Many of you have contacted us regarding the recent mailing from AARP advertising immediate annuities, and wondering if this rate is competitive. Once again, the answer is NO!

The AARP rate is from New York Life Insurance (just one company, which pays AARP large royalties for any AARP member that purchases an annuity from New York Life). We recently did a quick comparison among dozens of companies and here’s what we found as an example (in this case, for lifetime income with a cash refund option for a 65-year-old male based on a $100,000 immediate annuity purchase, for an A.M. Best A rated insurimance company):

Guaranteed Monthly IncomeTotal Annual IncomeAnnual Payout Rate
Annuity FYI$526$6,3156.32%
AARP$501$6,0176.0%

This is lifetime income, so the difference in payout rate is significant. Before investing in an immediate annuity, make sure you get competitive rates from multiple companies. Annuity FYI is pleased to generate a free immediate annuity rate report based on your age and profile so that you can be sure you are getting the most competitive rate. Just reply to this email, or call 866 223-2121 to speak with an licensed financial professional who can answer any of your questions and send a quote via e-mail.

Above rate is for a 65-year-old male based on a $100,000 annuity purchase as of 4/07/14. Payout rate is the percentage of the purchase price paid out annually. It is not an interest rate, and includes both interest and return of principal. The annuity income shown is before any local, state, or federal taxes.

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