February 25, 2013

Many friends of Lutherans For Life are using a gift annuity as a way of increasing their own retirement income and making a future gift to support the mission of Lutherans For Life. You probably know how a charitable gift annuity works. You give cash or appreciated stock to establish your charitable gift annuity and you receive a fixed income stream for the rest of your life (or for two lives). This arrangement benefits you in several ways, including tax relief. Lutherans For Life benefits because we receive a gift from you sometime in the future to help us carry out our mission.

Charitable gift annuities help both the donor and the organization the donor cares about. Some folks like them so well that they establish a new one every year.

But did you know that you can give a charitable gift annuity to someone else? For example, let’s say your mother is 85 years old and lives on a fixed income. She could use some extra money to live on. So you make out a check for $20,000 for a charitable gift annuity and we establish the annuity with your mother being the income recipient. 

According to the current charitable gift annuity rates (age 85 single life payout rate of 7.8%), she would receive a monthly fixed annuity payment of $130 for the rest of her life. Lutherans For Life would benefit from this thoughtful arrangement by receiving the remainder of the annuity principal at your mother’s death.

Or, consider this scenario. You have two adult children and you want to supplement their retirement income. You establish a deferred payment charitable gift annuity with Lutherans For Life for each of them. At the outset, when you provide the initial funds, you determine when the annuity payments to your children will begin. It could begin at their age 65. They will receive the annuity payments for their life. Lutherans For Life again would benefit from this type of arrangement for your children by receiving the remaining principal of the charitable gift annuity at the death of your child.

Can you give a charitable gift annuity to a non-family member? Yes, indeed. In fact, some donors use these gift arrangements to benefit a treasured friend, a longtime employee, a revered teacher or pastor. What a wonderful way of telling someone you care by providing them with a new stream of retirement income. Charitable gift annuities can help just about anyone. And in all of these cases Lutherans For Life receives future blessings from you to carry out our important mission.

If you would like to learn more about how a charitable gift annuity could work for you or for someone you care about contact me at jschroeder@lutheransforlife.org or call me at 515.490.7371. I can help give you a personal written analysis of any charitable gift annuity idea. This would show the actual payments and tax advantages. 

There is a very important point to remember in establishing a gift annuity for another person. There are limits on the amount that can be gifted to another person without triggering a gift tax. I am able to provide you the information that you will need to discuss this with your own tax advisors.