Dedicated to Deposits: Deals, Data, and Discussion
Featured Savings Rates
Featured Accounts

Retirement Income? Fixed Annuities Come Up Short

Sunday, May 1, 2011 - 8:41 AM
From the Wall Street Journal
[Fixed annuities] eliminate the risk that you'll outlive your savings. And they let you squeeze out extra income while you're alive, at the cost of leaving nothing for your heirs.

But there's a big problem right now. Annuity payout rates have slumped.

It should be noted the article focuses only on fixed annuities (also called an immediate payout annuity or life annuity). These are very different than variable annuities which have lots of issues as Clark Howard describes.
3
Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
Rep Points: 125,077
1. Sunday, May 1, 2011 - 10:35 AM
Vanguard has an immediate annuity that includes an inflation rider that provides fixed income payments with added income based on any increase in annual inflation. Of course, with this added feature there comes a short-term negative. The initial income payments with this annuity are a tad less than a regular immediate fixed income annuity without the inflation rider. Consult the following site for more information regarding this product:

https://personal.vanguard.com/us/whatweoffer/annuities/income?Link=facet
3
ShorebreakShorebreak2,608 posts since
Apr 6, 2010
Rep Points: 14,135
2. Tuesday, June 14, 2011 - 2:31 PM
More information is available on fixed annuity rates at annuityrateshopper.com
2
RayMortRayMort2 posts since
Jun 1, 2011
Rep Points: 3
3. Sunday, December 4, 2011 - 5:04 AM
One aspect to take into consideration is that interest rates will probably begin increasing soon.  The Fed infused vast amounts of cash into the markets and that cash is still there.  We could easily experience inflation and higher interest rates when the economy picks up.  Thus, you may want to wait for interest rates to increase before purchasing an immediate fixed annuity so you can realize higher returns.
1
christiehchristieh1 posts since
Dec 4, 2011
Rep Points: 1
Reply