Best Annuities For 2023


Share post:

2022 saw an increase in the sale of annuities due to volatility in the equities markets and increasing interest rates. According to the Life Insurance Marketing and Research Association, (LIMRA), in 2022 total U.S. annuity sales hit $310.6 billion, a 23% increase over 2021 and 15% higher than the sales record set in 2008.

Turning To Annuities

According to the U.S. Department of Health and Human Services, by the year 2040, 80 million Americans will be over the age of 65. What is driving the increase in annuity sales is investors’ desire to protect their retirement income streams in the face of these headwinds:

  • Inflation: According to the Consumer Price Index, inflation during 2022 hit a 40-year high, reaching 9.1% in June 2022.
  • Rising energy prices: Energy prices spiked during 2022 due to Russia’s invasion of Ukraine in February 2023.
  • Rising interest rates: Since March 2022, the Federal Reserve has raised the Federal Funds Rate from 0.25% to 5.25%, which in turn has decreased the valuation of bonds.

For details on the various types of annuities see “Best Annuities For Reliable Income.”

  • Fixed annuities: In 2022, sales reached $208 billion, a 60% increase from 2021. Of that $208 billion, fixed-rate deferred annuities were the largest component at $112.1 billion.
  • Variable annuities: Total U.S. sales reached $102.6 billion in 2022, down 18% from $125.3 billion in 2021; the largest contributor was traditional variable annuities at $61.7 billion.

With inflation running at 4.0%, dividend stocks offer one of the best ways to beat inflation and generate a dependable income stream. Download Five Dividend Stocks To Beat Inflation, a special report from Forbes’ dividend expert, John Dobosz.

Best Annuities To Buy

Here’s a look at the five largest annuities providers by sales.

1. New York Life Insurance and Annuity

Rated A++ by A.M. Best, AA+ by Standard & Poor’s

Top selling fixed deferred annuities include Secure Term Choice Fixed Annuity II, Secure Term MVA Fixed Annuity II and Secure Term Fixed Annuity V. Top selling income annuities are Guaranteed Lifetime Income Annuity II, Guaranteed Future Income Annuity II, Guaranteed Period Income Annuity II, and Clear Income Advantage-FP Series. Among top selling variable annuities are Premier Variable Annuity-FP Series and IndexFlex Variable Annuity-FP Series.

2. Variable Annuity Life Insurance Company (Corebridge)

Rated A by A.M. Best, A+ by Standard & Poor’s and A2 by Moody’s

Valic was a part of American International Group (AIG) but is now a wholly-owned subsidiary of Corebridge Financial, Inc. Valic’s Power Series Index Annuity with Lifetime Income Plus Multiplier Flex guarantees lifetime withdrawals of up to 7.35% per year for single investors aged 75 or greater. The company’s Power Series Index Annuity with Lifetime Income Max promises to protect principal and secure annual withdrawals of up to 7.35% for life for those aged 75 and older who are single.

3. Athene Annuity and Life Insurance Company

Rated A by A.M. Best, Fitch and Standard & Poor’s

In New York state, the company issues under the Athene Annuity & Life Assurance Company of New York. Besides issuing their own annuity contracts, Athene is also a top reinsurer of other insurers’ existing blocks of annuity business. Athene’s fixed index annuities include the Protector 7, Agility 7, Performance Elite 7 and the Athene Agility 10, the latter of which includes a built-in income rider at no additional cost. Athene’s fixed annuities include the MaxRate 3, 5 and 7. Athene holds 67.8% of their assets in bonds and 19.2% in mortgages, the latter of which is higher than most insurance companies.

4. Massachusetts Mutual Ascend Life Insurance Company

Rated A+ by A.M. Best, A+ by Standard & Poor’s, and A3 by Moody’s

MassMutual Ascend became the new name of the Great American Life Insurance Company on October 3, 2022. Their multi-year guaranteed annuities include SecureGain 3, 5 and 7, and their fixed indexed annuities include American Landmark 3 and 5 and American Legend 7.

5. Jackson National Life Insurance Company

Rated A by A.M. Best, Fitch and Standard & Poors and A2 by Moody’s

Jackson National has been at the top of the variable annuity segment for more than ten years, and in 2022, their variable annuity sales were second in the U.S. However, Jackson has begun exiting the variable annuity market and begun focusing instead on Registered Index Linked Annuities (RILAs). Their fixed indexed annuities include the MarketProtector and Perspective II while their registered index linked annuities include the Jackson Market Link Pro. What makes Jackson unique is that they have a Total Surplus and AVR as a percent of general account assets of 9.2%.

6. Allianz Life Insurance Company of North America

Rated A+ by A.M. Best, AA by Standard & Poor’s and A1 by Moody’s

The company is a leading provider of fixed, variable and fixed index annuities. Its fixed annuity products are issued by Allianz Life Insurance Company of North America, and its variable annuities are distributed by Allianz Life Financial Services, LLC. Allianz’s top performing annuities are Allianz Core Income 7 Annuity, Allianz 360 Annuity.

Are Annuities A Good Investment?

The answer depends on your particular circumstances. They are a good choice for those who:

  • Want a guaranteed rate of return that is higher than that offered by a bank CD.
  • Want a reliable income stream during retirement.
  • Who fear running out of funds during retirement.
  • Have received a lump sum structured settlement.
  • Want to defer taxes on investment earnings.

Annuities are a poor investment choice because:

  • Annuity interest rates are usually lower than some other types of investments.
  • Annuity contracts are long term, three to 20 years in length, and there are penalties if you want to withdraw your money early.
  • The guaranteed income from an annuity may not keep up with inflation.
  • Unless you purchase a rider, an annuity might not provide death benefits to your beneficiaries.
  • Investment-based annuities can come with high fees.
  • You must be 59 1/2-years-old to withdraw funds from an annuity.

With inflation running at 4.0%, dividend stocks offer one of the best ways to beat inflation and generate a dependable income stream. Download Five Dividend Stocks To Beat Inflation, a special report from Forbes’ dividend expert, John Dobosz.

Source link

Nicole Lambert
Nicole Lambert
Nicole Lamber is a news writer for LinkDaddy News. She writes about arts, entertainment, lifestyle, and home news. Nicole has been a journalist for years and loves to write about what's going on in the world.

Recent posts

Related articles