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Plan for Your Retirement by Giving

By Jackie Jacobs

What does charitable giving have to do with retirement planning? Lots, if you consider the benefits of a Deferred Payment Gift Annuity.

Here’s how it works. You decide how much you want to contribute and (unlike an IRA) can place as much into it as you want. You can either write a check or transfer stock.

For example, let’s say you’re 40 years old and you set up a Deferred Payment Gift Annuity with a qualified charity. You indicate that you want your annuity payments to start arriving when you reach 65 years of age. (You can defer the payments as long as you want. The longer you wait the larger your payments.) When you reach 65, you’ll start receiving regular payments for as long as you live, even if you live to be 125 years.

Here’s another benefit: you’ll receive a charitable income tax deduction for a portion of your contribution. The charity will run the numbers for you. If you can’t claim the entire deduction in the year that the gift was made, IRS allows you to carry forward the excess deduction for up to five years.

Another benefit: your payments, when they begin, will be fixed and backed 100 percent by the charity’s own assets. No need to worry about fluctuating payments or a major decline should the stock market seriously drop. You will have reason to depend on your set payments year in and year out.

Still more good news: part of the payments you receive from you annuity will be tax-free. And, if you have a larger estate, your Deferred Payment Gift Annuity could save major estate taxes.

One final benefit: personal satisfaction. When you “plan for your retirement by giving” through a deferred gift annuity, you provide future resources to further the charity’s mission. While you’re enjoying your retirement, you’ll have the satisfaction of knowing that the charity will eventually benefit from your wise and generous planning.

Always consult with your own qualified advisor before making a final decision to proceed with any planned gift. The Columbus Jewish Foundation has been serving community donors since 1955, and operates a strong charitable gift annuity program. Feel free to call me at (614) 338-2365 for additional information about charitable gift annuities, to prepare a customized illustration tailored to your personal circumstances and interests, or to learn out about the good work of the Columbus Jewish Foundation.

Article appears as originally published in the Ohio Jewish Chronicle, April 16, 2015.

Jackie Jacobs is the Chief Executive Officer of the Columbus Jewish Foundation, the Central Ohio Jewish community’s planned giving and endowment headquarters.

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