3 Unforgettable Annuity Case Studies of Clients with CDs
June is Annuity Awareness Month, making it the perfect time to bring back some of our most unforgettable annuity case studies.
Three particular stories stand out to us, because all of these clients ended up moving money from a certificate of deposit (CD) to a fixed annuity.
If you have any funds in a CD, give us a call!
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1. 72-Year-Old Earns Nearly 8x the Interest
Agent: Taylor Thomas
A 72-year-old gentleman client had roughly $25,000 sitting in a certificate of deposit (CD) earning only 0.5% – half a percent!
When I suggested looking at a fixed annuity, he was originally very put off by that term, “annuity.” But once we went through the particulars, he understood that a fixed annuity has just as much safety as a CD, but the earning potential is far higher.
We ended up selecting a 5-year fixed annuity earning 3.95%.
He loved the fact that he could access 10% of his deposit every year, and he loved the much greater return on his money! He is very happy with the outcome.
2. Mike Gets Double the Interest
Agent: Luke Hockaday
Mike had just over $120,000 in a certificate of deposit (CD), and it was earning 1.5%, which is actually a lot for a CD.
However, at the time, we had a fixed annuity with a 3% interest rate, which would get Mike double the interest.
Most clients wait until their CD comes due to make any changes, because there are penalties for withdrawing your money early. Most of the time, that penalty is six months of earned interest.
What’s unique about Mike’s case is he didn’t actually wait for the CD to come due. We crunched the numbers and found that he would be money ahead if he transferred his $120,000 to the annuity right away.
He would lose the past six months of earned interest, but he made so much more interest in the fixed annuity that it turned out to be the right decision.
Mike loved the 10% free withdrawal feature of this annuity, and he also liked the tax-deferral, which doesn’t come with CDs.
Read more of this case study: Mike Is Getting Double the Interest Thanks to Luke Hockaday
3. Jim and Becky Get 5x the Interest
Agent: Dianne Renner, retired
Becky and Jim had a $40,000 CD at a bank that was making a measly 0.60%. Dianne Renner was delivering their new Medicare Supplement policy to them, and mentioned a 3% annuity we offer, from a company that has been around since 1894, surviving two world wars and the Great Depression.
Instead of making only $240 in the first year, and getting an IRS 1099 for the growth from the bank, they could make $1,200, and the earnings would be tax-deferred.
At the end of the 5-year annuity, they would make over $5,100 more in the annuity than they would with the CD, and it would all be tax-deferred. Jim felt that having the ability to take 15% in penalty-free withdrawals was appealing to him, even though he would probably not take it out.
In the end, they chose to go with the annuity, since it offered 5 times the interest that the CD was earning, and just as much safety.
Read the original case study: Jim and Becky are getting 5 times the interest
While CDs at the bank are safe, most clients we see decide to move those funds into a fixed annuity. Their funds remain safe, and they get a guaranteed interest rate that beats a CD every time.
Fixed annuity rates can fluctuate, but they’re often between 3-4%. Call our office to learn about the most competitive fixed annuity rates today!
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