This holiday, consider making a gift that keeps on giving…to you.
It’s well-known that charitable contributions made before yearend can provide a tax deduction. But a charitable gift annuity (CGA) can be set up to offer some tax benefit and a lifetime annual income.
A CGA is basically a contract between you and a qualified nonprofit that allows you to donate cash, assets or securities. In return, you receive a partial tax deduction and a fixed income stream for the rest of your life. When you die, the remaining annuity stays with the charity.
Amid two years of inflation and growing concerns Social Security will run out of money, retirees might be looking to secure reliable income for those golden days. A CGA could help, experts say.
“It can be a really good option if you want to support charity but want to retain cash flow,” said Greg Olsen, partner at wealth management firm Lenox Advisors.
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How does a charitable gift annuity work?
You donate money, securities or assets to a nonprofit organization that offers charitable gift annuities. The charity invests part or all your donation. Based on your age at the time of the gift, you receive a fixed monthly or quarterly payout (typically supported by the investment account) for the rest of your life.
Younger people may receive more payments over their lifetime, but they’ll likely be smaller than those for older adults who receive larger but fewer…
