Your Retirement Fund provides for both Pastor and Surviving Spouse, regardless of who passes first!
Most members of a Church want to see their Pastor and Spouse live a comfortable lifestyle. They don’t give much thought to the Pastor’s Retirement?
Putting money away for retirement seems almost impossible, with today’s costs of raising a family and meeting all the obligations of normal family life. How can you have any confidence at all that you will have enough money set aside to survive during your retirement years? Asking for an increase in budget so the Pastor can put more money into a retirement fund is sometimes a difficult task. What if there was a way to raise the money to fund retirement and create a benefit for others who also need to build their retirement fund, or increase their income and save on taxes? There is a very simple tool that all charities can use to build funds for any purpose. It is called a Charitable Gift Annuity. It is a perfect tool to create a Retirement Fund for the Pastor and Spouse, and it can also provide such a fund for Assistant Pastors and staff members, if that is desired.
A Recent Fox News Survey said that when it comes to providing for Retirement, 61% of the women surveyed said they worry about that a lot. But only 50% of the men surveyed said that they worry about having enough funds for retirement.
The Benefits of Gift Annuities
Security When You Need it Most
Under the terms of a simple gift annuity agreement, you transfer funds to the charity. The funds may take the form of cash or marketable securities, such as stocks or mutual funds. You will receive payments that arrive regularly for the rest of your life. Payments may also continue for the life of a second person, if you wish.
Higher fixed rates: The amount you receive is fixed and will not change as long as you live. This is an especially attractive feature today. Many people have seen their income from investments fluctuate over the past few years. When you create a gift annuity, an immediate income tax charitable deduction is available if you itemize deductions. Payments are even partially tax free for a period of years. An added benefit is that the amount used to fund the gift annuity for yourself and/or your spouse will generally not be included in your taxable estate.
Reliable payments: Your payments are guaranteed by all of the charity’s available assets. The gift annuity can meet the needs of those who wish to give but want to make certain they have first provided for their own financial needs and those of their loved ones.
To Illustrate: Brenda Simms has been a committed donor for many years. She discovers she can receive generous payments for life while making a charitable gift. She decides to transfer $40,000 in assets from two sources: a certificate of deposit that has matured, and securities that have grown in value over many years. Neither yields more than 4 percent in income. By selecting a gift annuity, she increases the payments she receives to 5.8% and does not pay any tax on the capital gain in the securities when she gives them to a gift annuity. Part of the capital gains tax is eventually due, but it is payable over her life expectancy as a portion of her gift annuity payments. Brenda is also eligible for an immediate charitable income tax deduction of $21,000. And each payment is only partially taxed to her for the first six years. After that time it becomes fully taxable.
Ways to receive payments: Payments can be made for one life, or for one life then for a second; or to two people, and then the survivor. A big feature is the start of the payments can be deferred, but you get an immediate tax deduction.
Special Note: For each gift annuity established by a Church member or friend, a portion is put into the Pastor’s Retirement Fund Account. That must be done under IRS rules for gift annuities; an immediate amount of each gift annuity must be given to fund.
($5,000 for each $100,000 goes into the Pastor’s account to grow until retirement; $25,000 per $100,000 is paid into the account at the death of the annuitant.)
For more information or for personal illustrations of how a gift annuity can help you and your Church set up a Pastors Retirement Fund using Gift Annuities, contact us at (800) 822-6711 or click here.