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jrobb45 01-28-2009 06:51 PM

What did Fixed Annuities pay in the early 80's
 
Does anyone remember what fixed annuities paid in the early 80's when CD rates were in the double digits? Were their rates competitive with CD's? It seems to me that FA never paid much more than mid single digit returns. But I would like to hear from someone with a better memory than mine.

Thanks,
jr

OAG 01-29-2009 03:57 AM

Frankly, I can not help, but having been into CD's for about 30 years I do not remember CD's (Bank/CU, FDIC/NCUA Insured CD's) being in the "double digits". Must be some old times myth. As far as fixed annuities I cannot help there either but maybe someone else will calling a current issuer of Annuities would help.

BTW Welcome to the Forum.

ats5g 01-29-2009 07:40 AM

TIAA traditional account paid about 11% at its highest in the early 80's. See page 3.

FinanceDude 01-29-2009 08:34 AM

As recently as 2000-2001, you could get 7% fixed for 6 years........:)

CyclingInvestor 01-29-2009 08:57 AM

I had a short-term 15.1% CD in the early 80s. I still have some 9.5% Cal GO munis that I bought in 1984 - they mature next year - my last non-stock holding. I hope California can afford to pay me off.

Dawg52 01-29-2009 09:07 AM

Yeah, no myth. My parents made a lot of their money with double digit cd's in late 70's and early 80's. I remember opening up my first IRA with a high return cd.

OAG 01-29-2009 09:34 AM

Well I stand corrected. This is interesting, wonder if we will get back there: Certificate of Deposit Index (CODI), Historical Data

REWahoo 01-29-2009 09:39 AM

Quote:

Originally Posted by OAG (Post 777973)
Well I stand corrected.

I recall my dad having a 3 year CD back in the erly 80's paying 17%. I also remembered how he groused when it matured and he could get only a measly 10%...

Martha 01-29-2009 09:43 AM

Yeah, but our mortgage from the mid-eighties had a 14% interest rate.

REWahoo 01-29-2009 09:49 AM

Quote:

Originally Posted by Martha (Post 777979)
Yeah, but our mortgage from the mid-eighties had a 14% interest rate.

Uh oh. Sounds Four Yorkshiremenish to me...:coolsmiley:

Koolau 01-29-2009 10:06 AM

Early '80s I had a 3 yr SPDA @ 11%. As I recall, most CDs and bonds paid double digits due to the very high inflation rate at the time.

FinanceDude 01-29-2009 10:07 AM

Quote:

Originally Posted by OAG (Post 777973)
Well I stand corrected. This is interesting, wonder if we will get back there: Certificate of Deposit Index (CODI), Historical Data

We just might. I have a master plan, just make the CD rate the same as the unemployment rate..........:laugh:

OAG 01-29-2009 10:35 AM

This "lay-off rate" is starting to look like a stampede. I wonder how many companies have suggested to their employees that they all (everyone, including the managers and the bosses) take a 10 or 20% pay cut and/or a reduction in hours to protect jobs in the company. If the books were transparent and the company could make a case for it most employees would opt for it for some limited period. I guess some are actually doing it but that is not considered newsworthy I guess.

saluki9 01-29-2009 01:05 PM

Quote:

Originally Posted by FinanceDude (Post 777947)
As recently as 2000-2001, you could get 7% fixed for 6 years........:)

We have a framed ad in our office from the treasury dept offering savings bonds at 11%

FinanceDude 01-29-2009 01:19 PM

Quote:

Originally Posted by saluki9 (Post 778063)
We have a framed ad in our office from the treasury dept offering savings bonds at 11%

Where can I get some?? ;D

The best I know of right now, from a company that actually can pay the rate, is 6.5% for 10 years.........

jrobb45 01-30-2009 11:33 AM

Thank you all for your replies. I remembered that the mortgage rate on the house we bought in 1972 was about 6.75-7.00% and that the cd rates got into the double digits in the early '80's, but I couldn't remember what annuities were paying because we weren't investing in them back then.
Now I've started to look at them more(but will not make an investment at current rates), because of the tax deferral. No more IRA contributions because we don't have earned income.
I'm aware of all the fees annuities charge and was wondering if the annuity companies interest rates on single premium deferred income products raise proportionally, as intermediate term cd's(5 year) do, if they lag a little, lag a lot etc.. Sorry for such a long sentence.

It seems to me, that for the last several years, FA returns have lagged cd rates and the only thing they had going for them was the tax deferral.

Regards,
jr

OAG 01-30-2009 12:40 PM

Take it from someone that is there, tax deferrals will catch up with you.

jrobb45 01-30-2009 03:05 PM

Quote:

Originally Posted by OAG (Post 778473)
Take it from someone that is there, tax deferrals will catch up with you.

In hindsight, is there anything you would have done differently?

Regards and thank you for your service to our country.

jr

OAG 01-30-2009 03:17 PM

I do not think so. Even tho they have caught up with us we still get to keep a significant percentage for ourselves. Maybe earlier, when I lived in FL, I should have shifted a lot more to a ROTH (no state income taxes there). I am not comfortable with going the annuity route now (from an issuer security standpoint; and estate considerations). I do have two annuities but they are under the US Government so they are reasonably safe.

jrobb45 01-30-2009 03:43 PM

I pretty much feel the same as you about annuities. Even though a very good friend, who is a retired insurance agent, and one of my son in laws who is currently an insurance agent say annuities are good(in the right situation), except for the fees.

regards,
jr


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