Best annuity payout 5 years

[goillini52]

Ok, I really can't comment about the FIA's.

Sometime back, maybe 2-3 years, Ray made a rates comment and mentioned Oxford. As a result, I hunted for rates and found the agent rate sheet they publish each month.

I could understand the MYGA part. I tried to understand the FIA's, FIA's were totally incomprehensible to me. After a couple of months of that I gave up. (I also did not understand income riders but that is another story.)

I review the rate sheet periodically just to see MYGA rates. I have learned even that approach is flawed because different carriers will adjust their MYGA rates differently in given months.

I could also understand the MYGA GLWB approach Oxford uses, but at the time I was looking carefully, there was no way I was going to have $20k of Roth qualified money to purchase one of their MYGA's, with or without the income rider.

From your comments, it is obvious to me that I don't know about their FIA's, so I can't comment on what is $10K and what is $20K and what is 80 years and what is 85 years.

For their MYGA's, 85 is the maximum issue age for the MYGA, 80 is the maximum issue age for the income rider. Because of all the conflicting information I have been getting about income riders, There is something I had been considering doing with an Oxford MYGA as part of my overall plan, but the July rate sheet shows that is no longer possible.

There is also the problem I would have obtaining an Oxford product. Ray says their commissions are low to start with. My age would reduce that compensation further. There is no good reason for an agent to even discuss Oxford annuity products with me, let alone sell me one.

I forgot most of what I knew about FIA's...haven't sold one in 15 years. I'm only doing MYGA'S. Keeping it simple.

While you can get better rates than Oxford, Terminal Illness...Home Health Care and Nursing Home benefits are baked in, where many carriers reduce the interest when adding these riders. Also, Oxford is A rated.

Yes, the commissions are reduced at your age, and when you turn 80, they go down again.

Maybe you can find an agent that's licensed in Kansas to help you.

 

[PrivClientSG]

The payout factors for Nationwide are horrendous compared to what's offered currently.

Thanks. Really? In what aspect? I recently saw an independent case study and the payout at age 70 (male, single life) looked very good. So what are you comparing the Nationwide to? Similar product or different strategy/product?

 

[PrivClientSG]

The income riders can be solid products for the right situation. Very strong guaranteed income.

Biggest drawback is that most do not provide inflation options. And you will zero out the actual cash surrender value pretty quickly, relatively speaking.

I do not think Nationwide has any type of inflation protection once income begins. Some use the index gains to increase the income, others use a set COLA increase, others use CPI. Of course the inflation options start you at a lower income, so the right balance has to be there for the situation.

But they can be a strong alternative to a SPIA or DIA.

Agreed. The inflation protection is true, but my thinking is that this is only a small piece of one's puzzle, however, regardless, I agree. As far as zero'ing out the cash surrender value, absolutely. Pretty obvious. All the more reason I viewed this as one piece and even at that it's a hedge against outliving a specific pool of money. Very good points and I agree.

 

[Tahoe Ray]

Thanks. Really? In what aspect? I recently saw an independent case study and the payout at age 70 (male, single life) looked very good. So what are you comparing the Nationwide to? Similar product or different strategy/product?

They're not that competitive on the guaranteed side anymore which I'm guessing is what MTC is referencing.

Some of these carriers use stacking, credit par leverage, and a whole lot of other "hopes and dreams" to show larger incomes.

When we design the annuity side of a distribution plan, we only rely on the guarantees. Everything else (any increased income, account value stability, etc.) is just icing if it happens.

 

[PrivClientSG]

They're not that competitive on the guaranteed side anymore which I'm guessing is what MTC is referencing.

Some of these carriers use stacking, credit par leverage, and a whole lot of other "hopes and dreams" to show larger incomes.

When we design the annuity side of a distribution plan, we only rely on the guarantees. Everything else (any increased income, account value stability, etc.) is just icing if it happens.

I am going to have to check that because all I looked at was guarantees. It was pretty simple -- $100k going in, 30% ( I think it was 30%) bonus, wait 365 days and get 8% on that figure for the income base (and the fee seemed very fair) -- and that's with zero ROR on the deposit. Actually, it seemed to be selling the guarantee. So who do you look at? I am not really in this marketplace, but the study was interesting from a "distributing planning" perspective.

I didn't see another company that beat it and again, this was an indy case study. Thanks for the insight, and like I said, I am going to check again.

 

[Tahoe Ray]

I am going to have to check that because all I looked at was guarantees. It was pretty simple -- $100k going in, 30% ( I think it was 30%) bonus, wait 365 days and get 8% on that figure for the income base (and the fee seemed very fair) -- and that's with zero ROR on the deposit. Actually, it seemed to be selling the guarantee. So who do you look at? I am not really in this marketplace, but the study was interesting from a "distributing planning" perspective.

But what's the age and what's the lifetime income distribution percentage?

5% on 140,400 (after 1 year using your example) is 7,020 for life.

If that same client had a 20% upfront income bonus with a 7% rollup but was at 6% for life for the same client (128,400), that would be 7,704 for life, or 10% more income.

Corebridge (their MSG distribution line), F&G, National Western, Global Atlantic, and Allianz are all players in the one-year deferral market.

On no deferral, you'd have to add in North American, Symetra, and Pru.

On longer deferrals, Athene, American Equity, and others.

There are a ton of moving parts in this space and the players are constantly changing.

 

[LostDollar]

When we design the annuity side of a distribution plan, we only rely on the guarantees. Everything else (any increased income, account value stability, etc.) is just icing if it happens.

Well ..............

Speaking as a consumer, one can hope, but I recently had an agent fire me, in part, because I wasn't willing to accede to some of his recommendations.
One of the recommendations he was most upset about my not agreeing with was recommended action BASED ON AN ASSUMPTION PORTION OF AN ILLUSTRATION, not the guarantee section. I could not believe my eyes when I finally understood his basis for the action he suggested I take.

 

[Tahoe Ray]

Well ..............

Speaking as a consumer, one can hope, but I recently had an agent fire me, in part, because I wasn't willing to accede to some of his recommendations.
One of the recommendations he was most upset about my not agreeing with was recommended action BASED ON AN ASSUMPTION PORTION OF AN ILLUSTRATION, not the guarantee section. I could not believe my eyes when I finally understood his basis for the action he suggested I take.

Was there a complete financial plan done?

Because that's what I'm referencing. We are sourcing one piece that needs to be fully guaranteed but the plan often has a number of other moving parts (equities/bonds/ETFs in managed accounts, tax considerations, etc.)

 

[MTC]

They're not that competitive on the guaranteed side anymore which I'm guessing is what MTC is referencing.

Some of these carriers use stacking, credit par leverage, and a whole lot of other "hopes and dreams" to show larger incomes.

When we design the annuity side of a distribution plan, we only rely on the guarantees. Everything else (any increased income, account value stability, etc.) is just icing if it happens.

Correct. Nationwide payout factor at age 70 on some products are between 3.5 and 4% compared to 6 to 7% offered today. And that's guaranteed, unlike caps and par rates. (Which doesn't really matter anyway)

 

[LostDollar]

Correct. Nationwide payout factor at age 70 on some products are between 3.5 and 4% compared to 6 to 7% offered today. And that's guaranteed, unlike caps and par rates. (Which doesn't really matter anyway)

I had forgotten about this because I am interested in joint life payouts.

If you go to single life payouts, ages 70 and above, and take lifetime income after one year on $100K, according to their consumer facing calculators, the Nationwide payout is a bit higher than the North American. ( I believe the Nationwide payout used to be a lot higher, but it is still slightly over.)

If you do joint life payouts, it's a different story.