What Is The Average Return on Annuities?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

What Is the Average Return on Annuities?

Annuities can be a cornerstone of your retirement strategy, offering stability and a predictable income stream. The average return on an annuity varies depending on the type, the contract terms, and market conditions.

  • Average Return on a Multi-Year Guarantee Annuity (MYGA)
    • MYGAs offer a guaranteed rate of return, making them a straightforward and reliable choice. At the initiation of the contract, the return rate is set and remains fixed for the agreed duration. You can expect an average return of 4% to 5%. This predictability can be vital to your retirement plan, providing a stable income stream.
  • Average Return on a Fixed Indexed Annuity
    • Fixed-indexed annuities link your returns to the performance of a specific index, offering a balance between potential growth and security. The average return can be between 5% and 7%, depending on the index performance, participation rate, cap rate, and spread. This type of annuity often yields higher returns than MYGAs but less than variable annuities, offering a middle ground in terms of risk and reward.
  • Average Return on a Variable Annuity
    • Variable annuities typically offer the highest returns, ranging from 6% to 8% after fees. These returns depend heavily on the performance of the underlying investments. While they carry more risk, the potential for higher returns can be appealing if you have a higher risk tolerance and a longer investment horizon.
  • Single-Premium Immediate Annuity (SPIA)
    • SPIAs provide immediate payouts after a single premium payment, making them a unique and beneficial option. The return on this type of annuity is calculated based on your payment amount, age, and payout period. Expect a return rate ranging from 1% to 2%, offering a dependable income stream shortly after investment.
Annuity Average Return

How We Can Help

At The Annuity Expert, we understand that planning for retirement can be complex and overwhelming. With 15 years of experience as an insurance agency, annuity broker, and retirement planner, we specialize in helping you navigate the intricacies of annuities to secure your financial future.

Identifying Your Core Needs

Your core need is financial security in retirement. Annuities can address this need by providing a steady income stream, protecting your investments, and offering peace of mind. We believe in finding the best solutions at the lowest costs, ensuring you get the maximum benefit from your investments.

Symptoms of Financial Uncertainty

Financial uncertainty can manifest in various ways, such as anxiety about market volatility, fear of outliving your savings, or confusion about which annuity products are right for you. These symptoms can take an emotional toll, causing stress and uncertainty about your future.

Annuity Rate Of Return

What We Recommend

Taking the first step towards securing your financial future with annuities involves a clear and actionable plan. Here’s how we can help you achieve your goals:

  • Step 1: Initial Consultation
    • Schedule a free consultation with one of our experts. During this session, we’ll assess your financial situation, retirement goals, and risk tolerance. The main benefit is a personalized retirement strategy tailored to your unique needs.
  • Step 2: Tailored Annuity Solutions
    • Based on your consultation, we will recommend the most suitable annuity products for you. We’ll explain each option’s details, benefits, and potential returns. This step ensures you understand your choices and feel confident in your decision.
  • Step 3: Implementation and Monitoring
    • Once you’ve chosen an annuity, we’ll handle all the paperwork and manage the implementation process. We’ll also monitor your annuity’s performance and provide regular updates. The main benefit is peace of mind, knowing your retirement plan is in expert hands.

Features and Benefits

  • Personalized Plans: Tailored to your financial situation and goals.
  • Expert Advice: Benefit from 15 years of industry experience.
  • Ongoing Support: Regular updates and performance monitoring.
  • Comprehensive Solutions: From MYGAs to variable annuities, we cover it all.

Addressing Common Objections

  • High Fees: We provide transparent fee structures and work to minimize costs.
  • Market Risk: We offer a range of products, including low-risk options.
  • Complexity: Our experts simplify the process, making it easy to understand.

Choosing not to work with us may leave you facing continued uncertainty and potential financial shortfalls in retirement. However, partnering with us can lead to a secure, stable, and prosperous future. You’ll feel confident, relieved, and empowered, knowing you’ve made informed decisions about your retirement.

Contact us today for free advice or a quote and take the first step towards securing your financial future with The Annuity Expert.

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Which type of annuity has the highest average rate of return on annuities?

The type of annuity with the highest average rate of return depends on various factors, such as the investor’s risk tolerance and time horizon. Generally speaking, variable annuities offer higher rates of return than fixed annuities but at a greater level of risk.

What type of annuity generally has the lowest average rate of return on annuities?

Fixed annuities generally have the lowest average rate of return because they are not tied to market performance. This makes them less risky than variable annuities but also means that their rate of return is usually significantly lower. However, fixed annuity rates may be higher than other investments, such as CDs and bonds, for people who are more risk-averse or looking for a guaranteed income stream.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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