Deferred Gift Annuity
How It Works
- You transfer cash or securities to Exeter.
- Beginning on a specified date in the future, Exeter begins to pay you, or up to two annuitants you name, fixed annuity payments for life.
- The remaining balance passes to Exeter when the contract ends.
- You must be at least 55 to begin receiving payments.
- The minimum gift requirement is $10,000.
- Deferral of payments permits a higher annuity rate and generates a larger charitable deduction.
- You can target your annuity payments to begin when you need them, such as retirement or when a grandchild needs help with tuition payments.
- The longer you defer payments, the higher the effective rate you will receive.
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Questions and Answers
A Deferred Gift Annuity provides lifetime annuity payments commencing at a future date. Because of this deferral, payments from deferred gift annuities are higher than from annuities whose payments begin immediately, and donors usually receive a larger charitable deduction than they would for an immediate-payment annuity. Many donors use deferred gift annuities as a source of supplemental retirement income. They often create their annuity with funds they had already set aside for retirement saving, and set their anticipated retirement as the date to begin receiving payments. An attractive option is to establish a series of deferred gift annuities over several years, all scheduled to begin payments upon the donor's retirement.
Yes, you may. Choose whatever date makes sense to you. And remember this: the longer you wait, the larger your payments will be.
One is not necessarily better than the other. Both have distinct advantages. A gift of cash will produce a larger tax-free portion of the annuity. A gift of stock will reduce the donor’s capital gain tax and produce income that will likely be at a lower tax rate. Both assets produce an equal annuity rate and charitable income tax deduction.