Gift annuity rates increased on January 1, 2024, and are the highest they have been since 2009. If you have ever considered a gift annuity or already have an annuity, we can now offer you an even more generous annuity payment. If you defer the start of payments for a year or more, the rate increase is even greater.
A charitable gift annuity (CGA) is a simple agreement between you and the Texas Methodist Foundation promising to pay a certain amount of money to you, or someone you choose, for life. The annuity amount depends upon the age(s) when you make your gift and does not change for the rest of your lifetime(s).
You can receive an income tax charitable deduction now for the charitable value of your contribution. In addition, a part of each payment you receive can be tax free. If you contribute appreciated investments, like stocks or mutual funds, only a portion of the capital gain will be taxed, and that portion can usually be spread over your life expectancy.
The chart below illustrates a gift of $25,000 for one annuitant:
| Age | Annuity Rate | Annual Annuity Amount | Charitable Deduction |
| 65 | 5.7% | $1,425 | $8,524 |
| 70 | 6.3% | $1,575 | $9,145 |
| 75 | 7,0% | $1,750 | $10,195 |
| 80 | 8.1% | $2,025 | $11,213 |
Please note that this information is for illustrative purposes and is not intended as tax or legal advice. Rates are subject to change and are based on rates suggested by the American Council on Gift Annuities. Gift annuities are not available in all states. Always consult an attorney, accountant, or other professional adviser before making any material decisions based on any data presented herein.
Other Ways to Enjoy the Benefits of a Gift Annuity
- If you don’t need the annuity payments yourself, you can establish a CGA for the benefit of someone else, perhaps to provide supplemental financial support for aged parents who have limited income.
- If you want to make a gift now but do not need your payments until later, you can establish an annuity and receive payments in the future and even have the flexibility to choose when to start receiving payments in the future without having to pick a start date to receive payments.
- If you are age 70½ or older, you may be able to use money from your IRA retirement account to fund a CGA.
- You can even include a CGA in your will or other estate plan to provide a regular stream of payments to your heirs.
New Giving Opportunity
Under a new law, donors who are over age 70½ can make a Qualified Charitable Distribution (QCD) in exchange for a charitable gift annuity. You can make this election only once in your lifetime and there is a limit of $53,000. Although there is no charitable deduction for your contribution, your QCD counts toward your Required Minimum Distribution (RMD).
This is an opportunity to turn some of your IRA into a lifetime stream of income without paying income tax. And, if you are concerned about RMDs, this contribution will reduce the amount of income tax you will have to pay.
We would be happy to show how a charitable gift annuity could work for you. Please contact: Justin Gould, Chief Philanthropy Officer at 512-583-1944 or JGould@tmf-fdn.org.