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Will fixed annuity rates ever go back up?

Posted by admin in Annuity

We do not speculate on such uncertain topics. However, the general consensus of the majority is that over the next couple of years we should see a steady increase in interest rates on fixed annuities. Should this be the case we want to share with you some of the best ways to position your assets to take advantage of the rate increases.

Laddering annuities can be helpful. 

One way to reap some rewards of rising interest rates is to do what some refer to as laddering annuities. In today’s low interest rate environment,  a fixed annuity may not seem like a smart investment.  But if you like the security of guarantees and you believe that interest rates will rise in coming years, you could put your better foot forward by laddering annuities.

Today’s immediate rates are low, but, if you purchased an immediate annuity now for a term of  5 years you could provide guaranteed income for the next five years.  At the same time place some into a fixed deferred annuity with a 5 year term that can be “annuitized” or converted into payments after 5 years.  The deferred annuity would then replace the income from the immediate annuity providing 5 more years of income payments. These payments could possibly be at higher rates than the previous five years which could even provide some help  battling inflation. In a  third annuity you would place some additional money which will be left to sit and accumulate for 10 years.  Because of the longer term you will receive a higher interest rate on the accumulation. You could even participate in a fixed indexed annuity which would allow you to receive gains based on the performance of  particular market indices without actually participating in the market.  This type of product provides the opportunity for better returns with the same protections of a fixed annuity.

With all three annuities in place you have now guaranteed your income and growth for the next 10 years.  This strategy not only provides you opportunity to grow your money and take advantage of increasing interest rates money but guarantees an income for the future.