- 10,313
What type of annuity and what type of payout?
- Thread starter
- #3
- 924
OK, my usual snide remark is deleted.
- 10,313
Still not enough info...
You are age 65? Or do you want income to start at age 65?
Im guessing you are a consumer? Tell us where you are and what you want to achieve and you will get much more relevant answers.
BoomBoom68
Expert
- 61
Sorry ... NJ ... Lump sum ... Start taking income at 70
- 10,313
I would recommend putting it in a 5 year FA or IA. Then look at a SPIA when you hit 70.
We have historically low interest rates right now. It is extremely likely that you will create a higher income by waiting to lock in the payout rate.
Midland has a 2.75% 5 year Fixed Annuity.
Athene has a 5 year Index Annuity that has a 2.55% Spread with uncapped gains.
In 5 years payout rates will likely be much higher. Wait until then to lock them in.
7 years ago I was selling variable annuities with living benefits...5% for life at 65 was the norm. Now we have FIAs at that level and higher...in a much lower rate environment.
SPIAs will certainly look better, but I can't see the FIA GMWB bands being significantly higher in the future.
(I can still appreciate and utilize your strategy though...)
- 10,313
I dont think you can compare a VA payout to an IA. Different reserve requirements, etc.
Also, with an IA, 9 times out of 10 the GMWB Value will be higher than the Account Value. Thats not true for VAs. So I would think more VAs w/ Rider walk at the end of surrender vs. IAs w/ rider. I would be very surprised if the actuarial values are the same on the two. Look at today's rates, IAs are above VAs. So I dont think that is an apples to apples comparison... but I could certainly be wrong...
But look at IA Payout & RollUp Rates just 3 or 4 years ago...
Payouts were a good 1% higher or more. Rollups were higher/longer too. And the reductions happened while rates were dropping. So I cant imagine them not going back up as rates rise.... unless the market as a whole overextended themselves actuarialy...
BoomBoom68
Expert
- 61
Ok ... Let me re-phrase ... Sorry guys ... I'm new to the annuity market so bear with me ... I was talking about what you/we get paid ... I have s friend of a friend of a friend who says he gets paid 9% on a Midland annuity ... My IMO has me at a 4.5% payout ... I guess my question is ... Is getting paid 9% on an annuity really out there?
