Waiting for Rates to Increase Could Cost Retirees

September 1, 2022

Even in a low interest-rate environment, an annuity can be a good choice. Compounded growth and tax deferral can grow your savings faster than you may think. But if your clients say they’re waiting for interest rates to go up before buying an annuity, they may be missing out.

Consider this example:

If a client puts $50,000 into a five-year fixed annuity paying 4.00%, that client would be guaranteed $60,833 at the end of five years, minus any withdrawals taken.

That’s the power of tax-deferred, compounded growth. Plus, clients can experience a minimum guaranteed return and flexible access to funds along the way. Few taxable investments can compete with this blend of safety, growth and flexibility.

Here’s another way to look at it:

If a client waits one year before buying an annuity, that same $50,000 would have to earn 5.02% annually for four years to catch up with the annuity’s value of $60,833.

What happens if a client waits two years? That $50,000 would have to earn 6.76% annually for three years to achieve the guaranteed $60,833 if the client had not waited.

Use This Sales Idea With Clients

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What Is the Cost of Waiting?

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