Save Taxes and Generate Income with a Charitable Gift Annuity

August 2023

Congress and the American Council on Gift Annuities have recently enacted changes that make creating a charitable gift annuity especially attractive. These changes include:

ABILITY TO DIRECTLY TRANSFER IRA FUNDS TO A CHARITABLE GIFT ANNUITY
For the first time, senior adults aged 70 ½ or older can fund a Charitable Gift Annuity (CGA) with the pre-tax assets in their Individual Retirement Account through a qualified charitable distribution (sometimes referred to as an IRA charitable rollover). An individual can transfer up to $50,000, or from each spouse’s respective IRA accounts for a combined $100,000 total, into a single, combined gift annuity. This is part of the Federal Secure 2.0 Act effective January 1, 2023.

The transfer counts toward the required minimum distribution, but because the distribution is directed to a charity such as BVC, the withdrawal is not taxed as income. In exchange for establishing the CGA, BVC through our ministry partner WatersEdge, provides fixed annual payments to the retiree for life. If a couple, the payments will continue for both lives.

It is critical to understand the gift will not qualify as a tax-free transfer if you withdraw the funds first and then establish the CGA. The funds from your IRA must be transferred directly to WatersEdge to fund the Baptist Village Communities CGA.

HISTORICALLY HIGH CHARITABLE GIFT ANNUITY (CGA) RATES
In 2022, the American Council on Gift Annuities raised rates, not once, but twice. The result is the highest CGA rate table seen in decades, meaning senior adults can earn fixed income percentages nearly unprecedented in recent history.

The annual income rates, determined by your age when you fund the CGA, can be quite generous. For a single person, the rate is 5.4% at age 65, and is as high as 9.7% annually if you are age 90 or older. For couples, the rates can be as high as 9.5% annually. (see chart on next page)

For seniors looking for a predictable, fixed income stream in an uncertain economic climate, CGAs are a tax-efficient way to secure stable payments to augment your retirement income and ultimately support crucial ministries like Baptist Village Communities.

If you or someone you love is considering a gift of this type, please contact Steve J. Thomas at Baptist Village Communities by phone at 405.942.3800, ext. 4208, or you can email Steve at sjthomas@baptistvillage.org.

What is WatersEdge?
WatersEdge began in 1946 as The Baptist Foundation of Oklahoma and exists to financially empower donors and ministries to transform lives with the Gospel of Jesus Christ. This is accomplished through:
Smart charitable giving solutions that help multiply donors’ gifts.
Biblically grounded investment strategies that maximize charitable distributions.
Powerful financial services like loans, investments and accounting provide churches with practical tools to facilitate growth.

For more than 75 years, WatersEdge has remained faithful to the calling to strengthen ministries that advance God’s Kingdom. Each year, this ministry helps Christ-followers give millions of dollars to the charitable causes they believe in.

Today, WatersEdge manages more than $600 million for hundreds of Southern Baptist churches, Oklahoma Baptist ministries and institutions, and other like-minded organizations across the United States. They distributed more than $30 million to ministry last year.

As a ministry partner, WatersEdge provides investment and estate planning services for donors who support Baptist Village Communities.

Not a Baptist? Not a problem. You do not have to be Baptist to benefit from our services.

Learn more about charitable gift annuities here.