Retirees often spend far less than planners assume: married households withdraw about 2.1% of savings at 65, and singles 1.9%, well below the 4% rule.
A charitable remainder unitrust addresses that underspending by converting appreciated assets into a life-based payout stream while letting the trust sell and reinvest without immediate federal capital-gains tax at the trust level.
The structure must pass an IRS rule requiring the charitable remainder to equal at least 10% of each contribution, using population mortality tables and the Section 7520 rate when the trust is funded.
That creates a key asymmetry: if wealthy donors live more like annuitants than the general population, they may collect payments for longer than IRS valuation assumptions imply.
Unlike a fixed annuity, CRUT payments rise or fall with annually revalued assets and the remainder goes to charity, making longevity not just a retirement risk but part of the return.