The Gift Plus Annuity

Income for life

You have savings and investments, but interest rates fluctuate and sometimes your month-to-month income doesn’t keep pace with rising prices. What’s more, you know that your investments have to last your lifetime.

It’s a dilemma, but there is good news: You may be able to make your gift and improve your cash flow at the same time.

A gift that gives back

A gift annuity is an arrangement under which you make a contribution to a church or charity and receive, in turn, guaranteed payments for life. The amount of these payments depends on your age and the size of your contribution, but they will likely be significantly higher than you are receiving from your present investments, and the annuity arrangement is guaranteed. It will continue as long as you live, no matter what happens to the economy or interest rates. If you are married, you may choose a joint-and-survivorship annuity which continues as long as either spouse lives.

Your gift annuity brings you a special bonus at tax time: a sizeable portion of your payments will be tax-free. While older annuitants will receive payments that are totally tax-free, all donors are entitled to a donation receipt that will result in a tax credit.

Consider these examples:

Wendell Mueller, age 74, contributes $25,000 for a gift annuity with the Diocese of Ontario. He receives an annuity of $1,972 (7.8 percent) per year for life, of which 84.1% is paid out tax-free. He is also entitled to a donation receipt for $6,250. in the year he makes the gift.

 

Sharon and Dan Richards, ages 75 and 79, contribute $50,000 for the Anglican Foundation and receive $3,504 per year (7.0 percent) for as long as either of them lives. The tax-free portion is $2,825 per year and the donation receipt is $10,000.

 

Muriel Chan, age 78, contributes $10,000 for the Anglican Foundation and receives a lifetime annuity of almost $800 (8.0 percent) per year — 91% of which is paid out tax free. She is also entitled to a donation receipt for $2,500.

Below are some representative rates currently in effect for individual and joint-life annuities.

Your gift to General Synod, your diocese, parish, or other Anglican-related ministry

To arrange your gift annuity, you sign a gift agreement that authorizes the Church to use a portion of your contribution to purchase an annuity from a licensed insurance company that pays the amount stipulated in the gift agreement. This is the Church’s way of assuring payment to you.  Five percent of your contribution is allocated for the present ministry and mission of General Synod.

The balance of your contribution, retained by the Church after purchasing the annuity, will be used as you direct. You may specify whether you wish it to be available for immediate use or invested until it reaches the size of your original contribution. In consultation with us, you may also specify which particular programme, project or ministry of the Anglican Church of Canada your gift will support. Gifts that meet minimum requirements may be used to establish endowed funds which continue to provide support for the Church in perpetuity.

A representative of General Synod will be pleased to explain the gift annuity in greater detail and answer your questions. At your request, we will prepare a personalized illustration showing the annuity and tax consequences from whatever contribution you are considering. We encourage you to review the illustration with your own financial and tax advisors, and when you are ready to proceed, we’ll assist you in the arrangements.

The gift annuity

It’s your opportunity to make a generous gift to the Church and do yourself a favour at the same time!

Charitable Registration Number: 10808 2835 RR0001

The information in this document does not constitute legal or financial advice and should not be relied upon as a substitute for professional advice. The Anglican Church of Canada encourages you to seek qualified legal, estate planning, and financial advice before deciding on a course of action.