A charitable gift annuity is an agreement between you and Seton. In exchange for your charitable gift, Seton will pay you and/or your loved ones a fixed annuity for life. The size of the payment is determined at the time the gift is made and will not fluctuate with the market. We issue gift annuities in amounts of $10,000 and greater.
Donors who choose to defer income for a period of years can take a larger immediate income tax deduction and will receive a higher payout once payments begin. "Deferred payment" gift annuities and "flexible starting date" gift annuities can be great retirement planning tools for younger donors.
When you establish a gift annuity, you receive an immediate income tax deduction for a portion of the gift, and this deduction can be used over as many as six consecutive tax years. If your gift is funded with appreciated assets, you can also reduce your capital gains liability.
Charitable gift annuities are not insured by any government agency but are backed by all of the assets of Seton.
Below are some sample rates and examples.
|
Some sample rates as of February 1, 2011: |
|
Two Beneficiaries |
One Beneficiary |
|
Your Ages |
Payout Rate |
Deduction on $100,000 gift |
Your Age |
Payout
Rate |
Deduction on $100,000 gift |
|
67/65 |
5.1% |
$18,173 |
65 |
5.5% |
$26,664 |
|
70/68 |
5.3% |
$22,224 |
70 |
5.8% |
$35,033 |
|
75/70 |
5.5% |
$27,637 |
75 |
6.4% |
$41,757 |
|
80/75 |
5.9% |
$36,035 |
80 |
7.2% |
$48,425 |
|
80/80 |
6.3% |
$39,651 |
85 |
8.1% |
$55,715 |
|
85/80 |
6.6% |
$42,939 |
87 |
8.6% |
$58,131 |
|
Deduction amounts are based on applicable I.R.S. discount rate of gifts in July 2010. |
Examples
A) Example of a gift annuity
Mr. and Mrs. Benedetto, both age 70, donate $50,000 in cash to Seton to fund a gift annuity. While they’re alive, the annuity will provide them fixed annual payments of $2,700. About $1,868 of this will be treated as tax-free income for the next 20½ years, with the rest treated as ordinary income. The Benedettos' current income tax deduction will be about $11,688. If needed, the Benedettos have up to six years to use this deduction.
B) Example of a deferred payment gift annuity
Mrs. O’Riley, age 50, makes a gift of $50,000 of stock to fund a deferred payment gift annuity. At age 65, she will begin receiving annual payments of about $5,250, and she will continue to receive these payments for her entire life. She is also able to claim a current income tax deduction of about $9,367, which, if need be, can be used over six years.
For some, a charitable remainder annuity trusts with gifts of $100,000 or more can make more sense (cents). Like a gift annuity, an annuity trust makes fixed payments; however, the tax treatment of an annuity trust differs. In general, a gift annuity will receive a more favorable tax treatment if you are making a gift with cash, and an annuity trust will receive a more favorable tax treatment if you are making a gift with highly appreciated assets. Seton can help you determine which gift vehicle is best for your particular situation.