Taking the “Ouch” Out of Low Interest Rates

Low and declining interest rates have never been so evident as today when someone faces the renewal of a CD. For those on fixed incomes, particularly when a sizeable part comes from interest sensitive investments like certificates of deposits, the effect has been felt somewhat painfully. Ouch! Just like getting a finger caught in a door, a hand against a stove burner, or getting pinched by pesky brother, it hurts.

Fortunately, the Rehab offers a very popular and simple solution through its very popular charitable gift annuity program. A charitable gift annuity is a simple contract between a donor and the Rehab. In exchange for an irrevocable gift of cash, securities, or other assets valued at $5,000 or more, we agree to pay one or two annuitants a fixed sum each year for life. Payments are made quarterly. The older the annuitants are at the time of the gift, the greater the fixed income we can agree to pay. Like most charities, we voluntarily use rates that are established by the American Council on Gift Annuities. In most cases, part of each payment is tax-free, increasing each payment's after-tax value.

For some people, who already have plans to remember the Rehab in their will, these gifts can be much better than waiting until after death to make the gift through a bequest. By making the gift now through a gift annuity, a person can experience the real joy of making a sizeable gift, may reduce their estate taxes or probate costs, and will be assured of a high and stable income for the rest of life. And, because each gift is considered by law to be partly gift and partly an investment in contract, a nice charitable income tax deduction results, which may lower income taxes.

Are gift annuities advisable in all situations? No! But if your interest rates are low, now is an excellent time to consider how the Rehab might help you take the “ouch” out of these very low interest rates. We are as close as a call to our toll-free number, 888-861-6385 or roger@rogerellison.com . As always, your inquiry is without cost or obligation.