Best Annuity for Immediate Income to Compete with CDs?

[jacobtn]

I have a 67 yr old with 220k in a 5 yr IRA cd. She is getting 3.94% until it renews in March at 0.5% her and hubby has about 300k in other investments with me, plus ample liquid assets. She is drawing a monthly check equal to the interest earned currently, and would like to continue doing so.

Best solution I came up with was a 6 yr MYGA with equitrust at 2.85%, which I thought would give her close to what she has now. They don't have LTC, both were declined coverage through Mutual for health conditions they have. Not sure if a better option exists? Clients reside here in TN.

 

[Tahoe Ray]

I have a 67 yr old with 220k in a 5 yr IRA cd. She is getting 3.94% until it renews in March at 0.5% her and hubby has about 300k in other investments with me, plus ample liquid assets. She is drawing a monthly check equal to the interest earned currently, and would like to continue doing so.

Best solution I came up with was a 6 yr MYGA with equitrust at 2.85%, which I thought would give her close to what she has now. They don't have LTC, both were declined coverage through Mutual for health conditions they have. Not sure if a better option exists? Clients reside here in TN.

How old is the husband?

 

[SWM]

On the EIA side with GIWB spousal continuance, you would be looking at 4-5% lifetime based on her age. Not knowing the husbands age, cannot speculate.

Are you securities licensed? If so, Metlife has a VA that might be a good fit as well.

 

[plummershawn]

I have a 67 yr old with 220k in a 5 yr IRA cd. She is getting 3.94% until it renews in March at 0.5% her and hubby has about 300k in other investments with me, plus ample liquid assets. She is drawing a monthly check equal to the interest earned currently, and would like to continue doing so.

Best solution I came up with was a 6 yr MYGA with equitrust at 2.85%, which I thought would give her close to what she has now. They don't have LTC, both were declined coverage through Mutual for health conditions they have. Not sure if a better option exists? Clients reside here in TN.

I can get her 3.1% Fixed, and I also can quote you the highest lifetime income payment for both single and joint lives. Send me a message if interested and include the husband's age.

Thanks!

Shawn

 

[jacobtn]

husband is 72. I didn't use a product with an income rider because she wanted to know that she won't be "going into her principal", and of course an income rider only guarantees her lifetime payments, not preservation of principal.

It is a little complicated because her friend has 120k in the same CD at the bank (also a client), and will likely want to do the same thing this couple does. Another reason I thought the MYGA was a good option as it was simple and clean. Now I wonder if using a fixed rate allocation in a bonus EIA wouldn't be a better option, like Am Equity where they have the free 4.5 income rider...??

 

[SWM]

I have not seen a fixed option in an EIA North of 2.0% for some time. A few older ones at 3%. Maybe someone else knows of one. Good luck

 

[Tahoe Ray]

husband is 72. I didn't use a product with an income rider because she wanted to know that she won't be "going into her principal", and of course an income rider only guarantees her lifetime payments, not preservation of principal.

It is a little complicated because her friend has 120k in the same CD at the bank (also a client), and will likely want to do the same thing this couple does. Another reason I thought the MYGA was a good option as it was simple and clean. Now I wonder if using a fixed rate allocation in a bonus EIA wouldn't be a better option, like Am Equity where they have the free 4.5 income rider...??

I would stick with the MYGA given this information. Not touching principal is a deal killer...the fixed buckets are all pretty bad (as SWM pointed out) and any significant bonus is going to come with a pretty long surrender. Plus you're adding another layer of complexity with the rider and the potential for varying payments (as the rates can change)...I would go the path of least resistance here.

 

[iceco1d]

Security Benefit has a flex premium fixed annuity called "Total Interest" where the first year rate is 4.25% and the second year target rate is 2.255. GMIR is 1.00% with a 6 year surrender.

 

[Tahoe Ray]

Security Benefit has a flex premium fixed annuity called "Total Interest" where the first year rate is 4.25% and the second year target rate is 2.255. GMIR is 1.00% with a 6 year surrender.

Not attacking but just curious...why wouldn't he go with the Equitrust for some certainty here? A 6 yr MYGA w/ them has a much higher yield to surrender and we all know the carriers' propensity to lower rates to the minimum...

 

[iceco1d]

Not attacking but just curious...why wouldn't he go with the Equitrust for some certainty here? A 6 yr MYGA w/ them has a much higher yield to surrender and we all know the carriers' propensity to lower rates to the minimum...

Oh I realize. I was just throwing out another option. SBL was at 5.0% for awhile least year with a 3.0% target for year 2. They ended up renewing those at 2.75% earlier this year (the GMIR was 1.0%).

I think SBL is looking to get back in agents "good graces" so I think they'll try and keep rates juicy as long as possible.

Just gives the client the option. Know your rate for 5 years, or roll the dice and have a chance at a little more/less.

The SBL product does 10% free each year also (don't know if the MYGA does), so you could have about half the contract pulled out before the 6 year surrender is up (and reinvest into higher rate products if/when rates start to go up).