If you’re single, widowed or divorced, you may be looking for individual retirement annuities where you need a guaranteed income for yourself as you enter retirement.
So, how do you know what are the best individual annuities for you?
After helping thousands of people in retirement, here is a guide on how to find the top individual retirement annuities.
Summary
- Top individual annuity providers include Fidelity Investments, North American, Allianz Life, New York Life, USAA, MassMutual, and American National, each with unique features tailored to different retirement needs.
- To find the top individual annuities, it’s always best to speak to an annuity expert who can show you what each annuity company offers (here’s how I can do this for you).
- When choosing individual single income annuities, consider deferring annuities for increased payouts.
- When choosing individual annuities consider stacking annuities—investing in multiple annuities with different trigger times—for increasing income during retirement, offering consistently higher income streams and the ability to adjust to changing financial needs.
Need help choosing the best type of annuity for your unique situation? Have questions about getting an annuity? If so, it’s best to speak with an annuity specialist. Watch this short video to see how I can help you do this (at no cost to you!)
The Top Individual Annuity Providers
The world of retirement planning can be overwhelming, given the numerous annuity providers and their diverse range of products. However, a select few stand out when it comes to individual annuity income.
Top tip: Click here to see how I can compare all the top annuity providers for you.
Some of the top individual annuity providers include:
- American Equity
- North American Company
- Allianz Life Insurance Company
- New York Life Insurance Company
- USAA Life Insurance Company
- MassMutual
- American National
Each of these companies offers a variety of annuity options tailored to suit different retirement needs. From variable annuities linked to market performance to fixed deferred annuities that provide a guaranteed income, the choices are vast.
For a thorough understanding, here’s a detailed look at what each of these leading annuity providers offers.
American Equity
American Equity stands as a beacon among annuity providers, recognized for:
- Personalized customer service
- A multitude of annuity options
- Diverse offerings
- Catering to the unique intricacies of retirement planning
A standout feature of Fidelity is their dedication to exceptional customer service. They offer:
- Dedicated phone support
- Access to trusted advisors
- A range of services to aid clients with annuity decisions
Moreover, their annuity charges are competitive, with an annual annuity charge of just 0% – 1.2% for an income annuity rider, which includes fixed index annuity and fixed annuity options.
Allianz Life Insurance Company
Allianz Life Insurance Company is a prominent player in the annuity market, known for its specialization in fixed index annuities. With a track record of selling high-quality products, Allianz offers a range of annuities designed to meet various retirement income needs.
Their Allianz Index Advantage, a customizable index variable annuity product, and Allianz 222, which includes an income rider at no extra cost, stand as testament to their commitment to offering versatile annuity solutions.
Allianz’s commitment to customer satisfaction is evident in their low complaint ratio and strong financial strength ratings. The company offers various annuity products each with its own unique features, such as the Core Income 7 Annuity which includes a 1.25% rider charge on a minimum $10,000 premium.
Each product has been designed with the potential to provide a reliable source of retirement income.
New York Life Insurance Company
New York Life Insurance Company sets itself apart as a top-tier provider of variable annuities. These annuities offer benefits such as tax deferral, accumulation of value, and professionally managed investment options
However, they also come with their own set of risks like market risk and potential loss of principal.
Key features of New York Life’s variable annuity include:
- A++ AM Best Rating
- Annual fee ranging from $30 to $40 (waived at $100,000)
- Surrender charges of 1% to 8% applicable to withdrawals beyond the surrender charge-free withdrawal amount
- Various payout options, primarily lifetime income, catering to diverse retirement income needs.
USAA Life Insurance Company
USAA Life Insurance Company offers the following types of annuities:
- Basic fixed annuities
- Immediate income annuities
- Fixed Indexed Annuities, offering enhanced potential for secured growth compared to standard fixed annuities
- Fixed Guaranteed Growth (FGG) deferred annuities, which include interest rate guarantee periods of 3, 5, or 10 years.
Their immediate income annuities provide:
- A unique one-time withdrawal benefit
- Protection from market fluctuations
- Consistent guaranteed income for a specific duration or lifetime
- A joint and survivor payout option
This makes USAA a worthy consideration for military service members and their families seeking a steady retirement income.
MassMutual
MassMutual, recognized for its robust financial footing and an A++ AM Best Financial Strength Rating, offers a range of annuity products. Among them, the RetireEase term certain annuity stands out as a choice for retirement planning.
This product offers attractive attributes such as the absence of annual contract fees, a minimum initial premium of $10,000, and the flexibility of choosing from various payment schedules.
In the event of a policyholder opting to withdraw from a MassMutual annuity, they can anticipate surrender charges that fall within the range of 4% to 8%. Despite these charges, the robust product offerings and strong financial standing make MassMutual a top contender in the annuity provider space.
American National
American National’s Palladium MYG 10 Annuity offers a high-quality product with the following features:
- Guaranteed interest rate for a 10-year duration
- Reliable return, with interest rates varying from 5.20% to 5.45% based on the investment amount (as of this writing)
- Penalty-free withdrawal after 10 years
- Penalty-free death benefit
The minimum premium required to invest in American National’s Palladium MYG 10 Annuity is $5,000, rendering it accessible to a wide spectrum of investors. The attractive returns and low minimum investment make this product a worthy contender for those seeking a steady retirement income.
Want to learn the best rates for your retirement needs? Watch this video to learn how I can help you find the best rates.
Maximize Individual Retirement Income with Deferred Annuities
Beyond selecting the right annuity provider, considering strategies to boost your retirement income is equally vital.
One such strategy is investing in a deferred annuity. As the name suggests, deferred annuities allow you to defer your income payments until a later date, allowing the underlying investments more time to potentially grow and provide higher expected payouts upon retirement.
Those in higher income tax brackets seeking extra ways to save for retirement may find deferred annuities particularly beneficial. Income deferral offers tax advantages and the potential for increased returns. Now, let’s examine how deferring for five and ten years could enhance your retirement income.
Five-year deferral
A five-year deferral on an annuity involves the postponement of regular income or a lump sum payment for a period of five years. This allows the underlying investments more time to potentially grow, leading to higher payouts when the income is eventually drawn.
The benefits of a five-year deferral on annuities encompass tax-deferred earnings, potential tax savings, and the ability to establish a secured future income for retirement.
However, it’s important to note that deferring an annuity for five years does come with certain potential risks. These include:
- Illiquidity
- The risk of passing away before receiving the full benefits
- Company solvency risks
- Impact of inflation
- Lost alternative investment opportunities
- Sensitivity to fluctuating interest rates
Ten-year deferral
A ten-year deferral on an annuity involves a similar mechanism, with regular income or a lump sum payment deferred for a period of ten years. This allows for an even greater potential growth of the underlying investments, leading to higher payouts when the income is eventually drawn.
For instance, a $500,000 annuity deferred for ten years can result in an anticipated monthly payment of approximately $7,061, or an annual income of $84,738.
That being said, a ten-year deferral isn’t without its drawbacks. These include:
- Associated costs
- Limited liquidity
- Complexity
- Potential impact on financial flexibility
Additionally, any premature withdrawals before age 59½ may result in a 10% early withdrawal penalty tax.
Stacking Annuities for Flexible Retirement Income
Stacking annuities is another strategy to amplify your retirement income. It entails investing in several annuities and triggering them at various times to create a layered income.
This can provide a steady stream of income throughout your retirement, adjusting to your changing financial needs and market conditions.
For retirees with limited other sources of retirement income like Social Security and pensions, stacking annuities can prove especially advantageous.
By combining deferred annuities, which enable the accumulation of earnings over time, with income annuities that provide immediate income, you can form a retirement income strategy that balances immediate income with long-term growth potential.
Benefits of stacking annuities
Stacking annuities provides several benefits. For starters, it offers a consistent income stream and a 4%-8% roll-up in the guaranteed benefit base for some annuities. This can be particularly beneficial when you’re looking for a steady income throughout your retirement.
Furthermore, stacking annuities allows for flexibility in achieving diverse financial objectives. Whether it’s legacy planning, charitable giving, or long-term care funding, stacking annuities can be a beneficial strategy to meet these goals.
How to stack annuities effectively
But what’s the best way to stack annuities effectively? Some recommended strategies include:
- Utilizing Single Premium Immediate Annuities (SPIA) to take advantage of increasing rates
- Combining fixed interest rate annuities with those tied to the S&P for risk management
- Employing annuity laddering to secure rates at various intervals
- Implementing the bucket strategy to ensure consistent payments.
Diversification is also an important aspect of stacking annuities.
It offers the benefit of shifting more longevity risk to the annuity purchaser, establishing stronger guarantees, and capitalizing on different asset classes, ultimately enhancing retirement security.
Staggering the activation dates of annuities, also known as annuity laddering, helps in maintaining ongoing income streams and minimizing interest rate risk.
Choosing the Right Single Income Life Annuity for Your Needs
Having familiarized yourself with leading annuity providers and strategies to optimize retirement income, the next step is to contemplate your specific needs.
An annuity advisor can help you do this.
Choosing the right annuity involves:
- Assessing your financial goals
- Evaluating your risk tolerance
- Considering important factors such as fees, financial strength, and customer satisfaction when selecting a provider.
Assessing your financial goals
The initial step towards choosing the appropriate annuity involves evaluating your financial goals and retirement needs. This involves understanding the income you will require from sources other than Social Security.
You should strive to calculate a savings level that will enable you to sustain approximately 80% of your pre-retirement income and lifestyle during retirement.
The variety of annuities available, from immediate fixed and variable annuities to deferred annuities, provide different benefits depending on your financial goals. Some factors to consider when choosing an annuity include:
- Your age
- Immediate or deferred plan requirements
- Desired safety
- Coverage options
- Liquidity needs
- Anticipated future income needs
- Financial status
- Tax implications
- Investment objectives
Considering these factors will help you make an informed decision about the type of annuity and provider that best suits your needs.
Conclusion
Securing your retirement income is an essential part of your financial planning, and annuities can play a crucial role in this process.
From understanding the offerings of top annuity providers to adopting strategies like deferring annuities and stacking annuities, you now have the knowledge and resources to make an informed decision about your retirement income strategy.
Remember, every individual’s retirement needs and financial goals are unique.
Therefore, it’s important to carefully assess your financial goals, evaluate your risk tolerance, and choose an annuity and provider that align with your needs.
Have more questions about annuities? Click here to book a free consultation.
In this consultation, I can provide personalized advice and strategies, guiding you to make informed decisions about annuities and optimize your retirement planning.
I can also compare all the annuities so you can see which one is best regardless of the commissions associated with the annuity.
During the consultation, you will:
- Be able to compare different annuity options
- Learn how to grow & protect your wealth in retirement
- Get all of your questions about annuities answered
I look forward to speaking with you soon!
