How Much Does a $100K Annuity Pay per Month?
Hello out there! Stan The Annuity Man here. You have landed in the right place. Who am I? I'm Stan The Annuity Man, America's annuity agent, licensed in all 50 states, and that is including yours. You're sitting out there, wherever you're sitting; thanks for reading along.
Today's topic is the general question that everybody asks me because they think all annuities are one type, all work the same, and they're all priced the same. So, the question is, how much does a $100,000 annuity pay? I need more information from you there, Chester.
There's No Good Answer, Just Bad Sales Pitching
There's no good answer. In fact, in the annuity world, there's no good answer, just bad sales pitching. First of all, what type of annuities are you talking about? There are different types. Most people asking that question are asking it based upon a kind of lifetime income stream question. They're saying, "I want to put $100,000 into the annuity, and I want it to pay for life."
The Information I Need to Know
Okay, good question. But remember that annuity lifetime income streams are based on your life expectancy at the time you start the payment. If you're setting up joint with a spouse or partner, it's life expectancies, plural, so it's based on two life expectancies. So, I will need your date of birth if it's single, obviously dates of birth if it's joint life. And then, in addition to that, because there are 35 or more different ways to structure a lifetime income stream payout, you're going, "Wait a minute, 35?" Yeah. Most people think, "Hey, when I die, when my Lear jet hits the mountain, when my Bentley hits a tree, when my Ferrari runs off the road, when my heart stops beating, and I die, the evil annuity company keeps the money." That's only one way. That's called life only.
Now, that will pay the most because you're accepting some of that risk. But most people work very hard for their money. They say, "Hey, I don't want that to happen. I want the lifetime income stream guarantee. But if I die, I want any unused money going to the listed beneficiaries of the policy." Would that be what you want? Yeah, exactly. Most people want that.
So, you've worked hard for your money, saying, "Okay, how much does a $100,000 annuity pay?" I need that information. I also need to know what state of residence you're in. I'm licensed in 50 states. It doesn't matter from my standpoint. But from your standpoint it matters because Fixed Annuities are approved and regulated at the state level. We have to shop all carriers for those annuities that are approved in your state.
In addition to that, I need to know what type of account you want to use: an IRA, a non-IRA, a non-qualified taken into account, or a Roth IRA. Whatever it is, the guarantees will be the same; it is just that the taxation of the income coming out will be different. Those are the details that I'm going to need.
So, what does a $100,000 annuity pay? It depends on what you're talking about. We're going to talk about a couple of other types of annuities, answering that question as well.
Let's talk about payment annuities and income annuities, but not for life. Okay. The question again, "Hey Stan, what's a $100,000 annuity pay?" If you're not looking at a lifetime income stream, you're looking at, say, it's going to pay for 10 years, or it's just going to pay for 20 years, or it's just going to pay for 15 years. That's called a period certain annuity. You need to tell me exactly the period certain, maybe you need a gap filled for some income stream. We'll run that. It depends on the period certain that you want. It doesn't have to be a lifetime income stream.
And for any income quote, the other thing I will need to know from you is when do you want the income to start? So, dates of birth, where you live, state of residence, how you want it structured, when you want the income to start, type of account, you need that as well. All of those parameter's feed into the contractual guarantee. Of course, we have the best annuity calculators on the planet. And I represent all carriers and licensed in all 50 states, so when we put your information in, we will find the highest contractual guarantee for your situation.
Love the Number, Not the Company
And when you're looking at these types of products, income type of products, whether it's for life or whether it's for a period certain, or whether it's for a combination of the two, we're going to need all that information. And then, I don't really care who the carrier is. What I do is I put the information in, we get the number, and you're going to fall in love with the number, not the company.
Now, at the end of the day, we have to look at the Claims-Paying Ability of the carrier. We have the carrier backing up the guarantee. We have to make sure that they can pay for it. Common sense. So, what are we going to do? We're going to look at the Claims-Paying Ability of that carrier. We're going to look at the rating service Comdex rankings, which are also on my site. So that all plays in.
Multi-Year Guarantee Annuities
Again, let's go back to the question. What's a $100,000 annuity pay? We talked about the income type annuities. How about Multi-Year Guarantee Annuities, which are the industry's version of a CD? What's that pay? Well, it depends on your chosen duration and the guaranteed interest rate. So, if you're taking out the interest on say, a five-year, it's going to pay a specific interest rate annually if you want to take that out. That's the answer to what that pays.
Variable and Index Annuities
Let's talk about other products, Variable Annuities, or Index Annuities. "Hey, Stan, what's a Variable Annuity or Index Annuity pay?" I don't know. Those are products that the accumulation value of them is not guaranteed. In other words, the Variable Annuities are based on mutual funds. They call them separate accounts for some reason, the annuity companies. With Index Annuities, it's a little different. It's a Fixed Annuity, but the return is non-guaranteed based on a call option. It's a long story, but with those, you really can't answer that $100,000 question.
All right. Hopefully, I have answered the question, "What does a $100,000 annuity pay?" or "How much am I going to get from a $100,000 annuity?" Walk away from this blog saying, "Hey, he can't answer that." Nobody can truly answer that without getting specific information on the type of product you want to look at. And if it's an income product for life, we need dates of birth and all the specific information.
The bottom line, annuities aren't just one product. When people say, "Well, I just hate all annuities, Stan." First of all, you own one. It's called Social Security. Second of all, saying that is like saying you hate all restaurants. That's crazy talk.
Now what isn't crazy talk is me giving away my books. Look at that: I'm a writer. You can download all 6 of my books for free by clicking this link. And because I'm the king of all content for annuities, I'm sucking the oxygen out of the room for annuities. You say, "What does that mean?" That means I do a blog and video every day. And I do a podcast every week for now, but I'm thinking about doing one every day.
And you're saying to yourself, "Stan The Annuity Man, how is that even possible?" It is possible. I have no life. I've been married for 32 years. My kids are in their twenties. That's what I do. Plus, I'm an annuity educator and the number one agent in the country. So, if you want to talk about annuities or buy an annuity, book a call with me. Why wouldn't you? I'm the expert. Why wouldn't you do that? There's no reason not to. Thank you for joining me today, and I will see you on the next Stan the Annuity Man blog.
Never forget to live in reality, not the dream, with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.