For a regular CGA:
Mrs. Agatha Maroon is 75 years old and funds a gift annuity of $100,000. Her fixed payment rate is 5.4%, giving her an annual payment of $5,400 (with $3,888 tax-free!). She also receives a charitable deduction of $51,382.18 and knows the remainder of her gift will support Aggieland after her lifetime.
For a deferred CGA:
Mr. and Mrs. Aggie are both 65 years old and planning for retirement. They fund a deferred gift annuity with $100,000 and receive an immediate charitable deduction of $28,963.94. They set a 15-year window in which they can begin to receive payments. The following demonstrates the increase they will receive in their fixed payout rate if they wait longer to receive payments:
What is a charitable gift annuity?
A CGA is a contract between a charity and a donor in which the charity agrees to make fixed payments to one or two annuitants for their lifetimes. In exchange, the donor gifts the charity cash or appreciated securities that the charity invests.
How are payments determined?
The Texas A&M Foundation offers the annuity rate recommended by the American Council on Gift Annuities based on the age of the annuitant(s). The annuity rate increases with age, and the rate for one annuitant is generally higher than for two.
Can a gift annuity make payments to more than one person?
Yes. A gift annuity can be established for one or two people, and you can designate any person as your annuitant. If you designate someone other than yourself or your spouse as the annuitant, please consult with your advisors about possible capital gain and gift tax consequences.
Do payments fluctuate?
No. The gift annuity payment amount is fixed at the time the annuity is created.
Can I fund more than one annuity?
Yes! Some donors create a new gift annuity every few years. This enables them to receive more income as they age and provide additional support to their Texas A&M passions.