Charitable Gift Annuity Rates to Decrease February 1, 2009
Federal interest rates are at an historic low. This may help stimulate the economy, but what effect does it have on philanthropy?
Many ATS donors have taken advantage of the higher interest rates offered by Charitable Gift Annuities and Charitable Remainder Annuity Trusts. However, due to a reduction in the federal interest rates, the American Council on Gift Annuities, at a special meeting on December 29th, voted to reduce the recommended annuity rates for Charitable Gift Annuities. Although the new rates have not yet been established, they are expected to be 0.4% to 0.7% lower than the current rate and will go into effect February 1.
If you or someone you know is considering a CGA, now is the time to lock in a higher rate. For example, if you are 75 years old, you can receive a 6.7% annuity rate. If you are 85 years old, you can receive an 8.9% annuity rate. If you lock in a higher rate now, your rate cannot decrease, regardless of market conditions. Your income could be two or three times higher than from other investments—and you'll qualify for a substantial income tax deduction. Waiting until next month will mean locking in a lower rate.
Click here to read the original press release from the American Council on Gift Annuities.
For more information, please contact me, Mark L. Hefter, Esq., Director of Planned Giving, at (212) 407-6313 or email@example.com.
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