Introduction
When planning for retirement, it’s essential to explore all available options, including immediate and deferred annuities. These annuity types offer different benefits depending on your financial goals and timeline. In this article, we’ll guide you through the process of finding the best immediate and deferred annuity rates and provide a list of the top rates available.
Understanding Immediate and Deferred Annuities
Before discussing the best rates, let’s clarify the differences between immediate and deferred annuities:
Immediate annuities: With an immediate annuity, you make a lump-sum payment to an insurance company, and in return, they provide you with a guaranteed stream of income for a predetermined period or for life. Payouts begin shortly after the initial investment, usually within a year.
- Deferred annuities: Deferred annuities accumulate interest on your initial investment over time, with payouts beginning at a later date, such as 5, 10, or 20 years in the future. This delay allows your investment to grow, potentially resulting in higher payouts when the annuity's income phase begins.
Immediate Annuities
Immediate annuities (Such as Single Premium Immediate Annuities) provide a guaranteed income stream that begins shortly after the purchase, usually within one year. Factors affecting immediate annuity rates include:
- Age and gender: The older the annuitant and the shorter their life expectancy, the higher the annuity rate. Gender also plays a role, as women tend to live longer than men, which can affect the payout rates.
- Policy type: The policy type, either joint or single, has a significant impact on the payouts of immediate and deferred annuities. In a joint policy, where two people receive payments until the last surviving spouse dies, the payouts are generally lower than in a single policy, where only one person receives payments. This is because the insurance company has to take into account the possibility of making payments for a longer period in a joint policy.
- Interest rates: Current interest rates in the market will impact immediate annuity rates. Higher market interest rates usually translate to higher annuity payout rates.
Advantages
- Guaranteed income stream: Immediate annuities provide a secure income stream that lasts for the annuitant's lifetime or a specified period.
- Quick income generation: Payments begin shortly after the purchase, making immediate annuities ideal for those who need income right away.
- Various payout options: Immediate annuities offer a range of payout options, allowing annuitants to tailor the income stream to their needs.
Disadvantages
- Lack of liquidity: Once purchased, immediate annuities typically cannot be reversed, limiting access to the principal investment.
- Inflation risk: The fixed income stream can lose purchasing power over time due to inflation, especially if no cost-of-living adjustments are included.
- Limited growth potential: Immediate annuities provide a stable income but do not offer the potential for significant growth compared to other investment options.
Strategies for finding the best immediate and deferred annuity rates
- Compare: Compare payout rates from multiple insurance companies, taking into account the financial strength of each issuer.
- Assess: Assess your financial needs and choose the payout option that best aligns with your goals. Consider the various payout options, such as single-life, joint-life, or period-certain annuities, to find the best fit for your needs.
- Monitor Rates: Keep an eye on interest rates in the market and consider purchasing an immediate annuity when rates are higher to lock in a higher payout rate.
- Check Surrender Charges: Assess surrender charges and fees: Review any surrender charges, administrative fees, or other costs associated with the annuity contract.
- Check financial ratings: Examine the financial strength and credit ratings of the insurance company offering the annuity to ensure they are reputable and stable.
Best Immediate Annuity Rates (Updated as of June 2025)
Unlike fixed annuities and Multi-Year Guaranteed Annuities (MYGAs), which offer predetermined and uniform interest rates for all investors, the rates in immediate annuities are not the same for everyone. Instead, they depend upon several factors that can significantly impact the amount of income an individual receives. These factors include the current interest rate environment, the age and gender of the annuitant, the chosen payout option, and the specific insurance company offering the annuity. This variability in immediate annuity rates highlights the importance of considering one’s unique circumstances and financial goals when selecting an annuity product. It also emphasizes the need to shop around, compare quotes from different insurance companies, and stay informed about market conditions to secure the most favorable rates and terms for one’s specific situation.
Through this article, we will try to find out the best immediate annuity rates by comparing the monthly payout offered by different companies based on two different scenarios and payout options.
Scenario 1a – Policy Type: Single
| Age | Gender | Payout Start | Premium | Funding |
|---|---|---|---|---|
60 | Male | After 12 months | $100,000 | IRA (Qualified) |
| Annuity Company | Monthly Income | Annual Income | Annual Payout Rate | A.M. Best Rating |
|---|---|---|---|---|
New York Life Insurance and Annuity Corporation (NYLIAC) | $647 | $7,764 | 7.76% | |
MassMutual | $635 | $7,620 | 7.62% | |
Penn Mutual Life Insurance Company | $634 | $7,608 | 7.61% | |
Integrity Life Insurance Company (W&S) | $633 | $7,596 | 7.59% | |
Corebridge Financial | $631 | $7,572 | 7.57% | |
Minnesota Life Insurance | $631 | $7,572 | 7.57% | |
United of Omaha Insurance Company | $628 | $7,536 | 7.53% | |
Nationwide Life Insurance Company | $623 | $7,476 | 7.47% | |
Guardian Insurance & Annuity Company | $611 | $7,332 | 7.33% | |
American National Insurance Company | $602 | $7,224 | 7.22% | |
Jackson National Life Insurance | $599 | $7,188 | 7.18% | |
Pacific Life Insurance Company | $586 | $7,032 | 7.03% | |
Midland National Life Insurance Company | $575 | $6,900 | 6.90% | |
North American Company for Life and Health Insurance | $574 | $6,888 | 6.88% | |
Symetra Life Insurance Company | $567 | $6,804 | 6.80% | |
Lincoln Financial | $550 | $6,600 | 6.60% |
| Age | Gender | Payout Start | Premium | Funding |
|---|---|---|---|---|
Primary - 60 | Male | After 12 months | $100,000 | IRA (Qualified) |
Joint - 55 | Female | After 12 months | $100,000 | IRA (Qualified) |
| Annuity Company | Monthly Income | Annual Income | Annual Payout Rate | A.M. Best Rating |
|---|---|---|---|---|
New York Life Insurance and Annuity Corporation (NYLIAC) | $556 | $6,672 | 6.67% | |
Integrity Life Insurance Company (W&S) | $547 | $6,564 | 6.56% | |
Penn Mutual Life Insurance Company | $546 | $6,552 | 6.55% | |
MassMutual | $545 | $6,540 | 6.54% | |
United of Omaha Insurance Company | $540 | $6,480 | 6.48% | |
Minnesota Life Insurance Company | $530 | $6,360 | 6.36% | |
Nationwide Life Insurance Company | $527 | $6,324 | 6.32% | |
Guardian Insurance & Annuity Company | $527 | $6,324 | 6.32% | |
American National Insurance Company | $523 | $6,276 | 6.27% | |
Midland National Life Insurance Company | $516 | $6,192 | 6.19% | |
North American Company for Life and Health Insurance | $516 | $6,192 | 6.19% | |
Jackson National Life Insurance | $506 | $6,072 | 6.07% | |
Corebridge Financial | $501 | $6,012 | 6.01% | |
Pacific Life Insurance Company | $495 | $5,940 | 5.94% | |
Symetra Life Insurance Company | $467 | $5,604 | 5.60% | |
Lincoln Financial | $459 | $5,508 | 5.51% |
Exhibit 2: Top Immediate Annuity Rates for a hypothetical joint applicant (as per Scenario 1b) as of June 2025
Notice how payout rate changes when the type of policy is joint, when compared to single. In a joint policy, the company’s expected payout is for a longer term when compared to a single policy. Also, notice how for best rates for immediate annuities differ as the policy type differs. It signifies that the SPIA rates truly differ based on factors like age, gender, policy type, payout type, etc. It is a good idea to shop around and compare rates from different companies to find the best deal for your needs. I recommend consulting a trusted financial professional to help you get the best SPIA as per your unique needs.
Note: These rates are subject to change, and it’s essential to verify current rates and terms with the respective insurance providers. Also, keep in mind that the following annuities may have different features, surrender periods, and riders, so compare them based on your specific needs.
Deferred Income Annuity Rates (Updated as of June 2025)
A Deferred Income Annuity, like an immediate annuity, provides a guaranteed income stream, but the payments begin after some waiting period (known as a deferral period). The deferral period can range from a few years to several decades, depending on the terms of the contract.
As for the best deferred annuity rates, they vary depending on factors such as the insurance company, the type of annuity product, the length of the deferral period, and current interest rates.
Through this article, we will try to find out the best deferred annuity rates by comparing the monthly payout offered by different companies based on two different scenarios and payout options.
Scenario 2a – Policy Type: Single
| Age | Gender | Payout Start | Premium | Funding |
|---|---|---|---|---|
60 | Male | After 10 Years | $100,000 | IRA (Qualified) |
| Annuity Company | Monthly Income | Annual Income | Annual Payout Rate | A.M. Best Rating |
|---|---|---|---|---|
Guardian Insurance & Annuity Company | $1,296 | $15,552 | 15.55% | |
United of Omaha Insurance Company | $1,288 | $15,456 | 15.45% | |
New York Life Insurance and Annuity Corporation | $1,268 | $15,216 | 15.21% | |
Integrity Life Insurance Company (W&S) | $1,260 | $15,120 | 15.12% | |
Global Atlantic - Forethought Life Insurance Company | $1,249 | $14,988 | 14.98% | |
Corebridge Financial (AIG) | $1,205 | $14,460 | 14.46% | |
Symetra Life Insurance Company | $1,112 | $13,344 | 13.34% | |
Lincoln Financial | $1,051 | $12,612 | 12.61% | |
Pacific Life Insurance Company | $1,039 | $12,468 | 12.47% |
Here are the top deferred annuity rates as of June 2025, for a hypothetical single applicant based on Scenario 2a.
Scenario 2b – Policy Type: Joint
| Annuity Company | Monthly Income | Annual Income | Annual Payout Rate | A.M. Best Rating |
|---|---|---|---|---|
Guardian Insurance & Annuity Company | $991 | $11,892 | 11.89% | |
United of Omaha Insurance Company | $987 | $11,844 | 11.18% | |
New York Life Insurance and Annuity Corporation | $969 | $11,628 | 11.62% | |
Integrity Life Insurance Company (W&S) | $949 | $11,388 | 11.38% | |
Global Atlantic - Forethought Life Insurance Company | $924 | $11,088 | 11.09% | |
Pacific Life Insurance Company | $795 | $9,540 | 9.54% | |
Corebridge Financial | $794 | $9,528 | 9.52% | |
Symetra Life Insurance Company | $785 | $9,420 | 9.42% | |
Lincoln Financial | $766 | $9,192 | 9.19% |
Exhibit 4: Top Deferred Annuity Rates for a hypothetical joint applicant (as per Scenario 2b) as of June 2025
When comparing immediate annuities and deferred annuities, you’ll notice a significant difference in payout rates. Unlike immediate annuities, deferred annuities have a waiting period, known as the deferral period, before payments begin. This period can range from a few years to several decades, during which the insurance company invests the premium, allowing it to grow tax-deferred. As a result, the payout rates for deferred annuities are generally higher than those for immediate annuities.
It’s also worth noting that the best rates for deferred annuities can vary depending on the policy type. This highlights the fact that deferred annuity rates vary based on several factors, such as age, gender, policy type, payout type, and more. Therefore, it’s crucial to shop around and compare rates from different insurance companies to secure the most favorable rates and terms for your specific needs.
We highly recommend consulting with a trusted financial professional who can help you navigate the complexities of deferred annuities and identify the best annuity product for your unique needs. By taking the time to evaluate your financial goals, risk tolerance, and personal circumstances, you can make an informed decision and select an annuity product that aligns with your specific needs and goals. Don’t hesitate to seek expert guidance to ensure that you make the most of your investment and secure a stable income stream for the years to come.