Confusing aspect of Annuity charts (bonds, credit, investment, income)

[old_cold]

I've checked a few different companies for immediate fixed annuities.
One supposed good aspect is capital preservation but the calculators show guaranteed payouts at an amount less than the initial deposit.
I tried using a flat 10 year so there would be no potential for confusion with a lifetime option.
What am I missing?
Also, when and if an interest rate is given, is that made up from both "my money" and theirs?

[mathjak107]

an annuity is not an investment it is insurance and it has no interest rate.

it only has a payout rate.

you must be looking at a life time annuity with a payout to heirs over the first 10 years.

a 10 year fixed contract annuity which is called a gic contract is paying around 910.00 a month for 10 years per 100k.

a short term gic contract has no additional reward in mortality credits as a life annuity does.

that means you get no bonus for living from those that died.

in effect a gic contract is no different than buying a cd except you are buying it from an insurance company instead of a bank. you may find it a bit higher than a cd.

you need to go to a life time payout where you actually put principal at risk if you die young to really see a bigger payout than you can get on cd's or bonds and still have a safe ,secure and consistant income source..


in its simple form an annuity works like this.

you give me 100k and i will pay you 6k a year forever.

at a 6% payout rate the first 12 years basically you are getting all your own money back that you just gave me. the 13th year you are finally on my dime.

while the irs computes a yearly interest rate for tax purposes it really is not an actual rate you get.

someone only knows your real rate of return when you die and the payments stop.

[old_cold]

Originally Posted by mathjak107

.

a 10 year fixed contract annuity which is called a gic contract is paying around 910.00 a month for 10 years per 100k.


someone only knows your real reate of return when you die and the payments stop.

Yes, but in a last column it declares the guaranteed payout as less than the 100k.

That's what I don't understand.

[mathjak107]

not what i see at immeadiateannuity.com.

62 years old male

Guaranteed Income for a 10-Year Period Certain Only ("10PC")
You receive this income for 10 years only, not for your lifetime. If you should die during the 10 years your beneficiaries will continue to receive this income until the end of the 10th year. Note that your monthly income is comprised of some premiumTo receive your FREE 9-page report with detailed quotes about this annuity, click the box(es) to the right and fill in the information at the bottom of this page.

$907 10.88%

[old_cold]

It would probably be better if I could show you the chart I am referring to. It's a java pop up though so I'll have to find it again, fill it out again and try to do a screen shot.
Don't hold up your lunch waiting

[mathjak107]

whatever it is there is something that is different about it and not just a gic then.