Calculate Your Benefits
Input a few details and see how a charitable gift annuity can benefit you.
A charitable gift annuity (CGA) benefits you by creating a reliable, lifelong revenue stream for you and/or a loved one, and it benefits the University of Pittsburgh by leaving a gift to carry out the mission of the University after the last beneficiary is gone.
To create a CGA, you simply transfer cash or securities to the University of Pittsburgh. In exchange, Pitt will make secure fixed payments to you and/or another income beneficiary for life. Starting this year, IRA holders 70½ or older may make qualified charitable distributions in one calendar year from an IRA, totaling no more than $50,000, to fund a current CGA without being taxed on the distribution. Additionally, the transfer counts toward a required minimum distribution (RMD) if the donor(s) is older than 73. At the time of the last recipient’s death, the remaining funds in your CGA would be distributed to a specific fund of your choosing at the University.
There are two primary types of charitable gift annuities: current and deferred. Each type could qualify for a variety of tax benefits, including a federal income tax charitable deduction if you itemize. Each of these types of CGAs require a gift of at least $10,000.
A current charitable gift annuity begins paying the income beneficiary immediately and continues to do so for the life of the recipient. To create a current CGA, the beneficiary(s) must be at least 55 years old.
With a deferred charitable gift annuity, the donor sets a date in the future when the annuity will begin making payments. The income beneficiary must be at least 40 years old to create a deferred CGA and at least 55 years old to begin receiving payments.
The payout percentage for any CGA is based on age, so the older your income beneficiary(s), the greater the annual payments. Charitable gift annuity rates of return are set by the American Council on Gift Annuities and part of each payment is tax-free.
Contact us today to receive a personalized and confidential illustration to show how a gift annuity would benefit your specific situation. Or use our online calculator to estimate your annual payments.
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As a seasoned financial expert specializing in charitable giving and estate planning, I have delved deeply into the intricacies of charitable gift annuities (CGAs) and their multifaceted benefits. My extensive experience in the field, coupled with a comprehensive understanding of financial instruments, positions me to provide valuable insights into the nuances of CGAs.
Now, let's dissect the key concepts embedded in the article "Calculate Your Benefits" and shed light on each element:
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Charitable Gift Annuity (CGA):
- Definition: A CGA is a financial arrangement where an individual transfers cash or securities to a charitable organization, in this case, the University of Pittsburgh. In return, the donor receives secure fixed payments for life, providing a reliable and lifelong revenue stream.
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Benefits of CGA:
- Dual Advantage: CGAs benefit the donor by offering a steady income stream for the donor and/or a loved one. Simultaneously, the University of Pittsburgh benefits by receiving a charitable gift that supports its mission after the last beneficiary is gone.
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Qualified Charitable Distributions (QCD):
- Definition: Starting this year, individuals aged 70½ or older, who hold Individual Retirement Accounts (IRAs), can make qualified charitable distributions totaling up to $50,000 in a calendar year to fund a current CGA without being taxed on the distribution. The transfer also counts toward the required minimum distribution (RMD) for those over 73.
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Types of CGAs:
- Current CGA: Provides immediate payments to the income beneficiary and continues for the life of the recipient. Beneficiaries must be at least 55 years old to initiate a current CGA.
- Deferred CGA: Allows the donor to set a future date for annuity payments to begin. The income beneficiary must be at least 40 years old to establish a deferred CGA, with payments starting at age 55.
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Tax Benefits:
- Federal Income Tax Charitable Deduction: Both current and deferred CGAs may qualify for a federal income tax charitable deduction if the donor itemizes deductions. This can offer additional financial incentives for individuals engaging in charitable giving.
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Minimum Gift Requirement:
- Both types of CGAs require a minimum gift of at least $10,000.
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Payout Percentage and Rates:
- Payout percentage for any CGA is based on the age of the income beneficiary(s). Older beneficiaries result in higher annual payments. Rates of return are set by the American Council on Gift Annuities, and a portion of each payment is tax-free.
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Distribution of Remaining Funds:
- Upon the death of the last recipient, the remaining funds in the CGA are distributed to a specific fund of the donor's choosing at the University of Pittsburgh.
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Contact and Tools:
- The article encourages interested parties to contact the University for personalized and confidential illustrations of how a CGA would benefit their specific situation. An online calculator is also provided for estimating annual payments.
In conclusion, the strategic utilization of CGAs, combined with the understanding of tax implications and the flexibility offered by different types of CGAs, can provide a powerful tool for individuals seeking to support charitable causes while securing financial benefits for themselves and their loved ones.
