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Charitable Gift Annuity
A gift annuity provides assured fixed annual income for the lives of one or two individuals.
A charitable gift annuity provides fixed payments that are partially tax-free and partially ordinary income. If the assets you use to fund a gift annuity are appreciated, the income will also be partially capital gain. You will be able to claim a charitable deduction over a total of six years.
Gift annuities through the Pomona Plan offer payment rates as high as 13.0% for a single life for a person age 90 or older. A few other examples of our rates are:
| One Person's Age |
Gift Annuity Rate |
| 60 |
7.0% |
| 70 |
7.8% |
| 80 |
10.0% |
|
| Two People's Ages |
Gift Annuity Rate |
| 65 and 65 |
6.8% |
| 80 and 80 |
8.4% |
| 90 and 90 |
11.2% |
The promise to make payments on a gift annuity is a legal obligation of Pomona College and is backed by all the assets of the College.
Here is An Example:
"Interest Rates Are So Low!"
Mr. and Mrs. Hall, ages 78 and 79, have significant savings in certificates of deposit. As the CDs mature, the new rates are less than 2%. The Halls would like to receive more income, but they don't want to put these funds into the financial markets and thereby increase their market risk.
By giving cash $200,000 to Pomona College in return for a gift annuity, the Halls' income from these funds will increase from $4,000 per year ($200,000 x 2%) to $16,000. The gift annuity will make payments to them at 8% per year.
Their payments will be 61% tax-free and 39% ordinary income for the period of their life expectancies. After that period, it will all be taxable as ordinary income.
The Halls will also be able to claim a $65,000 charitable deduction on their income tax returns.
NOTE - The Internal Revenue Service makes periodic adjustments in the factors used to compute tax benefits for life-income gifts. Therefore, while the figures shown here were correct at the time of publication, there may be minor variations at the time a particular Pomona Plan agreement is made.
Please contact us for more information on your particular situation.
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