It continues to be a wild ride in the financial markets. You’d think that trade war fears and some soft recent macroeconomic data would push markets lower. But that’s not what has happened at all. The stock market had its best first half of the year in recent memory. And bond prices have risen to … <a href="https://www.blueprintincome.com/resources/annuity-trends/july-2019-10-year-treasury-yields-drop-below-2/">Continued</a>
In response to a decline in bond yields, many insurers reduced annuity rates this month, but top fixed annuity rates have held steady. Lincoln Financial increased longevity annuity rates, but all other carriers have reduced rates. Sentiment has shifted from believing the Federal Reserve would not change rates any time soon to conventional wisdom now … <a href="https://www.blueprintincome.com/resources/annuity-trends/july-2019-10-year-treasury-yields-drop-below-2/">Continued</a>
Fixed annuities tend to follow movements in Treasury rates but move more slowly. The highest yielding fixed annuities are relatively more attractive, but be aware of counter-party credit risk.
Annuity rates have held steady this month. After several consecutive months of Treasury Bond declines, things leveled off in April.
We have recently identified parameters where certain indexed annuities with income riders generate more lifetime income than longevity annuities (a.k.a. deferred income annuities or DIAs).
There were steep declines in longer-term Treasury yields in March, largely precipitated by the Fed’s comments that they were less likely than previously assumed to raise rates this year, next year, and even in 2021.
A summary of rate lock procedures for income annuities and fixed annuities.
Although top fixed annuity rates held steady in February, many insurers decreased their rates.
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.
Not all insurance agents are created equal. Be leery of those who think of your financial life as an opportunity to sell you something.