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Minnewaska Home Development Foundation Deferred Rewards Deferred Payment Gift Annuities: Good Things Come To Those Who Wait Current Deduction, Delayed Income There is a remarkable gift vehicle that helps donors provide generously for our efforts and also addresses their personal tax and financial concerns. This flexible planning tool is called a deferred charitable gift annuity. A deferred payment gift annuity is simply a contract in which you transfer cash or securities to Minnewaska Home Development foundation and in return we pay you a fixed income for life – starting at a future date which you designate (usually the year in which you expect to retire).  A large part of the asset(s) transferred represents an important gift to our future, which translates into a sizable charitable deduction for you.  Delaying the starting date of your payments also increases the amount you will receive each year. Generous Payout Rates How large will your deferred annuity payments be?  That depends on your current age as well as when you begin to receive payments.  The table below shows the payment rate percentages that would be used if you choose an "immediate payment" gift annuity. Please note how payments are increased if they are deferred 5, 10, 15, or even 20 years. Deferred gift annuities can also be set up to make payments over the lifetimes of two people such as a husband and wife, brothers and sisters, parents and children, or even close friends.     Present Age of Donor   Immediate Payment Annuity Rate Deferred Gift Annuity Rates – Number of Yrs from Date of Issue of Agreement to Annuity Starting Date   5 yrs. 10 yrs. 15 yrs. 20 yrs. 45    5.0%    6.8%    9.0%    11.8%    15.9% 50 5.3 7.0  9.3 12.5 17.2 55 5.5 7.3  9.8 13.5 18.8 60 5.7 7.7 10.6 14.8 21.2   Ideal Retirement Savings Tool "Baby boomers" may find deferred gift annuities to be an ideal way to assist our efforts as well as supplement their IRAs, 401(k)s or other retirement savings plans. For example, if an individual now age 45 arranges a $10,000 deferred payment charitable gift annuity, with payments to begin at age 65, he or she can deduct about $2,800 as a charitable contribution now and will also receive $1,590 a year beginning in 20 years. Even if you already contribute the maximum amount allowable to your IRA, 401(k) plan or other account, a gift annuity can still provide you with tax-sheltered retirement savings. Unlike IRAs and other retirement accounts, there is no limit on how much you can put into a deferred payment gift annuity. A large part (usually 25% to 40% or more) of every contribution will be tax deductible. Plus, a portion of your annual payments will be tax free or favorably taxed as a capital gain (if you transfer stock to fund your annuity). Flexible Starting Date to Begin Receiving Payments? You may be interested in the advantages offered by deferred annuities, but don't know the exact year you need payments to begin. A new planning option allows you state a"ball-park estimate" of when the first check should be sent. However, you aren't locked in to that date and the longer you wait to begin payments, the larger those payments will be. Example: A woman (now age 50) plans to give us $10,000 in stocks to establish a deferred payment gift annuity. She guesses she will retire at age 65, so that age is the "ballpark estimate" of when she wants her payments to begin. She deducts roughly $3,000 this year as a charitable gift deduction and at age 65 can start receiving annuity payments of $1,250 (12.5%) a year. But suppose she decides, for any reason, to postpone the start of annuity payments. She can elect to initiate benefits at age 68 and be paid 15.2% - or receive 17.2% by starting at age 70, as shown in the table. If she finds it wants to begin receiving annuity payments before age 65, she could do so, but at a reduced payout rate. Please note the charitable deduction is unaffected by the choice of when to bein receiving payments. Starting Age Payout Rate Annual Payments 66 67 68 69 70 71 72 73 74 75   13.3% 14.2 15.2 16.2 17.2 18.4 19.6 20.9 22.2 24.0 $1,330   1,420 1,520 1,620 1,720 1,840 1,960 2,090 2,220 2,400     Special Planning Opportunities Deferred payment gift annuities create large charitable deductions, which may be especially helpful to: Individuals facing heavy income taxes due to inherited IRAs, accounts receivable, savings bonds and certain other estate assets   High tax-bracket parents who wish to augment the retirement security of adult children who are unable to save sufficiently (Mom and Dad receive the tax deductions)   Persons who withdraw large sums from their IRAs or other retirement accounts   Anyone who experiences a year of unusually high income, such as from bonuses or commissions, or the sale of a business or investment assets For more information, please contact us. Minnewaska Lutheran Home (320) 239-2217 e-mail: info@mlh-healthcare.org The information provides is not intended as legal, tax, or investment advice. Please consult an attorney, tax or financial planning professional for questions specific to your financial situation.

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