Protecting Yourself and Hindu Causes in a Shaky Economy

Agamas
A charitable gift annuity is a secure form of financial support providing a steady income in all economic environments

When stock and real estate prices plummet, consider this: An old-fashioned charitable gift annuity is both easy to understand, predictable to the penny, guaranteed to pay, and beneficial to Hindu Heritage Endowment and other Hindu causes.

You give cash or stock in return for fixed payments for life. The amount of the payment is determined by your age when your payments begin. You get an immediate charitable income tax deduction. Part of your payments is tax-free. Plus, you have the satisfaction of supporting HHE, Iraivan Temple or other good causes.

A temple supporter, age 75, wishes to establish a one-life annuity with a $10,000 gift of cash. In exchange for her gift, she receives annual payments of $630.00 for life. $469.98 of her $630.00 payment is tax-free over her life expectancy. She also receives a $4,169.50 charitable income tax deduction.

Here are the current rates:

  • One Life Two Lives
  • Age Rate Ages Rate
  • 65 5.3 65/70 5.0
  • 70 5.7 70/75 5.3
  • 75 6.3 75/80 5.8
  • 80 7.1 80/85 6.5
  • 85 8.1 85/90 7.5
  • 90+ 9.5 90/90 9.0

Annuities are not only for seniors. Individuals as young as 45 may use a deferred charitable gift annuity as a retirement supplement. They receive an immediate income tax deduction when they make their gift, but postpone their payments to a later date, receiving a higher payment rate because of the deferral.

A supporter of the Iraivan Temple, age 50, wants a fail-safe supplement to his retirement plan. He contributes $10,000 for a gift annuity that will start making fixed, guaranteed payments to him at age 65. He receives an immediate charitable income tax deduction of $3,086. At 65, his payments will be $980 annually, 9.8% of his original gift. $348 of his annuity is tax-free over his life expectancy.

Charitable gift annuities are regulated by the state where the annuitant resides. Your contract will be with a community foundation in your state for the benefit of the causes you name. The Hindu Heritage Endowment can put you in contact with a community foundation in your state that issues gift annuities. Minimum contributions and other annuity policies vary from foundation to foundation.  Charitable gift annuity payment rates, however, are usually the same.

Community foundations, as with most charities, follow the rates recommended by the American Council on Gift Annuities (ACGA). ACGA was founded in 1927 to guide charities in issuing gift annuities which had become increasingly popular among donors since the issuing charity backed its annuity payments with its full faith and credit.

Though their tax and income benefits are significant, charitable gift annuities are primarily ways of making a charitable gift that fits a donor’s financial circumstances, not investments. As complex investment vehicles offering spectacular returns have proven near worthless, however, the predictable charitable gift annuity has been a comfort to donors, a vivid case of virtue being its own reward.

For more information on charitable gift annuities and other planned gift options, visit the HHE Web site, www.hheonline.org, and click on Gift Planning, then Compare Gifts.

 
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