A high rate of retirement income

An immediate federal income tax deduction

A meaningful gift to Smith.

Case Studies
Before Before leaving her position as vice president of a university, Bonnie ’67 reviewed her financial plans. She had recently downsized from her big family house to a smaller one and needed a tax deduction to help balance her capital gains. She also needed to add a fixed income component to her retirement portfolio, and she wanted to find a way to include Smith in her long-term financial plan.

The solution: Bonnie made a gift to Smith through a deferred payment gift annuity. She was able to claim a charitable income tax deduction and lock in a high fixed annuity payment to begin ten years later, at age 65. She was pleased to be recognized as a generous donor in her 35th reunion year.

Bonnie could have designated her gift for a particular purpose at Smith, but she preferred to leave it unrestricted, knowing that the college will not use the gift principal until after her death, at which time there may well be new priorities and needs.

“Smith provided me with scholarship and loan funds that enabled me to attend college. Most important, it provided me with a first class education and a "passport" to the corps of educated citizenry that is important even today. I want to see Smith flourish into the next century. A deferred gift annuity made sense for me as a way to augment my retirement income, gain an income tax deduction and give back to Smith.”

Charitable Gift Annuity Rates

Note: Payments may not begin before age 60. Minimum gift amount is $5,000.

A 1965 Smith graduate, Christine is a systems analyst at a government lab in the Southwest and plans to retire in 2005. “I’m looking forward to hiking and birding, plus more volunteering and traveling than I can manage now.”

Christine examined her retirement savings and estate plan and thought about her desire to leave a bequest to Smith College to create a scholarship fund. She realized that life income gifts could help secure her own retirement and create her charitable legacy all at once.

Christine began to make annual gifts to Smith through deferred payment gift annuities. Each gift has entitled her to an immediate charitable tax deduction and has locked in a fixed stream of payments that will begin when she retires. The annuities are locked in at rates ranging from 7.2-8.9%.

“To me, a series of deferred payment gifts is similar to setting up a bond ladder. To help counter the effect of inflation on this fixed annuity, I’m also purchasing inflation-indexed U.S. Savings Bonds.”

Christine is creating the Eleanor Terry Lincoln Scholarship Fund, which will be endowed at her death with the principal of her annuity gifts. She has the satisfaction of knowing that future students of engineering, math and natural sciences will benefit from her gifts, and she is being recognized during her lifetime as an important benefactor of the college.

“My personal connection with Smith adds warmth and purpose I don’t find in my investments. Professor Lincoln cared deeply about her students, and it seems right to remember her with a student scholarship.”

Series of deferred gift annuities with one payout date:
In this scenario you would make gifts to Smith annually through gift annuities and would receive a charitable deduction in each of those years. The annuities would all begin paying out to you in November 2013. Annual payments of $5,690 would continue for your lifetime.

Gift Date	Gift Amount	Rate	Charitable Deduction	Payments Begin	Annuity Amount
June 2002	$10,000	12.6%	$3,995	Nov. 2013	$ 1,260
June 2003	$10,000	12.0%	$3,434	Nov. 2013	$1,200
June 2004	$10,000	11.3%	$3,435	Nov. 2013	$1,130
June 2005	$10,000	10.8%	$3,335	Nov. 2013	$1,080
June 2006	$10,000	10.2%	$3,310	Nov. 2013	$1,020
Total Annuity Beginning November 2013				$ 5,690

Series of deferred gift annuities with laddered payout dates:
In this scenario you would contribute annually through a gift annuity and receive an immediate charitable deduction. Each annuity will have a 12-year deferral period. In the year you turn 62, you will receive a payment from the first annuity. The next year you will receive payments from two annuities, and so on. By the end of 2018, all five annuities will be paying you. Your cumulative annual payment for the rest of your lifetime will be $6,380.

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