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 Nature Conservancy can offer a higher income rate for these annuities than for annuities whose income starts 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 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.
The deferred gift annuity offers the same benefits of simplicity, security, and attractive income taxation that the regular gift annuity provides our donors:
- A deferred gift annuity at The Nature Conservancy can be made with a gift of $5,000 or more. The minimum gift age is 30 and payments must be deferred until at least age 50.
- Your deferred annuity is a contract between The Nature Conservancy 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;
- No up-front capital gains tax is payable 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;
- In general part of each annuity payment to you comes tax-free as the return of principal;The balance remaining in your deferred annuity after the death of the beneficiaries will be used by The Nature Conservancy for the purpose you designated when you created the gift annuity.
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 us 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 institution.
Flexible deferred gift annuity
With this option, you are not immediately locked into how long you wish to defer payments. It allows the income beneficiary to choose to start receiving payments on any one of a range of dates that are more than one year after the date of the gift. You might choose the start date of the range based on your expected retirement date or other considerations. The longer the deferral period, the greater the fixed income The Nature Conservancy can agree to pay.
You would choose an initial target date for the payments to start. The Conservancy would then offer a range of payouts with differing fixed payment amounts and differing starting dates. The income beneficiary would decide on an annual basis whether or not s/he wishes the annuity payments to start that year. You receive an immediate income tax deduction for a portion of your gift. It is based on the lowest deduction amount out of all of the years in the range.
Example: You are 55 and currently employed. You expect to retire within the next few years, and would like supplemental income to begin at that time. Since you are unsure exactly when that will be, you fund a $10,000 flexible deferred gift annuity with the following options:
|Age at Start Date||Annuity Rate||Annual Income||Tax Deduction|
*This example is based on a factor that changes monthly. Contact our office for a personal illustration based on the latest rates.
Information that may interest you ...
Are you planning for your retirement? Find helpful tips.
You can protect mountains and other natural places by making a planned gift with The Nature Conservancy. Contact us today.