Planned Giving - Claremont McKenna College

Will Power - Giving Through Your Estate Plan

Supplemental Retirement Planning

Income to meet health care and assisted living costs

Informative Articles on gift planning topics.

The CMC Flexible Deferred Gift Annuity

A Flexible Deferred Gift Annuity is a simple contractual agreement between you and CMC. In exchange for your irrevocable gift of cash or securities, CMC agrees to make fixed payments for life to one or two people, with payments to begin on a future date. The payments are a legal obligation of the College and are guaranteed by the general resources of CMC. The older the designated annuitants are at the point when annuity payments begin, the greater the fixed income CMC can agree to pay.

How You Benefit

You Control When Payments Start You choose when payments start within a pre-determined range of possible starting date that you select.

Eliminate Investment Risk Your gift grows tax-deferred inside the annuity until payments start, at a guaranteed rate of 5.25%.

Income You Can't Outlive With payments for life, you cannot outlive your annuity.

Charitable Deduction Your gift qualifies for a charitable income tax deduction for a portion of your gift amount.

Capital Gain Benefits You may fund a gift annuity with appreciated securities without having to sell the stock first and pay the tax.

Attractive Rates CMC annuity rates are among the highest in the country.

Tax-Advantaged Payments A portion of each payment will be tax-free, capital gain (if funded with appreciated securities), and ordinary income.

Secure Payments Your annuity payments are guaranteed by all of the assets of Claremont McKenna College; now over $600 million. The College has earned an Aa2 (double A-2) credit rating from Moody Investor Services.

A Case Study

Mr. Burton has wanted to give back to CMC to say "Thank you" for the significant role the College played in his life. The Burtons are concerned, however, about having sufficient resources should health issues arise later in life or should they need to move to an assisted living facility.

A Flexible Deferred Gift Annuity will enable Mr. Burton to give back to the College and reserve a substantial income stream to meet their needs later in life.

The Burtons, ages 70 and 68, donate $150,000 to establish their Flexible Annuity, and set ages 75 and 73 as the first ages at which they can choose to start receiving annuity payments. They must begin taking payment no later than ages 100 and 98. They may start taking payments at any time in between. Their gift entitles them to a charitable deduction of $15,002.

If they choose to start taking payments at, say, ages 78 and 76, they would begin to receive, for life, $14,368. Of that amount, $8,994 (63%) will be tax-free for 15.0 years. If instead, they waited to take payments at ages 85 and 83, they would receive lifetime payments of $31,500. Of this amount, $13,230 (42%) will be tax-free for 10.2 years.

At their death, funds remaining in the gift annuity will be used to establish an endowed memorial scholarship in their names.

The information in this Web site is not intended as legal advice. For legal advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income tax include federal taxes only. Individual state taxes and/or state law may impact your results.

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