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Deferred Gift Annuity

Deferred Gift Annuity
Several years ago, Neal and Betsy invested $30,000 in what they believed to be an attractive stock. It turned out to be a very wise decision, because the value of the stock increased to $100,000 a few years later. Though they were not in need of additional income at the time, the couple decided to cash in on this growth and began considering selling the stock.

Betsy: We had had a good year and were looking for ways to maximize deductions and reduce what we owed in taxes. At the same time, we had been exploring the best way to make a gift to the Jewish Federation.

Neal: Betsy and I were both age 50 at the time, in good health and still working. And though we didn't really need extra current income, we were planning to retire at age 65 so we were always interested in smart retirement planning. Our goal was to be able to live comfortably and travel to visit friends and family.

Betsy: I remember when we met with a gift planner. He explained the benefits of setting up a deferred gift annuity. Instead of selling, we could give our stock to the Federation and receive an immediate charitable tax deduction. Plus, when we turn 65, the deferred gift annuity would make annual retirement income payments to us for our lifetime.

Neal: We decided to set up the deferred gift annuity. And we experienced first-hand each of the benefits the gift planner had mentioned: we received a charitable tax deduction and tax savings immediately. And now that we're retired, we receive income each year that helps make our retirement travel possible. On top of all of this, the deferred gift annuity makes a portion of the income payments we receive tax free.

*Please note: The names and image above are representative of typical donors and may or may not be actual donors to The Jewish Federations of North America, a Jewish Federation or a Jewish Community Foundation. Since your gift annuity benefits under federal rules may be different from this couple, you may want to click here to view a color example of your benefits.

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Any tax consequences described on this page are based on U.S. federal tax law. Charitable deductions from state and local taxes or from Canadian and provincial taxes may not be available to the same extent as from U.S. federal taxes. The Jewish Federations of North America (JFNA) does not provide legal advice. Donors are encouraged to seek independent tax and legal counsel. You may read JFNA's charitable solicitation disclosure statement here and important information about endowment gifts and bequests to JFNA here.