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Deferred Gift Annuity: The Details

Is this gift right for you?

A deferred gift annuity is for you if…

  • You are in high-earnings years, looking for both income tax savings now and an additional source of revenue when you retire.
  • You want to make a significant gift to your favorite parish, school, or ministry, and receive payments in return.
  • You want to maximize the payments you receive from your planned gift — and you want to lower your income tax on those payments.
  • You want the security of payments that won’t fluctuate during your lifetime.
  • You also appreciate the safety of your payments being a general financial obligation of the Roman Catholic Foundation.

Note: If you’re over 65, you may want to consider a charitable gift annuity.

This version of the charitable gift annuity is especially designed for younger donors. Called the deferred gift annuity, it makes fixed annual payments to you and/or another beneficiary for life, with payments commencing at a future date. Because of the deferral of income:

  • the Roman Catholic Foundation can offer a higher income rate for these annuities than for annuities with payments that start immediately, and
  • You may receive a larger charitable income tax deduction than you could get from any other life-income gift plan.

These two features make the deferred gift annuity quite attractive to donors in high-earnings years who are concerned about securing both current tax deductions and additional sources of retirement income.

Use a deferred gift annuity to help plan for retirement

Many donors establish a series of deferred gift annuities over several years, using funds they had already set aside for retirement saving. They set the commencement date for payments from these annuities to coincide with their or their spouse’s retirement.

Most Common Uses

  • Supplement Income in Retirement — If you have not yet retired and are already putting the maximum amount in tax-deferred retirement accounts, you can make a gift that pays you income in retirement.
  • Paying for College — It is possible to set up a deferred gift annuity now to help pay for your grandchildren’s education.

Planning points

The deferred gift annuity offers the same benefits of simplicity, security, and attractive income deductions that the regular gift annuity provides our donors:

  • Your deferred annuity is a contract between the Roman Catholic Foundation and you, and your annuity payments are an obligation backed by our assets;
  • You secure a charitable income tax deduction based on the market value of the assets you contributed, minus the present value of the life-income interest you retained;
  • You avoid all up-front capital gains taxes. If you fund your deferred gift annuity with appreciated securities, only a portion of your gain is recognized, with the tax spread over your annuity payments;
  • Part of each annuity payment to you is tax-free;
  • The difference between our costs for maintaining your annuity payments and the size of your gift provides a generous gift to the Roman Catholic Foundation, benefiting your favorite parish, school, or ministry, for the purpose you designated when you created the gift annuity.

Note: If you’re over 65, you may want to consider a charitable gift annuity.

Please contact us so that we can assist you through every step of the process.

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