Estimate your potential future annuity payments from a deferred charitable gift annuity.
Understanding Deferred Charitable Gift Annuities
A Deferred Charitable Gift Annuity (DCGA) is a popular planned giving option that allows you to make a significant gift to a charity while also securing a fixed income stream for yourself (and/or another annuitant) later in life. Unlike an immediate gift annuity, payments from a DCGA begin at a future date you choose, rather than immediately.
How a Deferred Charitable Gift Annuity Works
The Gift: You make an irrevocable gift of cash or appreciated assets (like stock) to a charitable organization.
The Agreement: In return, the charity agrees to pay you (and/or another designated annuitant) a fixed amount of income each year for life, starting at a specified future age.
The Deferral Period: The time between when you make the gift and when the payments begin is called the deferral period. This period allows the charity to invest the gift, and it typically results in a higher annuity rate when payments eventually start.
The Payments: Once the deferral period ends, you begin receiving regular, fixed payments for the rest of your life. A portion of these payments may be tax-free for a period.
Benefits of a Deferred Charitable Gift Annuity
Future Income Security: Provides a reliable, fixed income stream that can supplement retirement income.
Tax Advantages: You may receive an immediate income tax deduction for a portion of your gift in the year you make it. A portion of your future annuity payments may also be tax-free for a period. (Consult a tax advisor for specifics.)
Charitable Impact: You make a meaningful gift to a cause you care about, knowing that the remainder of the gift will support the charity's mission after the annuity payments cease.
Higher Annuity Rates: Because payments are deferred, the annuity rate is generally higher than for an immediate gift annuity, especially with longer deferral periods.
Factors Influencing Your Annuity Rate
The annuity rate you receive is primarily determined by:
Your Age at the Start of Payments: Generally, the older you are when payments begin, the higher your annuity rate.
The Deferral Period: A longer deferral period typically leads to a higher annuity rate.
Number of Annuitants: Rates for two-life annuities are generally lower than for single-life annuities, as payments are expected to last longer. (This calculator assumes a single annuitant.)
American Council on Gift Annuities (ACGA) Rates: Many charities follow the uniform recommended rates published by the ACGA, which are updated periodically. Our calculator uses a simplified rate table for illustrative purposes.
Important Considerations
This calculator provides estimates based on simplified rate and life expectancy tables. Actual rates and tax benefits will vary based on the specific charity, current ACGA rates, prevailing IRS discount rates (Section 7520 rate), and your individual circumstances. It is crucial to consult with a qualified financial advisor, tax professional, and the charitable organization before entering into a deferred charitable gift annuity agreement.
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function getAnnuityRate(startAge) {
// Simplified illustrative rates for a single-life deferred gift annuity.
// These are NOT actual ACGA rates and are for estimation purposes only.
if (startAge = 65 && startAge = 70 && startAge = 75 && startAge = 80 && startAge = 85 && startAge = 90) return 10.0;
return 0; // Should not happen with valid input
}
function getLifeExpectancy(startAge) {
// Simplified illustrative life expectancy for a single annuitant.
// These are NOT actuarial tables and are for estimation purposes only.
if (startAge = 65 && startAge = 70 && startAge = 75 && startAge = 80 && startAge = 85 && startAge = 90) return 4;
return 0; // Should not happen with valid input
}
function calculateAnnuity() {
var giftAmount = parseFloat(document.getElementById("giftAmount").value);
var currentAge = parseInt(document.getElementById("currentAge").value);
var annuityStartAge = parseInt(document.getElementById("annuityStartAge").value);
var resultDiv = document.getElementById("result");
// Input validation
if (isNaN(giftAmount) || giftAmount <= 0) {
resultDiv.innerHTML = "Please enter a valid Gift Amount (must be a positive number).";
return;
}
if (isNaN(currentAge) || currentAge 100) {
resultDiv.innerHTML = "Please enter a valid Annuitant's Current Age (18-100 years).";
return;
}
if (isNaN(annuityStartAge) || annuityStartAge 100) {
resultDiv.innerHTML = "Please enter a valid Annuity Start Age (65-100 years).";
return;
}
if (annuityStartAge <= currentAge) {
resultDiv.innerHTML = "Annuity Start Age must be greater than your Current Age for a deferred annuity.";
return;
}
// Calculations
var deferralPeriod = annuityStartAge – currentAge;
var annuityRate = getAnnuityRate(annuityStartAge);
var annualPayment = giftAmount * (annuityRate / 100);
var estimatedLifeExpectancy = getLifeExpectancy(annuityStartAge);
var estimatedTotalPayments = annualPayment * estimatedLifeExpectancy;
// Display results
resultDiv.innerHTML =
"Calculated Results:" +
"Deferral Period: " + deferralPeriod + " years" +
"Estimated Annuity Rate (at start age): " + annuityRate.toFixed(2) + "%" +
"Estimated Annual Annuity Payment (starting at age " + annuityStartAge + "): $" + annualPayment.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "" +
"Estimated Total Lifetime Payments: $" + estimatedTotalPayments.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "" +
"Note: These calculations are estimates based on simplified tables and do not account for potential tax deductions or specific charity policies. Consult a financial advisor.";
}