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!
10-Year Fixed Indexed Annuities:
(AM Best A+) – 1% Spread with 220% Participation Rate – 9.34%!!!
(AM Best A) – 0% Spread with 190% Participation Rate – 9.30%!!!
(AM Best A-)– 0% Spread with 185% Participation Rate – 9.18%!!!
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 backtest.
These products not only have a phenomenal return in the most recent ten-year period but a strong return in the worst ten-year period!
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 backtesting came in for this one: (AM Best A-) 9.01%!!! (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.
10-Year FIA with Indexing Fee:
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 12.69%!!! (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.
How To Get The Most Out of Annuities:
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!
This is a solicitation for insurance based on guaranteed tax-deferred fixed annuity rates. Rates are subject to change. State of residence, age, premium, and financial suitability may determine availability. Early termination surrender charges may apply. Guarantees are backed up by the claims-paying ability of insurance carriers and are not FDIC insured. Certain restrictions and exclusions may apply, which can be found in the contract disclosures. This document is not a legal contract. Martin M. Becker and/or Atlas Financial Strategies, Inc., is an independent insurance agent/agency and does not offer tax or legal advice. This material is for informational or educational purposes only and is not a recommendation to buy, sell, hold, or roll over any asset. It does not consider the specific financial circumstances, investment objectives, risk tolerance, or needs of any specific person. You should work with Martin M. Becker/Atlas Financial Strategies, Inc. to discuss your specific situation.
All the best,