How to Plan for a Financially Secure Future 

Will you have enough income during retirement, without spending too much of your principal?

It may reassure you to know that many retirees live comfortably on a lower income than people who work full time. When you retire, you tend to spend less on clothing, transportation, food and other daily expenses. You also generally pay less in taxes because of your lower income and the special tax breaks available to people aged 65 and older. Plus, if you are like many people, you can count on income from pensions, Social Security, investments and perhaps even earnings from a part-time job.

But you may still wonder if your retirement income will be adequate.


A Plan to Make Your Assets More Productive With Minimal Risk
One attractive charitable plan that can ensure your personal financial future and help us achieve our important goals is a unitrust. Under this plan, you:

  1. Make a gift to Willamette, which we will receive in the future,
  2. Receive an uninterrupted stream of payments for life, and
  3. Benefit from an immediate and valuable tax deduction.
For example, suppose you would like to receive payments during your lifetime based on a specific percentage of the fair market value of the assets you select. (You also have the right to name another person to enjoy an income for life if that person survives you.) To accomplish this, you create a charitable remainder unitrust, funding it with those assets. Cash and marketable securities are the most common types of assets used, but real estate and other types of nonliquid assets may also be included. You choose the percentage of income at the outset, and your income for each year is calculated by multiplying this rate by the latest annual valuation of the trust's assets. Thus, your income will vary each year with the value of the underlying assets.

Charitable Remainder Trust
You
You
1
You give cash or property to the trust.
2
You receive an income tax deduction and named individuals receive income for life.
Charitable Remainder Trust
3
Remainder goes to Willamette University after your lifetime.
Willamette University


You will enjoy a partial charitable deduction in the year you fund the trust. If you cannot use your full deduction in the year you fund the trust, you will have five additional years to use the balance. At the termination of the trust, the assets are distributed to us to support our mission.

Example: Alice, aged 60, contributes $100,000 in cash to a unitrust, arranging to receive 6 percent of the fair market value of the unitrust assets each year. The first year she is entitled to $6,000 (6 percent of $100,000). At the time of the second valuation, the unitrust portfolio is worth $110,000. For that year, Alice is paid $6,600 (6 percent of $110,000). If the trust value had decreased to $90,000 at the time of the second valuation, Alice would have received $5,400 (6 percent of $90,000). In each subsequent year, the same process is followed. In the year she creates the unitrust, Alice is entitled to an income tax charitable deduction of $32,522* (deductible up to 50 percent of her adjusted gross income). If necessary, she has an additional five years to use up the deduction.

An Open Invitation
You are invited to create your own distinctive plan for a more financially secure future. You can increase your cash flow and decrease your current income tax bill with the satisfying assurance that your benevolence will perpetuate our good work. Contact Lori L. Hoby at (866) 204-8102 or lhoby@willamette.edu for help in choosing a plan that's right for you.


*Based on a 2.4 percent charitable midterm federal rate?deductions vary based on income earned.