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