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Home > Planned Giving > Deferred Annuity Can Boost Retirement Income

Deferred Annuity Can Boost Retirement Income

You can secure fixed payments for life when you make a contribution to Sisters Hospital Foundation.

If you wish, with a gift annuity plan, your payments can start right away. But instead of receiving an immediate payment, you might want to defer it until a later date, such as when you retire.

How It Works
You make the contribution now, securing a current income tax charitable deduction, and we agree to pay you fixed payments for life starting at any date you select. This is especially advantageous if your tax bracket is higher now than it will be later. In addition, the payment rate is considerably higher when the payments begin.

For many people, tax reform curtailed the tax benefits of IRAs, 401(k) plans and other retirement plans. The deferred payment gift annuity is a good way to make up for the loss of the future funds you may need.

Example: Caroline is age 45. She transfers $2,000 annually to a deferred payment charitable gift annuity, arranging for payments to start when she reaches age 65. Caroline is in a 25 percent tax bracket, and she itemizes her deductions. The first year she deducted $4761 of the $2,000 transferred, an income tax savings of $119. The amount of her deduction varies slightly each year thereafter. Subject to current rates in effect with each contribution, she would receive $3,804 each year (partly income tax free) beginning at age 65, a rate of 9.5 percent on her contribution totaling $40,000.

Since the rates for newly established gift annuities increase with age, each annual contribution from Caroline receives a slightly higher deferred annuity rate.

Count the Advantages
The most important advantage you gain from a deferred gift annuity is the opportunity to make a major contribution to us while still meeting your personal financial needs.

Count the other benefits:
  • You can supplement future retirement funds with a known dollar amount.
  • Your contributions are unlimited, unlike those for qualified pension plans.
  • You can secure a substantial income tax charitable deduction immediately.
  • You can receive secure payments that are partly tax free.
  • You free yourself of investment cares on amounts you contribute.

Gift Calculator Calculate how a charitable gift annuity can benefit you.


Gift Calculator Calculate how a deferred charitable gift annuity can benefit you.

1Based on quarterly payments and at 3.4 percent charitable midterm federal rate.

ebrochureClick the icon to request your FREE guide to charitable gift annuities.

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.