Comparing Current Annuity Rates and Investment Options
This article offers an overview of current annuity rates, highlighting recent industry trends, key investment options, and top providers. It emphasizes the importance of understanding various annuity types, rates, and future benefits to make informed retirement decisions. With insights into fixed and immediate annuities, readers can better evaluate which plan suits their financial goals, supported by recent market data and expert forecasts.
Historically, annuities have been more often sold than directly purchased. This industry, valued at approximately $2.8 trillion, has experienced steady growth driven largely by commission-based sales through insurance agents and brokers. Unfortunately, this often results in limited focus on the best interests of clients. Recently, many agents have stepped back from traditional annuities to prepare for upcoming regulations that require a fiduciary duty in retirement investment advice.
In 2017, annuity rates declined significantly, with variable annuity sales dropping to 10%, the lowest since 1998. Experts forecast continued decreases in current rates. Fixed income annuities generally offer more attractive returns, with rates between 5% and 6%. For instance, a $200,000 investment could yield around $12,000 annually, surpassing the $4,600 from a 10-year treasury. However, choices vary—some annuities offer deferred income, others provide immediate payouts.
Understanding average annuity rates, future value, and your specific needs is crucial in selecting the right plan, whether it’s an immediate, fixed, deferred, or variable annuity. In 2017, top immediate "life-only" annuities included offerings from American National, providing approximately $966 monthly at a 5.80% rate, totaling about $289,809 by age 85. Guardian was also notable, with monthly payments of around $964 at a 5.79% rate, leading to approximately $289,260 at 85 years old.
Disclaimer: Our blog offers diverse, practical information and research to help readers explore their topics of interest. However, articles are not meant to be definitive guides. The team is not responsible for discrepancies or inaccuracies across other platforms. Additionally, we may not feature all available schemes or offers, which could be more beneficial for individual needs.
