Annuity Guys®

Annuity Rates, Features & Ratings: America's trusted annuity resource. Compare best options for hybrid, index, fixed, variable & immediate annuity quotes.


Helping You Create Great Results Your Retirement Deserves!



(217)753-1515
  • Home
  • About Us
    • About Us
    • Contact Us
    • Site Terms & Disclosure
    • Privacy Policy
  • FAQs
    • Most Frequently Asked Annuity Questions
  • All Annuity Guys Videos
  • Annuity Types
    • Best Annuity Reviews
    • Market Free™ Annuities
    • Choosing an Annuity
    • Deferred Annuities
    • Hybrid Annuity Choices
      • Hybrid Annuity Pros&Cons
      • Hybrid Income Riders
      • Hybrid Annuity Guarantees & Strategies
    • Fixed Annuity Choices
      • Fixed Annuity Performance
      • Better Fixed Annuities
      • Fixed Deferred Annuities
      • Fixed Rate Annuities
      • Fixed Annuity Alternatives
      • Fixed Annuity Pros & Cons
      • Fixed Annuity Negatives
    • Index Annuity Choices
      • Fixed Index Annuity Features
      • Fixed Index Annuity Performance
      • Better Fixed Index Annuities
      • Fixed Index Annuity Alternatives
      • Fixed Index Annuity Pros & Cons
      • Fixed Index Annuity History
      • Fixed Index Annuity Negatives
    • Immediate Annuities
      • Immediate Variable Annuity
      • Immediate Fixed Annuities
    • Variable Annuities
      • Variable Annuity Features
      • Better Variable Annuities
      • Variable Annuities Disadvantages
      • Variable Annuity Alternatives
      • Variable Annuity Negatives
      • Variable Annuity Performance
    • Pre-Issued Annuities™
      • Hybrid Annuities versus Pre-Issued Annuities ™
    • Annuity Glossary
  • Articles
    • How Do MarketFree™ Annuities Work?
    • Are Annuities Safe?
    • Living Benefits
    • FIA Performance
    • Beware of FIAs?
    • Annuities & Retirement
    • Annuities & Estate Tax
    • Rollovers & Annuities
    • Annuities & Tax
    • Charity & Annuities
    • The Lost Decade
    • Best Annuity Videos
    • Social Security Benefits
  • Calculators
    • Retirement Planning Calculator — Basic
    • Retirement Shortfall Calculator — Basic
    • Immediate Annuity Calculator & Quotes
    • Fixed Index Annuity Calculator & Fixed Annuity Calculator
    • Variable Annuity Calculator & Hybrid Annuity Calculator
  • Blog
    • Annuity Guys® Weekly Annuity Video Blogs
  • Get Annuity Guys Help
    • Request Annuity Guys’ Planning Help Today
You are here: Home / Archives for Interest Rate

Low Interest Rates Hurt Seniors

April 20, 2012 By Annuity Guys®

The Federal Reserve Board has not formally relaxed its intention to keep interest rates low through the end of 2014. And there is little new to say about the way non-existent interest rates on savings accounts, certificates of deposit, and U.S. Treasury securities have hurt all savers, particularly risk-averse investors.

Retirees are, of course, the poster children for risk-adverse investments, and their nest eggs have been hammered by the Fed’s policy. The Fed has said that low rates help the economic recovery. So it argues, in effect, that investors should enjoy the solid stock market returns and that savers should display a stiff upper lip. [Read More at US News…]

**Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. During this segment, Dick and Eric are referring to Fixed Annuities unless otherwise specified.

4 Ways New Annuity Rules Will Help Retirees

The White House last week strongly endorsed annuities as a needed but missing piece of Americans’ retirement plans. Insurance companies and annuity trade groups had something nice to say about Washington regulators for a change. And the new rules just might set in motion some interesting retirement-plan changes.

Among financial products, annuities have long been a very hard sell. It’s easy to understand the appeal of buying Apple stock or getting in on the ground floor of Facebook’s IPO. Understanding annuities and their benefits, however, is not on the minds of many investors.

The premise of an annuity is easy to state: Give some money to an insurance company and it will make **guaranteed payments to you for the rest of your life. The money can be paid now or in the future. The payments can begin at any time the investor chooses. And the lifetime stream of income promised by an annuity can augment Social Security and help put to rest a person’s fear that he or she will run out of money before they die.

[Read More at US News…]

Annuity Guys® Video Transcript:

Dick: One thing that really gets our blood boiling, and I would have to say a lot of the folks that we speak with, is this low interest rate environment that is really being penalizing to retirees.

Eric: The unfortunate thing is you’ve got a government who is forcing low interest rates down our throat.

Dick: Why would that be to our government’s benefit, Eric?

Eric: Let’s see here. If I print cheap money, and if I don’t have to pay it back at high interest rates . . .

Dick: If I owe $16 trillion, and there’s a way I can actually manipulate and hold interest rates low, that might be a good thing for me?

Eric: Just borrowing free money. We’ve been propping up the banks and propping up and, supposedly, economy by keeping these rates low, but the return effect is we’ve taken our retirees and our savers, and we’ve thrown them under the bus.

Dick: We’ve penalized them in a major way. When you look at the financial institutions that these interest rates were put into effect, supposedly, to help and to shore-up, these financial institutions are all passing their stress tests.

Eric: They’re making money.

Dick: They’re making money; they’re coming back. There’s a few that are having a challenge, but overall, our financial system at least gives the appearance that it’s been restored to some degree.

Eric: What they did is they designed this to basically push money into the economy to make it better to borrow. Borrowing helps the economy; that’s what the theory is here.

Dick: Stimulating the economy.

Eric: If you want to borrow money right now, it’s a great time, but if you’re getting close to retirement and you’ve already saved up everything, you’re now earning next to nothing on most of your major options or your safe money options: Your CDs, your money markets, the FDIC-insured options. You’re being forced to look at other alternatives.

Dick: Our corporations are cash-rich. The banks have a lot of cash that they don’t know what to do with. The demand isn’t there to borrow the money, even though the rates are extremely low. What I believe that this is leading up to, and I think, Eric, we’ve discussed this, is that there is no short-term fix.

Eric: No. In fact, Uncle Ben Bernanke has promised us that we’re going to keep interest rates at this level at least until the beginning of 2015. We’re sitting here, years away now, and people are saying, “Are rates ever going to increase?” The crystal ball in front of us says no, because we’ve got a **guarantee, or a pledge, to keep rates at a hyper-low level.

Dick: Our government’s motivation isn’t there to stimulate and raise the rates for savings, which encourages savings and that type of thing. The more that consumers spend, the more that they borrow, the more that drives the economy, and it has that other side effect of holding the government’s borrowing costs down. When we look at Japan, we go back to 20 years of very, very low interest rate environment, and the savers over there have had . . . who knows if we’re really following that model or not, but there are some similarities there.

Eric: I’ll be honest, and Dick’s heard me say, I don’t care about Japan. I’m worried about what happens here at home.

Dick: What happens to our clients right here in Central Illinois, United States.

Eric: That’s right. We’ve got people that are constantly walking in the door. I’ve had umpteen people that are typical CD borrowers, who walk in with their hands in the air, and they go, “What can I do? What are the alternatives?”

Dick: We’ve been pretty fortunate. We’ve been able to establish at least the foundational portion of many of our clients’ portfolios in annuities, and we’ve been able to ladder those annuities and get 8% **guaranteed growth on the income base anyway. Maybe the cash accumulation isn’t growing at 8%, but their income base is growing, that they can draw their income off of. It will have a tendency to outpace or stay ahead of inflation.

Eric: Just real quickly, when we talk about laddering annuities, what we’re talking about is basically having different start-points for annuities. You may turn on Year-1 and you may wait 5 years before you turn on another, and another 10 years before you would turn on a third.

Dick: You’ve got this 8% or 7% compounding year-after-year. The longer you can stretch it out, the better. You may need some income immediately or income in 5 years, and then income in 10, in 15.

Eric: To turn those on after those have been in deferral so they have a greater compounding effect.

Dick: The other choice that we have if somebody needs income right away, is to setup some type of an immediate annuity or a hybrid annuity that will actually have some cost of living adjustment built into it.

Eric: The one thing with [inaudible: 05:11] the immediate annuities, if you start them with a cost of living adjustment, they usually start a little bit lower than those that just have a normal life expectancy.

Dick: Similarly on some of the hybrids, but there are some hybrids that will actually start about the same point and still have a cost of living adjustment built into them.

Eric: That’s what we always talk about with the client: What’s the longevity expectation? If you have a longer than normal life expectancy in your family, that’s especially the time to look at those things, because that’s [inaudible: 05:39].

Dick: You can really come out ahead. Our goal is never to do out and beat up on the insurance company, but when it comes down to . . . Eric says, “Yes we do.” When it comes down to the client or the insurance company, we’re for the client.

Eric: That’s exactly right. We want you to make the most money possible back.

Dick: If you can win against the insurance company, then obviously, longevity is one of those variables, those wildcards.

Eric: Our goal is for everybody to win. I say that facetiously. I don’t want to take the insurance company down, but that being said, I want all my clients to benefit.

Dick: To benefit in the best way possible. We really come down to, Eric, a low-rate interest environment. It’s affecting retirees all over the country, and their choices aren’t that many.

Eric: No, very limited. I don’t want to say ‘in closing,’ necessarily, but in summary . . .

Dick: It’s okay. We can close.

Eric: Look at your full range of options because of the interest rate environment. It’s not the time to be sitting on the fence, unfortunately. People keep on saying, “If I wait.’ I’ve had somebody out there waiting for 3 years now, waiting for rates to increase, and the opposite has happened.

Dick: It lost ground, and they don’t have the same options they had a few years ago.

Eric: How long can you sit in a 0.5% CD?

Dick: With 3% inflation.

Eric: Exactly. You’re losing money by putting yourself in a . . .

Dick: You’re going backwards at 2½% to 4% a year, probably.

Eric: In summary, yes. Low interest rates hurt retirees, they’re very painful, but it shouldn’t stop you from taking action and making a progressive retirement plan.

Dick: Yeah, making a good decision. Use a good financial advisor and just weigh all the options. Thank you.

Filed Under: Annuity Commentary, Annuity Guys Video, Annuity Income, Annuity Rates, Annuity Returns, Retirement Tagged With: annuities, Annuity, Interest Rate, Interest Rates Low, Life Annuity, Low Interest Rates, Low Rate, Pension, Rates Low, retirement, Risk Adverse

 

Empowering Annuity Reference Book

 
DOWN-LOAD NOW - FREE!
  • Annuity Guys Reference Book - 250 pages of Annuity Facts

  • "The New Retirement"
    Annuity Reference Book 
    Free Instant Download
  • Confidential - Easy Opt Out
  • This field is for validation purposes and should be left unchanged.

 

  • How Much Money is Enough to Secure Your Retirement?

    How Much Money is Enough to Secure Your Retirement?

    It’s important to differentiate what you need for retirement security versus what you would desire if all your investments go …Read More »
  • Hybrid Annuity Sales Hit All Time Highs! Do You Know Why?

    Hybrid Annuity Sales Hit All Time Highs! Do You Know Why?

    Record numbers of retirees and savers are flocking to fixed and fixed index annuities – why?For many baby boomers , the great …Read More »
  • Why are Hybrid Annuities so Popular?

    Why are Hybrid Annuities so Popular?

    What made fixed index annuities and hybrid annuities the fastest growing annuity type on the market according to a LIMRA …Read More »

Revealing Fun Video: Fiduciary Advisors Vs. Annuity Salesmen
MUST KNOW FACTS 90% of
ANNUITY ADVISORS AVOID TELLING!
  • *FIDUCIARY RETIREMENT REVIEWS
    Second Opinions Improve Retirements
     
    "For Your Retirement's Success"
     Choose a *Fiduciary Advisor who gives you Full Disclosure of Cost & Selection.
     
    Material Fact 1:
      About 90% of advisors ARE NOT REQUIRED by law to do what is best for their clients!
     
    Material Fact 2:
     Fiduciary Advisors ARE REQUIRED by law to do what's best for their clients! 
     
      Hence, clients of a fiduciary can know that their advisor chose the highest legal standard required by law to work strictly for their highest good.
     
     We estimate Fiduciaries are less than 10% of total U.S. financial service providers. Fiduciaries are held to the highest client legal standard of financial planning and investment advice.
     
     The other 90% are sales oriented advisors, brokers, bank reps, registered reps. & insurance agents, selling products on a much lower suitability legal standard, not necessarily what's best for their client!
     
       Fiduciaries also must disclose conflicts of interest that could potentially bias their advice, such as; selling products that pay them higher commissions having higher fees or costs, and their lack of investment product access limiting their client's opportunities, to name a few.
     
    Choosing your advisor can have
    "The Largest Single Impact on
    Your Retirement's Success or Failure"


  • Choosing a Hybrid Annuity

    Choosing a Hybrid Annuity

    Why are so many folks choosing hybrid annuities for their retirement?Let’s summarize the four key elements most retirees are looking for that make …Read More »
  • Hybrid Annuities as an Inflation Hedge

    Hybrid Annuities as an Inflation Hedge

    Inflation – this one word strikes terror in the hearts of many retirees on a fixed income.Never to fear, we have a cost of …Read More »
  • Are Annuity Fees, Surrender Costs, & Commissions too High?

    Are Annuity Fees, Surrender Costs, & Commissions too High?

    I would wager that everyone has used the phrase “You get what you pay for” in describing a less than desirable …Read More »
  • OutCome Based Planning™ for Retirement

    OutCome Based Planning™ for Retirement

    We practice and recommend a “Holistic – OutCome Based Planning™ process when considering annuities.” This approach has the effect of …Read More »
  • Annuity Guys® Verified Reviews

    We highly value your reviews. Please help other site visitors learn from your experience. Reviews are verified based on a …Read More »
  • Annuities vs (IUL) Indexed Universal Life – How do they compare?

    Annuities vs (IUL) Indexed Universal Life – How do they compare?

    What are the differences between a hybrid index annuity and an (IUL) index universal life policy? Wow! Steve, we thought we …Read More »
  • Annuities – Liquid or Not?

    Annuities – Liquid or Not?

    As advisors who specialize in retirement planning one of the first questions we discuss with clients surrounds the subject of  liquidity. …Read More »
  • Hillary or Trump? Will Your Retirement be Safe?

    Hillary or Trump? Will Your Retirement be Safe?

    A cardinal rule of etiquette we all have heard and usually with some degree of sarcasm is “never talk about …Read More »

View Our Newest Videos! Subscribe Now
  • Annuity Guys Videos - Annuity Answers
  • New Annuity Guys Videos
    Our Entertaining & Informative
     Saturday Morning Video Blog
  • Timely Retirement & Annuity Issues - Easy Opt Out
  • This field is for validation purposes and should be left unchanged.


  • Why are Hybrid Annuities so Popular?

    Why are Hybrid Annuities so Popular?

    What made fixed index annuities and hybrid annuities the fastest growing annuity type on the market according to a LIMRA …Read More »
  • Fixed Index Annuity Returns Reviewed

    Fixed Index Annuity Returns Reviewed

    Dick and Eric take a look at the Wharton study and what it means for anyone considering a fixed index …Read More »
  • Are Annuities a Good Choice in a Low Interest Rate Environment?

    Are Annuities a Good Choice in a Low Interest Rate Environment?

    One of the questions we have heard asked quite a bit lately, “Is it the right time to buy an …Read More »
  • Is the Fiscal Cliff a Threat or an Opportunity for Annuities?

    Is the Fiscal Cliff a Threat or an Opportunity for Annuities?

    The “Fiscal Cliff” could have profound implications on the economy. Dick and Eric examine the potential impact on retirees and …Read More »
  • Are Annuities a Tax Trap?

    Are Annuities a Tax Trap?

    Never buy an annuity – it is a tax trap or so the negative articles say! When I hear the words …Read More »
  • Do Not Waste Time Considering Annuities, If You…

    Do Not Waste Time Considering Annuities, If You…

    Do not waste your time considering annuities if you cannot find one of the following Annuity Profiles that matches your …Read More »
  • Top Five Reasons, Not to Buy an Annuity!

    Top Five Reasons, Not to Buy an Annuity!

    Let’s be honest, there are plenty of reason why someone should not buy an annuity. As Annuity Guys, we understand …Read More »
  • Seven Ways to Use Annuities for Estate Planning!

    Seven Ways to Use Annuities for Estate Planning!

    Annuities are not commonly thought of as financial tools that are utilized within an Estate Plan. You may be surprised to know that there are, in …Read More »
Get Newly Released Annuity Guys® Videos on Saturday Mornings
  • Annuity Guys Videos - Annuity Answers
  • New Annuity Guys Videos
    Our Entertaining & Informative
     Saturday Morning Video Blog
  • Timely Retirement & Annuity Issues - Easy Opt Out
  • This field is for validation purposes and should be left unchanged.


  • Five Early Annuity Surrender Options

    Five Early Annuity Surrender Options

    There may be 50 ways to leave your lover, sings Paul Simon! And, there are at least five ways to …Read More »
  • “I Hate Annuities” “Secret Annuity Strategy”<br>Internet & TV Gimmicks!

    “I Hate Annuities” “Secret Annuity Strategy”<br>Internet & TV Gimmicks!

    Negative statements and hyperbole inherently make strong headlines, grabbing our attention! The financial industry is very guilty of using this …Read More »
  • Is an Old Variable Annuity Better than a New Hybrid?

    Is an Old Variable Annuity Better than a New Hybrid?

    “Don’t buy an annuity! The **guarantees they offer are often unnecessary and costly.” – has turned into “that annuity sure …Read More »
  • Are MarketFree® Hybrid Annuities Good for Retirement?

    Are MarketFree® Hybrid Annuities Good for Retirement?

    What would the perfect retirement financial vehicle look like if we could design it from the ground up?Would it allow for stock index …Read More »
  • Are Annuities Good or Bad?

    In and of themselves, annuities just like any other investment are not technically good or bad. An annuity can, however, …Read More »
  • Annuities, Investing and Retirement – What’s Your Strategy?

    Annuities, Investing and Retirement – What’s Your Strategy?

    A goal without a plan is mostly just a hope and a wish. So, do you have a well thought …Read More »
  • Government Shutdowns Affect Annuities

    Government Shutdowns Affect Annuities

    Can you feel the impending doom of the government shutdown?Every night, it seems that the media cannot wait to tell …Read More »
  • How do you Choose the Best in Class Annuity?

    How do you Choose the Best in Class Annuity?

    The latest issue of Barron’s proclaims to know and list the Top 50 Annuities. Being the Annuity Guys® that we are, …Read More »
  • Annuity Timing – Jump in or Wait?

    Annuity Timing – Jump in or Wait?

    Annuity Guys®, Dick and Eric examine the question on the mind of many people when comes to selecting an annuity …Read More »
  • Stop Annuity Procrastination: New Years Resolution!

    Stop Annuity Procrastination: New Years Resolution!

    Procrastination – or the act of replacing high-priority actions with tasks of lower priority.We always hear of people who spend more …Read More »

 

Empowering Annuity Reference Book

 
Start Reading Now - Instant Download
  • Annuity Guys Reference Book - 250 pages of Annuity Facts

  • "The New Retirement"
    Annuity Reference Book 
    Free Instant Download
  • Confidential - Easy Opt Out
  • This field is for validation purposes and should be left unchanged.

 
Comprehensive Site Terms and Disclosure | Privacy Policy | Copyright © 2025 Annuity Guys®


  ** Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. Annuities are not FDIC insured and it is possible to lose money.
Annuities are insurance products that require a premium to be paid for purchase.
Annuities do not accept or receive deposits and are not to be confused with bank issued financial instruments.
During all video segments, Dick and Eric are referring to Fixed Annuities unless otherwise specified.


  *Retirement Planning and annuity purchase assistance may be provided by Eric Judy or by referral to a recommended, experienced, Fiduciary Investment Advisor in helping Annuity Guys website visitors. Dick Van Dyke semi-retired from his Investment Advisory Practice in 2012 and now focuses on this educational Annuity Guys Website. He still maintains his insurance license in good standing and assists his current clients.
Annuity Guys' vetted and recommended Fiduciary Financial Planners are required to be properly licensed in assisting clients with their annuity and retirement planning needs. (Due diligence as a client is still always necessary when working with any advisor to check their current standing.)



  # Investors should consider the investment objectives, risks, charges and expenses of a variable annuity and its underlying investment options. The current prospectus and underlying prospectuses, which are contained in the same document, provide this and other important information. Please contact an Investment Professional or the issuing Company to obtain the prospectuses. Please read the prospectuses carefully before investing or sending money.


  ^ Investors should consider investment objectives, risk, charges, and expenses carefully before investing. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.


  ^ Eric Judy offers advisory services through Client One Securities, LLC an Investment Advisor. Annuity Guys Ltd. and Client One Securities, LLC are not affiliated.