Like the thermometer outside, the financial markets seem to be dropping lower than anyone might have predicted just a few months ago, causing lots of concern about the best ways to preserve assets and income sources.
This brings me to the topic of an ideal gift plan for uncertain economic times. I often talk and write about the benefits of Charitable Gift Annuities as a terrific way to supplement your income and help make a difference at your alma mater or other favorite charity. A Charitable Gift Annuity offers, essentially, guaranteed income at a fixed rate of return that will never change in your lifetime – a welcome thing right now more than ever.
Rates of return for Charitable Gift Annuities are changing this spring - dropping. As much as 1.0 percent. Current economic conditions are affecting the capacity of colleges & universities - and, othe charities - to continue offering the same rates that have been in effect for the past few years.
BUT, even at the slightly lower rates, a Charitable Gift Annuity still offers donors an ideal life income gift plan that just may be too good to pass up.
Folks in their 70s and 80s - and older - find Charitable Gift Annuities to be special ways to add a steady income stream for life - that leads later to a legacy gift for their alma mater (or other favorite charity). Young folks (under 50) can create a Charitable Gift Annuity for the benefit of parents and grandparents - and lock in a fixed rate income source for the rest of their lives.
Rates in the 6.5 - 9.5 percent range are available, and the precise level is determined by the age of the donor - or the beneficiary, as the case may be.
Perhaps the most special thing about a Charitable Gift Annuity is how it benefits both you and your alma mater (or other favorite charity). In creating a Charitable Gift Annuity you can choose to create a scholarship, fund student-faculty research projects, or help student-athletes. Actually, your gift can help you champion just about any particular purpose you may wish to support. Best of all, this gift is a chance to transform your under-performing investments (e.g., stocks, mutual funds, real estate) into a higher yield source of income for the rest of your life, with the added bonus of receiving a federal income tax deduction based on the value of the assets you use. In addition, part of the annual income you receive will be tax-free for a few years, based on your age.
There's more information available on the details of creating a Charitable Gift Annuity - but the key thing is that there's not a lot of paperwork and the gift can be set up relatively quickly. If you'd like more information on Charitable Gift Annuities, just let me know. If you have a question, ask here and i'll answer in a post right away.
