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 Payout

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

March 9, 2012 By Annuity Guys®

One of the questions we have heard asked quite a bit lately, “Is it the right time to buy an annuity?”

A prolonged low interest rate environment does impact returns and interest crediting on annuities. Payouts, **guarantees and riders have all been impacted in the annuity marketplace during the last five years. In fact, one recent example showed that immediate annuity payouts were down about five percent from just eight months ago.

So, if you are considering an annuity — is this the right time or should you wait?

[embedit snippet=”video-specialist-button”]

 

**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.

Firstly, proper financial planning would indicate that a balance of assets and asset classes should be utilized in constructing a quality retirement plan. Many financial planners now utilize annuities as part of the fixed income allocation adding additional layers of security by eliminating longevity and credit risk. When it comes to providing income, annuities offer unparalleled combinations of safety and security when navigating through 20 to 40 years of retirement.

Secondly, if you are trying to time the market you may just end up guessing wrong. How can we guess wrong when the Federal Reserve has indicated they plan to keep interest rates at near zero levels until 2014? Only hindsight will be certain, but what are the costs to your portfolio when you park money in an account earning zero or stuff it in your mattress. While you may not lose principle you most likely will lose buying power. Inflation, which has averaged somewhere around four percent for about the last 30 to 40 years is sure to erode your future spending power.

However, nothing could be worse than losing principal and depleting your retirement savings just because you choose to stay invested in riskier asset classes due to a perceived lack of choice.

What is the best plan for when I prepare for retirement – NOW?

  1. Protect the Basics – If you are in or near retirement protect your income by selecting safe money options that provide reliable and steady income. Consider CD’s or annuities for this portion. Annuities are superior for providing income, while CD’s are federally insured.
  2. Spread out your assets – Look at all assets classes, not just stocks and bonds to provide diversification. You can spread out your risk by choosing assets classes than are not as heavily correlated to each other. Consider MLPs, REITs, preferred stock, commodities, currencies, options, carry trades and annuities.
  3. Take reasonable risks – Once you have protected your foundational level of income you can be more comfortable in engaging traditional more aggressive asset classes that can provide additional returns to combat inflation.
  4. Get a second opinion – Ideas and philosophies about financial planning are plentiful. Seek out professional advice and don’t be afraid to get a second opinion. When it comes to retirement planning some advisor are definitely better than others.

Lastly remember you are in charge, too often we hear from clients who say “I did not want to do that but my advisor said I should”… if you don’t like their advice or service. Get a new advisor. It’s your money and more importantly it is your retirement.

Annuity Guys® Video Transcript:

Dick: Today we have with us the new and improved Eric. He’s done a little shaving and he’s got that youthful appearance. Hey, we’re going to talk about annuity timing today and what is the best time to buy an annuity?

Eric: Yeah, it’s really we’re looking at today’s low interest rate environment. One of the questions we constantly get asked is “Is it the right time, or am I better off waiting?”

Dick: That’s the big question and I think that is the good thing about an annuity is that they are structured for income, and they’re not really structured just for the aspect, of treating them like a CD. So they’re more of a potentially, foundational place in your portfolio that can get you the higher income that you’re desiring even in a low rate environment. So I think that that’s just part of structuring an overall portfolio. What would you say, Eric?

Eric: Yeah, it’s about asset allocation, so when it comes down to it, you start with a plan. You can’t hit a target, you can’t see. So what’s your retirement financial plan? And then you start building from that, all right? We always talk about the foundation, taking care of the foundation and if income is part of the foundation, that’s really where annuity makes sense.

Eric: An annuity makes sense for fitting that income foundation portion, securing it so you don’t have to worry about running out of money.

Eric: One of the biggest concerns a lot of people we talk to have is with the rates being as low, you know…

Dick: Yeah, right, when is the right timing? And we do know, Eric. I mean it is a fact, if we keep money in a low-rate environment and we do nothing, put it in our mattress or put it…

Eric: Put it in a savings account.

Dick: When you put it in the bank it’s about like putting it in the mattress. It’s going to earn about the same amount of money, so we know that we’re not going to keep up with inflation.

Eric: Right, we know that zero is what we’re getting…

Dick: We know that our spending power is dropping, dramatically.

Eric: So if inflation’s averaging 4.0%, over the last 30 to 40 years, what are you getting when you put it in a zero-earning environment? You’re losing money. You don’t like to think of it as losing money, but you are.

Dick: Well by contrast, let’s just talk about for a minute, because we hear a lot about it. The hybrid annuity and what makes the hybrid annuity unique in this low-rate environment when it comes to income?

Eric: Well, it’s the income riders. You’ve got that **guaranteed return, sometimes as high as 8.0%, 7.0-8.0%, that those dollars can be used to **guarantee income in the future and that’s a way of securing income.

Dick: Right, it’s another layer of security that we’re really asking the insurance company to take that risk, instead of us taking the risk by going into riskier investments, we’re saying, “Hey, if I can grow my income base in a similar way, if I just put it in the stock market and tried to earn 8.0%, I mean I realize it’s not going into my cash accumulation account.” But if I can draw income off of it on a similar level that I could, if my stock account grew then that’s a way of transferring some of that risk.

Eric: Right and it’s about putting the right pieces or filling the right buckets. You want to have that secure portion taken care of, so then you can add those other allocations that can help you combat inflation, help you earn a little bit higher, because you’re taking care of your foundation.

Eric: So it allows you to take more risk in other areas.

Dick: Exactly, folks. I think that you can kind of understand that. That if you’ve got your income foundation very secure, you feel a lot more comfortable taking risk, or being more aggressive with that portion of your assets that’s more discretionary.

Eric: That’s really what we’re going after, so if you have somebody that you’re working with and, you have to be comfortable with your advisor.

Dick: Yes, you do.

Eric: First of all, get professional advice. It never hurts to get a second opinion.

Dick: No, no.

Eric: No matter, if you’re at the first stage or you’ve been investing and are ready for retirement, for a long time, you’re getting to that stage, ask for a second opinion.

Dick: Well, one of our slogans that we use quite a bit is, “Your Retirement Deserves a Second Opinion,” and it’s true. It’s really true.

Eric: We work with a lot of folks who had a very good accumulation specialist to get them to retirement.

Dick: Good strategy. They’ve earned well.

Eric: But when you get to retirement, you need to work with a retirement planning specialist and that’s where we would encourage people, to get that comfort level with your retirement plan.

Dick: If you do not feel comfortable with what is being proposed or the plan just doesn’t seem to make sense, get that second opinion. Don’t just go along, because how many times have we heard someone come in to us new and say, “Well, my advisor told me to do this.” Well, this is a reciprocating two-way street when you work with an advisor. We want our clients to tell us…

Eric: There has to be a comfort. There’s a relationship that you have to have with your advisor. If you cannot tell your advisor no, you’re working with the wrong guy or gal. Don’t want to be gender specific. But it’s about that relationship and letting them know where you feel comfortable and how you’re going to work to achieve, they’re going to work to achieve your goals, and you have to feel comfortable with that client.

Dick: And yet, Eric, there is that balance that we do know things that, because of our training, because of the way that we forecast, project and look at the way that these things interrelate, that there has to be a mutual level of trust and comfort between us and the client. That’s why they have us. We’re the professional. We know what we’re doing. We have the expertise. But they should never feel forced. You should never feel in some way that you’re being coerced into something.

Eric: Right, and if you don’t agree with the advisor’s assessment get a second opinion. That’s what it’s about. It’s about your retirement.

Dick: Have we fairly answered the question of annuity timing? Is it a good time to buy an annuity?

Eric: Well, I would tell you that it’s always the right time, if it fits the situation. You don’t wait until it’s too late.

Dick: Right, I do agree. I could say a lot more, but why don’t we…?

Eric: That’s a great gag line. Don’t wait until it’s too late.

Dick: That’s right. That’s right. Thank you.

Filed Under: Annuity Commentary, Annuity Guys Video, Annuity Rates, IRA, Qualified Plan Tagged With: annuities, Annuity Buy, Equity-indexed Annuity, Immediate Annuity, Indexed Annuity, Insurance, Life Annuity, Low Interest Rates, Payout, Pension, Rate, Riders

 

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.

 

  • High Annuity Fees & High Annuity Commissions – Hear the Inside Truth

    High Annuity Fees & High Annuity Commissions – Hear the Inside Truth

    We’ll just give it to you straight – some annuities pay high commissions and some of them have high annuity …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 »
  • Can Annuities Create Your Highest Retirement Income?

    Can Annuities Create Your Highest Retirement Income?

    Which of these two statements about retirement income do you find more appealing?My retirement income is contractually **guaranteed to meet …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"


  • The New – Immediate Hybrid Annuity™

    The New – Immediate Hybrid Annuity™

    What could be better than a Hybrid Annuity? How about a New – Immediate Hybrid Annuity™!For a typical retiree with …Read More »
  • 2017 Annuity Guys Market Prediction, NOT!

    2017 Annuity Guys Market Prediction, NOT!

    Wow, we must admit, we were DEAD WRONG!As Annuity Guys, we tend to avoid sticking our necks out on economic …Read More »
  • Market Volatility is Back! Are MarketFree™ Annuities an Answer?

    Market Volatility is Back! Are MarketFree™ Annuities an Answer?

    Timing is everything. Unfortunately, 99 percent people who say they are only in the stock market when it is going up …Read More »
  • Is a Pre-Issued Annuity right for you? – Part 2

    Is a Pre-Issued Annuity right for you? – Part 2

    This is a two part blog on Pre-Issued Annuities. In part 1 we examined some of the reasons why someone …Read More »
  • Choosing Annuity Specialists, Local or National? Which are Best?

    Choosing Annuity Specialists, Local or National? Which are Best?

    There has been a huge shift of folks leaving local brokers and advisors to find better investment options online with …Read More »
  • 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 »
  • 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 »
  • Relying on Annuities for Retirement Pensions

    Relying on Annuities for Retirement Pensions

    The private sector has been bailing on providing pensions for employees over the last few decades. Now, it appears legislation to …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.


  • What Percentage of Your Portfolio Allocation Should Be Annuities?

    What Percentage of Your Portfolio Allocation Should Be Annuities?

    Want to know just how much of your retirement nest egg you should consider for placement into annuities? The U.S. …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 »
  • Long Term Care – Annuity and Life Insurance Solutions

    Long Term Care – Annuity and Life Insurance Solutions

    Long-term care, growth, and wealth transfer are built into many of today’s annuities and life insurance products, this is sometimes achieved …Read More »
  • Identifying Unethical Annuity Advisors

    Identifying Unethical Annuity Advisors

    Practicing as a financial advisor is an honorable profession that is dishonored when its practitioners employ abusive and deceptive sales …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 »
  • Beat the Tax-Man Fair & Square with Annuities!

    Beat the Tax-Man Fair & Square with Annuities!

    Pay Less Tax with Annuities – Legally!Here is our list of seven advantages you should know so annuities can help you avoid …Read More »
  • Annuities Make Life Better for Retirees – Study Reports

    Annuities Make Life Better for Retirees – Study Reports

    Would you rather be happy and optimistic in retirement or worried about spending too much? We know it sounds like …Read More »
  • Avoiding Annuity Gimmicks, Amateurs, & Charlatans!

    Avoiding Annuity Gimmicks, Amateurs, & Charlatans!

    Everyone loves a good practical joke – until the joker happens to be the salesperson who just sold you an annuity …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.


  • Tax Saving Income Tips

    Tax Saving Income Tips

    As we approach an almost insurmountable debt load likely increases in tax is may be inevitable, we thought it may …Read More »
  • Is Strong Growth from Annuities Likely in The Looming Bear Market?

    Is Strong Growth from Annuities Likely in The Looming Bear Market?

    Strong growth is a matter of perspective, and when your basis of comparison is a decrease of 20 to 30 …Read More »
  • Choosing Annuity Potential or Income **Guarantees

    Choosing Annuity Potential or Income **Guarantees

    Have you ever heard the quip “It can be hard to remember that the objective was to drain the swamp …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 »
  • Are Annuity Surrender Charges a Deal Breaker?

    Are Annuity Surrender Charges a Deal Breaker?

    The last time you bought a new car, how much of a factor in your purchase decision was the vehicles …Read More »
  • Can a Hybrid Annuity Uncapped Index Pay Higher Interest?

    Can a Hybrid Annuity Uncapped Index Pay Higher Interest?

    Should annuity buyers be giddy because they can own an annuity with no limiting upside cap and of market loss? Well, maybe, …Read More »
  • 7-Steps in Avoiding Annuity Information Overload

    7-Steps in Avoiding Annuity Information Overload

    “Information Overload” creates a condition we call “Paralysis of Analysis”. It is the fear of making a poor decision which …Read More »
  • How Much Income Can You Withdraw Safely in Retirement?

    How Much Income Can You Withdraw Safely in Retirement?

    A Reuter’s article hit our desk recently. It’s based on a “safe withdrawal rate” during retirement (safe being relative since we’re …Read More »
  • Should You Buy Annuities in our Trump Influenced Bull Market?

    Should You Buy Annuities in our Trump Influenced Bull Market?

    What would Trump do? Do you think he might be the type to buy low & sell high? This sounds …Read More »
  • Relying on Annuities for Retirement Pensions

    Relying on Annuities for Retirement Pensions

    The private sector has been bailing on providing pensions for employees over the last few decades. Now, it appears legislation to …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.