Concerns about Health, housing and finance are among the most important with seniors. During recessionary times these concerns become more paramount, and are further exacerbated by the political unknowns of the current election season. Seniors financial concerns imply the need to preserve capital so as to not outlive available resources. Often seniors address this need by changing their investment styles to reduce risk.

Comments by Neal P. Myerberg at the 2010 Partnership for Philanthropic Planning national conference provide a formulaic approach to how many older Americans might think about addressing their financial risk concerns.

To illustrate this, consider the following formula. From the number 100, an individual will subtract his or her age. Let's say he or she is 80. The difference, 20 expressed as a percentage (20%) represents, in the minds of most financial advisors, the maximum a person's investments should be at risk. At risk is often defined as investments not necessarily in highly speculative vehicles, but often in reasonably prudent stocks, mutual funds, and real estate (other than the personal residence) - any item that is subject to market risk, particularly in recessionary times.

To counter this risk, many seniors will consider including a lower risk strategy that will include a greater percentage of cash equivalents, U.S. Treasuries, and certain planned gift options in the form of life-income plans. The most popular of the life-income gifting options is the charitable gift annuity which provides an attractive and secure rate of return backed by all of the assets of the issuing charitable organization. This return is even better when one considers the added effect of the amount of income that is tax free. What a great way to mitigate a senior's financial concerns, and at the same time support an organization one cares about! In short, a charitable gift annuity may be the perfect addition to an older American's portfolio.

Davenport & Barr, Inc. would be pleased to assist any organization who would like to incorporate this popular gifting option into their philanthropic enterprise.   

Please contact us at 603-356-0311 or mdavenport@davenportbarr.com 

Washington Update   

 Lapsed Charitable IRA Rollover

On August 2, the Senate Finance Committee reported out the Family and Business Tax Cut Certainty Act of 2012. Most of the lapsed charitable provisions, including the Charitable IRA Rollover would be extended retroactively for all of 2012, and prospectively for all of 2013. This Act could be passed by the full Senate upon its return in September. However, the Senate is only scheduled to be in session for a short time before vacating again. It won't return until after the election on November 6.

The House leadership could (emphasis "could") take up this bill after the November election, or it could wait until next year (sounds like the Red Sox). Another possibility is that this act could be part of a more significant tax bill touted for 2013. Let's not hold our breath!

If we are so lucky to have the charitable IRA Rollover retroactively restored for 2012 in November or December, it will be too late for most donors as they will have already taken their required minimum distributions.

(source: Taxwise Giving, August 2012)