The larger the gift, generally the larger the potential income.
- Your age (and the age of any co-annuitant): Older individuals typically receive higher rates because they are expected to receive payments for a shorter period.
- The prevailing annuity rates: These rates are set by the American Council on Gift Annuities (ACGA) and are based on actuarial data. They fluctuate slightly year to year.
Key Benefits of a CGA:
- Immediate Tax Benefits: You may be able to claim a charitable income tax deduction in the year you make the gift.
- Tax-Deferred Income: A portion of your annuity payments may be tax-free for a period, and the rest is taxed at capital gains rates if you donated appreciated assets.
- Fixed Lifetime Income: You receive a predictable stream of income for as long as you live, regardless of market fluctuations.
- Support for Your Favorite Charity: A significant portion of your gift ultimately benefits the charitable organization.
- Simplicity: It's a relatively straightforward way to make a planned gift.
Calculator Explanation:
This calculator provides an estimate of your Annual Annuity Payment based on the details you provide. The calculation uses a simplified formula:
Annual Annuity Payment = Gift Amount × (Annuity Rate / 100)
The Age of the Annuitant is crucial for determining the actual payout rate offered by a charity, as it impacts actuarial calculations. While this calculator uses the provided annuity rate directly, actual rates are determined by the charity based on age, ACGA tables, and the specific asset used for the gift.
Example: If you make a gift of $10,000 and the annuity rate for your age is 5.5%, your estimated annual payment would be $550 ($10,000 × 0.055). A charity would then confirm the exact rate based on their specific policies and ACGA guidelines.
Disclaimer: This calculator is for informational purposes only and does not constitute financial or legal advice. Consult with a qualified financial advisor or the charity directly for personalized guidance.