PG Calc Blog What's the Difference Between the Gift Annuity Rate and the Discount Rate?

We get this question from time to time. The gift annuity payout rate is used to determine the annuity payment amounts. The annuity payout rate is typically a suggested rate by the American Council on Gift Annuities (ACGA), and the annuity payout rate is based on the life expectancy of the annuitant. An older annuitant would receive a higher annuity payout rate than a younger annuitant because the older annuitant has a shorter life expectancy. This means that the charity would pay more each year to an older annuitant with the thought that it would be for a fewer number of years.