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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:

  • 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:

  • 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

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. 

  • 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

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. 

  • 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:

  • 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.

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