What is a Charitable Gift Annuity?
A charitable gift annuity is a strategic way for people over 65 to donate a fixed amount to the college and, in return, receive a tax deduction and annual income payments. Payments are fixed and will remain constant regardless of market volatility. Donors can also choose to defer an annuity, resulting in larger annual payments, which would begin to pay out when the donor chooses after a minimum of one year.
How Does an Increase in Interest Rates Benefit Me?
As of July 1, 2022, charitable gift annuity rates increased 0.4 percent to 0.6 percent for most individuals, meaning annual payments will increase! For example, a 75-year-old contributing $10,000 in February 2022 would have locked in $540 annual payments; for someone that age creating a CGA in July 2022, those annual payments will be $600. The increase in payout rates is even larger for deferred annuities.
How Can I Take Advantage of This Great News?
Because of this increase, now is a great time to set up a CGA—and even if you already have a CGA, you can always create another! You can calculate your potential payments by clicking the link below, or if you prefer, feel free to contact us at any time for help.