Annuity Rates are Falling
The recent interest rate cut is already putting downward pressure on annuity rates—and additional cuts are likely. This means lower crediting rates for MYGA annuities and a potential decline in income guarantees.
That said, opportunities remain. Depending on carrier strength, it’s still possible to lock in 5%+ for five years. Note that lower-rated carriers are often offering higher rates to compete for business, but due diligence on financial strength is critical.
CD & Money Market Alternatives
For clients who don’t need immediate liquidity, a Multi-Year Guaranteed Annuity (MYGA) can serve as an attractive alternative to CDs and money markets. This can be especially valuable for pre-retirees in the “home stretch” who want to reduce sequence-of-returns risk.
We’ve also seen clients leverage in-service distributions to lock in market gains and move to safer ground.
Our new CFP® CE presentation, Annuities in Action: Case Studies & Stories, highlights how annuities can be strategically integrated into financial plans. We can deliver this presentation live for CE credit to your firm or study group. Contact us to schedule a session.