How does a Gift Annuity work?
Example: John, 80, and his wife Mary, 75, want a Gift Annuity to provide them with regular payments and a way to support their favorite LCMS ministry after the Lord calls them home. They establish a Gift Annuity by sending a check for $5,000 to The LCMS Foundation.
Based on their ages, they know they will receive a Gift Annuity rate of 6.6 percent. That means they will receive annual annuity payments of $330 for their lifetimes. Since a portion of the Gift Annuity is a charitable contribution, the couple also gets an additional $1965 income tax deduction for the year they established the gift. And, they enjoy even more tax savings. A little more than half of their annual $330 payment, $204, is tax free.
After John's death, Mary will continue to receive her regular payments. After her death, the remaining balance on the couple's Gift Annuity will go to their favorite ministry.
In general, annuity payments and the amount that eventually goes to the designated ministry are based on life expectancy. If the Lord calls John and Mary home at the age of their life expectancy, about half of the couple's original $5000 goes to their designated ministry. If they die before their life expectancy age, a larger amount goes to the ministry. If they live beyond their life expectancy, the ministry receives less.
Click here to visit our Gift Annuity Online Gift Calculator to see how a Gift Annuity can benefit both your family and ministry.
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