|
Home > Planned Giving > Charitable Gift Annuity or Savings Account: Which Better Serves You? Charitable Gift Annuity or Savings Account: Which Better Serves You?It used to be that a savings account could be counted on for reasonable earnings, and you would not have to give your savings much attention. These days, however, you may be looking for other options that produce a higher rate of return.Charitable life income plans, including the charitable gift annuity, could be the solution. Depending on your age, you can receive a payout rate that is substantially higher than that of noncharitable plans that provide life payments; an important consideration in these days of economic uncertainty. Compare a charitable gift annuity and a savings account and see the differences. In our example, the amount under consideration is $5,000, and the age of the person is 70.
These calculations are based on quarterly payments and a 3.4 percent charitable midterm federal rate. Your cash flow is further enhanced because you are allowed an income tax charitable deduction. In our example, the deduction allowed the year in which the gift is made is $1,808. Although the annuity payout rate is 6.1 percent, this additional tax benefit produces an effective rate of return on the net cost of the gift of 6.7 percent. Savings accounts offer no charitable benefit nor do they provide a tax deduction. Charitable gift annuities, however, provide you with lifetime payments and the balance thereafter helps support our mission. Please call Julie Snyder at 716-862-1992, or e-mail us at jsnyder@chsbuffalo.org, for more information. Copyright © The Stelter Company, All rights reserved.
The information in this Web site is not intended as legal advice. For
legal advice, please consult an attorney. Figures cited in examples are
for hypothetical purposes only and are subject to change. References to
estate and income tax include federal taxes only. Individual state
taxes and/or state law may impact your results. |