With a CGA, you can make a gift and receive a guaranteed stream of fixed income payments for life.

You may find that one or more CGAs can be a rewarding part of your retirement plan. Consider the following:

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• You can implement a CGA with a modest contribution of cash, stocks, or mutual funds. 

• You can elect a payment arrangement that is convenient for you (typically, annually or quarterly).

• You qualify for an immediate income tax charitable deduction for the gift part of the transaction (not the annuity part of the transaction), subject to AGI limitations. 

• If you fund the CGA with appreciated assets, you may be able to spread out capital gains tax liability. 

• Part of each annuity payment may be income tax free. 

• You can count on and plan for a lifetime income stream for yourself and/or a loved one (two people max).

The payment amount is based on:

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• The amount of the gift (higher gift amount = higher payment amount).

• The age(s) of whoever will be receiving the payments (older annuitants = higher payment amount).

• When payments will begin (deferring the start of payments = higher payment amount).

• The current rates for charitable gift annuities.

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OPTION 2—a deferred CGA

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This is an easy way to make a gift now but start receiving payments at a specified future date. You can time payments to retirement while locking in a higher income payment compared to an otherwise-similar immediate CGA. 

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• You select a payment start date at least one year in the future.

• Your gift still qualifies for an immediate income tax deduction.

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OPTION 3—a flexible deferred CGA

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This is simply a deferred CGA with an unspecified future start date. It allows you to postpone the decision on when you want to begin receiving payments within a predetermined time frame. 

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• You will receive a smaller immediate deduction based on the earliest possible start date.

• Your annuity rate increases with each year you continue to defer payments.

• Payments will begin automatically at the end of the time frame if you haven’t yet asked for them to begin.

This added flexibility is particularly useful for those who:

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• Want to begin payments at retirement but haven’t yet chosen a retirement date.

• Face a future expense without clear timing (such as the anticipation of needing to pay for a relative’s nursing home care at some point in the future).

• Want to maximize their annuity rate (and therefore payment amount) by waiting but are concerned they may need to begin receiving payments earlier.