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Your credit report is an important document: It contains an in-depth record of how you’ve used credit in the past, and it can have a big impact on your life.

For example, when you apply for a loan, lenders usually check your credit report. That information contributes to their decision on whether to lend to you, as well as what interest rate to charge.

You might also have your credit checked by potential employers or when you are applying to get a mobile phone, rent a home, or perhaps connect some utilities.

Since credit reports can be so critical to many aspects of your life, it’s important that they be accurate. Unfortunately, these reports can have more errors than you may realize. An April 2024 Consumer Reports study found that 44% percent of people had errors on their credit reports. These mistakes ranged from relatively minor (like a typo in their name or address) to more significant (such as incorrect debt information that could be unfairly lowering their scores).

With that in mind, read on to learn how you can check your report and work to correct any errors you might find.

Getting a Credit Report

Like going in for a check-up once a year can benefit your physical health, regular credit report check-ups can benefit your financial health.

You can order a free credit report from each of the three major credit bureaus (Equifax®, Experian®, and TransUnion®) as often as weekly at AnnualCreditReport.com, a site run by the government. It’s a good idea to take advantage of this service, and to look over your reports at least annually.

Checking your credit report regularly can also make it easier to notice when the numbers look off or if something’s amiss. This could help you catch fraudulent activity.

Scanning a Credit Report

The best way to find an error in a credit report is to read through it thoroughly.

The Consumer Financial Protection Bureau (CFPB) recommends making sure that the following information is accurate:

•   Name

•   Social Security number

•   Current address

•   Current phone number

•   Previous addresses

•   Employment history (names, dates, locations)

•   Current bank accounts open

•   Bank account balances

•   Joint accounts

•   Accounts closed.

If any of the above is incorrect, the report has an error that you may want to dispute.

Common Credit Report Errors

While there are any number of errors that could crop up on a credit report, some are more likely than others. According to the CFPB, these are among the most common:

•  Typos or wrong information: In the personal information section, names could be misspelled, or addresses could just be plain wrong.

•  A similar name is assigned to your report: Instead of a typo, the credit report might be pulling in accounts and information of a person with a similar name to yours.

•  Wrong accounts: If an account is in your name but unfamiliar to you, this could be evidence of identity theft.

•  Closed accounts are still open: You may have closed a credit card recently, but the report shows it as still open.

•  You’re reported as the owner of the account, when you’re just an authorized user: If you’re simply an authorized user on a credit card, your credit report should reflect that.

•  False late payment: A credit report might show a late or delinquent payment when the account was paid on time.

•  Duplicate debts or accounts: Listing an account twice could make it look like more debt is owed, resulting in an incorrect credit report.

•  Incorrect balances: Account balances might show incorrect amounts.

•  Wrong credit limits: Misreported limits on credit card accounts can impact a credit score, even if they’re only off by a few hundred dollars.

How to Report an Error

Errors on credit reports don’t typically fix themselves. Account owners often have to be the ones to bring the error to the credit bureau’s attention.

Here are steps to take if you find an error in one of your reports.

1. Confirm the error is present on other credit reports.

Credit scores may vary across credit reporting bureaus, but all the core information should be the same. That means if there’s an error on one, it’s best to check if it’s on the other two. You can order free reports from all three bureaus from AnnualCreditReport.com and check each report against the others.

2. Gathering evidence.

To prove an element of the credit report is wrong, there needs to be evidence to the contrary. That means you’ll want to collect supporting documentation that shows the report has an error, whether that’s a recent account statement, ID, or a loan document. Having this documentation on hand can make the process move faster.

3. Report the error to the credit reporting company.

To resolve the error, you’ll want to file a formal dispute with the credit reporting company. You can contact them by mail, phone, or online. The CFPB offers more details on how to file a dispute.

Be sure to include all documentation of the error, in addition to proper identification.

Here’s how to contact each credit reporting company:

Equifax

Online: Equifax.com

Mail:

Equifax Information Services LLC
P.O. Box 740256
Atlanta, GA 30374

Phone: (888) 378-4329)

Experian

Online: Experian.com

Mail:

Experian
P.O. Box 4500
Allen, TX 75013

Phone: (855) 414-6048

Transunion

Online: Transunion.com

Mail:

TransUnion Consumer Solutions
PO Box 2000
Chester, PA 19016

Phone: (800) 916-8800

4. Contact the furnisher (if applicable).

A furnisher is a company that gives the credit reporting bureau information for the report. If the report’s mistake is an error from a bank or credit card company, you can also reach out to the furnisher to amend its mistake. You can contact the company through the mail (the address can be found on the credit report), or reach out to customer service by phone or online.

If the furnisher corrects the mistake, it could, in turn, update the credit report. But to play it safe, reach out to both parties.

5. Reach out to the FTC to report identity theft (if applicable).

If you notice an error that suggests identity theft (such as unknown accounts or unfamiliar debt), it’s a good idea to sign up with the Federal Trade Commission’s (FTC’s) IdentityTheft.gov site in addition to alerting the credit bureaus. The FTC’s tool can help you create a recovery plan and figure out the next steps.

6. Sit tight and wait for a response.

Once you send a credit dispute to a bureau or furnisher, you can expect to hear back within 30 days, typically by mail.

When a credit bureau receives a dispute, they have one of two choices: agree or disagree. If the bureau agrees, they will correct the error and send a new credit report.

If the bureau disagrees and doesn’t believe there’s an error, they won’t remove it from the report. In some cases, they may not agree there’s an error because there’s a delay in information getting to them. For example, a recently canceled credit card might not show up as canceled in their records yet. Changes like that might take some time.

However, if you’re confident of the error and a credit bureau doesn’t agree, that’s not your last stop.

You can also reach out to the CFPB to file an official complaint . The complaint should include all documentation of the dispute. Once the CFPB receives the complaint, you can keep track of its progress on the organization’s website.

The Takeaway

Checking your credit reports can help you ensure that the information used to calculate your credit scores is accurate and up to date. It can also tip you off to fraud or identity theft.
It’s easy and free to gain access to your credit reports from the three major bureaus. Taking advantage of this service (and reporting any errors you may come across) can be key to maintaining good credit, and good overall financial health.

Another way to maintain good financial health is to pay your bills on time (which adds positive information to your credit reports), and to keep track of your spending. The right banking partner can help with both.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What are common errors on a credit report?

Common errors on credit reports include incorrect personal information (such as addresses or Social Security numbers), accounts that don’t belong to you, late payments that were actually on time, and incorrect credit limits or balances. Errors can also include closed accounts listed as open and duplicate entries.
These mistakes can negatively impact your credit, so it’s important to review your report regularly and dispute any inaccuracies.

Do you have rights when your credit report is wrong?

Yes, you have rights when your credit report is wrong. Under the Fair Credit Reporting Act, you can dispute inaccuracies with the relevant credit bureau(s). The bureau must investigate your dispute, forward the dispute and all relevant information you provided to the company that provided the information about you, and report the results back to you.

How to fix credit report errors fast?

To fix credit report errors quickly, start by obtaining a free copy of your report from all three major credit bureaus. Identify the errors and gather documentation to support your dispute. Submit a formal dispute using the credit bureaus’ online dispute systems for faster processing. It’s also a good idea to send a formal dispute letter to the company that furnished the incorrect information. Follow up with both the credit bureaus and the company to make sure your dispute gets resolved.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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SOBNK-Q225-076

Many people believe you must have a college degree to land a secure, high-paying job and build a successful career. However, going to college can be expensive in its own right and require taking on significant debt.

That’s why it may be wise to consider the rewarding and well-paying jobs that are possible without a degree. Instead of requiring an associate or bachelor’s degree, these careers often vet interested candidates through a certificate program, an apprenticeship, and/or on-the-job training.

Read on to learn about nine careers that pay well but don’t require a college degree.

1. Elevator Technician

Though it may appear as a niche industry, there are approximately 24,400 people employed as elevator and escalator installers and repairers in the United States.

To enter the field, you generally need to complete a four- to five-year apprenticeship program to learn relevant trade skills. You can apply for apprenticeships with unions, contractors, and industry associations, such as the National Elevator Industry Educational Program. Most apprenticeship programs require a high school diploma or GED certificate.

You can also choose to earn certification. The National Association of Elevator Contractors offers two types of certification: Certified Elevator Technician (CET) and Certified Accessibility and Private Residence Lift Technician (CAT). CET certification requires you to complete a training program or have 10,000 hours of on-the-job training, while CAT certification requires you to have completed a training program or have 6,000 hours of on-the-job training.

Although training to become an elevator technician can take many years, this field has some of the best jobs without a degree from a financial standpoint. The median salary for elevator technicians was $106,580 per year in 2024, according to the U.S. Bureau of Labor Statistics (BLS).

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2. Computer Programmer

Obtaining a bachelor’s or associate’s degree in computer science or a related field are common paths to computer programmer jobs. However, it’s still possible to forgo a formal degree program to enter this career path with the right skills and knowledge of programming languages, such as Python, JavaScript, and C.

There are a variety of platforms offering free coding classes for beginner and experienced programmers, including Coursera, Udemy, Codecademy, and edX. In some cases, these courses are drawn directly from top universities.

With a median salary of $98,670 per year, computer programming is one of the top-earning jobs without a degree.

Recommended: How to Make Money Fast

3. Commercial Pilot

There are several levels of certification for pilots, ranging from recreational purposes to a career flying commercial and passenger aircraft. Becoming a commercial pilot requires a high school diploma or equivalent and a commercial pilot’s license from the Federal Aviation Administration (FAA).

The commercial pilot certification process involves a minimum of 250 hours of flight time in varying conditions and in-depth training requirements. Commercial airlines often have stricter requirements, however, including at least 1,000 or 2,000 hours of flight time.

Commercial airline pilots are able to operate charter flights, rescue operations, and aircraft used in large-scale agriculture and aerial photography. They can also work for commercial airlines, though the major airlines often prefer to hire candidates with college degrees.

The median annual wage for commercial pilots was $198,100 in 2024. This is competitive with many of the highest paying jobs out of college.

4. Real Estate Broker

Looking for high-paying jobs without a degree or serious mechanical or tech skills? A career in real estate could be an option worth considering.

Every state has its own set of requirements for obtaining a real estate license. Generally speaking, this entails taking a set module of coursework and passing an exam.

Once certified, real estate agents are authorized to help clients buy, sell, and rent real estate for a sponsoring broker or brokerage firm. Depending on the state, real estate salespersons may also need to complete additional training or work a certain number of years to become a real estate broker.

The median salary for a real estate sales agent is approximately $58,960.

5. Flight Attendant

The airline industry offers other high-paying jobs, with no degree required. Working as a flight attendant can be a well-paying job that also affords the ability to travel.

Requirements can vary somewhat between airline carriers, but some universal qualifications include being at least 18 years old, passing a background check, and holding a valid passport.

Flight attendants may also need to pass physical and medical evaluations and meet certain vision and height requirements based on the airline.

Once hired, flight attendants will complete training with the airline, which typically runs from three to six weeks. Training can cover emergency procedures, first-aid, and soft skills related to customer service.

The median flight attendant salary in 2024 was $67,130 per year.

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6. Electrician

Instead of finding a job that pays for your college degree, how about getting paid for learning on the job? Through paid apprenticeship and education programs, that’s exactly what most electricians do to begin their careers. Typically, apprenticeships span four to five years and include a combination of classroom instruction and paid on-the-job training every year.

Rules for electrician apprenticeship programs vary by state and location. A handful of industry groups, such as Independent Electrical Contractors and the National Electric Contractors Association, provide resources for finding apprenticeship programs.

Electrician earnings are impacted by specialization and location, but the median wages for the industry totaled $62,350 per year in 2024.

Recommended: How to Make Money From Home

7. Plumber

Installing and repairing piping and plumbing fixtures can be counted among jobs that pay well without a degree. Plumbers account for around 473,400 people in the workforce.

The path to becoming a plumber parallels the apprenticeship and training requirements for electricians. A standard plumber apprenticeship spans four to five years and requires 2,000 hours of on-the-job training and classroom coursework. In most cases, a high school diploma or its equivalent is required to be accepted into a program. You can find apprenticeships through plumbing companies and trade unions.

Plumbers can be called in on evenings and weekends to respond to emergencies, such as burst pipes. This, among other factors, is why the median annual pay for plumbers ($62,970) is higher than some other trades.

8. Wind Turbine Technician

Considering careers without a degree but worried about long-term prospects? A job in wind energy could be a safe bet. Over roughly the next ten years, the BLS projects wind turbine technician jobs to grow by 60%, making it one of the fastest growing occupations in the United States.

Wind turbine technicians may perform tasks related to maintenance, repair, inspection, and analysis of wind energy systems. Community colleges and technical schools often offer associate’s degrees and certificates in wind energy technology that can improve a candidate’s prospects.

Upon hire, technicians usually complete about 12 months of on-the-job training related to electrical safety, equipment operation, and climbing wind towers. Wages can vary by location, but the median pay for wind turbine technicians was $62,580 per year in 2024.

9. Court Reporter

Court reporters type word-for-word transcriptions of a trial, deposition, or other legal proceeding, using shorthand, machine shorthand, or voice writing equipment. They may also be asked to read back portions of the transcript by judges.

Court reporters often work with private law firms or local, state and government agencies. There is some training required, but not a four-year college degree. Court reporting programs may be offered at community colleges, technical schools, or court reporter schools.

To enter a program, you may need to take an entrance exam that tests typing and English language skills. In 2024, the median income for a court reporter was $67,310 per year.

The Takeaway

Finding a high-paying and meaningful job doesn’t always require going to college.

But, while you may not need a bachelor’s degree for many of these rewarding careers, you will likely need some kind of education, such as an associate degree, some trade school, or other specific certifications or apprenticeships.

Whichever career path you choose, it can be a good idea to factor in education costs, and to start saving up these expenses as early as you can.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What job without a degree pays the most?

High-paying jobs without a degree include roles like elevator technician, computer programer, and commercial pilot. These positions often require specialized training, certifications, or significant experience. Other lucrative options include real estate agent, plumber, electrician, and wind turbine technician. While a degree isn’t required, these jobs may demand extensive on-the-job training and licensing.

How to make $100,000 without a degree?

It’s possible to earn $100,000 without a degree through skilled trades, entrepreneurship, or high-demand industries. Examples include becoming a pilot, elevator technician, and computer programmer. Sales jobs like real estate or insurance can also be lucrative with strong performance. Starting a business or freelancing can also be paths to a six-figure income.

Can you make $30 an hour without a degree?

Yes, many jobs pay $30 per hour without requiring a degree. Skilled trades like plumbing or electrical work, work often start near or above this rate. Tech roles like web development, digital marketing, or IT support can also pay this much if you build skills through online courses or bootcamps. Other roles that can pay $30 without a degree include: sales representative, writer, insurance claims adjuster, and building inspector.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.

SOBNK-Q225-083

A charitable gift annuity is a contract with a charitable organization that allows a donor (or donors) to make a contribution in exchange for a partial tax deduction, and a fixed income payout for life.

A charitable gift annuity combines aspects of charitable giving — which includes the satisfaction of giving to a meaningful cause, as well as a tax deduction — with the guaranteed, lifelong income stream that comes from an annuity.

When the donor and the spouse or beneficiary pass, any funds remaining in the charitable gift annuity are donated to the organization.

What Is a Charitable Gift Annuity?

A charitable gift annuity allows a donor to make a contribution to a charity in exchange for a fixed monthly income for both the donor and an optional additional beneficiary, often a spouse. This stream of payments may start immediately, or after an agreed-upon period of time, and can be a steady source of income in retirement that is guaranteed through the annuity until all listed beneficiaries die.

Many organizations, such as universities and other large nonprofit entities, offer charitable gift annuity contracts. Depending on the organization, donations can be made in cash, securities, or property. The assets are invested in an account on behalf of the donor(s); the donor takes a partial tax deduction.

Depending on the donor’s age and life expectancy, they will receive fixed payments (not variable, like some annuities), without inflation adjustments, for the rest of their life.

However, there are important tax considerations to think through before purchasing a charitable gift annuity — or any annuity, for that matter.

Understanding the Concept of Annuities

To fully understand charitable gift annuities, it’s important to have a background on annuities in general.

An annuity is a type of financial product used to create an income stream during retirement. It’s a contract — generally between the beneficiary and an insurance company or bank — that guarantees the buyer a set monthly payment in exchange for a lump sum deposit (although other terms may apply).

Recommended: What is an Annuity, Exactly?

Sometimes, payments into the annuity can be made directly from an existing retirement account like a traditional IRA account, if you open an IRA, or from 401(k). Then, the annuity provider invests the money and makes payments back to the buyer once the retirement period starts. Payments might last for a set amount of time, like 10 years, or for the rest of the beneficiary’s life.

For the provider, an annuity is basically a wager against the buyer’s life expectancy. If the buyer passes away before the funds have been paid back to them entirely, the annuity provider gets to keep the remainder.

With a charitable gift annuity, however, it works a little bit differently.

How Does a Charitable Gift Annuity Work?

With a charitable gift annuity, the contract is drawn up not between the buyer and an insurance company or bank (as with a standard annuity), but between a donor and a qualified charity. Organizations may have age or donation amount requirements.

The donor makes a gift to the charity, and the money is set aside in a reserve account, where it’s invested. Money from the reserve account — both principal and interest — are used to pay out the fixed monthly stipend the beneficiary or beneficiaries receive. Payments are generally not adjusted for inflation, but remain steady throughout the donor’s lifetime.

Charitable annuity payments are made to the donor and beneficiary until both have passed away — at which point, any remaining money is kept by the charity and used for charitable purposes.

In this way, the buyer of a charitable gift annuity can make a gift to a cause they support, all while helping themselves create a secure and reliable retirement income in the meantime.

Tax Implications of Using a Charitable Gift Annuity

The tax treatment of both the donation to the charity and the payments can be complicated; investors must be sure to read the fine print and/or consult with a professional.

The initial donation might qualify for a partial tax deduction that year, based on the estimated remainder amount the charity may receive when the donor dies. If the donor can’t take a tax deduction because the donation amount exceeds income for that year, it’s possible to carry the deduction forward for up to five years.

A gift of appreciated securities or other assets may help the donor avoid a portion of the capital gains tax they would have owed if they had sold those assets; but some capital gains are factored in over time.

By and large the annuity payments are taxed as income, although a portion of the initial payments may be tax free.

What Are the Benefits of Charitable Gift Annuities?

Along with helping donors support a charity of their choosing both during and after life, charitable annuities have some other features that can make them attractive retirement vehicles for some people.

Non-Cash Donations

Many charitable gift annuities allow donors to contribute non-cash donations, including fixed-income securities and investments — and sometimes tangible assets like art and real estate. Having this option means that donors might save money on capital gains taxes.

Annuity income is generally taxed as normal income at both the federal and state levels, although as noted a portion of the payments may be tax free, based on your statistical life expectancy. And by donating real assets, buyers of charitable gift annuities might avoid paying a portion of capital gains taxes on their donation. (That said, regular income tax will still apply on any and all income received through the annuity.)

Payment Flexibility

Another nice thing about charitable gift annuities is the flexibility buyers have in receiving the payments when there is more than one beneficiary. Payments can either be structured to go to both beneficiaries at once, or to only kick in for the second beneficiary after the death of the first.

In any case, as noted, any leftover funds will be donated to the charity when all beneficiaries have passed away.

Alternatives to Charitable Gift Annuities

Although charitable gift annuities can be a valuable tool, they may not be the right choice for every investor for a variety of reasons, including:

•   Gift annuities tend to offer lower rates than most commercial annuity types, so they might not maximize your retirement income.

•   If you don’t have physical assets to donate, there may be more efficient ways to invest your cash.

•   Income streams from any type of annuity are usually still subject to federal and state income tax, unless they’ve been purchased using a Roth IRA or Roth 401(k), whose funds have already been taxed.

For investors who’d like more control over their investments, and fewer restrictions around when and how they can access the money, there are other places to put your retirement money.

One option is to take advantage of an employer-sponsored retirement account like a 401(k) at work. And almost anyone can bolster their retirement savings by investing in an IRA. Those under set income limits can invest in a Roth IRA, which will allow them to take tax-free distributions once they reach retirement age.

Even if you choose an alternative retirement option, you can continue to make donating to charities part of your financial plan. It may even be possible to set aside money for charitable giving while on a tight budget.

The Takeaway

A charitable gift annuity enables a donor to contribute money to a charity, with the promise of getting regular payments in return later in life — for themselves and an optional beneficiary. Part of the initial payment, as well as any leftover funds, are donated to the charity after all the beneficiaries have died, making it a good way to secure retirement income while supporting a cause at the same time.

While a charitable annuity may be attractive to some investors, other types of retirement savings may allow an individual more nuanced control of their investments and more flexibility in the size and frequency of their withdrawals upon retirement.

Prepare for your retirement with an individual retirement account (IRA). It’s easy to get started when you open a traditional or Roth IRA with SoFi. Whether you prefer a hands-on self-directed IRA through SoFi Securities or an automated robo IRA with SoFi Wealth, you can build a portfolio to help support your long-term goals while gaining access to tax-advantaged savings strategies.

FAQ

How do you pick a good charitable gift annuity?

The right charitable gift annuity for you depends on your charitable giving goals, the rate of return on the investment (which determines the income payments), and other terms that may or may not be beneficial.

Is a charitable gift annuity a smart idea?

It depends. A charitable gift annuity offers the advantage of providing the donor with a fixed, guaranteed income stream for life — as well as a meaningful contribution to an important cause. That said, investors seeking retirement income may find higher rates through regular annuities or other options.

How much does a charitable gift annuity pay?

The terms of charitable gift annuities vary widely, depending on the organization. Some offer modest rates of return, others pay more. Donors must also factor in their age and life expectancy at the time of the donation, as well as the total amount of the donation itself.