Question: Your article about retirement annuities (Nov. 9) was very informative, but I have two questions you didn't cover: Where can I buy an annuity? And how do I pick a good one?
Answer: The individual deferred annuity is essentially an insurance contract, and most life insurance companies include annuities in their product lines.
Many of the larger brokerage houses and investment companies now offer annuities too, either by having established their own sponsoring companies or by an agency agreement with an existing insurance company.
There are literally hundereds of annuity contracts on the market; selecting the right one can make a difference of thousands of dollars over the life of the contract.
Comparing policies can be a very complicated and confusing task for the layman. However, there are some independent analyses published and available at many libraries.
One widely accepted rating source is A.M. Best's "Retirement Income Guide," published semi-annually. The Guide provides updated performance records of 85 companies that sponsor annuities. (Single copies may be purchased by mail, at $10 a copy, from A.M. Best Co., Ambest Road, Oldwick, N.J. 08858.)
From the latest edition, here are the companies offering the highest current yield (during the accumulation phase) on a single premium deferred annuity:
Travelers, 11.6 percent; First Variable Life, 11.5; Bankers Life of Iowa, 11.3; Great American Life, 11.0; Western National, 11.0; Life of Maryland, 11.0 (first six months); Bankers Life and Casualty, 10.75; Capitol Life, 10.6; and Safeco, 10.6.
For an immediate annuity, these companies now are offering the best payout. The figure shown is the guaranteed monthly income per $10,000 of principal for a 65-year-old annuitant:
Great American Life, $105.20 (male), $96.20 (female); Variable Annuity Life, $103.57, $95.05; Western National, $103.57, $95.05; Crown Life of Canada, $101.86, $92.58; American General, $100.20, $91.28; Manufacturers Life, $99.86, $88.98; Safeco, $99.09, $91.63; and Northern Life, $98.36, $91.21.
Of course, this is not an endorsement of the companies mentioned -- simply a report of a single selected feature as reported by one rating service. There may be other characteristics you want to consider, such as the size of the company, financial stability or how long it's been in business.
You should do some reading and shopping on your own. But these lists may be a starting point, and at the very least they give you an idea of the kind of information to look for if the concept of the individual annuity appeals to you.
Q: This is a comment on your recent series of articles on planning for retirement. I was surprised that I reached the end of the series without encountering mention of the possibility of working in one's own community as a volunteer.
I have found that this is the answer to not feeling productive in the traditional American sense, i.e., one's contribution having a monetary value. Working as a volunteer has other rewards, of course, and thousands of retirees in this community alone are witnesses to the fact.
You really have no idea until you have lived outside the U.S. -- as I did for a number of years in the Foreign Service -- how uniquely American the assumption of volunteer work is.
It simply doesn't exist elsewhere on the scale and in the context it occupies in our culture. I would state, flat out, that a lot of this country's work would never be done if it weren't for volunteers.
A: You're absolutely right, and I missed the boat in not talking about the opportunities for serving others and at the same time providing both challenging and satisfying work for yourself.
But I'm glad now that I failed to mention volunteer work, because you've said it all and far better than I could have.
There are plenty of organizations around that offer a wide variety of interesting jobs for volunteers. All that is left for me to say is, "Amen, brother -- and thanks for writing."