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American Council on Gift Annuities Recommended Maximum Rates

The following rates are the current rates effective January 1, 2020.  Note that these rates are somewhat lower than rates prior to that date.  Prior rates can be seen on the ACGA's web site:  www.acga-web.org.  Remember that these are maximum rates.  Donors can always request a lower rate, get a bigger charitable deduction and help their favorite charities even more.   

Single Life
Two-Life
Interest Factors For Deferred Annuities (Except New York and New Jersey)
Interest Factors For Deferred Annuities in New York and New Jersey

WARNING: These annuity rates, for both immediate and deferred annuities and for both single life and two lives, should not be used if the gift portion, based on IRS tables and the applicable discount rate, is not more than 10% of the amount paid for the annuity.

Single Life

Age Rate   Age Rate
5-7 2.2   69 5.0
8-13 2.3   70 5.1
14-17 2.4   71 5.2
18-21 2.5   72 5.4
22-25 2.6   73 5.5
26-28 2.7   74 5.6
29-31 2.8   75 5.8
32-33 2.9   76 6.0
34-35 3.0   77 6.2
36-37 3.1   78 6.4
38-39 3.2   79 6.6
40-42 3.3   80 6.9
43-44 3.4   81 7.2
45-47 3.5   82 7.4
48-49 3.6   83 7.6
50-51 3.7   84 7.8
52-53 3.8   85 8.0
54 3.9   86 8.2
55-56 4.0   87 8.4
57 4.1   88 8.6
58 4.2   89 8.8
59-60 4.3   90+ 9.0
61-62 4.4      
63 4.5      
64 4.6      
65-66 4.7      
67 4.8      
68 4.9      

NOTES:

  1. The rates are for ages at the nearest birthday.
  2. For immediate gift annuities, these rates will result in a charitable deduction of more than 10% if the CFMR is 1.8% or higher, whatever the payment frequency. If the CFMR is less than 1.8%, the deduction will be less than 10% when annuitants are below certain ages.
  3. For deferred gift annuities with longer deferral periods, the rates may not pass the 10% test when the CFMR is low.
  4. To avoid adverse tax consequences, the charity should reduce the gift annuity rate to whatever level is necessary to generate a charitable deduction in excess of 10%.

 

Two Lives - Joint and Survivor

 

 

Younger Age Older Age Rate


Younger Age Older Age Rate
5 5-95+ 2.0   74 74 4.9
6 6-95+ 2.0   74 75-76 5.0
7 7-95+ 2.0   74 77-78 5.1
8 8-95+ 2.1   74 79-80 5.2
9 9-95+ 2.1   74 81-83 5.3
10 10-95+ 2.1   74 84-95+ 5.4
11 11-95+ 2.1   75 75 5.0
12 12-95+ 2.1   75 76 5.1
13 13-95+ 2.1   75 77-78 5.2
14 14-95+ 2.2   75 79-80 5.3
15 15-95+ 2.2   75 81-82 5.4
16 16-95+ 2.2   75 83-85 5.5
17 17-95+ 2.2   75 86-95+ 5.6
18 18-95+ 2.3   76 76-77 5.2
19 19-95+ 2.3   76 78 5.3
20 20-95+ 2.3   76 79-80 5.4
21 21-95+ 2.3   76 81-82 5.5
22 22-95+ 2.3   76 83-85 5.6
23 23-95+ 2.4   76 86-87 5.7
24 24-95+ 2.4   76 88-95+ 5.8
25 25-95+ 2.4   77 77 5.3
26 26-95+ 2.4   77 78-79 5.4
27 27-95+ 2.5   77 80 5.5
28 28-95+ 2.5   77 81-82 5.6
29 29-95+ 2.5   77 83-84 5.7
30 30-95+ 2.5   77 85-86 5.8
31 31-95+ 2.6   77 87-89 5.9
32 32-95+ 2.6   77 90-95+ 6.0
33 33-95+ 2.6   78 78 5.4
34 34-95+ 2.6   78 79 5.5
35 35-95+ 2.7   78 80 5.6
36 36-95+ 2.7   78 81-82 5.7
37 37-95+ 2.7   78 83 5.8
38 38-95+ 2.8   78 84-85 5.9
39 39-95+ 2.8   78 86-87 6.0
40 40-95+ 2.9   78 88-90 6.1
41 41-95+ 2.9   78 91-95+ 6.2
42 42-95+ 2.9   79 79 5.6
43 43-95+ 3   79 80 5.7
44 44-95+ 3   79 81-82 5.8
45 45-47 3.1   79 83 5.9
45 48-95+ 3.2   79 84-85 6.0
46 46 3.1   79 86 6.1
46 47-50 3.2   79 87-88 6.2
46 51-95+ 3.3   79 89-91 6.3
47 47-49 3.2   79 92-95+ 6.4
47 50-95+ 3.3   80 80 5.8
48 48 3.2   80 81-82 5.9
48 49-51 3.3   80 83 6.0
48 52-95+ 3.4   80 84 6.1
49 49-50 3.3   80 85 6.2
49 51-95+ 3.4   80 86-87 6.3
50 50-54 3.4   80 88-89 6.4
50 55-95+ 3.5   80 90-91 6.5
51 51-53 3.4   80 92-94 6.6
51 54-95+ 3.5   80 95+ 6.7
52 52-57 3.5   81 81 6.0
52 58-95+ 3.6   81 82 6.1
53 53-55 3.5   81 83-84 6.2
53 56-95+ 3.6   81 85 6.3
54 54 3.5   81 86 6.4
54 55-59 3.6   81 87 6.5
54 60-95+ 3.7   81 88-89 6.6
55 55-58 3.6   81 90-91 6.7
55 59-63 3.7   81 92-93 6.8
55 64-95+ 3.8   81 94-95+ 6.9
56 56 3.6   82 82 6.2
56 57-61 3.7   82 83 6.3
56 62-95+ 3.8   82 84 6.4
57 57-59 3.7   82 85 6.5
57 60-64 3.8   82 86 6.6
57 65-95+ 3.9   82 87-88 6.7
58 58 3.7   82 89 6.8
58 59-62 3.8   82 90 6.9
58 63-67 3.9   82 91-92 7.0
58 68-95+ 4.0   82 93-94 7.1
59 59-61 3.8   82 95+ 7.2
59 62-64 3.9   83 83 6.4
59 65-69 4.0   83 84 6.5
59 70-95+ 4.1   83 85 6.6
60 60-63 3.9   83 86 6.7
60 64-67 4.0   83 87 6.8
60 68-95+ 4.1   83 88 6.9
61 61 3.9   83 89 7.0
61 62-65 4.0   83 90 7.1
61 66-68 4.1   83 91-92 7.2
61 69-95+ 4.2   83 93 7.3
62 62-63 4.0   83 94-95+ 7.4
62 64-66 4.1   84 84 6.6
62 67-95+ 4.2   84 85 6.8
63 63-65 4.1   84 86 6.9
63 66-68 4.2   84 87 7.0
63 69-95+ 4.3   84 88 7.1
64 64 4.1   84 89 7.2
64 65-66 4.2   84 90 7.3
64 67-70 4.3   84 91 7.4
64 71-95+ 4.4   84 92 7.5
65 65 4.2   84 93-95+ 7.6
65 66-68 4.3   85 85 6.9
65 69-73 4.4   85 86 7.0
65 74-95+ 4.5   85 87 7.2
66 66-67 4.3   85 88 7.3
66 68-71 4.4   85 89 7.4
66 72-95+ 4.5   85 90 7.5
67 67-69 4.4   85 91 7.6
67 70-73 4.5   85 92 7.7
67 74-95+ 4.6   85 93-95+ 7.8
68 68 4.4   86 86 7.2
68 69-71 4.5   86 87 7.3
68 72-75 4.6   86 88 7.5
68 76-95+ 4.7   86 89 7.6
69 69-70 4.5   86 90 7.8
69 71-73 4.6   86 91 7.9
69 74-76 4.7   86 92-95+ 8.0
69 77-95+ 4.8   87 87 7.5
70 70-72 4.6   87 88 7.7
70 73-74 4.7   87 89 7.8
70 75-78 4.8   87 90 8.0
70 79-95+ 4.9   87 91 8.1
71 71-73 4.7   87 92-95+ 8.2
71 74-76 4.8   88 88 7.9
71 77-79 4.9   88 89 8.0
71 80-95+ 5.0   88 90 8.2
72 72 4.7   88 91-95+ 8.4
72 73-74 4.8   89 89 8.2
72 75-76 4.9   89 90 8.4
72 77-79 5.0   89 91-95+ 8.6
72 80-83 5.1   90 90 8.6
72 84-95+ 5.2   90 91-95+ 8.8
73 73 4.8   91 91-95+ 8.8
73 74-75 4.9   92 92-95+ 8.8
73 76-77 5.0   93 93-95+ 8.8
73 78-80 5.1   94 94-95+ 8.8
73 81-83 5.2   95+ 95+ 8.8
73 84-95+ 5.3        

 

 Procedure for Calculating Suggested Deferred Gift Annuity Rates

Approved by the American Council on Gift Annuities--Effective January 1, 2020

New York & New Jersey see note below)

  1. Determine the annuity starting date, which is:
    1. One year before the first payment, if payments are made annually.
    2. Six months before the first payment, if payments are made semi-annually.
    3. Three months before the first payment, if payments are made quarterly.
    4. One month before the first payment, if payments are made monthly. 
  1. Determine the number of whole and fractional years from the date of the contribution to the annuity starting date (the deferral period). Express the fractional year to four decimal places.
  1. For a deferral period of any length, use the following formula to determine the compound interest factor: 
    1. F = 1.0325 d, where
    2. F is the compound interest factor and
    3. d is the deferral period 

Example: If the period between the contribution date and the annuity starting date is 10.25 years, the compound interest factor would be 1.032510.25 = 1.387948

  1. Multiply the compound interest factor (F) by the immediate gift annuity rate for the nearest age or ages of a person or persons at the annuity starting date.

Example: If the sole annuitant will be nearest age 65 on the annuity starting date and the compound interest factor is 1.387948, the deferred gift annuity rate would be 1.387948 times 4.7%, or 6.5% (rounded to the nearest tenth of a percent).

Comments:

  • The annuity starting date for purposes of calculating the deferred gift annuity rate will be the same as the annuity starting date for calculating the charitable deduction, if payments are at the end of the period (which is usually the case). This was not true with the pre-July 1, 2001 methodology.
  • An annuitant is credited with compound interest for the entire period from the date of contribution to the annuity starting date. Under the pre-July, 2001 methodology, compound interest was credited only for the number of whole years between the two dates.
  • Charities issuing deferred gift annuities in New York and New Jersey may need to use a slightly lower compounding rate depending on the deferral period.

 

Note to Charities Issuing Deferred Gift Annuities in New York and New Jersey

 Approved by the American Council on Gift Annuities - Effective January 1, 2020

The following compound interest factors during the deferral period noted will satisfy the requirements of New York and New Jersey:

For all deferral periods:

Single-life and two-life annuities, whatever the gender of the annuitants, a compound interest factor of 3.25%.

*New York and New Jersey are the two states known at this time that may require different interest factors for deferred gift annuities with longer deferral periods.

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© 2016 Lawrence P. Katzenstein

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