Flexible Gift Annuity

Whether as a supplement to retirement income or to replace an income stream that will disappear at some point in the future, the flexible gift annuity allows a donor to make an important gift to Quinnipiac University that will provide a guaranteed income to one or two individuals at a time in the future of your choosing. The rates of return are based on the age(s) of the annuitant(s) and the length of time receipt of the payments is deferred. In addition, you don't need to decide today the precise date on which you wish to begin receiving annuity payments. Rather, you select a range of dates at any time during which you may request the payments begin. The minimum gift to establish a flexible gift annuity is $10,000.

Best of all, you will find satisfaction in making a gift today that will continue to provide you with income and will in time make a valuable difference in the lives of Quinnipiac students.

How they work:
At its heart, the flexible gift annuity is a contract, usually one or two pages, where, in exchange for a gift of $X, Quinnipiac agrees to pay $Y each year to one or two individuals identified by the donor for life beginning at a time in the future determined by the annuitants. Quinnipiac’s obligation to make these payments is backed by the full faith and assets of the University. At the time the gift is made, the donor will qualify for an income tax charitable deduction equal to Quinnipiac’s interest in the gift and based on the earliest date on which the annuitants may begin receiving annuity payments. To the extent that a donor may not be able to use the entire deduction in the year of the gift, a five-year carry forward is available. The flexible gift annuity’s payout rate will be determined by the date on which the annuitant(s) actually request to begin the annuity payments; the longer the deferral period, the higher the payout rate.

Unlike the immediate payment charitable gift annuity, we are unable to determine how the annuity payments will be taxed with a flexible gift annuity. That is because the taxation of annuity payments is determined by the tax law in effect at the time the payments actually begin. While the past is no guarantee of the future, it is interesting to note that the tax treatment of annuity payments has remained unchanged for at least the past 25 years.

Here’s an example:*
Mike and Celeste are 50 and 52. They have had a good year and would like to establish an endowed scholarship at Quinnipiac but are also concerned about building their retirement income. They are not sure when they will retire. As much as early retirement has its attractions, they both like their work and may want to continue working past the typical retirement age. They are also unsure of what will happen with retirement ages as they relate to Social Security, IRAs and 401(k) plans. They decide to establish a flexible gift annuity with Quinnipiac University with a gift of $25,000. The earliest they think they might retire is when they are 60 and 62, while the latest they can envision working is at ages 75 and 77.

At the time Mike and Celeste make their gift, they will qualify for an income tax charitable deduction of $4,813 based on the earliest date at which they can request payments to begin, their ages 60 and 62. The actual payments they receive will depend on when they actually opt to begin the payments. Their choices are represented in the table below.

AGES AT START DATE

ANNUITY RATE

TOTAL ANNUITY

60/62

8.2%

$2,050

61/63

8.7%

$2,175

62/64

9.1%

$2,275

63/65

9.6%

$2,400

64/66

10.2%

$2,550

65/67

10.7%

$2,675

66/68

11.4%

$2,850

67/69

12.0%

$3,000

68/70

12.8%

$3,200

69/71

13.4%

$3,350

70/72

14.3%

$3,575

71/73

15.2%

$3,800

72/74
15.9%
$3,975
73/75
17.0%
$4,250
74/76
18.1%
$4,525
75/77
19.2%
$4,800

You can see that the longer that Mike and Celeste wait to start payments from their flexible annuity, the higher their annuity payments will be. Then, at the death of the survivor of Mike and Celeste, whatever is left will pass to Quinnipiac to fund the scholarship that was so important to them.

Please contact Steven Greaves, director of gift planning, at 203-582-3995, toll-free at 877-582-1929 or by email at steven.greaves@quinnipiac.edu for additional information on charitable gift annuities and their advantages.

To calculate the benefit of a charitable gift to Quinnipiac University, click the icon:

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