It’s all over the news: Inflation in the U.S. has increased at an historic rate, and a recent Gallup survey revealed that inflation has become the top financial worry for Americans. If you are looking ahead to retirement, you may have a variety of concerns: Will you face fluctuations in your income? Will you be able to continue to support the charitable causes you care about, like Drexel University or Drexel University College of Medicine?
If these questions are on your mind, a “laddered” charitable gift annuity (CGA) could be an excellent choice for you. In addition to providing a way for you to support Drexel or the College of Medicine and lock-in a source of guaranteed, fixed income for life, “laddering” a series of CGAs can offer you the additional benefit of inflation protection during your retirement years. For example, you can establish five, separate $15,000 CGAs now while rates are high and defer the income payments on a “laddered” schedule.
Here’s how it would work for a 65-year-old donor who expects to retire in five years*:
|
Deferred CGAs |
CGA Amount |
First Payment Date |
Payout Rate |
Annual Income Amount (for life) |
|
CGA #1 |
$15,000 |
September 30, 2027 |
6.3% |
$945 |
|
CGA #2 |
$15,000 |
September 30, 2028 |
6.6% |
$990 |
|
CGA #3 |
$15,000 |
September 30, 2029 |
7.0% |
$1,050 |
|
CGA #4 |
$15,000 |
September 30, 2030 |
7.5% |
$1,125 |
|
CGA #5 |
$15,000 |
September 30, 2031 |
7.9% |
$1,185 |
Additionally, at the time the total $75,000 gift is made, you’ll qualify for an immediate charitable income tax deduction of approximately $40,292.
Want to learn more about the advantages of “laddering” CGAs? Contact David Toll, JD, senior associate vice president, Drexel University Office of Gift Planning, at 215.895.1882 or giftplanning@drexel.edu.
*assuming a 3.6 percent IRS discount rate