In an Unstable Market, Gift Annuities Make Financial Sense for Some
Like many investors during these tough economic times , Helen Hauer is weighing her options for getting the best return on her money. She was in a similar position 10 years ago when she decided to make a contribution to the Salk Institute through a charitable gift annuity. She's never regretted it.
"I was going to have to pay a sizeable chunk of capital gains tax if I didn't roll over an investment I had at the time," she explains. "I had heard about annuities so I figured I'd put the entire amount in one with Salk and have a monthly income for the rest of my life. I avoided having to pay capital gains, plus, I was able to claim a deduction over six years on my tax returns."
Charitable gift annuities allow participants to donate a gift of cash or securities in return for a guaranteed fixed income for life, typically at a much better rate than a Certificate of Deposit (CD), for example. The Institute eventually receives the remaining principal for support of research.
"It's worked out great for me because I like to know exactly what my income will be each month," Hauer says, "and it also provided a better return that allowed me to increase my income."
Besides the financial benefit, Hauer made her contribution to Salk for another more personal reason. Her late husband, Arthur, suffered a sever stroke in 1994, and she hopes that her gift will help scientists advance their research of the brain, particularly how stem cells can be applied toward treating or curing neurodegenerative diseases.
"It was the first time I had known anyone to have a stroke," says Hauer of her husband. "But it affected his brain in such a way that he eventually no longer knew me or anything else. Doctors told me at the time that when certain cells die, that's it, you can never recover them. But they were wrong as I have learned from going to lectures at Salk. So I'm very curious about the brain."
An avid golfer who lives in La Jolla, Hauer likes to point out the certificate she received from the Lomas Santa Fe Executive Golf Course for shooting a hole-in-one. Although she hasn't golfed recently due to a minor shoulder injury, she's looking forward to get back out on the course while she plans her next financial move.
She's considering other charitable gift annuities, but says this time she may choose to structure them to benefit her children as well.