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It Is Never Too Early to Plan for Retirement

John Young

By John Young, Class of 1986

My wife, Sheila, and I had been looking at annuities for a few years prior to establishing our gift annuity with Colorado College. We liked the idea of setting aside money for the future to complement the typical tax beneficial ways to save for retirement—IRA, 401(k), etc. It was also important to us that this be an attractive after-tax opportunity.

In our research, we read materials by investment managers and accountants, and we consulted with former colleagues. We analyzed the economics of fixed and variable commercial annuities. We concluded that the after-tax return of charitable gift annuities compares favorably with those alternatives. The real kicker is that by creating a gift annuity we benefit a worthy cause.

Choosing CC was easy. It immediately came to mind because of my rewarding experience and the knowledge that colleges always have a long-term need for funding. When we contacted CC, we learned that it not only had a gift annuity program in place, but had many other planned giving alternatives as well. At the Development Office's suggestion, we chose a flexible deferred charitable gift annuity, which includes a current tax deduction and the ability to receive larger payments on a date we select in the future.

Funding Our Gift
An important aspect to the gift annuity was the ability to donate highly appreciated property—in our case, shares of stock. In effect, we escaped paying upfront capital gains taxes by donating the shares directly rather than selling the stock and donating the proceeds. Credit considerations also played a part, as gift annuities are long-term gift arrangements. We are confident our gift annuity is secure at Colorado College, an institution with an Aa3 bond rating.

A True Win-Win
The transaction was both an acquisition of a gift annuity and a charitable contribution. After the details were decided, we began to consider how best to direct the donation. We discussed the importance of international experience and the success of my time working and studying abroad. To promote similar opportunities and to help generate income for expenses associated with exchange programs, we established the John R. Young 1986 and Sheila M. Collopy Endowed Fund for Study Abroad. It is just a win-win situation all the way around!

Discover how to make a gift to CC.

A charitable bequest is one or two sentences in your will or living trust that leave to Colorado College a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I, [name], of [city, state, ZIP], give, devise and bequeath to The Colorado College, City of Colorado Springs, County of El Paso, State of Colorado, [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

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able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to CC or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate, or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the gift tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to CC as a lump sum.

You fund this trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to CC as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and CC where you agree to make a gift to CC and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

Deferred Gift Annuity

You can defer your payments until a later date that you specify.

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Flexible Deferred Gift Annuity

You choose a time range in which to begin receiving payments.

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Personal Estate Planning Kit Request Form

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