Deferred-Payment Gift Annuity

This type of gift might appeal to you if you want to support UCS, are 40 to 60 years old, have a high income, need to benefit now from a current tax deduction, and are interested in augmenting potential retirement income.

The deferred-payment gift annuity involves the current transfer of cash or marketable securities in exchange for which UCS agrees to pay the donor an annuity starting at a future date—usually at the donor's retirement. The gift can consist of a single transfer, a series of transfers, or periodic transfers to the plan in high-income years.

You realize an immediate charitable deduction for the gift portion of each transfer to establish a deferred gift annuity. A portion of each annuity payment, when the payments begin, will be a tax-free return of principal over the life expectancy of the annuitant. When appreciated long-term capital-gain securities are transferred, any reportable capital gain is spread out over the donor’s life expectancy.

Gift Range: $10,000 or more

Example: A married couple, Michael and Lisa, both 55, wish to supplement their retirement income with deferred-payment gift annuities. After consulting with their own financial advisors and a member of our staff, they decide to contribute $25,000 each year for the next ten years to UCS's gift-annuity program.

The tax and financial benefits of this arrangement to Michael and Lisa are as follows:

  • Under the deferred-gift arrangement, Michael and Lisa are entitled to a charitable deduction for each annual contribution. While the deductions vary from year to year, the total charitable deduction over the ten-year period—based on current IRS mortality and interest assumptions—will be approximately $78,229 (about 31.2% of the amount they contribute over the ten-year period).
  • Beginning in the year they both attain the age of 65, when retirement income becomes important, Michael and Lisa will receive $13,775 each year from their well-planned annuities. In addition, a portion of those payments will be excludable from their taxable income for their life expectancy.
  • Unlike a qualified retirement plan, there are no upper limits to their contributions or other restrictive requirements on the design of the plan.

More Information

Contact Us

UCS Planned Giving Office
Tracy Donahoe
Eric St. Jacques

 

2 Brattle Square
Cambridge MA 02138
(617) 301-8095
plannedgiving@ucsusa.org

UCS Tax ID #: 04-2535767

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