What Will We Cover in this Annuity Review?
In this annuity review, we will be covering the following details regarding the Security Benefit Rate Track 5-Year MYGA Fixed Annuity:
- Product type
- Current rates
- Realistic long term return expectations
- How this annuity is best used
- How it is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
If you’ve been checking out fixed annuities because you want the security of knowing that your principal is safe, and you are comforted by the fact that these products can also offer a lifetime stream of guaranteed income in retirement, then the Security Benefit Rate Track 5-Year MYGA (multi-year guarantee) fixed annuity could be a good option for you.
This is because this particular annuity can guarantee you a set rate of interest for five years – regardless of what happens in the market – and, when the time comes to convert the contract to income, you’ll know that you will have the incoming cash flow for the remainder of your life. In addition, if rates go up during the annuity’s guarantee period, you could see an even higher rate of return.
But, even as great as these benefits may sound, don’t run out quite yet and sign on the dotted line to purchase this annuity – at least not until you know more about how the annuity really works, and what the tradeoffs may be for such guarantees.
Over the past several years – due primarily to the volatility of the stock market – fixed annuities have had a renewed popularity, particularly with those who are retired, or are in the process of preparing for retirement. With their income guarantee in retirement, as well as the fact that they keep your money safe during your working years, MYGA annuities can sound like the “best of both worlds.”
But just like with any other type of annuity, MYGA fixed annuities have some moving parts – as well as a fair amount of “small print” – that you really need to know about before committing what will likely be a large chunk of money to this product.
Annuity and Retirement Income Planning Information That You Can Actually Trust
If you’ve never been to our website before, please allow us to personally welcome you to AnnuityGator.com. We make up a team of highly experienced annuity experts who have a focus on providing comprehensive (and unbiased) annuity reviews.
We have been doing this for quite a while now – longer than our competitors have – and because of that, we have become known as a highly trusted source of annuity information. However, over the past decade or so, many “copycat” websites have also sprung up all over the Internet.
If you’ve been spending any time at all looking for annuity information online, it is highly probable that you’ve also come across some conflicting details regarding these financial vehicles. This isn’t really surprising, though, because there is a multitude of annuities out there in the market place, and everyone seems to have a different opinion about them.
It is also possible that you’ve recently attended an annuity seminar where, in return for a free lunch or dinner, the presenter provided you with a plethora of information about the Security benefit Rate Track 5-Year MYGA fixed annuity, or some other similar annuity product. You attending this seminar may even have been the catalyst that has ultimately led you here to our site in search of more information.
In your quest for more in-depth annuity information, though, you may also have come across some of the other sites that discuss annuities online. While these may initially seem informative, many of these websites are actually just trying to lure people in – in order to collect your contact information – by making some pretty bold claims, such as:
- High Annuity Income Payouts
- Guaranteed Income for Life
- Top-Rated Annuity Carriers
- Low Fees
Does this look familiar?
Unfortunately, as nice as these claims may sound, it is absolutely essential that you first verify their validity before you move forward with a long-term financial commitment, just like you would likely do before purchasing any other type of “high ticket” item.
But, if you’re seeking more details on the Security Benefit Rate Track 5-Year MYGA fixed annuity, then you are certainly in the right spot. In fact, we dare say that our website is the only place online where you can truly be able to obtain all of the in-depth information that you’ll need for making a well-informed buying decision (or alternatively, making the decision to forgo this particular annuity and move on to something else).
As you read through this annuity review, you will find that we don’t just layout the nice, rosy advantages of the product, but we also give you details about what could be considered some serious drawbacks, too. We don’t do this to scare you, but rather to give you the whole picture, as we firmly believe that knowing everything is the only way to make a truly informed financial related decision.
With that in mind, we also want to be clear in that we fully believe that an annuity can be a great financial vehicle for some people – provided that it fits in well with your short- and long-term financial goals.
So, with that being said, if you’re ready to proceed, then let’s go ahead and get started!
Security Benefit Rate Track 5-Year MYGA Fixed Annuity at a Glance
|Product Name||Rate Track 5-Year MYGA|
|Type of Product||Multi-Year Guaranteed Fixed Annuity|
|Phone Number||(800) 888-2461|
Opening Thoughts on the Security Benefit Rate Track 5-Year MYGA Fixed Annuity
Security Benefit is a leader in the United States retirement market. As of March 2017, the company had more than $35 billion in assets under management – which equated to a 14% increase in asset growth over 2015.
This company’s key strength lies in specialty markets – particularly overall fixed annuity sales. Security Benefit has applied its core capabilities and investment expertise to cultivate a full range of innovative products in order to help nearly 1/2 million clients retire comfortably – regardless of where they are on their retirement path.
Throughout the past several years, fixed annuities have grown in popularity, especially for those who have a goal of keeping their principal safe from market fluctuations, as well as those who want to know that they can count on an income for the remainder of their lives.
But, even though these features and guarantees might initially sound ideal, the truth is that if something sounds too good to be true, it just might be. So, given that, it is important that you gather as many of the details as you possibly can before you move forward with purchasing this, or any other, fixed annuity.
Before we get into the gritty details, here are some necessary legal disclosures…
This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Security Benefit has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see out perspective when breaking down the positives and the negatives of this particular annuity. Before purchasing any type of insurance and/or investment product, it is important that you do your own due diligence, and that you consult a properly licensed professional if you should have any specific questions that relate to your individual situation. All of the names, marks, and materials that were used for this annuity review are the property of their respective owners.
For more information on how to compare annuities in order to determine which one may be the best for you and your financial circumstances, click here to obtain our free annuity report.
How Security Benefit Describes the Rate Track 5-Year MYGA Fixed Annuity
Security Benefit describes the Rate Track 5-Year MYGA fixed annuity as “a new concept in fixed annuities,” that offers a floating rate of interest where you can benefit if interest rates rise during the guarantee period of the contract.
With the unique interest crediting structure, this annuity offers a guarantee period base rate (which is set at the time of contract issue, and lasts for the length of the guarantee period – in this case, for 5 years) + the 3-month ICE LIBRR (which is reset annually on the contract anniversary), in order to come up with the total credited interest rate.
So what exactly does this mean to you?
In a nutshell, a rate track annuity enables your savings – which are kept safe in the fixed annuity – to grow automatically as interest rates rise. This differs from other types of annuities, such as MYGA / multi-year guaranteed annuities, and even regular fixed annuities, that lock in a rate for a certain number of years, even if interest rates rise during that time period.
In other words, if you placed money in a regular fixed annuity or similar fixed savings instrument over the past few years, you may have had a nice safe rate, but you weren’t likely able to increase your return over time. So, while you were protected from any loss if rates went down, you also did not have the opportunity to receive any increase in return if interest rates went up.
With this annuity, during the rate track guarantee period of five years, the interest is calculated and credited on the combination of a fixed interest rate – the Guarantee Period Base Rate – and a floating rate, based on the 3-month ICE Libor USD rate (LIBOR), which has historically tracked the federal funds rate. The floating rate resets annually on the contract anniversary date as the LIBOR rate changes.
At the end of the five year guarantee period of your contract, you can do either of the following:
- Take no action – and your money will automatically be allocated to a one-year term at a rate of interest that is set by Security Benefit at that time, or
- Withdraw all or a portion of your money from the contract.
The annuity also has a couple of other features on it, such as a nursing home waiver, and a terminal illness waiver. To check out the full product brochure for more details, go here.
How an Advisor Might “Pitch” This Annuity
Because many pre-retirees today are concerned about not losing what they’ve already saved, having certain guarantees can be comforting – so if you have been presented this annuity by an insurance or financial advisor, it is likely that they keyed in on the safety features of this product, along with the ability to earn a higher return if or when rates rise in the near future. So, in many ways, this annuity can allow you to potentially increase the returns on your “safe money.”
But there are some tradeoffs that you need to be mindful of. For example, even though you can earn more than the guaranteed rate on this annuity, the reality is that you still may not be able to beat, or even meet, the rate of inflation. Because of this, you would still need other options for increasing your savings and/or your future income if you want to keep your retirement income rising enough to meet future living expenses.
In addition, while you may have the opportunity to access your money free of surrender charges if you are confined to a nursing home and/or you become terminally ill, this is not always the case. Here, if you check the “fine print” a tad bit closer, you’ll find that you need to meet certain additional criteria in order to qualify. For example, the surrender charges are only waived if you request a withdrawal after the third contract anniversary of owning the annuity. Plus, depending on your state of residence, these benefits may not even be available to you at all.
The Fees Associated with this Annuity
As with most other insurance and financial products, you will also run into some fees if you purchase the Security Benefit Rate Track 5-Year MYGA fixed annuity. While there is no up-front commission, there is a surrender period, meaning that if you take out more than 10% of the contract’s value during the first five full years, you will incur a fee. The amount of the surrender fee depends on the year. For example:
Security Benefit Rate Track 5 MYGA Fixed Annuity Surrender Charge Schedule
The Annuity Gator’s End Take on the Security Benefit Rate Track 5 Year MYGA Fixed Annuity
Where it works the best:
The Security Benefit Rate Track 5 Year MYGA Fixed Annuity may be right for you if:
- The interest rate for money you have in a bank savings or CD does not compare favorably to the interest rate potential that this annuity can offer
- You can put money into the annuity for a committed amount of time with the option to withdraw up to 10% per year free of surrender charge (if needed)
- You would like to accumulate more interest because you have a tax-deferred product rather than paying taxes on the interest in the same year in which it is credited
- You want the peace of mind in knowing that you can access your money free of surrender charges if you become terminally ill or confined to a nursing home facility.
Where it works the worst:
This particular annuity may not be right for you if:
- You want the opportunity to earn an even higher rate of return in order to keep better pace with future inflation
- You want to access more than just 10% of the contract’s value each year
- You do not plan to use the lifetime income feature
When considering how to position your savings for retirement, there are a number of factors that should ideally be taken into account. For example, when it comes to annuities, you will want to ensure that the annuity provides you with an opportunity to earn a return, while at the same time keeping your funds safe from a market downturn. And, if income is an issue, you should also know how the annuity will pay out when the time comes.
If you are considering purchasing the Security Benefit Rate Track 5-Year MYGA fixed annuity, you can be assured that your principal will be safe, no matter what happens in the market. You can also count on the receipt of a lifetime income stream – regardless of how long you may live.
But, even with all of these great features and benefits that are included with the Rate Track 5 annuity, it could still fall somewhat short – and quite honestly, there just may be a better alternative out there for you. This is especially true if you want the opportunity to earn an even better return.
The only way to really know how this annuity may perform – based on your specific situation – is to have it tested. We can do this for you by running the numbers through our annuity calculator, and we can then provide you with a spreadsheet of the results. In order to receive this information, just simply contact us through our secure online form here and let us know.
Do You Have Any Additional Questions About the Rate Track 5-Year MYGA from Security Benefit?
While we know that this annuity review was a bit on the long side, we feel that providing “too much” information than not enough. That being said, we appreciate you sticking with us here to the end. We also realize that, because everyone’s situation is different, there may have been some questions that went unanswered in this review. If this is the case and you still have any additional questions or concerns, please feel free to reach out to us here.
In addition, if you found this annuity review to be helpful, then please forward it on to anyone else that you think may benefit from it, as there is a lot of misconception out there about annuities and how they work.
Is there any other annuity you would like to see reviewed?
If so, we will get right on it! There are many annuities available in the market today. So, if you don’t see an annuity in our database that you would like to know more about, then just simply let us know the name of that annuity (or annuities, if there are more than one), and our team of annuity “geeks” will get to work on it!
The Annuity Gator