![]() Then you can begin to sort through which specific contract best addresses your needs.Īnnuities can help plan for retirement during a volatile market. The best way to make sense of them is to assess what problem or concern you’re trying to address, and then decide which category of annuity can best do the job, says Tamiko Toland, director of retirement markets at Cannex, an independent research firm specializing in retirement products. Each type is designed for a specific task. "Single life" pays for one person's lifetime "joint life" pays for both spouses' lifetimes.Īnnuities are the Swiss army knives of financial tools. One of the tables also includes a new section, Variable Annuity Variations, to reflect an explosion in both product development and consumer interest.Ĭash refund: When an investor dies, any remaining principal is paid to heirs in a lump sum. We included fees and, where applicable, limitations on stock allocations because these factors affect underlying account values. This year’s tables introduce more key information on variable annuity contracts with guaranteed income riders. A contract’s competitiveness-or lack thereof-can change just with the tweak of a single factor, such as age, size of investment, length of surrender charge, or how remaining principal is paid to heirs at death. Contract terms-guarantees, benefits, rates, fees-change frequently, particularly in times of volatility or fluctuating interest rates. To help give a sense of the marketplace, Barron’s looked at 100 competitive contracts across different annuity categories, based on a set of assumptions about an investor’s profile. So, while one contract might be a good fit for one person, it could be a costly mistake with long-term consequences for another. Insurers have been churning out new types, each designed to address a particular aspect of investors’ unease. Overall, investors put $61 billion into annuities in the period, producing the strongest quarterly sales since the second quarter of 2019.Īs interest in annuities revs up after a tough 2020, product selection can be overwhelming. In this year’s first quarter, sales of a type of contract called a registered index-linked annuity were up 89%, according to Limra’s Secure Retirement Institute, an insurance research firm in Windsor, Conn. They also can offer considerably more income than would be generated by Treasuries or certificates of deposit, and their returns can be linked to stock-market indexes.Įager to lock in these protections, investors are driving some of the biggest annuity sales increases on record. Their insurance component can protect against investment losses or guarantee lifetime income, like a traditional pension, and investments within them grow tax-deferred, like assets in an individual retirement account or 401(k). It’s no wonder that investors in or nearing retirement are seeking alternatives to the traditional stock-and-bond portfolio.Īnnuities, a form of insurance with underlying investments, have the unique capacity to address these issues-when used wisely. Both are member companies of the Western & Southern Financial Group.Consider the myriad looming threats, each of which alone could be the bane of any retirement plan: potential tax increases, inflation, an overstretched stock market, and bond yields so low they’re useless for income and no longer serve as ballast during a stock market tumble. National Integrity Life Insurance Company, Greenwich, New York, operates in NY. ![]() Western-Southern Life Assurance Company, Cincinnati, Ohio, operates in DC and all states except NY. ![]() USAA Protected Retirement Income Annuity is issued by USAA Life Insurance Company, San Antonio, TX, and in New York by USAA Life Insurance Company of New York, Highland Falls, NY. Western & Southern IncomeSource ® Annuity is issued by Western-Southern Life Assurance Company or National Integrity Life Insurance Company. MassMutual RetireEase SM is issued by Massachusetts Mutual Life Insurance Company New York Life Guaranteed Lifetime Income Annuity II/New York Life Guaranteed Period Income Annuity II are issued by New York Life Insurance and Annuity Corporation (a Delaware Corporation), a wholly owned subsidiary of New York Life Insurance Company. The Guardian Guaranteed Income Annuity III SM is issued by The Guardian Insurance & Annuity Company, Inc. Western & Southern IncomeSource ® Annuityįinancial strength rating of issuing company 3 New York Life Guaranteed Lifetime Income Annuity II/Guaranteed Period Income Annuity II The Guardian Guaranteed Income Annuity III SM Since an annuity's guarantees 2 are only as strong as the insurance company providing them, you should consider the strength 3 of the company you select and its ability to meet future obligations. Available through The Fidelity Insurance Network ® ![]()
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