By: Barry G. Allen- President & CEO
Like many people you may depend upon income from certificates of deposit and other fixed income investments.
If so, I am confident you wish interest rates were a lot higher than they are. Also, you may have been thinking about how to provide some kind of financial benefit to your church and other charitable causes, but did not feel you could give up that income producing CD.
I am delighted to inform you the Kentucky Baptist Foundation offers you a simple solution to your need of more income and your charitable intentions. That solution is a charitable gift annuity (CGA).
A CGA is an agreement between you and the KBF under which, in exchange for your gift to the KBF of cash or appreciated securities with a value of at least $5,000, the KBF agrees to pay you a fixed amount each quarter for the rest of your life. The payout rate depends upon your age. The older you are, the higher the payout rate.
Also, a CGA can be on one or two lives. For example, it can be on the lives of a husband and wife.
Not only is the payout partially tax free, but also the gift portion of the plan is tax deductible. If you give appreciated assets, there likely will be capital gains tax savings as well.
The portion of your gift not needed to make the lifetime annuity payments to you will be available at your death for the chartable cause(s) you designate in advance.
You can specify for the remaining portion to be available to the charitable cause(s) outright, or to be held by the KBF in a permanent endowment fund with only the earnings, not the principal, being paid in perpetuity to the cause(s).
Anyone age 50 or older is eligible. Example of the current single life payout rates are: 5.1% at age 70; 5.8% at age 75; 6.8% at age 80; 7.8% at age 85; and 9.0% at age 90 and older.
As you anticipate the maturity of your next CD, consider using it for a CGA. Laurie Valentine and I are awaiting your toll free call to assist you.
For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.
The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.