2012 Gift Annuity Rates

The updated gift annuity rates are effective on January 1, 2012 and they are 0.5% to 0.8% lower than the 2011 rates. The American Council on Gift Annuities reduced the rates because there is a lower yield on the ten-year Treasury bond.

Most donors aim to receive certificate of deposit (CD) payouts of 3% to 4%. Interest rates have declined in the past two years and CD rates have declined with them.  In order to achieve the original payout goal, donors should transfer 1/3 of their CDs into a charitable gift annuity. The gift annuity will provide a higher payout rate than the current CD rate and it also provides a tax deduction. Donors should keep the other 2/3 of their CDs so that they have enough of a liquidity reserve. This reserve should be sufficient to cover home health care, assisted living, or full nursing care.

See ACGA Announces New Rate Schedule, Crescendo Interactive, Dec. 2011. 

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention