Today’s Best Annuities

Things have changed since our last survey of the annuity market in August and September 2014. On pages 7 and 8 you’ll see an update of what we found are today’s best yields, distributions, or other features available in different annuity categories. We discussed each of these different types of annuities in past visits, and you can find these discussions in the Annuity Watch section of the Archive on the members’ section of the web site.

You’ll see that since our last survey, yields are down almost across the board. Compared with seven months ago, you’ll receive lower guaranteed interest rates on fixed deferred annuities and lower income from immediate annuities and longevity annuities.

Some people avoid immediate annuities and longevity annuities because of their use-it-or-lose-it feature. Your income is guaranteed for life, but if you die before life expectancy, your estate and heirs don’t receive anything. In the tables we show how much income you give up by selecting a refund of premium rider.

If you believe rates are likely to rise and don’t want to lock in today’s low yields, a good alternative is to put the money into a fixed indexed annuity, says Todd Phillips of Phillips Financial Services (888-892-1102) who compiled the data in the tables. (See our April 2014 visit for a detailed discussion of fixed indexed annuities.) You can convert later when rates are higher to an immediate annuity and you want a steady stream of income. Or you can stay in the FIA and take withdrawals as needed. The idea is to protect yourself from market losses but position yourself for positive returns if the bull market continues.

But don’t settle for any FIA and work with an agent who deals with multiple insurers. Terms and costs differ substantially among insurers and can change quickly. Todd believes the Athene Balance Choice is one of the best FIA options now. If you want details on this or any other annuity, or want to know the latest on annuities, give Todd a call.