Flexible Deferred Gift Annuity
Sam is a 64-year-old executive at a large healthcare company. He purchased company stock during years when the stock price was low, and now the stock's value has grown substantially to $118,000.
Sam and his wife, Carol, sold a vacation home earlier this year and are looking for a way to offset the capital gains tax owed on the sale. Sam enjoys the challenge and responsibility of his job and is not quite ready to retire, but he is looking at planning options that will provide income in the future with the flexibility to retire when he is ready.
CAROL: We needed a charitable deduction to avoid paying the taxes we owed from the sale of our second home. While Sam invested his energies at work, I spent years volunteering with a local charity and wanted to find a way to make a special gift to help further the good work they were doing.
SAM: Carol and I were both in good health, and I still enjoyed working. We were living comfortably on my current salary but were looking for ways to plan for retirement in the future. I wasn't quite certain when I would retire, so we wanted to find an income source that would permit me to be flexible with my retirement date.
CAROL: An advisor from the charity told us that a flexible deferred gift annuity would help us meet our goals. Instead of selling our appreciated stock and paying high capital gains taxes, we could donate it to them and receive an immediate charitable tax deduction to offset our current tax bill. The flexible deferred gift annuity would permit us to elect to begin taking payments for life when Sam was ready to retire.
SAM: We decided to set up the flexible deferred gift annuity and were able to achieve all of our goals. We received a charitable tax deduction in the year that the gift was made and experienced immediate tax savings. When I am ready to retire, we will contact the charity to begin payments, giving me the flexibility to continue working as long as I would like. In addition, the flexible deferred gift annuity makes it possible for us to receive a large portion of our income tax free, and this is an attractive benefit!