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LEARN MORE ABOUT: Retirement Annuities
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Income Annuities Look Better Now Than Any Time in My Career
As an experienced financial advisor with decades of knowledge in the industry, I can confidently say that income annuities have never looked better than they do now. With the current economic climate and the uncertainties brought about by the COVID-19 pandemic, these annuity products have proven themselves to be a reliable and attractive option for individuals seeking financial stability and guaranteed income during retirement.
One of the main reasons income annuities stand out in today’s market is their ability to provide a secure and steady stream of income. Unlike traditional investments, such as stocks or bonds, which can be subject to market volatility and fluctuations, income annuities offer a fixed income. This means that regardless of market conditions, retirees can count on a consistent paycheck every month, alleviating worries about outliving their savings.
Moreover, with interest rates at historic lows, income annuities have become more appealing than ever before. When purchasing an annuity, the interest rate at the time of purchase remains fixed throughout the contract period. Consequently, locking in a higher interest rate now can be particularly advantageous, as it provides a reliable source of income even in a low-rate environment. By taking advantage of the current rates, individuals can secure a higher level of income for the rest of their lives.
Additionally, income annuities offer greater flexibility and customization options than they did in the past. Annuity providers now offer a wide range of features that can be tailored to an individual’s needs and preferences. For instance, beneficiaries can be named to ensure a smooth transfer of funds to loved ones after the annuitant’s passing. Moreover, some annuity contracts offer inflation protection, which helps protect the purchasing power of the annuity payments against future increases in the cost of living.
Furthermore, income annuities can provide peace of mind during uncertain times. With the economic turmoil caused by the pandemic, many retirees have expressed concerns about the viability of their investment portfolios. Income annuities can serve as a reliable safety net, providing a stable income source that is not influenced by market fluctuations. This relieves retirees of the stress and anxiety associated with a volatile investment portfolio, allowing them to enjoy their retirement without constant financial worries.
As with any financial product, it is important to consider various factors and consult with a financial advisor before making a decision. However, it is clear that income annuities are currently presenting an attractive solution for those seeking financial security and a steady income stream during retirement. With their fixed income, the flexibility to tailor features to individual needs, and the peace of mind they offer, income annuities truly look better now than at any other time in my career.
Great video Josh. I love the 15 period certain for early retirement. Plus some piece of mind with monthly income.
Josh…Today os 2-6-2023…Annuities right now are paying even better than the numbers from 3 months ago, when you did this video.There is additional good news, in that depending of who your advisor is, there are now advisors (Fee Only, AUM types) that have access to no-commission annuities. (See the company DPL.)
I just used 52% of my retirement nest egg and purchased a lifetime income annuity with cash refund from NYL at 8.25% D.I.A stating at age 60. At age 73 I will be on N.Y.L dollar with S.S at 62 and the annuity income those two income sources will cover my living expense in retirement and the other 48% retirement nest egg can still grow. During retirement it's difficult to draw an income in a down market and still keep the same lifestyle.
Logic tells me that the only place to get any significant return is in annuity and treasuries; or protect what you have now. I am a Suspicious one.
I saw yesterday “New York Life” had instant annuities at 8.1… but down to 7.6 today.. I guess you like 6.0 this is gotta be a lot better…Thinking of delaying Social Security from 67 to 70 and use this for the extra living expenses…
If I achieve my year cash bucket by that age, the Annuitiy could work for me. Put in Cash Bucket and know you have approx $4592 per month. 5 years I am covered.
@Josh S: How about 10-year T-Note (4% +) versus a 10-year annuity ?
I think spending down that 250k over 15 years would be better plan. $1389. a month. And you can adjust that as needed. With annuity your locked in and have risk to principle.
I get SS and a Teacher Pension- $5,000 a month, I have a 403B but I am so hesitant to draw from it.
Fees are outrageous. Stay away!!!
Your annuity is only as good as the health, past and future, of the company providing the annuity.
I realized that the secret to making a million is saving for a better investment. I always tell myself you don't need that new Maserati or that vacation just yet. That mindset helped me make more money investing. For example last year I invested 80k in stocks (with the help of my Financial Advisor of course) and made about 246k, but guess what? I put it all back and traded with her again and now I'm rounding up close to a million.
The annuity rates are very high today because interest rates are high. I prefer to use an annuity to cover my fixed expenses for life and use my equity for inflation.
If we ever bought a SPIA, it would be joint life. I think some companies offer an inflation adjustment so the income increases 3-4% every year….how would we find out which companies offer this ?
i have been looking at some MYGAs. For 5 or 7 years they are paying around 5% interest. MYGAs are the insurance industry's CDs. MYGAs are not FDIC insured, but there is some state insurance backing it depending on your state.
I retired from Federal Service in May 2022 with a retirement annuity. 2 years prior to retirement, I purchased a $350k Mass Mutual annuity because I’m risk intolerant. The annuity will pay me and my wife for as long as we live. We are 62 and will draw from our Bucket A until age 65 whereby we will then draw from the Mass Mutual annuity. We can earn up to 4.5% cap on the annuity, and the annuity receives a 7% bump each year from purchase until we begin to use it at age 65. Friends told me I was being too conservative but it may have really worked out for us. We also have a bucket C for growth. With the 7.7% Federal Retirement annuity COLA and Social Security 8.7% COLA’s for 2023, we are quite happy and sleep well at night.
The fees are too high .
Very interesting info.
Josh, this looks good but what about all the fees annuities are known for?
The returns you mentioned and what's mentioned on the website for immediateannunites are for x number of years. A 25 percent return over 10 years works out to just 2% a year in gains.
How would taxes work? Thanks
Who can forget the good old days (2000)? American Skandia with its guaranteed 6.5% yield.
I’ve just done something like this with an investment. I’m glad to see that this is good thing!
Josh if you pay this annuity from an 401k I assume when you take the money out you have to pay the tax on $250k?
Almost all co workers where I work who chose to not stay in pension and have recently retired have taken life time annuity for whole accumulation via TIAA Cref. They look at it as pension- izing their accumulation.
As a good comparison, you should have compared life and 20 yr certain to the 20 year annuity. You compared the life and 20 with 15 year guarentee. If you have a history of dying young, or not in great health, take the guarentee. If you have a history of longevity and in good health, do the life certain. After the 20 years is where you start coming ahead.
Hi Josh, You can only get a lifetime annuity if your under 59 1/2. No period certain until your 59 1/2. The insurance Co. won't sell them. (I tried). Income annuities have great rates now. I sleep very well at night. Another thing to concider is you won't know your ROI until you and your wife die.
You and/or estate get 6% annual return on your investment for 20+ years, and at the end of the annuity they keep your initial principle. If you think 6% return is satisfactory for an ordinary guaranteed investment, my thinking is you should only invest in an income annuity if it provides 12% annual return; 6% investment return and an additional 6% (for first 20 years?) to compensate for the eventual forfeiture of the principle.
So when were full on socialist things are going to be getting better?? Were at a turning point and we may not be able to go by the past and what was
I'm finding that a CD ladder over 5yrs will do better.
Yes. Although very high maintenance costs, my principle is protected. My fund has still doubled from 12 years ago when I last contributed to it. . 25 percent of my investments are in IRA Roth annuity.
Thanks for the info Josh bc I'm going to be facing this decision to take the buyout or pension in a few years when I'm 62 and plan to retire. If I do determine that the lifetime annuity funded by the lump sum buyout, pays better than my pension, I'll take the buyout and buy an annuity. Only question is would doing so be a taxable event? If it is, then I guess I might be forced to take the company pension even if the monthly benefit is a little lower.
I'd appreciate to hear your thoughts.
Too much counter party risk
Please don't say 'eckspecially', I don't know how this got changed in the english language but it is way too common.