Annuities cast a light when things seem dim
December 6, 2022 by Jim Poolman
Click HERE to read the full story via INN
Wink’s Note: When you read, “Annuities, for example, pay more as interest rates increase…” doesn’t it make you think that the annuity you already purchased will earn a greater interest rate, as rates increase?
I know that cannot be how it was intended because it just isn’t true. In fact, it is practically the opposite of that! If you want to take advantage of steadily-increasing rates, the best way to do it is to ladder annuities.
I was a little perturbed at the suggestion that one should “Know the roll-up rate (percentage at which the guaranteed side of the annuity keeps growing).” For starters, hardly any Guaranteed Lifetime Withdrawal Benefits (GLWBs) have rollups anymore (self-serving to the funders of this trade group, perhaps?). More importantly, a GLWB is not the only way to guarantee a lifetime of income.
There IS this thing called “annuitization,” and it just happens to be FREE.
I know it isn’t the most popular option because it is inflexible, but sometimes the insurance companies’ thirst for more fees gets in the way of telling the whole story.
Anyhow, lots of interesting stats in this one. I am not sure how big the survey sampling is for this organization, but the fact that younger people were much more receptive to indexed annuities caught my attention. – sjm