September 14, 2014

Immediate Annuity Rates September 2014

I actually hesitate to post this since I'm in doubt about the accuracy of the numbers.    I got the figures below from the Annuity QuickQuote website.   I'm suspicious of the accuracy since some of the numbers aren't linear.  e.g. there is no reason I can think of that the annuity rate of a 54 year old would be marginally better than a 55 year old.  Unless its just different quotes from different insurers but I don't know why insurers wouldn't quote all ages.

So anyway, big fat disclaimer, that I"m not sure all these figures are really accurate.   It doesn' matter anyway, you'd have to get a real quote from a real insurer so the numbers here are just meant for reference.

Here are the rates for a married couple with 100% survivor benefits.  Male age is on the rows and female is in the column. :



50 55 60 65 70
50 3.60% 3.63% 3.85% 3.93% 4.10%
55 4.59% 4.75% 4.90% 5.31% 5.36%
60 5.14% 5.28% 4.53% 5.55% 5.65%
65 4.22% 4.30% 4.58% 4.72% 4.84%
70 3.59% 3.70% 3.74% 4.82% 5.15%

So if for example you've got a 65 year old man and a 60 year old wife then they can get 4.58% payment rate.

Note that I"m not sure why the payout rates aren't always linear in that table.  For example why is the payout rate for a 60 year old man and 50 year old wife better than a 70 year old man and 50 year old wife?  I'd assume the 70 year old man and 50 year old wife would have lower payout.  I'm not sure if the numbers are inaccurate or if theres something going on with the mortality rates or how insurance companies quote the figures that I'm not aware of.  

Single life annuity rates are :



M F
           50 4.45% 4.55%
           51 4.55% 4.57%
           52 4.60% 4.59%
           53 4.65% 4.62%
           54 4.75% 4.65%
           55 4.70% 4.76%
           56 4.98% 4.82%
           57 5.11% 4.85%
           58 5.20% 4.89%
           59 5.28% 4.95%
           60 5.25% 5.08%
           61 5.32% 5.15%
           62 5.10% 5.20%
           63 5.34% 5.23%
           64 5.70% 5.25%
           65 5.73% 5.29%
           70 6.60% 6.25%
           75 7.85% 7.30%

Again I'm not sure why the numbers aren't always linear.  I'm sure its not mortality tables doing that since.   I suspect there may be something wrong in the database.

These annuities would not have any kind of cost of living adjustment so keep that in mind.
It may be worth it to get an annuity with 10 or 15 year certain return.  Sometimes the 10 year certain return annuities are the same payout and the 15 year can be marginally lower.   Its kind of like an insurance policy for your heirs if you want just to feel confident that the money won't be wasted in the worst case that both spouses pass prematurely.

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