Immediate Annuity Rates

[ScottLFB]

Tahoe Ray is correct.. The original poster has the split annuity concept correct, but now find the tools the will produce those results.. There's not a 6yr SPIA paying anything North of 1% currently and the best Rate Guarantees are 2.55% for 5yrs 2.75% for 6yrs..

You can definitely beat the Bank CD with the Rate Guarantee Annuity, but wants the overrall solve point for the client here? Is the client trying to get income off this money immediately too?

 

[WPM]

Anyone have a link to a calculator that will calculate the IRR on a fixed period SPIA?

 

[ScottLFB]

Anyone have a link to a calculator that will calculate the IRR on a fixed period SPIA?

Spend the $30 and buy a Texas Instruments BA II Plus or any other financial calculator that does Time Value of Money calculations. There may be something similar on BankRate.com calculator section.

 

[Tahoe Ray]

Anyone have a link to a calculator that will calculate the IRR on a fixed period SPIA?

Internal Rate of Return (IRR) Calculator - Dinkytown.net Financial Calculators

Make sure that the withdrawal is negative. Future value should be 0. I hope this helps.

 

[WPM]

Internal Rate of Return (IRR) Calculator - Dinkytown.net Financial Calculators

Make sure that the withdrawal is negative. Future value should be 0. I hope this helps.

Thanks!

If I'm running this thing correctly, I'm not sure why a fixed period SPIA makes sense in this environment.

 

[Tahoe Ray]

Thanks!

If I'm running this thing correctly, I'm not sure why a fixed period SPIA makes sense in this environment.

You probably are running it correctly b/c in this environment, it rarely does.

 

[Guest]

Does anybody have a clue as to the actual rates the AARP sponsored
NY LIFE "lifetime annuity plan with cash refund" offers?
I did it for a female aged 70 and their socalled 6% rate is more like 3% when I factored in mortality...
Can anybody comment on this .
Thank you.

 

[Norwayguy]

Does anybody have a clue as to the actual rates the AARP sponsored
NY LIFE "lifetime annuity plan with cash refund" offers?
I did it for a female aged 70 and their socalled 6% rate is more like 3% when I factored in mortality...
Can anybody comment on this .
Thank you.

I don't understand how they can quote that rate...I lost out on a 100k SPIA even though my monthly payment was larger because the carrier would not allow my to quote the same type of rate of return....And trying to get the client to understand the "ROR" was not the way she was thinking of it. I asked her what her rate of return was if she died 1 year in to it, but I was just the greedy insurance salesman and AARP is looking out for the senior citizens.

 

[Guest]

My mistake

They gave a table that showed for $50k, the "annual payout rate"
was 6%, so, technically they didn't say the yield was 6%.

But why aren't they obligated to give the actual rate (including accounting for mortality) which I calculated at a piddly 3%.?

To me, after all the smoke and mirrors, that is what I want.

Would appreciate your comments.

.

 

[Guest]

Correction
I made an error. The actual ratre was zero.
That is, the insurance company just gave back the initial payment.
- - - - - - - - - - - - - - - - - -
OK,
I did it more accurately and got 0.3% for the rate, still very poor indeed.
I think as others, that you may as well purchase 1 year CDs for the next few years and hope that the rates will go up a bit before committing to a SPIA.