Charitable Gift Annuity Rates Have Gone Up – and Up!

There's good news for those who have a cash income and would like to support Kent State University while enjoying tax benefits at the same time. A charitable gift annuity is a great vehicle for meeting both your immediate needs and those of the university once your gift matures. The best news is that rates for charitable gift annuities have risen considerably since July 1, 2018.

Rates are based on age, are recommended by the American Council on Gift Annuities and are not affected by fluctuating stock and real estate markets.

For gift annuities that make payments for the lifetime of one individual:

Age Old Rate New Rate
65 4.7% 5.1%
70 5.1% 5.6%
75 5.8% 6.2%
80 6.8% 7.3%
85 7.8% 8.3%

For gift annuities that make payments to two people jointly and then to the survivor for life:

Age Old Rate New Rate
65/65 4.2% 4.5%
70/70 4.6% 5.0%
75/75 5.0% 5.5%
80/80 5.7% 6.2%
85/85 6.7% 7.3%

Example: if you are age 75 and contributed $50,000 for a gift annuity for Kent State before July 1, you would receive $2,900 a year. But for new gift annuities funded now, your payments would be $3,100 a year for life.

For a couple who are both 75 and contributed $50,000 for a gift annuity before July 1, payments to them jointly and then to the survivor are $2,500 a year. For new gift annuities funded now, your payments would be $2,750 a year for life.

The rates are designed with two benefits in mind: to provide attractive payments to individuals who want to make a gift but need to receive income from their contribution; and to leave a significant amount of the contribution to the university after the payment obligation is fulfilled.

If you have a previous gift annuity, the rate in effect when your annuity was established remains unchanged for the duration of the annuity. For example, if you have been receiving $2,000 per year from a gift annuity, that amount will not change. The new rates affect only annuities established after June 30, 2018.

Benefits for you

  • Larger fixed payments for life that are guaranteed.
  • Continued tax benefits: an immediate income-tax charitable deduction and payments that are favorably taxed.
  • If you contribute cash, a significant portion of your payments will be tax-free for the duration of your life expectancy.
  • If you contribute appreciated property, such as securities, a portion of the capital gain will not be taxed and the gain that is taxable is spread out over your life expectancy.

Now that rates are higher, you may be interested in hearing more about this giving option to Kent State. We will be happy to provide you with a financial illustration showing the payments you would receive. Contact us at 330-672-1000 or [email protected] to find out more.