Deferred Gift Annuity
This version of the charitable gift annuity is especially designed for younger donors. Called the deferred gift annuity, it makes fixed annual payments to you and/or another beneficiary for life, with payments commencing at a future date. Because of the deferral of income:
- Franklin College can offer a higher income rate for these annuities than for annuities whose income starts immediately, and
- You may receive a larger charitable income tax deduction than you could get from any other life-income gift plan.
These two features make the deferred gift annuity quite attractive to donors in high-earnings years who are concerned about securing both current tax deductions and additional sources of retirement income.
Use a Deferred Gift Annuity to Help Plan for Retirement
Many donors establish a series of deferred annuities over several years, using funds they had already set aside for retirement saving. They set the commencement date for payments from these annuities to coincide with their or their spouse's retirement.
The deferred gift annuity offers the same benefits of simplicity, security, and attractive income taxation that the regular gift annuity provides our donors:
- A deferred gift annuity at Franklin College can be made with a gift of $5,000 or more. The minimum gift age is 30 and payments must be deferred until at least age 50.
- Your deferred annuity is a contract between Franklin College and you, and your annuity payments are an obligation backed by our assets;
- You secure a charitable income tax deduction based on the market value of the assets you contributed, minus the present value of the life-income interest you retained;
- No up-front capital gains tax is payable if you fund your deferred gift annuity with appreciated securities; only a portion of your gain is recognized, with the tax spread over your annuity payments;
- In general part of each annuity payment to you comes tax-free as the return of principal;
- After your lifetime, we apply the balance of the gift annuity to our general endowment or the program you designated when you made your gift.