March 1, 2009

Pay out rates for Immediate Annuities

Thanks to a link over at Lazy Man and Money I found this Immediate Annuities site that gives easy and quick quotes on annuity payouts. The site gives you quick figures on payout rates for immediate annuities. Previously I've looked at annuity figures on the Vanguard site but its a little hard to find their annuity quotes there.

I ran the calculations for a few ages on an premium of $100,000 and came out with sample figures for a few ages. For a $100,000 purchase you would get monthly payout rates in the $500-$700 range. It varies based on age and sex. If you get a joint payout for a married couple then it will pay out less but it will pay benefits for the life of both spouses. For the joint payout I assumed that the spouses are the same age. Spouses of different ages will have different payouts but you can run the numbers yourself at Immediate Annuities site. These are just sample quotes and theres no guarantee you'll get these payouts. You may find better or worse payout through other sources. Your exact health condition and state you live in may impact the quote you get.

Monthly payout figures for $100,000 annuity purchase:

Age Male Female Joint
40 $534 $523 $506
45 $552 $537 $516
50 $576 $558 $529
55 $610 $585 $544
60 $656 $623 $573
65 $723 $676 $593

Or as a % annual payout from the initial premium cost:

Age Male Female Joint
40 6.4% 6.3% 6.1%
45 6.6% 6.4% 6.2%
50 6.9% 6.7% 6.3%
55 7.3% 7.0% 6.5%
60 7.9% 7.5% 6.9%
65 8.7% 8.1% 7.1%


So in other words if you are a 40 year old male and buy a $100,000 immediate annuity then you could get $534 a month. That is $6,408 annually which equates to 6.4% payout from your initial $100,000.

Keep in mind that these annuities have no inflation adjustment. Personally I'd recommend looking into annuity with a cost of living adjustment built in. Also the joint payouts are for 100% payout to surviving spouse. I don't think 1 person needs 100% as much as 2 people so you could go with a 66% or 75% payout rate instead and get a better benefit payout.

1 comment:

  1. Hello “Free by 50” author,

    As a fellow money (miser) saver I have followed your blog for some time now....

    The blog is great and you have some great posts so I have a little offer for you....

    The company I work for would like to pay you to put a text link to a credit card site on your blog. I have not seen any other deals already, but would love to make you an offer anyway. I’m sure we can come up with some good terms?!

    The website is called creditcardmenu.com and we will be launching a new fantastic looking credit card review and comparison service which is free to our customers; advertising with sites like your should be great for our profile.

    So let the bartering begin??!

    Oh and keep on blogging!

    Alex Preece
    Bad with my money, great with other peoples!
    Negotiator
    Giant Investments
    E: alex.preece@giant.org.uk
    T: 01273 224002

    ReplyDelete

Blog Widget by LinkWithin