February 2019: Annuity Rates Continue to Decline

Published February 6, 2019

The Fed sent a strong signal last week that rates were less likely than previously thought to move up in the near-term. After the Fed’s meeting, Wall Street thought there was now only about a 10% chance of any rate increases this year. This caused 10 Year Treasury yields to decline and the stock market to rally. Here’s reporting from New York Times, Wall Street Journal and CNBC on the news.

Annuity Intelligence Report

Most insurers reduced rates on their fixed annuity and (immediate and deferred) income annuity products in January and early February to reflect declining bond yields in November, December and the early part of January. The highest products were relatively stable, despite many insurers dropping rates.

Click to download the February 2019 Annuity Intelligence Report.

blueprint-income-annuity-intelligence-report-201902

Market Update

As we suspected, annuity rates have mostly moved in one direction in January and early February — down. The yield declines in the fixed income (especially Treasury) markets in November, December and early January have now, in our estimation, mostly been factored in. Treasury bond yields have been range bound for the last three weeks.

Despite the majority of insurers lowering rates, the top rates haven’t budged for most terms. That’s because Equitable Life (AM Best: B), Sentinel Life (AM Best: B++) and Atlantic Coast (AM Best: B++) are the highest payout for most terms and have held rates steady.

Top rates for carriers rated A or better have declined. After being essentially the only insurer to raise rates at the beginning of January, American National cut rates for all terms and in all states at the beginning of February. Contact us to learn more.

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Nimish Shukla

Nimish Shukla

Financial Planning Professional

Nimish has spoken with thousands of customers about retirement spending. As a CFA Charterholder and licensed fixed annuity producer he values the importance of building an income stream for retirement. In addition to his work at Blueprint Income he is also a regular contributor to Nerdwallet.

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