Page 16 - CEMS Summer 2022 Newsletter

GIVING MATTERS
Give back to CEMS and receive
Charitable gift annuity rates to increase.
With charitable gift annuities, donors can support students, faculty, and research in CEMS and receive fixed annual payments for life and an immediate income tax deduction. Following rate increase suggestions by the American Council on Gift Annuities, the University of Minnesota Foundation will offer higher rates for new gift annuities created on or after July 1, 2022.
How Charitable Gift Annuities Work
You make a gift of cash or publicly traded securities to the U of M Foundation. The foundation then pays you (or up to two people you designate) a fixed amount annually for life. The remaining assets are used to support the CEMS fund or priority most important to you.
Important things to know about charitable gift annuities:
• You choose the area of CEMS and/or the University of Minnesota that your gift will support.
• The minimum amount to fund a gift annuity is $10,000, and income beneficiaries must be 55 years of age or older when payments begin.
• Payments can be made to you, or up to two people you designate.
• Payout rates are based on age; typically, the older the income beneficiaries are when the gift is made, the higher the payout rate.
• In most instances, a portion of each annuity payment is tax free.
• You claim an immediate income tax deduction for a portion of the gift, subject to applicable limitations.
• You can save on capital gains tax if you use appreciated securities to fund the gift annuity.
Deferred Gift Annuities: Start Payments When You’re Ready
If you want an immediate tax deduction but don’t need income now, you may prefer a deferred payment gift annuity. With this option, you make your gift now and
select a date in the future for payments to begin. Because payments are deferred, the payout rate will typically be higher than for an immediate payment gift annuity. Donors often choose this option as a way to supplement future retirement income.
Not sure when you will need the income? You may also choose from a range of possible start dates and then determine on
Courtney Billing
an annual basis whether to start
payments that year or defer them for another year. The longer payments are deferred, the higher the payout rate. With this option, you have the flexibility to determine the timing of payments that best fits your tax situation or retirement plan.
For more information or to receive a personalized gift annuity illustration, contact Courtney Billing, CEMS Director of External Relations, at 612-626-9501 or cbilling@umn.edu.
Sample gift annuity rates* — payments deferred
For a 50-year-old making a gift:
Age when payments begin
60
65
70
75
Payout rate 6.1% 7.8% 10.2% 13.7%
*American Council on Gift Annuities suggested maximum rates effective July 1, 2022. Rates are for a single-life annuity; two-life annuity rates will be lower.
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