In this month’s Atlas Annuity Rate Report, we’ll take a look at the highest MYGA and FIA rates. Plus, I will list the highest returns of the indexes that have the increased participation rates that are optional with the fee. When assessing returns, I always consider the renewal rate history of the companies that I recommend. Meaning, it does you no good if a company will give you a 100% participation rate if they have a track record of decreasing that rate during your next indexing period. There are plenty of options for solid renewal rate track records. 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
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%
2 Year (AM Best A-) Free Withdrawal Yr1/Yr2+ 0%/10% – 2.05%
3 Year (AM Best A-) Free Withdrawal Yr1/Yr2+ Int/Int – 2.65%
3 Year (AM Best B++) Free Withdrawal Yr1/Yr2+ 0%/5% – 2.60%
3 Year (AM Best A-) Free Withdrawal Yr1/Yr2+ 0%/10% – 2.55%
4 Year (AM Best A-) Free Withdrawal Yr1/Yr2+ 0%/10% – 2.90%
4 Year (AM Best A) Free Withdrawal Yr1/Yr2 Int/10% — 2.90%
5 Year (Demotech S) Free Withdrawal Yr1/Yr2 Int/Int – 3.50% (AZ, PA, TX, UT only)
5 Year (AM Best B++) Free Withdrawal Yr1/Yr2+ 0%/0% – 3.15%
5 Year (AM Best A-) Free Withdrawal Yr1/Yr2+ Int/Int – 3.10%
5 Year (AM Best A) Free Withdrawal Yr1/Yr2+ 10%/10%- 3.05%
When it comes to FIA’s, we do not just want to look at the highest returns, but the lowest returns as well. If a product has, for example, 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.
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 – 8.47%!!!
(AM Best A-) – 0% Spread with 60% Participation Rate – 8.14%!!!
(AM Best A+)– 2.75% Spread with 100% Participation Rate – 7.79%!!!
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 principle, in exchange for a higher participation rate or cap on the mother of all indexes, the S&P 500.
The results of the backtesting came in for this one: (AM Best A-) 10.35%!!!
That’s some serious growth considering these products have zero fees and do not risk your money like a stock, bond, or mutual fund will.
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 is with an A-Rated company and has returned: 10.83%!!!
I normally do not recommend an indexing fee because your principle 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 wishes.
When we design your 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 principle associated with them; they do 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, and 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. 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 principle, but you would be charged a fee for the increased participation in a said index. If you would be willing to have the fee deducted from your principle, 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.)