Annuity Rates update April 2012
Immediate Annuity Rates This post will update annuity rates for immediate annuities. First a quick review of immediate annuities and exactly what they do. An immediate annuity is a single deposit by the investor with an insurance company in return for monthly payments for a period of time. That period of time can be anywhere from five years to life. Although I’ve not seen statistics on this, I believe most people take the lifetime option as this is the most attractive feature of immediate annuities. They can act like a second Social Security check, providing a payment for life that you cannot outlive. The first question an investor may have is what are the annuities rates I can get. But this question assumes you can compare the annuity rate to other investments, which you cannot. When investors, economists and accountants analyze an investment, they calculate the internal rate of return. The internal rate of return on an immediate annuities is terrible, about 1% annually. What person in their right mind would make a investment lasting 20 or 30 years at 1%? The annuity rates on immediate annuities will always pale when analyzed against other investments on an internal rate of [...]
Categories: annuity rates Tags:
Annuity Rates Online 2012
Here are some valuable and useful sources for annuity rates in this post. If you go looking for “annuity rates,” you will come across mostly sites that require you to enter your personal information. You will then get called by 4 insurance people trying to sell you an annuity. Would you like to get current annuity rates and avoid that? Here are sites that show you the annuity quotes without the need to complete any on-line form or get any calls. Note that you need to understand different types of annuities and how they work or else these annuity uotes won’t be of much value to you. You cannot buy directly from the annuity company anyway–almost all annuities must be purchased through an annuity agent. “CD-Type” or “Multi-year Guarantee” Annuity Rates These first sites list what are called “CD Type” annuity rates or “multi-year guarantee” annuity rates. These annuities guarantee a fixed rate for a period of years, typically anywhere from 3 to 10 years. The typical fixed annuity or deferred annuity, that is not of this multi-year guarantee variety, has a rate that changes annually so you never know what you will get after the first year. “CD Type” [...]
Categories: annuity rates Tags: 2011, annuity rates, CD type, multi year guarantee
Annuity Rates
Some commenters on the blog have asked about where to find annuity rates. Here are sources for annuity rates: any annuity agent comparative annuity reports (www.comparativeannuityreports.com) Immediate annuity rates http://www.annuityshopper.com/calculators/immediateannuities/ Enjoy. Updated: annuity rates online For agents seeking to expand their annuity business
Categories: annuity rates Tags: annuity rates
Tread Carefully when Comparing Bonus Annuity Rates
Rebates, longer-term financing, and other temptations are often used by automakers to get you to buy or lease a new car. But these complications obfuscate how much you really pay in financing costs. Along a similar line, fixed annuity companies frequently have incentives to reward you for investing. One of the most widely used is the “bonus rate.” But if you aren’t careful, you might not get what you bargained for. Bonus rates look good at first buy may cloud your ability to see what you really earn. The bonus annuity rate is generally given during the first year or few years that you own the fixed annuity and can significantly enhance the initial return. Furthermore, the bonus increases the annuity’s principal on which future interest will be credited. Therefore, a bonus could possibly boost the overall yield over the contract’s term. However, the company may be offering this reward because you are expected to keep the contract for up to 10 years. If you remove your investment before that time is up, you may be hit with surrender charges that could more than wipe out the bonus you had received. Additionally, some annuities with high bonuses may not have [...]
Categories: annuity rates Tags: annuity rates, bonus annuity, bonus rate
What’s the “Real” Fixed Annuity Rate?
Annuity rates can often change in tandem with the rates paid on other fixed interest investments. However, whenever rates drop, the real return on annuities could potentially be higher than other interest-paying assets. First of all, fixed deferred annuities typically promise a minimum rate of return for the term of the contract. For example, if you select a fixed annuitythat locks in current rates for five years, you will earn a competitive rate for the first five contract years. After that, you will receive no less than the minimum rate, regardless of how low market rates might possibly go. Such an annuity is called a multi-year guarantee annuity. Second, annuities are tax-deferred investments. That means the earnings on your annuity’s principal will compound without you owing current taxes. Other fixed income investments, such as CDs, are taxed as interest is credited (of course, CDs are FDIC insured for up to $250,000 per account per beneficiary through 12/31/09). Even if you reinvest the interest, you have to pay income tax. This reduces the effective rate of return on your taxable fixed interest investments. Please note, however, that annuities are designed for long-term investing and ordinary federal income taxes and a 10% tax [...]
Categories: annuity rates Tags: fixed annuity rate
Seniors Can Protect themselves from Declining Short Term Rates
Fixed annuities can be popular among seniors. They are easy to buy, you know exactly how long you must tie up your money, and the IRS will let you defer the income tax on the earnings. But one point that may have stopped you from investing in an annuity is that some traditional fixed annuities do not lock in the interest rate for the duration of the contract. This means that after the initial period, which is typically one year, the return that the annuity company pays could possibly go higher or lower each year thereafter. However, there is a type of annuity that fixes the return for the entire contract’s term. This way you will know exactly how much you’ll earn while you own the contract–see the fixed annuity calculator for a projection. CD-annuities (also known as multi-year guarantee annuities) provide level interest rates for the entire term so you won’t get any surprise notices during this time. You select the term, which generally ranges from three to ten years when you make the investment. At the end of the term, you will usually have a 30-day window to withdraw all or part of your money, or renew the contract [...]
Categories: annuity rates, fixed annnuities Tags: cd annuity, mutli-year guranatee
Annuity Rates
An annuity is an investment which an individual makes to ensure a lifetime income. There are different types of annuities. These are Indexed annuity, variable annuity, fixed annuity, immediate annuity, deferred annuity and retirement annuity. Equity Indexed annuities grow depending upon the performance of an underlying stock market index. It is a good source of investment if the stock market is in an upward cycle. In an indexed annuity the principal is guaranteed and the profits are locked in. As a result investors do not lose their money. The annualized rate of return for these kinds of products can be anything between 5% to 9%. The best time to invest is when the stock market is depressed. A variable annuity allows an investor to grow investments in portfolios. This is one of the most preferred methods of annuity investments because the money is invested in conservative stocks and the payments are tax deferred. Investors can choose the method of payouts. The expected rate of return for variable annuity is 8% to 10% assuming equity accounts are selected. Fixed income annuities come with a time frame of 5 to 15 years. This type of annuity is more suited for conservative investors to ensure that [...]
Categories: annuity rates Tags: annuity basics, annuity rates, types of annuities
Annuity Rate of Various Annuities
An annuity is an investment which an individual makes to grow principal and optionally insure a lifetime income. There are different types of annuities with different annuity rates. These are Indexed annuity, Variable annuity, Fixed annuity, Immediate Annuity, Deferred Annuity and Retirement annuity. Equity Indexed annuities grow depending upon a predetermined annuity rate or any stock market index. It is a good source of investment if the stock market is in an upward cycle. In an indexed annuity the principal is guaranteed and the profits are locked in. As a result investors do not lose their money. The annualized rate of return for these kinds of products can be anything between 4% to 9%. The annuity rate of return is typically higher than a traditional fixed annuity. A variable annuity allows an investor to grow investments in portfolios. The annuity rate of return is not fixed. This is one of the most preferred methods of annuity investments because the money is invested in conservative stocks and the payments are tax deferred. Investors can choose the method of payouts. The expected rate of return for variable annuity is 7%-10%. Fixed income annuities come with a time frame of 5 to 15 years. This [...]
Categories: annuity rates Tags: annuity rates
Annuity Rate Renewal Time
If you bought a fixed deferred annuity a few years ago, you may be looking at the end of your initial annuity rate guarantee, and the renewal annuity rates could be lower than they were when you first made the investment. Some fixed annuities leave you no option other than accepting the current one-year rate, or transferring the annuity to another one so you can lock in a new, long-term annuity rate guarantee. However, a one-year annuity rate lock may not be such a bad idea. You could earn a reasonable return and wait until next year to see where interest rates have gone before deciding to renew for another year, or explore other options. If your contract surrender period has ended and the renewal annuity rates are low, the annuity company might offer you a new multi-year (usually five to 10 year) annuity rate guarantee period. This could be their way of trying to keep your business rather than lose you to another insurance company. You could, however, possibly face a new round of surrender charges by doing this. (Surrender schedules and rates vary among companies.) It might also be time to take money from your annuity through annuitization (payments over [...]
Categories: annuity rates Tags: annuity rates, annuity renewal rate, annuity withdrawals
