The rate environment comes up in almost every conversation I have. I can't predict where rates are going — and neither can anyone else. But here's some context that might be useful.
Some context.
For most of the 2010s, interest rates sat near historic lows. Caps on indexed annuities were thin and guaranteed rates on fixed products were modest. The last few years brought rates back up, and with them, some of the most attractive annuity terms carriers have offered in over a decade.
Rates don't stay anywhere forever. When they move down, carriers reprice — caps tighten, guaranteed rates drop, income factors shrink. The products don't go away, but the terms change.
What that means for you.
- If you buy a multi-year guaranteed annuity, you lock today's rate for the full term, whatever happens next.
- If you turn on lifetime income, the payout factor is set at purchase and doesn't change.
- If you buy an indexed annuity, the first-year cap is set, and renewal caps follow the carrier's policy within contract limits — so carrier strength and renewal history matter.
What I'm not saying.
I'm not saying "buy now before it's too late." Fear is a bad reason to make a 10-year decision. I'm saying: if an income floor is part of your plan anyway, it's worth knowing what today's terms are, because they're a real variable in the outcome.
If you'd like, I'll pull current numbers for the amount you're considering so you can see exactly what's on the table.
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Author of Indexed Annuity Secrets and founder of Pacific Ridgeway Insurance Solutions in San Diego. Navy veteran. Licensed financial professional, CA #4132743.
Fixed indexed annuities are insurance products, not investments. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. This article is for educational purposes only and is not financial, investment, tax, or insurance advice.