How it works
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You transfer cash, securities, or other assets to Wentworth Institute of Technology. |
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Wentworth pays you (or the beneficiary of your choice) a fixed income, either for a specified number of years (with a higher fixed amount) or for life (with a lower fixed amount.) |
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The remaining balance passes to Wentworth once the Annuity ends. |
What is a Commuted Payment Gift Annuity?
A Commuted Payment Gift Annuity is a simple contract between you and Wentworth Institute of Technology. In exchange for your gift of cash, securities, or other assets, Wentworth agrees to pay one or two people of your choice (annuitants) a fixed sum each year for either a specified number of years or for life.
The Commuted Payment Gift Annuity is especially attractive if you are currently earning a high income and you desire both a current tax deduction and also additional income at a later point in your life.
Payments begin at least one year after you make your gift. The payments are guaranteed by the general resources of Wentworth and are usually paid annually or semiannually. The longer payments are deferred, the greater your payments are.
College Annuity Plans
You have the option to set your Annuity payments to be a fixed number of payments whose total value equals what the payments made over the course of your lifetime would have been. Since these payments would only last a few years, the shortened duration allows Wentworth to make you larger payments than they would have been otherwise. This type of Commuted Payment Gift Annuity is often called a "College Annuity Plan," because many donors use it to help a child (or grandchild) finance a college education. The donor names the future student as the annuitant, and the payments begin when the child enters college and continue for the four years of the student's enrollment.
The minimum donation for a Commuted Payment Gift Annuity is $10,000. Please be sure to consult your financial advisor if you are considering a Commuted Payment Gift Annuity.
Benefits
- You can postpone your Annuity payments until you need them, such as when your child is ready to begin college or when you reach retirement.
- You will qualify for an immediate federal income tax deduction for a portion of your gift.
- If you fund the Annuity with an appreciated asset, you will receive a capital gains tax deduction.
- The longer you defer your payments, the higher the income that the annuitant will receive will be. In the meantime, the principal grows tax-free.
- Your fixed annual Annuity payments are guaranteed, backed by the assets of Wentworth Institute of Technology.
- Your gift will benefit both you and Wentworth.
An illustration
Charles, Class of 1990, would like to make a gift to Wentworth, but he also wants to be sure that he can send his daughter Emily, who is 5, to college. Many years ago, Charles bought some stock for $20,000. The shares have now appreciated to $200,000.
Charles can enter into a Commuted Payment Gift Annuity (also known as a College Annuity Plan) agreement with Wentworth by which:
- Wentworth will pay Emily an annual fixed income of $70,861 for four years, starting when she turns 18 years old. A portion of these payments will be completely tax-free.
- Charles will immediately receive a charitable federal income tax deduction of approximately $80,000.
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Please note that information and calculations are for illustration purposes only and should not be considered legal, accounting, or other professional advice. Your actual benefits may vary depending on the timing of the gift. |
