Providing a More Secure Retirement

Contributing to a qualified plan such as a 401(k), 403(b), Keogh, or IRA is an ideal way to save for retirement. Unfortunately, all of these plans are subject to contribution limitations.

If you would like to supplement the payments you receive from your qualified plan and Social Security, consider a deferred gift annuity. Not only will you have more to spend in your later years, but you may reduce your income tax now. You will also help assure that Epiphany Lutheran Church has the financial footing to continue ministering in our community.

 

Unlike an employer-sponsored retirement plan, a deferred gift annuity enables you to

 

• contribute as much as you want without limitation,
• contribute appreciated stock as well as cash,
• decide in which years to make a contribution, and
• start receiving payments as early or as late as you wish.

In the event you own your own business, you can establish a deferred gift annuity for yourself only, without having to include employees.

To establish a deferred gift annuity with Epiphany Lutheran Church, you would transfer cash or securities to the WELS Foundation and execute an agreement that states when payments are to begin and to whom they are to be made. Ordinarily, single persons have payments made to themselves, and married persons elect joint and survivor annuities. You could, however, direct the payments to augment retirement income for someone else—a sibling, for example.

In the year you make your contributions you will receive a charitable deduction, the size of which depends on the number of years before payments begin and the age(s) of the beneficiary(ies) at that time. If you contribute appreciated securities, and name yourself as the sole or initial beneficiary, you will not be taxed on the capital gain at the time of the contribution. A portion of your future payments will be taxed as capital gain, but this is preferable to having them taxed entirely as ordinary income, which is the case with payment from your qualified plan.

If you know exactly when you want to retire, you can select in advance the year in which payments begin. However, if your retirement date will depend on future circumstances, the agreement can provide for payments to begin in any year you later choose. The longer you wait, the larger your payments will be.