Mrs. Butler, who is 75 years old, establishes a $10,000 gift annuity for the eventual benefit of The Metropolitan Museum of Art. At her age, she will receive payments fixed for life at 5.8% ($580 per year) paid in quarterly installments of $145, some portion of which will be tax free, and can claim an immediate charitable deduction of about $4,577 on her federal income tax.
Ms. Wise, who is 55 years old, establishes a $10,000 gift annuity that defers payments for ten years. She can claim an immediate charitable deduction of about $3,794 on her federal income tax. When she turns 65, she will begin to receive payments fixed for life at 6.3% ($630 per year), some portion of which will be tax-free.
Ms. Wise can add significantly to her retirement income by establishing a new deferred-payment gift annuity each year for a number of years, creating a growing stream of income for her. She will be able to claim a charitable deduction on her income tax each year a new annuity is established.
Mr. Young, who is 66 years old, has already retired. He is comfortable with his income at the moment but is concerned that he will outlive his resources. Therefore, he establishes a $100,000 gift annuity with payments deferred for six years. He can claim an immediate federal income tax charitable deduction of about $48,785 on his income tax. When he turns 72, he will begin to receive payments fixed for life at 6.3% ($6,300 per year), some portion of which will be tax-free.
The examples provided here are based on calculations as of July 2014 and are for illustration purposes only. The donors are composites and do not represent actual contributors to the Museum. Specific updated examples can be provided on request at no obligation.