“Rolling over” low-interest CDs:
Many of our donors have certificates of deposit that are reaching Maturity. They are encouraged to consider converting a CD into a Gift Annuity.
What is a Gift Annuity?
The Gift Annuity Is A Simple Contract
§ Income for life (one or two lives). Donor chooses monthly, quarterly, semi-annual or annual. Click here to see suggested rates for CGA's.
§ Income tax deduction for part of the amount transferred based on the age of beneficiary and payout.
§ Part of annuity income will be TAX-FREE return of principal.
§ SOME capital gain reported on gifts of stocks or property, but gain may be reduced and spread over donor’s life expectancy.
§ Payments can be DEFERRED until a future year.
Five Ways a Gift Annuity Can Benefit You
Have you considered the benefits of obtaining a charitable gift annuity with Children’s Homes? Here are five points to ponder:
1. Attractive Rates. Mr. and Mrs. Smith, in their mid-80s, are receiving a modest income from their Certificate of Deposit. When the CD matures in two months, they plan to obtain a gift annuity and start receiving 7.9 percent.
Gift annuity rates are very attractive for older friends of Children’s Homes. You can receive as much as 11.1 percent for a two-life annuity and 11.3 percent for a single-life annuity.
Many folks in their retirement years will be pleased when they compare their low investment rates with the current annuity rates offered by Children’s Homes.
2. Tax-Free Payments. Part of each annuity payment is tax-free. For example, Mrs. Jones, age 82, contributed $25,000 toward a gift annuity. Every year, she will receive $2,125 (8.5 percent). Of this amount, more than half will be excluded from income taxes. The tax-free portion of the annuity payment is considered "return of principal" and continues through your estimated life expectancy.
3. Income Tax Deduction. Because a charitable gift annuity is partly a gift and partly an investment in an annuity contract, the donor who itemizes is entitled to an income tax deduction for the gift portion of his or her annuity.
In the case of Mrs. Jones mentioned earlier, her $25,000 gift annuity produced a charitable tax deduction of more than $11,500.
The deduction is available for the tax year when the gift annuity is established. If it cannot be used entirely, the donor has up to five years to carry forward the unused amount. The tax advantages with the charitable deduction make the effective rate of the gift annuity even higher than the rate used to establish the annuity.
4. Fixed, Regular Payments. It’s nice to be able to count on a specific amount of payment no matter what happens to the financial markets. Your annuity payments will not change from year to year.
And since gift annuity payments are backed by the full assets of Children’s Homes, you have assurance that your check will be in the mail (or direct deposited) every payment date for the rest of your life.
5. Personal Satisfaction. Perhaps the greatest benefit of a gift annuity is the personal fulfillment you receive by helping Children’s Homes as well as yourself. Your gift annuity assists a worthy cause that makes a difference in the lives of others. Your gift enables us to "(state mission)."
There are additional reasons for obtaining a gift annuity with Children’s Homes. Some like the idea of reducing the size of their estate, thus lowering potential estate taxes. Others like the ease and simplicity of the gift annuity transactions.
People with highly appreciated stock can also benefit from a gift annuity. They particularly like the partial bypass of capital gains they receive. For examples of CGA's click here.
Whatever the reason, you owe it to yourself to find out more about charitable gift annuities. To obtain a personalized illustration, contact James Balcom at 870-239-4031 or by email at jamesb@childrenshomes.org.
Is a Gift Annuity Right for You?
(Try this simple little test to find out.)
1. I would like to make a gift to Children's Homes, Inc. that would not only help Children's Homes, but provide me with income for the rest of my life.
2. I would like to receive regular, fixed payments that I can count on.
3. I would like to receive payments that would be as much or more than I might receive from other financial arrangements.
4. I would like a portion of each payment I receive to be tax-free.
5. I would like to receive a charitable income tax deduction for my gift.
6. I would like to reduce the size of my estate to lessen (or avoid) estate taxes.
7. I would like to know more about charitable gift annuities.
If you answered “yes” to most or all of these questions, a gift annuity from Children's Homes, Inc. may fit your needs perfectly. Fill out the form below and submit for further information. Or, call James Balcom, at 870-239-4031 or email him at jamesb@childrenshomes.org. As always, your inquiry will be treated confidentially.