Best Annuity Rates for All Types of Annuities

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Introduction

Annuities are financial products designed to provide retirees with a steady stream of income. They come in various forms, each offering unique features and benefits tailored to suit individual retirement needs. In this article, we will discuss the top 10 annuity rates for all types of annuities, including fixed annuities, variable annuities, indexed annuities, and immediate annuities. We will be covering specific rates in this article; and will delve into the factors that affect these rates and the advantages and disadvantages of each type of annuity.

Fixed Annuities

Fixed annuities offer a guaranteed interest rate for a predetermined period, providing a stable and secure income for retirees. When comparing fixed annuity rates, consider the following factors:

  1. Contract term: The length of the contract will affect the interest rate offered. Longer terms usually provide higher interest rates. However, tying up your money for an extended period can also increase the risk of inflation eroding your purchasing power over time.
  2. Financial strength of the issuing company: The credit rating and financial stability of the insurance company are essential as they guarantee the payment of the annuity. Look for companies with strong financial ratings from independent agencies like A.M. Best, Standard & Poor’s, or Moody’s.
  3. Additional features: Some fixed annuities offer optional benefits such as inflation protection or death benefits, which may impact the interest rate. These riders can provide added security but often come at an additional cost.

Advantages

  • Guaranteed and predictable income: Fixed annuities provide a stable income stream that doesn’t fluctuate with market conditions.
  • Low investment risk: The principal is protected, and returns are guaranteed, making fixed annuities a safer investment option.
  • Protection of principal: The initial investment remains intact, regardless of market fluctuations.

Disadvantages

  • Limited growth potential: The returns on fixed annuities are generally lower than other investment options due to their conservative nature.
  • Inflation risk: Over time, inflation may erode the purchasing power of the fixed income stream, reducing its value in real terms.
  • Less flexibility than other types of annuities: Fixed annuities typically have limited options for withdrawal and payout structures.

Strategies for finding the best fixed annuity rates:

  • Shop around and compare rates from multiple insurance companies.
  • Consider shorter-term contracts, as they may offer higher rates in a rising interest rate environment.
  • Evaluate the benefits of optional riders and weigh their costs against the added security they provide.

Best Fixed Annuity Rates (Updated as of March 2023)

When it comes to fixed annuities, Multi-Year Guaranteed Annuities (MYGAs) and Traditional fixed annuities are two popular types of annuities, each with its own features and benefits. The primary difference between traditional fixed annuities and Multi-Year Guaranteed Annuities (MYGAs) lies in the interest rate guarantee period. 

MYGAs offer a fixed interest rate for the entire term of the contract, usually ranging from 3 to 10 years. This provides the annuitant with a predictable, stable return on their investment throughout the contract term, but with limited flexibility in adapting to changing market conditions. On the other hand, Traditional fixed annuities guarantee a minimum interest rate for a short term, typically one year. After this period, the insurance company may adjust the interest rate periodically, subject to a guaranteed minimum rate.

The below table describes the best annuity rates for MYGAs, updated as of March 2023. It is important to know that lower-rated companies tend to offer higher rates to compensate for the additional risk that an annuitant takes (remember that annuities are beneficial only as long as the companies providing them maintain solvency). So, I will be mentioning the top MYGA rates for 1) Annuities that are A-rated and above and 2) Annuities that are rated below A separately. 

Best Rated MYGAs (Only A-rated and above) as of 22nd March 2023

ProductCompanyAM BestMinimum PremiumYearsGuaranteed Yield
Ibexis MYGA PlusIbexis LifeA-$100,00055.80%
Synergy ChoiceAspidaA-$100,00075.60%
ECAccumulateSBLIA$25,00055.50%
Palladium MYGAAmerican NationalA$250,00065.45%
Platinum AssureAmerico Financial A$25,00055.40%
Multi SelectOxford LifeA$20,00065.35%
Milestone MYGASagicor LifeA-$100,00055.30%
RetireMax SecureLSWA+$100,00055.25%
Athene MaxRateAtheneA$100,00075.25%
HarbourViewOceanview LifeA-$80,00065.20%
FG Guarantee PlatinumFidelity and Guarantee LifeA-$20,00075.15%
GuaranteeShieldAmerican EquityA-$100,00054.90%

Exhibit 1: Best Rated MYGAs (Only A-rated and above) as of 22nd March 2023

Note that I have listed one MYGA product of each annuity company that offers the highest rate. It is possible that multiple products of the same company may offer higher rates. For example, Aspida Synergy Choice 7 offers 5.60% for 7 years, and Aspida Synergy Choice 5 offers 5.50% for 5 years, which is higher than many of the MYGAs listed above. It is also important to understand that these rates tend to change frequently, and may vary from state to state. You should check with your annuity provider the exact rate on the day you sign up for an MYGA.

Best Rated MYGAs (Rated below A) as of 22nd March 2023

ProductCompanyAM BestMinimum PremiumYearsGuaranteed Yield
AnnuityAdvantage ClassicAmerican LifeB++$1,00055.65%
Safe HavenAtlantic CoastB++$5,00035.63%
Personal Choice Sentinel Security B++$2,50035.60%
Nassau MY AnnuityNassau LifeB++$10,00075.60%
Navigator UltraWestern UnitedB++$10,00075.40%
Certainty SelectEquiTrustB++$10,000105.40%
Focused Growth Standard Insurance B++$100,00075.10%

Exhibit 2: Best Rated MYGAs (Only rated below A) as of 22nd March 2023

Note that I have listed one MYGA product of each annuity company that offers the highest rate. It is possible that multiple products of the same company may offer higher rates. For example, Nassau MY Annuity 7 offers 5.60% for 7 years, and Nassau MY Annuity 5 offers 5.50% for 5 years, which is higher than many of the MYGAs listed above. It is also important to understand that these rates tend to change frequently, and may vary from state to state. You should check with your annuity provider the exact rate on the day you sign up for an MYGA.

Best Rated Traditional Fixed Annuities as of 23rd March 2023

Unlike MYGAs, Traditional fixed annuities guarantee a minimum interest rate for a short term, typically one year. After this period, the insurance company may adjust the interest rate periodically, subject to a guaranteed minimum rate.

ProductCompanyAM BestMinimum PremiumYearsFirst Year Guaranteed YieldGuaranteed Minimum Term Yield*
Apollo-MVAReliance Standard Life InsuranceA++$5,00076.30%4.58%
Apollo-SPReliance Standard Life InsuranceA++$5,00076.15%4.43%
American Pathway FixedAmerican General Life InsuranceA$100,00075.36%4.35%
Liberty SelectLiberty Bankers Life InsuranceA-$5,00075.25%3.96%
Liberty ChoiceLiberty Bankers Life InsuranceA-$5,00054.75%3.95%
Century PlusAmerican National InsuranceA$100,000108.40%3.89%
Wealth Quest Citadel DiamondAmercian National InsuranceA$100,00075.60%3.60%
FlexPlusGuaranty Income Life InsuranceA-$5,000102.90%2.90%
Eagle 8United Heritage Life InsuranceA-$8,000106.00%2.62%
SageChoiceSagicor Life InsuranceA-$2,00062.00%2.00%

Exhibit 3: Best Rated Traditional Fixed Indexed Annuities as of 23rd March 2023

Note that the Guaranteed Minimum Term Yield, is the yield (including bonuses if applicable), up to the first penalty free full withdrawal window, assuming the current base interest rate remains unchanged for the duration of the term.

Indexed Annuities

Indexed annuities provide a minimum guaranteed rate of return and the potential for higher returns linked to a market index. Factors to consider when comparing indexed annuity rates include:

  1. Participation rate: The percentage of the index’s gain credited to the annuity. A higher participation rate means more potential growth, but it may come with other limitations such as a cap rate or a spread.
  2. Cap rate: The maximum rate of return that can be credited to the annuity. A high cap rate allows for greater potential growth, but it may be accompanied by a lower participation rate or higher fees.
  3. Index used: The performance of the chosen index will impact the annuity’s returns. Commonly used indices include the S&P 500 and the Dow Jones Industrial Average. It’s essential to understand how the index is calculated and the risks associated with it.

Advantages

  • Guaranteed minimum interest rate: Indexed annuities offer a minimum guaranteed rate of return, ensuring some level of growth even in poor market conditions.
  • Potential for higher returns: These annuities have the potential for higher returns based on the performance of a market index.
  • Protection from market downturns: Indexed annuities limit the downside risk by offering a guaranteed minimum return.

Disadvantages

  • Limited growth potential: The potential returns are often capped, limiting the growth potential compared to other investment options.
  • Complexity: Indexed annuities can be complicated due to their unique structure and features, such as participation rates, cap rates, and spreads.
  • Less flexibility than other types of annuities: Like fixed annuities, indexed annuities typically have limited withdrawal and payout options.

Strategies for finding the best indexed annuity rates:

  • Compare participation rates, cap rates, and spreads among different indexed annuities.
  • Research the historical performance of the chosen index and how it may impact the annuity’s returns.
  • Consider the financial strength of the issuing company, as it guarantees the minimum interest rate and any additional benefits.

Best Indexed Annuity Rates (Updated as of March 2023)

ProductCompanyAM BestMinimum PremiumYearsMax Participation CapFixed Account Rate
Prosperity EliteFidelity & Guaranty Life Insurance CoA-$10,0001415.00%5.25%
Athene Performance EliteAthene Annuity & Life Insurance CoA$10,000713.50%3.00%
Accelerator PlusFidelity & Guaranty Life Insurance CoA-$10,0001413.00%4.50%
Accumulator PlusFidelity & Guaranty Life Insurance CoA-$10,0001012.75%4.25%
Retirement Plus MultiplierAtlantic Coast Life Insurance CompanyB++$5,000512.00%4.50%
Asset ShieldAmerican EquityA-$5,000711.75%3.75%
Power ProtectorAmerican General Life Insurance A$100,0001011.00%4.75%
American LegendMass Mutual Ascend Life Insurance A+$100,000710.00%4.10%
RetireVantageMidland National Life InsuranceA+$75,0001010.00%4.40%
VersaChoiceNorth American Co for Life & HealthA+$75,0001010.00%4.25%
Strategy Indexed Annuity PLUSAmerican National InsuranceA$10,000109.65%4.50%
Retirement StagesDelaware Life InsuranceA-$10,00079.50%3.75%

Exhibit 4: Top Potential Annuity Rates for Fixed Indexed Annuities as of 23rd March 2023

It is essential to understand that there is no one-size-fits-all “best” annuity rate in fixed indexed annuities due to the many factors that can influence the potential returns and overall performance of the contract. Individuals considering an FIA should carefully evaluate their financial goals, risk tolerance, and personal circumstances to find the most suitable annuity contract. Consulting with a financial advisor can help in making an informed decision and selecting the most appropriate FIA to meet one’s unique needs. 

We keep posting unbiased fixed indexed annuity product reviews on our blog, where we also comment on the indexes and strategies that come up with the annuity product. You can check them out here. If you want to get a particular annuity product reviewed, let me know in the comments.

Immediate Annuities

Immediate annuities (Such as Single Premium Immediate Annuities) provide a guaranteed income stream that begins shortly after the purchase, usually within one year. Factors affecting immediate annuity rates include:

  1. Age and gender: The older the annuitant and the shorter their life expectancy, the higher the annuity rate. Gender also plays a role, as women tend to live longer than men, which can affect the payout rates.
  2. Payout option: The chosen payout option, such as single life or joint life, will affect the annuity rate. Joint life annuities typically have lower payout rates, as they cover two lives and payouts generally last longer.
  3. Interest rates: Current interest rates in the market will impact immediate annuity rates. Higher market interest rates usually translate to higher annuity payout rates.

Advantages

  • Guaranteed income stream: Immediate annuities provide a secure income stream that lasts for the annuitant’s lifetime or a specified period.
  • Quick income generation: Payments begin shortly after the purchase, making immediate annuities ideal for those who need income right away.
  • Various payout options: Immediate annuities offer a range of payout options, allowing annuitants to tailor the income stream to their needs.

Disadvantages

  • Lack of liquidity: Once purchased, immediate annuities typically cannot be reversed, limiting access to the principal investment.
  • Inflation risk: The fixed income stream can lose purchasing power over time due to inflation, especially if no cost-of-living adjustments are included.
  • Limited growth potential: Immediate annuities provide a stable income but do not offer the potential for significant growth compared to other investment options.

Strategies for finding the best immediate annuity rates:

  • Compare payout rates from multiple insurance companies, taking into account the financial strength of each issuer.
  • Assess your financial needs and choose the payout option that best aligns with your goals.
  • Keep an eye on interest rates in the market and consider purchasing an immediate annuity when rates are higher to lock in a higher payout rate.

Best Immediate Annuity Rates (Updated as of March 2023)

Unlike fixed annuities and Multi-Year Guaranteed Annuities (MYGAs), which offer predetermined and uniform interest rates for all investors, the rates in immediate annuities are not the same for everyone. Instead, they depend upon several factors that can significantly impact the amount of income an individual receives. These factors include the current interest rate environment, the age and gender of the annuitant, the chosen payout option, and the specific insurance company offering the annuity. This variability in immediate annuity rates highlights the importance of considering one’s unique circumstances and financial goals when selecting an annuity product. It also emphasizes the need to shop around, compare quotes from different insurance companies, and stay informed about market conditions to secure the most favorable rates and terms for one’s specific situation.

Through this article, we will try to find out the best immediate annuity rates by comparing the monthly payout offered by different companies based on two different scenarios and payout options.

Scenario 1a – Policy Type: Single
Age: 60, MalePayout Start: After 12 monthsPremium: $100,000Funding: Non-IRA (Non-Qualified)State: PA
Annuity CompanyMonthly IncomeAnnual IncomeAnnual Payout Rate
Penn Mutual Life Insurance$618$7,4167.42%
Symetra Life Insurance$590$7,0807.08%
Nationwide Life Insurance$586$7,0327.02%
New York Life Insurance$586$7,0327.02%
Minnesota Life Insurance$584$7,0087.01%
AIG$581$6,9726.97%
Pacific Life Insurance$580$6,9606.96%
Jackson National Life Insurance$579$6,9486.94%
United of Omaha Insurance$573$6,8766.88%
Massachusetts Mutual Life Insurance$570$6,8406.84%

Exhibit 5: Top Immediate Annuity Rates for hypothetical single applicant (as per Scenario 1a)  as of 26th March 2023

Scenario 1b – Policy Type: Joint
Age
Primary – 60, Male
Joint – 55, Female
Payout Start: After 12 monthsPremium: $100,000Funding: Non-IRA (Non-Qualified)State: PA
Annuity CompanyMonthly IncomeAnnual IncomeAnnual Payout Rate
Penn Mutual Life Insurance$530$6,3606.36%
AIG$503$6,0366.04%
New York Life Insurance$499$5,9885.98%
Nationwide Life Insurance$496$5,9525.95%
Pacific Life Insurance$486$5,8325.83%
Jackson National Life Insurance$485$5,8205.82%
Symetra Life Insurance$484$5,8085.81%
Brighthouse Financial$481$5,7725.77%
Integrity Life Insurance$477$5,7245.72%
United of Omaha Insurance$475$5,7005.70%

Exhibit 6: Top Immediate Annuity Rates for hypothetical joint applicant (as per Scenario 1b) as of 26th March 2023

Notice how payout rate changes when the type of policy is joint, when compared to single. In a joint policy, the company’s expected payout is for a longer term when compared to a single policy. Also, notice how for best rates for immediate annuities differ as the policy type differs. It signifies that the SPIA rates truly differ based on factors like age, gender, policy type, payout type, etc. It is a good idea to shop around and compare rates from different companies to find the best deal for your needs. I recommend consulting a trusted financial professional to help you get the best SPIA as per your unique needs.

Deferred Income Annuities

A Deferred Income Annuity, like an immediate annuity, provide a guaranteed income stream, but the payments begin after some waiting period (known as a deferral period). The deferral period can range from a few years to several decades, depending on the terms of the contract.

As for the best deferred annuity rates, they vary depending on factors such as the insurance company, the type of annuity product, the length of the deferral period, and current interest rates.

Through this article, we will try to find out the best deferred annuity rates by comparing the monthly payout offered by different companies based on two different scenarios and payout options.

Scenario 2a – Policy Type: Single
Age: 60, MalePayout Start: After 10 YearsPremium: $100,000Funding: Non-IRA (Non-Qualified)State: PA
Annuity CompanyMonthly IncomeAnnual IncomeAnnual Payout Rate
Symetra Life Insurance$1,226$14,71214.71%
Brighthouse Financial$1,205$14,46014.46%
United of Omaha Insurance$1,147$13,76413.76%
Massachusetts Mutual Life Insurance$1,134$13,60813.61%
Guardian Insurance$1,117$13,40413.40%
New York Life Insurance$1,114$13,36813.37%
Global Atlantic$1,106$13,27213.27%
Lincoln National Life Insurance$1,092$13,10413.10%
Integrity Life Insurance$1,082$12,98412.98%
AIG$1,075$12,90012.90%

Exhibit 7: Top Deferred Annuity Rates for hypothetical single applicant (as per Scenario 2a) as of 26th March 2023

Scenario 2b – Policy Type: Joint
Age
Primary – 60, Male
Joint – 55, Female
Payout Start: After 12 monthsPremium: $100,000Funding: Non-IRA (Non-Qualified)State: PA
Annuity CompanyMonthly IncomeAnnual IncomeAnnual Payout Rate
Brighthouse Financial$905$10,86010.86%
New York Life Insurance$848$10,17610.18%
United of Omaha Insurance$848$10,17610.18%
Symetra Life Insurance$844$10,12810.13%
Guardian Insurance$835$10,02010.02%
Global Atlantic$834$10,00810.01%
AIG$823$9,8769.88%
Integrity Life Insurance$804$9,6489.65%
Lincoln National Life Insurance$799$9,5889.59%

Exhibit 8: Top Deferred Annuity Rates for hypothetical joint applicant (as per Scenario 2b) as of 26th March 2023

You’ll notice that there is a huge difference between payout rates of immediate annuities and deferred annuities. Deferred annuities have a waiting period, known as the deferral period before the annuity starts to pay out income. This period can range from a few years to several decades. During this time, the insurance company invests the premium, which allows it to grow tax-deferred. As a result, the payout rates for deferred annuities are generally higher than for immediate annuities.

Also, notice how for best rates for deferred annuities differ as the policy type differs. It signifies that the deferred rates truly differ based on factors like age, gender, policy type, payout type, etc. It is a good idea to shop around and compare rates from different companies to find the best deal for your needs. I recommend consulting a trusted financial professional to help you get the deferred annuity as per your unique needs.

Variable Annuities

Variable annuities offer the potential for higher returns based on the performance of underlying investments, usually a selection of mutual funds. Factors affecting variable annuity rates include:

  1. Investment performance: The rate of return depends on the performance of the investment subaccounts chosen by the annuitant. Diversifying your investments across different asset classes and sectors can help reduce risk and potentially increase returns.
  2. Fees and charges: Variable annuities often have higher fees than other types, which can impact the overall return. These fees can include management fees, mortality and expense risk charges, and surrender charges. Be sure to understand all the fees associated with a variable annuity before committing to a contract.
  3. Additional features: Optional riders such as guaranteed minimum income benefits or death benefits can affect the overall performance. These riders can provide a safety net but often come at an additional cost.

Advantages (Theoretically)

  • Potential for higher returns: Variable annuities offer the possibility of higher returns based on the performance of the underlying investments.
  • Tax-deferred growth: Earnings within the annuity grow tax-deferred until withdrawn, potentially increasing the overall return.
  • Investment flexibility: Annuitants can choose from a variety of investment options, allowing for greater customization of their portfolios.

Disadvantages

  • Higher fees: Variable annuities often have higher fees and expenses than other annuity types, which can impact overall returns.
  • Investment risk: Returns are not guaranteed and depend on the performance of the underlying investments, exposing annuitants to market risk.
  • Complexity: The numerous investment options and optional riders can make variable annuities more complex and difficult to understand.

Strategies for finding the best variable annuity rates:

  • Evaluate the historical performance of the investment subaccounts and their managers.
  • Compare the fees and charges associated with different variable annuities.
  • Consider whether optional riders are necessary for your specific financial situation.

Best Variable Annuities Rates. Is it a Thing?

Unlike Fixed Annuities, Variable annuities don’t have any return “rates.” In a variable annuity, the investor contributes money to the annuity, either through a lump-sum payment or a series of periodic payments. The contributions are then invested in a variety of sub-accounts, which are similar to mutual funds. So the entire return or the accumulation is dependent on how these sub-accounts perform.

If anyone asks me to suggest the best variable annuity rates, my first response is, “Why?” 

What I mean is that it is generally a good idea not to invest in variable annuities. Variable annuities come with fees and expenses, such as management fees, insurance charges, and surrender charges. And they still expose investors to market risk, as the performance of the underlying investments can fluctuate.

For instance, consider John, who invested in a variable annuity that charged a 2% annual fee and a 1.5% investment management fee. Over 20 years, these fees can potentially decrease John’s returns by more than a whopping 30%, despite the underlying investments performing reasonably well. If you are planning to invest in variable annuities, you are better off investing in alternatives such as Mutual funds, Exchange-traded funds (ETFs), Index funds, Dividend Paying Stocks, or even Real estate investment trusts (REITs).

Also, especially for variable annuities, remember that past performance is not indicative of future results, and it is essential to thoroughly research your options before making a decision.

Conclusion

In this comprehensive guide, we have explored the various types of annuities, including fixed annuities, variable annuities, indexed annuities, and immediate annuities, as well as their respective advantages and disadvantages. As you search for the best annuity rates for each of these annuity types, it’s essential to consider not only the rates themselves but also the factors that impact them and how well they align with your retirement goals and financial situation.

By understanding the unique features and benefits of each annuity type, you can make an informed decision about which product best suits your needs. Keep in mind that annuities are long-term investments and should be considered as part of a comprehensive retirement plan. It’s always a good idea to consult with a financial advisor to ensure that an annuity is the right choice for your individual needs and circumstances. By doing so, you can confidently build a retirement income strategy that provides financial security and peace of mind during your golden years.

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