In this month’s Atlas Annuity Rate Report, we’ll look at the highest MYGA and FIA rates. Plus, I will list the highest returns of the indexes that have increased participation rates with an optional fee. When assessing returns, I always consider the renewal rate history of the companies that I recommend. Meaning, it does no good if a company offers a 100% participation rate if they have a track record of decreasing that rate during your next indexing period. There are plenty of annuity companies that have a solid track record of renewal rates. For the most up to date returns, or information on 5-year and 7-year FIA’s please click the “Schedule A Call” button or reach me directly at 636.926.6500.
Here are the latest annuity returns in the marketplace:
MYGA’s are increasing!
Multi-Year Guaranteed Annuities (MYGA’s):
2 Year: (AM Best B+) Free Withdrawal Yr1/Yr2 0%/0% – 2.15%
2 Year: (AM Best A-) Free Withdrawal Yr1/Yr2 0%/10% – 2.10%
3 Year: (AM Best A-) Free Withdrawal Yr1/Yr2+ 0%/10% – 3.00% (35 bps increase)
3 Year: (AM Best A-) Free Withdrawal Yr1/Yr2+ int/int – 2.65%
4 Year: (AM Best A-) Free Withdrawal Yr1/Yr2+ 0%/10% – 3.05%
4 Year: (AM Best A) Free Withdrawal Yr1/Yr2 0%/15% — 2.90% ($100,000 minimum)
5 Year: (Demotech S) Free Withdrawal Yr1/Yr2 Int/Int – 3.50% (AZ, PA, TX, UT only)
5 Year: (AM Best A) Free Withdrawal Yr1/Yr2 0%/0%- 3.50%
5 Year: (AM Best A) Free Withdrawal Yr1/Yr2+ 10%/10% – 3.25%
5 Year: (AM Best A) Free Withdrawal Yr1/Yr2+ 0%/15% – 3.25% ($100,000 minimum)
10-Year Fixed Indexed Annuities:
When it comes to Fixed Indexed Annuities, we do not just want to look at the highest returns, but the lowest returns as well. For example, if a product has returned 12% over the latest 10-year period, but only 2% in the worst ten-year period, that is too much of a spread in returns. That indicates a volatile and unstable index. We want to look at an annuity that has a spread of less than 3% in best and worst timeframes over a 20 year back test.
The following products not only have a phenomenal return in the most recent ten-year period, but a strong return in the worst ten-year period!
(AM Best A-) – 5% Spread with 100% Participation Rate – 7.94%!!!
(AM Best A) – 0% Spread with 135% Participation Rate – 7.56%!!!
(AM Best A+)– 2.75% Spread with 100% Participation Rate – 7.48%!!!
Then, there is the new Fixed Indexed Linked Annuity (FILA) that I wrote about on November 26, 2021. You can find that article by clicking the link. This annuity allows you to risk up to 15% of your gains, not your principal, in exchange for a higher participation rate or cap on the mother of all indexes, the S&P 500. There are also several other indexing options with higher Caps & Par Rates.
The results of the back testing came in for this one: (AM Best A-) 9.20%!!! (SG Global Sentiment)
That’s some serious growth considering these products have zero fees and do not risk your money like stocks, bonds, or mutual funds.
If you are willing to pay an indexing fee for a higher participation rate to possibly increase your gains, the highest 10-year return to date for an increased indexing strategy with an A-Rated company is 10.84%!!! (1.75% fee)
I normally do not recommend an indexing fee because your principal would be reduced due to paying the fee in those years when the index does not have a positive return.
However, there are several companies that offer a total reimbursement of your indexing fee and will guarantee that you never have less than your original premium that was allocated to the annuity. So, there is a place for the indexing strategy with the fee. But that will be individual recommendations according to your suitability.
When we design your Atlas Annuity Strategy, we will discuss how to use crediting methods to give you the best chance of getting a return every single year with the highest participation rates available.
In addition to these phenomenal rates that have absolutely zero risk of principal associated with them; they leave you access to 10% of your money starting at the beginning of Year-2 (certain annuities will give you access in Year-1). For a complete strategy on how to effectively use one of these products with my Atlas Annuity Strategy , instead of bonds or other products that risk your money, all while potentially save yourself tens of thousands of dollars in management fees, click the link to see a complete overview. Or schedule a time for a short conversation by clicking the “SCHEDULE A CALL” button!
(NOTE: For compliance reasons, I will not be listing company names. We would need to have a legitimate conversation about that. These rates are the latest for the State of Missouri. Please call for the latest returns in your state of residence. Minimum premium amounts vary between companies. As listed above, there are higher returns listed in my software, but I normally do not recommend them, unless there is a guaranteed Return of Premium. Almost every Fixed Indexed Annuity offers a higher participation rate for a fee. However, if a crediting strategy has a negative return in any given crediting term, it will not affect your principal, but you would be charged a fee for the increased participation in said index. If you would be willing to have the fee deducted from your principal, I’m happy to discuss the options available. As in any financial product that you may be investigating, current returns do not guarantee future results.)
All the best,