Archive for November, 2011

ACGA:

The American Council on Gift Annuities (ACGA) board of directors held its semi-annual meeting on November 7, 2011. As part of a continual monitoring process, the board reviewed the current assumptions that underlie the rates schedules.  Given the significant changes in the economic environment, the board approved a new schedule of suggested maximum gift annuity rates which will become effective January 1, 2012.  At ages older than 60, when the majority of gift annuities are issued, one-life rates will decline by 0.5% to 0.8%.

You have probably heard from ACU or others about the benefits charitable gift annuities can offer.  (See here for a concise explanation.)

• Backed by the full assets of Abilene Christian University
• Increases income, sometimes significantly, over a maturing CD or a savings account
• Provides a current charitable income tax deduction to you
• Can help you avoid capital gains taxes
• A significant portion of your annuity payment may be income tax-free
• Provides you with fixed income for your life, or jointly for your and your spouse’s lives
• Upon your passing any remainder will go towards funding life-changing opportunities for future students at Abilene Christian

But as the announcement from the ACGA (the group that sets recommended gift annuity rates, to which ACU adheres) makes clear, those rates are being lowered effective January 1, 2012.  Depending on your age and whether you create a single-life or joint-life annuity, your rate will drop between 0.4-0.8%.

As an example, for a husband and wife both aged 70, the gift annuity rate until December 31 is 5.2%.  Beginning January 1, 2012, that rate will be 4.6%.

For a single individual aged 75, the current gift annuity rate is 6.5%.  Beginning January 1, that rate will be 5.8%.

For a husband and wife both aged 80, the current gift annuity rate is 6.3%.  Beginning January 1, that rate will be 5.7%.

It is important to note that if you have already created a gift annuity with ACU or any other non-profit, the contractual rate and payment you currently receive will not be changed.  This rate change is effective only for new gift annuities created after December 31, 2011.

If you have ever considered a charitable gift annuity and you have a low-yielding savings account, a recently-matured CD, or a CD that will mature prior to December 31, we encourage you to call The ACU Foundation (800-979-1906) and we will be happy to provide specific information for your situation with no obligation.

Our offices will be closing at 5pm on December 23 and remain closed through January 2 for the Christmas holiday, but we can complete transactions postmarked and funded by December 31.

After a decade of working in the financial services arena and knowing the human propensity to “put off ’til tomorrow” when it comes to money matters, this story is extraordinary to me.

Personal Finance blog Get Rich Slowly has an excellent guest post on planning ahead for your demise.  The father in this story went above and beyond, in my view, just to make things easier for his executor (his daughter, the author of the post).  This wasn’t just ordinary estate planning.  This was a process that took YEARS and the man was very intentional about it.  I particularly appreciated the section on “Settling Affairs”, as it highlights a potential deficiency in the “all children receive equal shares” theory.

I see a couple of possible lessons in this story.

1. Your executor has to be someone you trust implicitly.
2. Take a significant amount of time to think through your plan, and be willing to alter the plan along the way.
3. Realize that when an heir is also your executor, the emotions of the heir will make the job of the executor more difficult.  Plan accordingly.
4. When possible, have a real relationship with a banker, investment professional, insurance agent, attorney, and accountant.

What are some other conclusions that could be drawn from this example?

This chart shows (almost) all the money in the world.  Absolutely fascinating.  (Here is a bigger version; you can – and should – zoom in considerably further.)

An advertisement, yes. But the message is excellent and the delivery is sweet and funny.

We’re coming into the holiday season. I can say that officially now, ten days before Thanksgiving.  It’s not too early to begin thinking about giving: not just to those you love, but to those who have great need.

Watch the video.  It’s worth 20 minutes of your time.

You are not special.  “Stop worrying about what gifts we came with and whether or not we’re special and worry a little more about what we’re doing with those gifts.”

We are all a little bit crazy.  “Crazy people make better leaders in times of crisis.”

A lot of what you believe is wrong.  “It’s easy to hate an idea.  It’s easy to hate a creed.  It’s a lot harder to hate a person with whom we break bread.”

You are not as safe as you think.  “So why not stop worrying and start living?”

Your ideas are not that original.  “Your ideas will be as good or bad as the books you read and the people with whom you interact.”

You are chasing the wrong dream.  “Ever more people today have the means to live, but no meaning to live for.”

The time will never be right.  “These excuses that we construct for ourselves end up becoming the shackles that keep us from pursuing our dreams.”

The headline of this Politico.com article doesn’t really tell the story, but it’s still worth looking at:

Almost one in five men between the ages of 25 to 34 are living with their parents, according to a Census Bureau report released Thursday. About 14 percent of men lived with their parents in 2005, a figure that crept up to 19 percent.

More statistics at the link, including this one:

Married couples with children made up 20 percent of all American households, versus 40 percent in 1970.

Fascinating.