Manage episode 325462275 series 2798004
In this episode, The Annuity Man discussed:
- What are interest rates?
- Payout rates and lifetime income
- Focusing on the monthly income
- You can’t beat the annuity companies
- Interest rates have to do with multi-year guarantee annuities, the annuity industry’s version of a CD. You will be locked in at a guaranteed interest rate. The payout rate is a whole different animal.
- Payout rates have to do with life expectancy and lifetime income, a combination of a return of principal plus interest. That percentage is the payout rate.
- Forget the bonus, forget the payout rate percentage, forget it all. Focus on the monthly income number; it’s the number that matters.
- They price it so that the longer you allow them to hold your money as it’s deferring, as you’re waiting to turn on the lifetime income stream, the more they enhance the payments. You can’t time interest rates or payout rates.
"Don’t look at the percentage, look at the monthly income number, and with any of this, look at the contractual guarantee." — Stan The Annuity Man.
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