Anyone rethinking Annuities now with increase in interest rates?

[sheehs1]

While I have not been a fan of annuities in the very low interest rate environment we have had the last many years, I am wondering as interest rates rise and continue to do so, if they have become more attractive and what others on this forum think.
In the past, I was only thinking about an immediate income Annuity. However, also in the past I used "a deferred annuity" in my Moms trust estate as a wealth transfer vehicle during the 2002-2008 time frame and during questionable stock market performance. It worked well adding 3% yearly to the Death Benefit for my Dad. My Dad and his estate was the Annuitant.
If you have been investigating annuities now, what guaranteed yearly interest rate are you being quoted? Have these guaranteed yearly rates gone up? Or considering they invest in the stock market in the sub accounts, have they remained the same or gone down?

 

[VanWinkle]

Also not a fan, but they may have a place for those with limited resources, inability to stay the course, or families with a history of extremely long lives. I have not recently quoted for an annuity, but it may take a while for annuity rates to catch up with interest rates.
Immediate and Deferred annuities along with MYGAs would be my only choices.

 

[Midpack]

I still don't have any interest in any annuity, but my annuitization hurdle cost is the lowest it has ever been since I retired in 2011 - consistent with higher rates (and advancing age).

 

[ShokWaveRider]

We have one 5 year at 4.3% ($200k) We may go for another if Schwab accessible Annuities with a A++ company hit 5%. But I expect CDs may top that too.

 

[Chuckanut]

I bought one annuity. I took my SS payment at 70. It's fully COLA'd.
It was the best deal I could find after I retired. In these inflationary times it looks very good.

 

[Willers]

I too had ignored them once the CPI-linked annuities went away and rates were so low, but I started tracking them again about a month ago. For us (60 and 57), we can now get a joint annuity with a 3.7% payout rate at a 4% inflation adjustment. This is about a 20% increase in that payout from the start of September. 3% adjustment is paying out 4.26%.

Our situation is different than most. We have no need for a legacy left behind so they may make sense for us as a hedge on longevity. I'd likely ignore them if I wanted to leave a pile to kids or other. I'm not ready to pull the trigger yet, but I'm sure closer than I was a year or two ago. Now if long-term inflation rolls on at 8% annually...

 

[Willers]

I bought one annuity. I took my SS payment at 70. It's fully COLA'd.
It was the best deal I could find after I retired. In these inflationary times it looks very good.

Definitely the best annuity out there for the foreseeable future (IMHO).

 

[sheehs1]

I too had ignored them once the CPI-linked annuities went away and rates were so low, but I started tracking them again about a month ago. For us (60 and 57), we can now get a joint annuity with a 3.7% payout rate at a 4% inflation adjustment. This is about a 20% increase in that payout from the start of September. 3% adjustment is paying out 4.26%.

Our situation is different than most. We have no need for a legacy left behind so they may make sense for us as a hedge on longevity. I'd likely ignore them if I wanted to leave a pile to kids or other. I'm not ready to pull the trigger yet, but I'm sure closer than I was a year or two ago. Now if long-term inflation rolls on at 8% annually...

Willers: That's what I am beginning to think and ponder too. "If long-term inflation rolls on at 8% "... or even higher. But as with all things "Annuity", the devil is in the details of the contract. Will be interesting to see if these guaranteed yearly inflation adjustment keeps going up. As another said though, it is likely CD's will pay the same interest.
I would not be doing this as a payout. Rather it would be as a wealth transfer vehicle to my heirs in which case it would be a "deferred annuity".
If I wanted a payout, and I am not ruling that out, it would be an "Immediate Annuity".
Just curious if payouts and yearly adjustments have gone up and from your post it seems to be the case. Up 20% since Sept. Thank you.

 

[sheehs1]

Definitely the best annuity out there for the foreseeable future (IMHO).

+100

 

[sheehs1]

I still don't have any interest in any annuity, but my annuitization hurdle cost is the lowest it has ever been since I retired in 2011 - consistent with higher rates (and advancing age).

Midpack: The older I have gotten the more relaxed I am about "my stash" and not outliving it and my other income sources. That is one positive for aging!

 

[sheehs1]

Also not a fan, but they may have a place for those with limited resources, inability to stay the course, or families with a history of extremely long lives. I have not recently quoted for an annuity, but it may take a while for annuity rates to catch up with interest rates.
Immediate and Deferred annuities along with MYGAs would be my only choices.

Agree VanWinkle. My only choices as well.

 

[Al18]

I am about to turn 60. Thinking about investing 50k into a 5 year MYGA and then converting the balance to a SPIA. Last I looked, A 5 year MYGA was paying just under 5% per year and interest would be tax deferred until I get the SPIA.

 

[Car-Guy]

At my age, NO!

As already pointed out, SS is okay, but I had no choice with that one.