Can I Get a 7% Annuity?
No, as of February 1, 2024, a 7% annuity is unavailable. However, you can obtain up to a 6% fixed interest rate through a Multi-Year Guaranteed Annuity (MYGA). Advertisements promoting a 7% rate are often misleading, as they do not represent a genuine interest rate but rather a hypothetical figure applied towards a guaranteed lifetime income. Moreover, as of March 2024, some annuity plans offer up to a 20% premium bonus.
Understanding Annuity Rates
Annuity rates, such as the 6% offered on MYGAs, are fixed for a set period. This ensures a consistent return on your investment for the duration of the term. MYGAs are popular for their stability and predictable income stream.
Advertisements claiming 7% returns are often referencing projected income rates, not actual interest earnings. These figures are typically used in marketing materials to illustrate potential income in retirement but are not guaranteed interest rates.
The premium bonus, which can be as high as 20%, is an additional amount added to your annuity contract’s value. This bonus can enhance the overall value of the annuity, but it’s essential to understand the terms and conditions attached to such bonuses.
Annuity Options Comparison
|Interest Rate (As of Nov 2023)
|Up to 6%
|Fixed interest, Guaranteed returns
|Advertised as 7%
|Hypothetical rates for lifetime income
|Up to 20% premium bonus
|Bonus added to contract value
While a 7% annuity is not available, you can still benefit from attractive options like a 6% MYGA or a 20% premium bonus. Understanding the differences between real interest rates and advertised hypothetical rates is crucial in making an informed decision. Contact us today for a free quote.
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