A charitable gift annuity is perhaps the most popular planned giving option. It allows you to give a portion of your assets to a cause you care about, while at the same time providing you with ongoing income. If you have significant savings in CDs or savings accounts, you may receive more income with a gift annuity.

The following example is for illustration purposes. Please call for current rates.

Mrs. Smith, at age 80, had all of her retirement savings in CDs and savings accounts that generated between 1 and 2% interest. With an annuity, she could increase her rate of return to 7.1%, a portion of which may be non-taxable (rates are subject to change). She was thrilled, as she depended on her savings for retirement income, and wanted to transfer as much of her savings as possible into an annuity for PFM.

Since charitable gift annuities are irrevocable -- there's no way to get the principal back if you need it later -- we encouraged Mrs. Smith to keep some of her savings in another investment that would provide better income but also be accessible in case of emergency.

She proceeded with this plan, and was able to accomplish all of her goals:

• She provided a generous gift annuity to PFM that would fund future ministry -- ministry she cared about deeply.
• She increased her retirement income as a result of the annuity.
• She held on to a portion of her savings for future needs, so she would have access to her money in case of an emergency.

More details

• Annuity rates range from 5.0% to 9.5% , depending upon your age at the time your agreement is established.
• An annuity may be funded with cash or stock (or other appreciated assets).
• You'll receive a tax deduction in the year of your gift.
  • For cash gifts, the deduction can be up to 50% of your adjusted gross income in the year of the gift, with partial tax-favored income each year for the life expectancy of the beneficiary.
  • For appreciated assets such as stocks, bonds, mutual funds, or real estate, the deduction can be up to 30% of your adjusted gross income, with a five-year carryover. A portion of the capital gains is avoided and the remainder is spread over the life expectancy of the donor, provided he or she is one of the annuitants.
• Your annuity income is guaranteed for life .
• Annuity payments may be deferred until age 50 or older. Deferred gift annuities offer higher annuity rates and higher income tax deductions than current annuities.

If you have any questions or are interested in setting up a gift annuity, drop us an email at give@pfm.org, or call us at 1-877-PFM-GIVE (1-877-736-4483). We are available to answer your questions and put together a personalized illustration for you.