Generating Income

Generating Income

In today's current interest rate environment, have you ever wondered what it would take to generate $10,000 in annual income?

According to, the current national averages on one-year and five-year CDs are .23 percent and .78 percent, respectively. The highest rates are 1.10 percent on a one-year CD and 2.30 percent on a five-year CD. The 10-year treasury is approximately 2.58 percent.

At those yields, this is what a lump-sum deposit would have to be to get $10,000 a year in annual income:

.23% $4,347,826
.78% $1,282,051
1.10% $909,091
2.30% $434,783
2.58%    $387,597


With an indexed annuity, executing the guaranteed income rider after one year, a 65-year-old client would only need a deposit of $166,800 to generate the same $10,000 a year in annual income.

With so many investment options, an indexed annuity with an income rider may be a good solution for your clients to help them overcome this low interest rate environment.